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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998 Commission File Number 1-973
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
80 PARK PLAZA
NEWARK, NEW JERSEY 07102
MAILING ADDRESS: P.O. Box 570
NEWARK, NEW JERSEY 07101-0570
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
See page 2.
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Stable Value Fund THE PRUDENTIAL LIFE INSURANCE
PRIMCO CAPITAL MANAGEMENT COMPANY OF AMERICA
101 SOUTH FIFTH STREET, SUITE 2150 PRUDENTIAL PLAZA
LOUISVILLE, KENTUCKY 40202 NEWARK, NEW JERSEY 07101
PRINCIPAL MUTUAL LIFE JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY INSURANCE COMPANY
THE PRINCIPAL FINANCIAL GROUP JOHN HANCOCK PLACE, 27th FLOOR
DES MOINES, IOWA 50392-0001 BOSTON, MASSACHUSSETTS 02117
THE CHASE MANHATTAN BANK STATE STREET BANK AND TRUST COMPANY
270 PARK AVENUE 225 FRANKLIN STREET
NEW YORK, NEW YORK 10017 BOSTON, MASSACHUSSETTS 02110-2804
J.P. MORGAN CAISSE des DEPOTS
60 WALL STREET 9 WEST 57th STREET
NEW YORK, NEW YORK 10260 NEW YORK, NEW YORK 10019
METROPOLITAN LIFE INSURANCE Enterprise Common Stock Fund and ESOP Fund
COMPANY PUBLIC SERVICE ENTERPRISE GROUP
ONE MADISON AVENUE INCORPORATED
NEW YORK, NEW YORK 10010-3690 80 PARK PLAZA
NEWARK, NEW JERSEY 07101-1171
ALLSTATE LIFE INSURANCE COMPANY Large Company Stock Index Fund
ALLSTATE PLAZA WEST THE VANGUARD GROUP
3100 SANDERS ROAD INSTITUTIONAL DIVISION
NORTHBROOK, ILLINOIS 60062 P.O. BOX 2900
VALLEY FORGE, PENNSYLVANIA 19482
NEW YORK LIFE INSURANCE Intermediate Government Securities Fund
COMPANY DELAWARE MANAGEMENT COMPANY INC.
501 MADISON AVENUE ONE COMMERCE SQUARE
NEW YORK, NEW YORK 10010 2005 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19103
FIRST ALLMERICA FINANCIAL LIFE International Stock Fund
INSURANCE COMPANY T. ROWE PRICE INC.
440 LINCOLN STREET 100 EAST PRATT STREET
WORCESTER, MASSACHUSETTS 01653 BALTIMORE, MARYLAND 02120
AIG LIFE INSURANCE COMPANY Mid/Small Company Stock Fund
ONE ALICO PLAZA PUTNAM INVESTMENTS
P.O. BOX 667 P.O. BOX 41203
WILMINGTON, DELAWARE 19899 PROVIDENCE, RHODE ISLAND 02940
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
- --------------------------------------------------------------------------------
THRIFT AND TAX-DEFERRED SAVINGS PLAN
INDEX
-----
PAGE
----
INDEPENDENT AUDITORS' REPORT.............................................. 4
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997........................................ 5-8
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 and 1997.......................... 9-12
NOTES TO FINANCIAL STATEMENTS............................................. 13-26
SIGNATURES................................................................ 27
EXHIBIT INDEX............................................................. 28
INDEPENDENT AUDITORS' REPORT
Employee Benefits Committee of
Public Service Electric and Gas Company:
We have audited the accompanying statements of net assets available for benefits
of the Public Service Electric and Gas Company Thrift and Tax- Deferred Savings
Plan (the "Plan") as of December 31, 1998 and 1997, and the related statements
of changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1998
and 1997, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information by fund is
presented for the purpose of additional analysis of the basic financial
statements rather than to present information regarding the net assets available
for benefits and changes in net assets available for benefits of the individual
funds, and is not a required part of the basic financial statements. This
information is the responsibility of the Plan's management. Such information has
been subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 4, 1999
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1998
Supplemental Information by Fund
--------------------------------------------------------------------------------
Intermediate
Stable Enterprise Large Company Government International
Value Fund Common Stock Stock Index Securities Stock
Total 3/98 Fund Fund Fund Fund
----------------------------------------------------------------------------------------------
ASSETS
Investments, at fair value
Plan interest in Master
Employee Benefit Plan Trust $ 584,360,039 $ 222,754,910 $ 61,065,698 $ 137,892,728 $ 7,781,284 $ 18,753,194
Receivables-Interest
and Dividends 1,386,991 1,227,635 159,286 - - -
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Total Assets $ 585,747,030 $ 223,982,545 $ 61,224,984 $ 137,892,728 $ 7,781,284 $ 18,753,194
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LIABILITIES
Accounts Payable $ 748,946 $ 485,495 $ 192,026 $ 517,829 $ (26,055) $ (265,684)
--------------------------------------------------------------------------------------------
Total Liabilities 748,946 485,495 192,026 517,829 (26,055) (265,684)
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Net Assets Available for Benefits $ 584,998,084 $ 223,497,050 $ 61,032,958 $ 137,374,899 $ 7,807,339 $ 19,018,878
============================================================================================
SEE NOTES TO FINANCIAL STATEMENTS.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1998
Supplemental Information by Fund (Continued)
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Mid/Small Cons 3/98 Mod 3/98 Aggressive
Company Pre-Mix Pre-Mix Pre-Mix ESOP Holding Trust
Stock Fund Portfolio Portfolio Portfolio Fund Account Loan Fund
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ASSETS
Investments, at fair value
Plan interest in Master $ 36,835,566 $17,778,510 $ 33,591,006 $ 29,510,191 $ 6,040,351 $ 1,083,382 $ 11,273,219
Employee Benefit Plan Trust
Receivables-Interest
and Dividends - - - - 70 - -
---------------------------------------------------------------------------------------------
Total Assets $ 36,835,566 $17,778,510 $ 33,591,006 $ 29,510,191 $ 6,040,421 $ 1,083,382 $ 11,273,219
=============================================================================================
LIABILITIES
Accounts Payable $ (543,140) $ (140,920)$ (17,176) $ (15,449) $ - $ 602,730 $ (40,710)
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Total Liabilities (543,140) (140,920) (17,176) (15,449) - 602,730 (40,710)
---------------------------------------------------------------------------------------------
Net Assets Available for Benefits $ 37,378,706 $17,919,430 $ 33,608,182 $ 29,525,640 $ 6,040,421 $ 480,652 $ 11,313,929
=============================================================================================
SEE NOTES TO FINANCIAL STATEMENTS.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1997
Supplemental Information by Fund
---------------------------------------------------------------------
Large
Enterprise Company Interm.
Stable Common Stock Government International
Value Stock Index Securities Stock
Total Fund Fund Fund Fund Fund
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ASSETS
Investments, at fair value
Plan interest in Master Employee
Benefit Plan Trust $502,663,165 $210,845,416 $48,490,434 $108,715,029 $5,504,992 $19,090,410
Receivables-Investments Sold 302,668 - 302,668 - - -
Receivables-Interest and Dividends 1,101,111 1,097,432 3,679 - - -
-----------------------------------------------------------------------------------
Total Assets $504,066,944 $211,942,848 $48,796,781 $108,715,029 $5,504,992 $19,090,410
===================================================================================
LIABILITIES
Accounts Payable $ 840,741 $ (798,775) $ 202,534 $ 445,596 $ 2,354 $ 490,588
Transfer to/from Employee Savings Plan (1,943) (1,943) - - - -
Forfeitures 10,429 - 6,753 1,660 321 356
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Total Liabilities 849,227 (800,718) 209,287 447,256 2,675 490,944
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Net Assets Available for Benefits $503,217,717 $212,743,566 $48,587,494 $108,267,773 $5,502,317 $18,599,466
===================================================================================
SEE NOTES TO FINANCIAL STATEMENTS.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1997
Supplemental Information by Fund (Concluded)
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Mid/Small Conserv. Moderate Aggressive
Company Pre-Mix Pre-Mix Pre-Mix ESOP Holding Trust
Stock Fund Portfolio Portfolio Portfolio Fund Account Loan Fund
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ASSETS
Investments, at fair value
Plan interest in Master Employee
Benefit Plan Trust $29,445,972 $13,370,272 $27,710,916 $22,548,413 $5,292,291 $554,186 $11,094,834
Receivables-Investments Sold - - - - - - -
Receivables-Interest and Dividends - - - - - - -
-----------------------------------------------------------------------------------------
Total Assets $29,445,972 $13,370,272 $27,710,916 $22,548,413 $5,292,291 $554,186 $11,094,834
=========================================================================================
LIABILITIES
Accounts Payable $ 83,943 $ (82,013) $ 88,155 $ 47,558 $ 423 $409,814 $(49,436)
Transfer to/from Employee Savings Plan - - - - - - -
Forfeitures 446 102 109 682 - - -
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Total Liabilities 84,389 (81,911) 88,264 48,240 423 409,814 (49,436)
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Net Assets Available for Benefits $29,361,583 $ 13,452,183 $27,622,652 $22,500,173 $5,291,868 $144,372 $11,144,270
=========================================================================================
SEE NOTES TO FINANCIAL STATEMENTS.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1998
Supplemental Information by Fund
-------------------------------------------------------------------
Stable Stable Enterprise Large Company
Value Value Fund Common Stock Stock Index
Tota1 Fund 3/98 Fund Fund
ADDITIONS ---------------------------------------------------------------------------------
Participant Deposits $ 32,002,038 $ 1,887,226 $ 6,243,226 $ 3,865,872 $ 7,283,918
Employers Contributions 7,894,743 556,528 1,801,787 510,169 1,826,763
Interfund Transfers - net - (211,462,750) 217,502,284 (2,931,620) (3,019,472)
---------------------------------------------------------------------------------
Total Deposits and Contributions 39,896,781 (209,018,996) 225,547,297 1,444,421 6,091,209
Plan Interest in Master Trust Investment Income 82,635,723 3,410,156 10,349,093 15,566,155 30,635,468
---------------------------------------------------------------------------------
Total Additions 122,532,504 (205,608,840) 235,896,390 17,010,576 36,726,677
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DEDUCTIONS
Withdrawals 36,763,026 6,990,553 11,271,806 4,022,439 6,321,229
Forfeitures 351,229 7,815 26,517 76,863 85,682
Administrative Expenses 1,308,125 182,059 413,712 119,527 282,395
Transfer to/(from) Employee Savings Plan 2,329,757 (45,701) 687,305 346,283 930,245
---------------------------------------------------------------------------------
Total Deductions 40,752,137 7,134,726 12,399,340 4,565,112 7,619,551
---------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 81,780,367 (212,743,566) 223,497,050 12,445,464 29,107,126
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 503,217,717 212,743,566 - 48,587,494 108,267,773
---------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $584,998,084 $ - $ 223,497,050 $ 61,032,958 $ 137,374,899
=================================================================================
Intermediate
Government International Mid/Small
Securities Stock Company
Fund Stock Fund
ADDITIONS ------------------------------------------
Participant Deposits $ 499,062 $ 1,823,695 $ 3,095,438
Employers Contributions 139,447 467,030 762,754
Interfund Transfers - net 1,486,850 (3,958,350) 769,653
------------------------------------------
Total Deposits and Contributions 2,125,359 (1,667,625) 4,627,845
Plan Interest in Master Trust Investment Income 512,973 3,168,808 5,780,448
------------------------------------------
Total Additions 2,638,332 1,501,183 10,408,293
------------------------------------------
Withdrawals 302,645 1,043,012 1,859,213
Forfeitures 2,199 33,844 40,843
Administrative Expenses 14,858 44,792 72,955
Transfer to/(from) Employee Savings Plan 13,608 (39,877) 418,159
------------------------------------------
Total Deductions 333,310 1,081,771 2,391,170
------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 2,305,022 419,412 8,017,123
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 5,502,317 18,599,466 29,361,583
------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 7,807,339 $19,018,878 $37,378,706
==========================================
SEE NOTES TO FINANCIAL STATEMENTS.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1998
Supplemental Information by Fund (Concluded)
---------------------------------------------------------------------------------
Conservative Con 3/98 Moderate Mod 3/98 Aggressive
Pre-Mix Pre-Mix Pre-Mix Pre-Mix Pre-Mix
ADDITIONS Portfolio Portfolio Portfolio Portfolio Portfolio
---------------------------------------------------------------------------------
Participant Deposits $ 234,332 $ 888,717 $ 664,322 $ 2,125,260 $ 3,390,970
Employers Contributions 51,075 191,743 155,274 541,794 890,379
Interfund Transfers - net (14,360,308) 16,636,930 (30,496,332) 29,709,487 (221,753)
---------------------------------------------------------------------------------
Total Deposits and Contributions (14,074,901) 17,717,390 (29,676,736) 32,376,541 4,059,596
Plan Interest in Master Trust Investment Income 909,226 1,147,037 2,427,496 2,146,686 4,618,073
---------------------------------------------------------------------------------
Total Additions (13,165,675) 18,864,427 (27,249,240) 34,523,227 8,677,669
---------------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 301,785 918,278 358,880 851,543 1,404,783
Forfeitures 7,226 5,893 6,442 16,465 41,440
Administrative Expenses 10,405 25,155 20,892 49,084 59,659
Transfer to/(from) Employee Savings Plan (32,908) (4,329) (12,802) (2,047) 146,320
---------------------------------------------------------------------------------
Total Deductions 286,508 944,997 373,412 915,045 1,652,202
---------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (13,452,183) 17,919,430 (27,622,652) 33,608,182 7,025,467
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 13,452,183 - 27,622,652 - 22,500,173
---------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ - $ 17,919,430 $ - $ 33,608,182 $ 29,525,640
=================================================================================
-----------------------------------------------
ESOP Holding Trust
ADDITIONS Fund Account Loan Fund
-----------------------------------------------
Participant Deposits $ - $ - $ -
Employers Contributions - - -
Interfund Transfers - net (179,664) - 525,045
-----------------------------------------------
Total Deposits and Contributions (179,664) - 525,045
Plan Interest in Master Trust Investment Income 1,627,824 336,280 -
-----------------------------------------------
Total Additions 1,448,160 336,280 525,045
-----------------------------------------------
DEDUCTIONS
Withdrawals 704,564 - 412,296
Forfeitures - - -
Administrative Expenses 12,632 - -
Transfer to/(from) Employee Savings Plan (17,589) - (56,910)
-----------------------------------------------
Total Deductions 699,607 - 355,386
-----------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 748,553 336,280 169,659
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 5,291,868 144,372 11,144,270
-----------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 6,040,421 $ 480,652 $11,313,929
===============================================
SEE NOTES TO FINANCIAL STATEMENTS.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1997
Supplemental Information by Fund
-------------------------------------------------------------------
Enterprise Large Intermediate
Common Company Government International
Stable Value Stock Stock Index Securities Stock
ADDITIONS Total Fund Fund Fund Fund Fund
---------------------------------------------------------------------------------
Participant Deposits $ 29,994,074 $ 9,898,808 $ 3,373,229 $ 5,856,382 $ 425,075 $ 2,086,826
Employers Contributions 7,838,936 2,914,900 509,513 1,545,771 120,656 547,793
Interfund Transfers - net - (18,391,914) (4,310,890) 8,169,060 (448,913) (2,438,528)
---------------------------------------------------------------------------------
Total Deposits and Contributions 37,833,010 (5,578,206) (428,148) 15,571,213 96,818 196,091
---------------------------------------------------------------------------------
Plan Interest in Master
Trust Investment Income 65,619,099 14,250,996 10,812,598 25,575,566 479,157 987,310
---------------------------------------------------------------------------------
Total Additions 103,452,109 8,672,790 10,384,450 41,146,779 575,975 1,183,401
---------------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 51,255,662 28,230,956 4,038,661 8,351,977 481,424 2,415,781
Forfeitures 340,335 97,171 32,201 88,570 9,305 31,606
Administrative Expenses 998,056 542,304 87,402 164,637 9,895 37,730
Transfer to/(from) Employee
Savings Plan (2,285,625) (941,662) (105,083) (388,416) (18,451) (172,631)
---------------------------------------------------------------------------------
Total Deductions 50,308,428 27,928,769 4,053,181 8,216,768 482,173 2,312,486
---------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 53,143,681 (19,255,979) 6,331,269 32,930,011 93,802 (1,129,085)
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 450,074,036 231,999,545 42,256,225 75,337,762 5,408,515 19,728,551
---------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $503,217,717 $212,743,566 $48,587,494 $108,267,773 $5,502,317 $18,599,466
=================================================================================
SEE NOTES TO FINANCIAL STATEMENTS.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1997
Supplemental Information by Fund (Concluded)
---------------------------------------------------------------------------------------------
Mid/Small Conservative Moderate Aggressive
Company Pre-Mix Pre-Mix Pre-Mix ESOP Holding Trust
ADDITIONS Stock Fund Portfolio Portfolio Portfolio Fund Account Loan Fund
---------------------------------------------------------------------------------------------
Participant Deposits $ 2,409,279 $ 771,133 $ 2,321,616 $ 2,851,726 $ - $ - $ -
Employers Contributions 595,904 211,280 648,635 744,484 - - -
Interfund Transfers - net 7,934,575 3,970,786 2,758,025 2,814,808 (232,439) - 175,430
---------------------------------------------------------------------------------------------
Total Deposits and Contributions 10,939,758 4,953,199 5,728,276 6,411,018 (232,439) - 175,430
---------------------------------------------------------------------------------------------
Plan Interest in Master
Trust Investment Income 4,410,891 1,396,726 3,420,292 3,091,544 1,096,756 97,263 -
---------------------------------------------------------------------------------------------
Total Additions 15,350,649 6,349,925 9,148,568 9,502,562 864,317 97,263 175,430
---------------------------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 1,473,238 1,383,574 1,664,525 1,288,256 902,358 - 1,024,912
Forfeitures 23,423 3,546 18,345 36,168 - - -
Administrative Expenses 41,808 20,560 45,651 42,036 6,033 - -
Transfer to/(from) Employee
Savings Plan (181,983) (71,562) (94,785) (182,353) (5,983) - (122,716)
---------------------------------------------------------------------------------------------
Total Deductions 1,356,486 1,336,118 1,633,736 1,184,107 902,408 - 902,196
---------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 13,994,163 5,013,807 7,514,832 8,318,455 (38,091) 97,263 (726,766)
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 15,367,420 8,438,376 20,107,820 14,181,718 5,329,959 47,109 11,871,036
---------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 29,361,583 $13,452,183 $27,622,652 $ 22,500,173 $5,291,868 $ 144,372 $11,144,270
=============================================================================================
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF THE PLAN
The Board of Directors of Public Service Electric and Gas Company (PSE&G or the
Company) adopted the PSE&G Thrift and Tax-Deferred Savings Plan (Plan) to
encourage thrift and savings by eligible employees (Eligible Employees) which
was first offered to Eligible Employees in 1981. Effective January 1, 1996, the
trust that holds the Plan assets was converted into the Public Service Electric
and Gas Master Employee Benefit Plan Trust, (Master Trust), a master trust
covering all of the Company's qualified retirement plans including the Plan and
the Public Service Electric and Gas Company Employee Savings Plan (Savings
Plan). (See Note 4. Investment of the Plan and Savings Plan in the Master
Trust.) The Plan was last amended December 21, 1998, effective January 1, 1998.
The Plan amendments made during 1998 provide for the following: PSEG Newark Bay
Services, Inc. (formerly known as CEA Newark Bay Services, Inc.) employees are
permitted to increase Basic Deposit from 6% to 8% and the merger, for investment
management purposes, of the Plan and Savings Plan Stable Value Funds,
Conservative and Moderate Pre-Mixed portfolios.
An employee may participate in the Plan from the date of hire. Matching Company
contributions begin when an employee has completed one Year of Service as
defined by the Plan. At the time any employee who is a Participant in the
Savings Plan becomes an Eligible Employee for the Plan, that employee will
automatically be enrolled in the Plan, all balances in the Savings Plan will be
transferred to the Plan and all contributions and investment elections in effect
for the Savings Plan will remain in effect. Participation in the Plan is
entirely voluntary, except with respect to those employees who participated in
the Employee Stock Ownership Plan (ESOP) Fund as a result of their participation
in the PSE&G Tax Reduction Act Employee Stock Ownership Plan (TRASOP) and/or the
PSE&G Payroll-Based Employee Stock Ownership Plan (PAYSOP), which were merged
into this Plan in 1988. Eligible Employees are those employees not covered by a
collective bargaining agreement of PSE&G or any affiliate of PSE&G participating
in the Plan (together hereafter each called an "Employer" or collectively
"Employers"). Certain Eligible Employees may also elect to have a distribution
from another qualified corporate plan contributed as a rollover contribution
with the approval of the Employee Benefits Committee of PSE&G (Committee), the
Plan Administrator.
Under the Plan, each participating Employee (Participant) may elect to make
basic deposits to Investment Funds of such Participant's choosing within the
Thrift Account Fund of 1% - 8% of his/her compensation (Basic Deposits), and
his/her respective Employer will contribute an amount equal to 50% thereof,
subject to certain exceptions and limitations (Employer Contributions). Employer
Contributions with respect to Basic Deposits in excess of 6% and up to 8% of
Compensation are made in shares of the Common Stock of Public Service Enterprise
Group Incorporated (Enterprise), the parent of the Company, and are not
available for transfer to any other Fund or withdrawal from the Plan prior to
the Participant's termination of employment. In addition, a Participant may
elect to make supplemental deposits to such Funds in increments of 1% of
Compensation up to an additional 17% of Compensation (Supplemental Deposits),
subject to certain limitations, without any corresponding matching Employer
Contribution.
PSEG CONFIDENTIAL
NOTES TO FINANCIAL STATEMENTS (Continued)
Participants may designate such Basic and/or Supplemental Deposits as
Nondeferred (post-income tax contributions) or Deferred (pre-income tax
contributions).
Each Participant may, within any Plan Year, make one or more Additional Lump Sum
Deposits on a Nondeferred basis in minimum amounts of $250 and in such total
amounts which, when aggregated with such Participant's Basic Deposits and
Supplemental Deposits, do not exceed 25% of his or her Compensation for that
Plan Year and subject to the limitations of the Internal Revenue Code of 1986,
as amended (IRC).
The maximum amount of Deferred Deposits to a Participant's Thrift Account may
have to be limited to less than 25% of Compensation to meet requirements of the
IRC. The extent of any such limitation will be determined from time to time by
the Committee based on the actual pattern of Deferred Deposits by all
Participants. If the maximum permitted percentage of Compensation for Thrift
Account Deferred Deposits is reduced, then all Deferred Deposits in excess of
such percentage will automatically be treated as Nondeferred Deposits. This will
result in taxable income to the affected Participants for Deferred Deposits in
excess of any limit so established. The Committee will attempt to assure that
any such limitation will apply only to future contributions, but it is possible
that, in order to meet requirements of the IRC, the limitation will, in some
circumstances, have to be applied retroactively. Deferred Deposits may not
generally be withdrawn until age 59-1/2. Nondeferred Deposits, on the other
hand, may be withdrawn at any time, subject to certain penalties and
restrictions.
Thrift Account Deposits are made through payroll deductions by the Participant's
Employer, rollover contributions from other qualified plans and Additional Lump
Sum Deposits. Deposits by Participants and contributions by their respective
Employers are transferred to the Trustee and separately held in the Plan's
Thrift Account Fund of the Master Trust Fund for investment and other
transactions, as directed by Participants. Each Participant is entitled to
choose the investment Funds in which his/her Deposits and Employer Contributions
will be invested from among the investment Funds offered under the Plan, except
for Employer Contributions with respect to Basic Deposits in excess of 6%, which
are invested in the Enterprise Common Stock Fund.
Bankers Trust Company is the Trustee of the Master Trust established pursuant to
the Plan. Hewitt Associates is the Record Keeper for the Plan.
Loan Provisions
The Trustee may, subject to the approval of PSE&G's Director, Performance and
Rewards, lend a Participant who is employed by an Employer an amount up to 50%
of the value of the vested portion of such Participant's Thrift Account and ESOP
Fund, but no more than the aggregate value of such Participant's Thrift Account
or $50,000, whichever is less. Any Participant loan must be for a principal
amount of $1,000 or more and no Participant may have more than two loans
outstanding at any time. All loans, including interest thereon, must be repaid
by payroll deductions in equal monthly installments over a period of 12 to 60
months as selected by the Participant. However, a Participant may prepay any
such loan in full or in part in a lump sum in accordance with such rules as are
prescribed by the Committee. A Participant may not apply for more than one loan
in any calendar year. A loan to a Participant is considered an investment of
such Participant's Thrift Account and repayments of principal of any loan
together with interest thereon, are invested in the Thrift Account Investment
Funds of the Plan in accordance with the Participant's then-current investment
direction for Deposits and Employer Contributions.
Each loan bears interest at a rate fixed from time to time by the Committee
taking into consideration the then-current interest rates being charged by other
lenders. The rate of interest applicable to any loan at its inception remains in
effect for the duration of such loan. During 1998, the rates of interest on
loans granted to Participants, by quarter and starting with the first quarter,
were 8-1/2%, 8-1/2%, 8-1/2% and 8-1/4%. (See Note 2. SIGNIFICANT ACCOUNTING
POLICIES - Loans.)
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan have been prepared in accordance with
generally accepted accounting principles.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Dividends and Interest
Dividends, interest and other income attributable to each Investment Fund of the
Plan are reinvested in that Investment Fund to the extent not used to pay direct
expenses of that Investment Fund. (See Expenses of Plan, below.)
All Deposits and Employer Contributions in the Stable Value Fund are invested in
either traditional Guaranteed Investment Contracts issued by insurance companies
or other financial intermediaries (Traditional GICs) or Benefit Responsive
Agreements (Synthetic GICs) which are similar to Traditional GICs in terms of
their ability to preserve principal and provide a stable rate of return.
Synthetic GICs are different in that they are backed or secured by a separate
portfolio of high-quality fixed income securities that are directly owned by the
Plan. The portfolio is wrapped by a "book value wrapper", usually a financial
institution other than the investment manager of the Synthetic GIC, which
provides a crediting rate and which guarantees that benefit repayments will be
made at book value. Deposits and Employer Contributions earn interest at the
composite rate of all GICs in which the assets of the Stable Value Fund are then
invested. Such rate varies as such Traditional and Synthetic GICs mature or are
entered into, and as Deposits and Employer Contributions are made to and
withdrawn from such contracts. Under the contracts in effect during 1998, the
composite rate of interest earned by such assets so invested was not less than
6.35%.
ESOP Fund Participants receive quarterly payments directly from the Trustee
equal to the dividends paid to the Trustee on the shares of Enterprise Common
Stock held for their ESOP Fund.
Valuation of Investments
The value of the Enterprise Common Stock Fund, the Large Company Stock Index
Fund, the Intermediate Government Securities Fund, the International Stock Fund,
the Mid/Small Company Stock Fund and the shares of Enterprise Common Stock held
by the ESOP Fund is based upon quoted market values. The value of the Stable
Value Fund is based on the contract value of all GICs in which the assets of the
Stable Value Fund are invested. These contracts are included in the financial
statements at contract value, which approximates fair value. Temporary
investments are valued at cost, which approximates fair market value. Securities
transactions are accounted for on the trade date.
The Plan's financial statements have been prepared in accordance with the
financial reporting requirements of the Employee Retirement Income Security Act
of 1974, as amended (ERISA), as permitted by applicable rules. Under such
requirements, realized gains and losses from securities transactions are
computed using an adjusted cost basis as prescribed by the Department of Labor's
(DOL) Rules and Regulations for Reporting and Disclosure. The adjusted cost is
the fair value of the security at the beginning of the Plan Year, or cost if
acquired since that date. Unrealized gains and losses on securities held for
investment are computed on the basis of the change in fair value between the
beginning and end of the Plan Year.
Expenses of Plan
Effective January 1, 1997, all expenses incurred for the administration of the
Plan, including taxes and brokerage costs, are deducted from the Master Trust
Fund.
The assets of the Enterprise Common Stock Fund and the ESOP Fund are invested in
shares of Enterprise Common Stock. Shares of Enterprise Common Stock required
for the Enterprise Common Stock Fund are purchased by the Trustee either
directly from Enterprise, at its sole discretion, on the open market through a
broker or from the ESOP Fund. In situations where the ESOP Fund is in a "sell"
position and the Enterprise Common Stock Fund is in a "buy" position, the
Enterprise Common Stock Fund will buy from the ESOP Fund at the closing price on
the New York Stock Exchange for that day. In such case, no brokerage commissions
are charged on the transaction. Otherwise, all shares sold for the Enterprise
Common Stock Fund and the ESOP Fund are sold by the Trustee on the open market
through a broker. The proceeds, net of brokerage commissions and transfer taxes,
are distributed to the Participant.
Loans
A loan to a Participant is considered an investment in such Participant's Thrift
Account and the principal amount of the loan is treated as a separate investment
within the various sub-accounts of the Participant's Thrift Account. Repayments
of the principal amount of the loan are credited to each such sub-account and
repayments of principal along with any accrued interest thereon are invested in
the Thrift Account Investment Funds in the same manner as the Participant's
then-current investment direction for Deposits and Employer Contributions.
Loan amounts are taken from sub-accounts of a Participant's Thrift Account in
the following order:
(a) Deferred Deposits
(b) Unmatured Vested Employer Contributions
(c) Matured Vested Employer Contributions
(d) Rollover Contributions
(e) Unmatured Post-1986 Nondeferred Deposits
(f) Matured Post-1986 Nondeferred Deposits
(g) Pre-1987 Nondeferred Deposits
Each loan is secured by an assignment of the Participant's entire right, title
and interest in and to the Master Trust Fund to the extent of the loan and
accrued interest thereon. (See Note 1. SUMMARY OF THE PLAN - Loan Provisions.)
Interfund Transfers -- ESOP Fund to Thrift Account
Participants are permitted to transfer all, but not less than all, shares of
Enterprise Common Stock from their ESOP Funds to their Thrift Accounts. To
effect such transfers, the Trustee will sell the shares of Enterprise Common
Stock held in the ESOP Fund and invest the proceeds in the Thrift Account
Investment Funds designated by the Participant. The cash value of each share of
Enterprise Common Stock transferred will be equal to the price per share of
Enterprise Common Stock actually received by the Trustee. Any such transfer is
treated as a rollover contribution.
Holding Account
The Holding Account is a vehicle to record the transactions either from one
Investment Fund to another Investment Fund or from an Investment Fund to an
outside source. Daily balances which remain in the Holding Account are
temporarily invested in short-term, liquid investments at the Trustee Bank until
disbursement. Activity within the Holding Account includes inflows and outflows
of cash related to investment Fund transfers, Deposits, Employer Contributions,
withdrawals, receipts of dividends and interest, expenses incurred in connection
with the administration of the Plan, benefit payments and loan transactions.
Vesting
Employer Contributions to a Participant's Thrift Account are immediately vested
upon a Participant's completion of five years of service with the Employer or
when a Participant is eligible for retirement, disabled, laid off or dies. A
Participant who was formerly a participant in the U.S. Energy Partners 401 (K)
Plan (which was merged into the Plan in 1996), will become vested in the value
of his or her U.S. Energy Partners Employer Contribution Sub-account according
to the following schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than one 0%
One 20%
Two 40%
Three 60%
Four 80%
Five or More 100%
All amounts credited to a Participant's ESOP Fund are fully vested.
Penalties Upon Withdrawal
If a Participant withdraws vested Employer Contributions and/or Deposits before
they have been in the Plan for twenty-four months, such Participant will lose
the matching Employer Contributions on Deposits made during the subsequent three
months. Distributions to Participants electing to withdraw Nondeferred Deposits
and Employer Contributions are made as soon as practicable after such elections
are received by the Plan's Record Keeper. Nondeferred Deposits may be withdrawn
at any time but certain penalties may apply. Deferred Deposits may not be
withdrawn during employment prior to age 59-1/2 except for reasons of
extraordinary financial hardship and to the extent permitted by the IRC
(hardship withdrawals). Distributions to Participants of approved hardship
withdrawals are made as soon as practicable after such approval.
Rights Upon Termination
The Company expects and intends to continue the Plan indefinitely, but has
reserved the right to amend, suspend or terminate the Plan at any time. In the
event of termination of the Plan, the net assets of the Plan would be
distributed to the Participants based on the balances in their individual
accounts at the date of termination.
3. INVESTMENTS
The financial statements of the Plan include the following:
A. Thrift Account Investment Funds
(1) On March 31, 1998, the assets of the Stable Value Fund were
merged, for investment purposes, with the Stable Value Fund
assets of the Savings Plan. The assets of the Stable Value Fund
are invested in GICs and similar investment instruments issued by
insurance companies or other financial institutions which
contractually provide for a guarantee of principal and interest
for the respective contract periods. Effective October 1997,
PRIMCO Capital Management was hired to manage the assets of the
Stable Value Fund. All contract values approximate fair values.
As of December 31, 1998, the Plan's interest in the following
GICs was approximately 67%.
The following Traditional GICs are continuing in effect:
(i) Two four and one-half year contracts with Metropolitan Life
Insurance Company, expiring December 31, 1999, effective
interest rates of 8.12% and 8.17%, respectively, contract
values of $6,829,806 and $16,123,205, respectively;
(ii) A five year contract with the Principal Life Insurance
Company, expiring on December 31, 1999, effective interest
rate of 8.15%, contract value of $17,777,206;
(iii) A five year contract with First Allmerica Financial Life
Insurance Company, formerly known as State Mutual Life
Insurance Company, expiring January 4, 1999, effective
interest rate of 5.66%, contract value of $10,532,028;
(iv) Two five year contracts with New York Life Insurance
Company, expiring June 30, 1999, each with an effective
interest rate of 7.07%, contract values of $6,016,969 and
$9,485,531, respectively;
(v) A five year contract expiring January 4, 1999, with Allstate
Life Insurance Company, effective interest rate of 5.65%,
contract value of $7,879,645;
(vi) A five year contract expiring December 31, 1999, with
Prudential Life Insurance Company, effective interest rate
of 8.01%, contract value of $15,630,942; and
(vii) A five year contract expiring June 30, 2000, with AIG Life
Insurance Company, effective interest rate of 6.14%,
contract value of $8,979,549.
The following Synthetic GICs are continuing in effect:
(i) An open-ended contract with J.P. Morgan as the book value
wrapper and Pacific Investment Management Company managing
the underlying portfolio providing an effective crediting
rate as of December 31, 1998 of 6.91% and a contract value
of $63,514,786. The crediting rate for the Synthetic GIC
effective January 1, 1999 through March 31, 1999 was 6.91%;
(ii) An open-ended contract with The Chase Manhattan Bank as the
book value wrapper and Seix Investment Advisors managing the
underlying portfolio providing an effective crediting rate
as of December 31, 1998 of 6.48% and a contract value of
$35,249,217. The crediting rate effective March 31, 1999 was
6.76%;
(iii) An open-ended contract with Allstate Life Insurance Company
as the book value wrapper and PRIMCO Capital Management
managing the underlying portfolio providing an effective
crediting rate as of December 31, 1998 of 5.89% and a
contract value of $57,920,302. The crediting rate effective
March 31, 1999 was 5.96%;
(iv) An open-ended contract with State Street Bank and Trust
Company as the book value wrapper and PRIMCO Capital
Management managing the underlying portfolio providing an
effective crediting rate as of December 31, 1998 of 5.42% and
a contract value of $30,846,390. The crediting rate effective
March 31, 1999 was 5.21%;
(v) A pooled separate account expiring May 1, 2007 with John
Hancock Mutual Life Insurance Company as the book value
wrapper and managing the underlying portfolio providing an
effective crediting rate as of December 31, 1998 of 5.18% and
a contract value of $8,198,099. The crediting rate effective
March 31, 1999 was 5.28%;
(vi) Two five year floating rate contracts with Caisse des Depots,
expiring November 26, 2002, effective crediting rate on each
contract as of December 31, 1998 of 4.80%, contract values of
$4,018,540 and $2,009,270. The crediting rate effective on
each contract as of March 31, 1999 was 5.29%;
(vii)Two five year floating rate contracts with Caisse des
Depots, expiring December 12, 2002, effective crediting rate
on each contract as of December 31, 1998 of 4.52%, contract
values of $4,009,701 and $2,004,851. The crediting rate
effective on each contract as of March 31, 1999 was 5.32%;
and
(viii)A five year floating-rate contract with Caisse des Depots,
expiring February 3, 2003, effective crediting rate as of
December 31, 1998 of 4.32%, contract value of $3,020,580.
The crediting rate effective March 31, 1999 was 4.73%.
(2) The assets of the Enterprise Common Stock Fund are invested in
Enterprise Common Stock.
(3) Effective September 1997, the assets of the Large Company Stock
Index Fund are invested in the capital stock of Vanguard
Institutional Index Fund ("Stock Index Equities Fund"), a no-load
mutual fund managed by The Vanguard Group, Inc. The prospectus
for the Stock Index Equities Fund indicates that such fund seeks
to replicate the investment performance of the Standard and
Poor's 500 Composite Stock Price Index. Prior to September 1997,
the assets of the Large Company Stock Index Fund were invested in
the Bankers Trust Institutional Equity 500 Index Fund managed by
Bankers Trust Company.
(4) The assets of the Intermediate Government Securities Fund are
invested in the capital stock of the Delaware-Voyageur U.S.
Government Securities Fund, a no-load mutual fund managed by the
Delaware Management Company, Inc. The prospectus for the
Delaware-Voyageur U.S. Government Securities Fund indicates that
such fund invests primarily in U.S. Treasury bills, notes, bonds
and other obligations issued or unconditionally guaranteed by the
U.S. Government, or otherwise backed by the full faith and credit
of the U.S. Government, and repurchase agreements fully secured
by such obligations.
(5) The assets of the International Stock Fund are invested in the
capital stock of the T. Rowe Price International Stock Fund, a
no-load mutual fund managed by Rowe Price-Fleming International,
Inc. The prospectus for the T. Rowe Price International Stock
Fund indicates that such fund invests primarily in common stocks
of established, non-U.S. companies.
(6) The assets of the Mid/Small Company Stock Fund are invested in
the capital stock of the Putnam Vista Fund, a no-load mutual fund
managed by Putnam Investment Management, Inc. The prospectus for
the Putnam Vista Fund indicates that such fund invests in a
diversified portfolio of common stocks which may include
widely-traded common stocks of larger companies as well as common
stocks of smaller, less well-known companies.
(7) On March 31, 1998, the assets of the Conservative Pre-Mix
Portfolio were merged, for investment purposes, with the
Conservative Pre-Mix Portfolio assets of the Savings Plan. The
assets of the Conservative Pre-Mix Portfolio are invested in
specific percentages within a mix of five existing Plan
investment Funds: 40% Stable Value Fund, 20% Intermediate
Government Securities Fund, 20% Large Company Stock Index Fund,
10% International Stock Fund, and 10% Mid/Small Company Stock
Fund. Every quarter the Trustee re-aligns this portfolio to match
its conservative (risk and return) investment strategy of 60% in
bonds and 40% in stocks.
(8) On March 31, 1998, the assets of the Moderate Pre-Mix Portfolio
were merged, for investment purposes, with the Moderate Pre-Mix
Portfolio assets of the Savings Plan. The assets of the Moderate
Pre-Mix Portfolio are invested in specific percentages within a
mix of five existing Plan investment Funds: 25% Large Company
Stock Index Fund, 20% Stable Value Fund, 20% International Stock
Fund, 20% Intermediate Government Securities Fund, and 15%
Mid/Small Company Stock Fund. Every quarter the trustee re-aligns
this portfolio to match its moderate (risk and return) investment
strategy of 60% in stocks and 40% in bonds.
(9) The assets of the Aggressive Pre-Mix Portfolio are invested in
specific percentages within a mix of four existing Plan
investment Funds: 30% Large Company Stock Index Fund, 25%
International Stock Fund, 25% Mid/Small Company Stock Fund, and
20% Intermediate Government Securities Fund. Every quarter the
Trustee re-aligns this portfolio to match its aggressive (risk
and return) investment strategy of 80% in stocks and 20% in
bonds.
B. ESOP Fund
Shares of Enterprise Common Stock held as assets of the Plan's ESOP
Fund were transferred to the Plan in 1988 as a result of the spin-off
and merger with the Plan of the non-bargaining unit portions of PSE&G's
former TRASOP and PAYSOP. No additional contributions to or transfers
into the ESOP Fund are presently permitted or were allowed during 1998.
C. Participants
Participants
As of December 31,
------------------
1998 1997
---- ----
Total Plan Participants 4,992 4,965
Participants by Fund
--------------------
Stable Value Fund 3,256 3,471
Enterprise Common Stock Fund 4,030 3,900
Large Company Stock Index Fund 3,017 2,886
Intermediate Government Securities Fund 720 677
International Stock Fund 1,373 1,473
Mid/Small Company Stock Fund 1,695 1,543
Conservative Pre-Mix Portfolio 667 570
Moderate Pre-Mix Portfolio 1,227 1,138
Aggressive Pre-Mix Portfolio 1,499 1,374
ESOP Fund 453 482
4. INVESTMENT OF THE PLAN AND SAVINGS PLAN IN THE MASTER TRUST
The Plan's investments are included in the Master Trust which was established
for the investment of assets of all of the Company's qualified retirement plans
including the Plan and the Savings Plan. The following tables present the fair
values of and the investment income recognized by the investments of the Plan
and Savings Plan in the Master Trust as of and for the periods ending December
31, 1998 and 1997. As of December 31, 1998 and 1997, the Plan's interest in such
assets of the Master Trust were approximately 64% and 65%, respectively.
December 31,
------------
1998 1997
---- ----
Investments at fair value:
Participant Loans $ 25,454,147 $23,576,663
Cash and Cash equivalents 45,231,345 47,743,519
Common Stock of Public
Service Enterprise Group 119,349,502 92,087,265
Mutual Funds 424,228,419 326,616,013
Guaranteed Insurance Contracts 310,046,617 279,675,584
-------------- ---------------
$ 924,310,030 $ 769,699,044
============== ===============
December 31,
------------
1998 1997
---- ----
Investment income recognized:
Net appreciation in fair value of Mutual Funds* $ 79,392,487 $ 57,823,392
Net appreciation/(depreciation) in fair value of
Common Stock of Enterprise 24,932,427 14,876,883
Interest from Mutual Funds 1,074,445 864,144
Interest from Common Stock of Enterprise Funds 272,697 319,066
Interest from Guaranteed Insurance Contracts 20,481,619 20,956,370
Dividends from Common Stock of Enterprise 5,405,541 5,268,123
------------- -------------
$ 131,559,216 $ 100,107,978
============= =============
* Includes Dividends earned from Mutual Funds.
5. UNIT VALUE INFORMATION -- THRIFT ACCOUNT INVESTMENT FUNDS
Unit values of the Investment Funds are determined at the end of each business
day (Valuation Date) by dividing the market value of net assets available for
benefits by the number of units allocated to all Participants as of the
respective Valuation Date.
New units are allocated to each Participant's Thrift Account at the end of each
business day by dividing Deposits made by, or on behalf of, such Participant for
such business day and the related Employer Contributions, if any, together with
repayment of the principal amount of any loan to the Participant's Thrift
Account, including interest paid thereon, by the unit value determined as of the
end of the Valuation Date. If a Participant makes a transfer between Investment
Funds, makes a withdrawal, receives a distribution or a loan or makes a rollover
contribution, the amount so transferred, withdrawn, distributed, loaned or
rolled over is also determined by the unit value of each Investment Fund as of
the applicable Valuation Date for such transaction. The unit information of
investments by Investment Fund as of the last business day of each year is as
follows:
Investment Fund Year Unit Value (Dollars) Number of Units
- --------------- ---- -------------------- ---------------
Stable Value Fund (1) 1998 $10.47 21,347,322
1997 $12.92 16,460,772
Enterprise Common Stock Fund 1998 $14.42 4,233,785
1997 $11.55 4,205,197
Large Company Stock Index Fund 1998 $19.93 6,891,341
1997 $15.51 6,980,963
Intermediate Govt. Securities Fund 1998 $12.33 633,079
1997 $11.44 480,812
International Stock Fund 1998 $13.02 1,460,295
1997 $11.24 1,654,907
Mid/Small Company Stock Fund 1998 $14.64 2,552,597
1997 $12.28 2,391,686
Conservative Pre-Mix Portfolio (1) 1998 $10.71 1,673,915
1997 $11.70 1,149,315
Moderate Pre-Mix Portfolio (1) 1998 $10.73 3,133,105
1997 $11.95 2,312,429
Aggressive Pre-Mix Portfolio 1998 $14.64 2,017,163
1997 $12.26 1,834,583
- --------------------------------------------------
(1) As a result of the merger of the Stable Value Funds, Conservative and
Moderate Pre-Mixed Portfolios on March 31, 1998 unit values were reset to
$10.00.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
ESOP FUND VALUATION
Enterprise Common Stock share value is determined by using the closing market
price on the New York Stock Exchange as reported in the Wall Street Journal as
Composite Transactions. If a Participant withdraws shares, the shares are, at
the Participant's election, either distributed to such Participant or sold by
the Trustee and the proceeds, net of commissions and taxes, are distributed to
the Participant.
The ESOP Fund information as of the last business day of each year is as
follows:
Year Price per share Number of shares
---- --------------- ----------------
1998 $40.0000 151,011
1997 $31.6875 167,002
6. FEDERAL INCOME TAXES
The Company believes that the Plan and its related Trust including the portions
of the former TRASOP and PAYSOP applicable to non-bargaining unit Participants,
which portions were spun-off and merged with the Plan effective January 1, 1988,
are qualified under Sections 401(a) and 501(a) of the IRC and, as such, the Plan
is exempt from taxation on its earnings. A determination letter to such effect,
dated April 8, 1998, was obtained from the Internal Revenue Service.
Participants are not taxed on Deferred Deposits, Employer Contributions or on
the earnings credited to their Thrift Account Fund, until distribution of such
amounts from the Plan.
7. COMPLIANCE WITH ERISA
The Plan is generally subject to the provisions of Titles I and II of ERISA,
including the provisions with respect to reporting, disclosure, participation,
vesting and fiduciary responsibility. However, it is not subject to the funding
requirements of Title I and benefits under the Plan are not guaranteed by the
Pension Benefit Guarantee Corporation under Title IV of ERISA.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
Public Service Electric and Gas Company
Thrift and Tax-Deferred Savings Plan
---------------------------------------
(Name of Plan)
By: M. PETER MELLETT
--------------------------
M. Peter Mellett
Chairman of Employee
Benefits Committee
Date: June 30, 1999
EXHIBIT INDEX
-------------
Exhibit Number
- --------------
1 Public Service Electric and Gas Company Thrift and Tax-Deferred Savings
Plan, amended December 21, 1998.
2 Independent Auditors' Consent.