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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 6, 2002
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
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(Exact name of registrant as specified in its charter)
NEW JERSEY 001-09120 22-2625848
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(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
80 Park Plaza, P.O. Box 1171
Newark, New Jersey 07101-1171
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(Address of principal executive offices)
973-430-7000
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(Registrant's telephone number, including area code)
http://www.pseg.com
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(Registrant's internet address)
PSEG ENERGY HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
NEW JERSEY 000-32503 22-2983750
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(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
80 Park Plaza, T-22
Newark, New Jersey 07102-4194
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(Address of principal executive offices)
973-456-3581
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(Registrant's telephone number, including area code)
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Item 5. Other Events
The following information updates certain matters previously reported to
the Securities and Exchange Commission under Item 1. Business of Part I and Item
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations and Item 8. Financial Statements and Supplementary Data of Part II of
the Annual Reports on Form 10-K for the year ended December 31, 2000 of Public
Service Enterprise Group Incorporated (PSEG) and PSEG Energy Holdings Inc.
(Holdings) and the Quarterly Reports on Form 10-Q for the quarters ended March
31, 2001, June 30, 2001 and September 30, 2001.
As previously reported, on August 24, 2001, PSEG Global Inc. (Global), an
indirect subsidiary of PSEG and of Holdings, entered into a Stock Purchase
Agreement to sell its minority interests in certain assets located in Argentina
to the AES Corporation (AES), the majority owner. The sale has not closed,
pending receipt of certain lender consents and regulatory approvals.
On February 6, 2002, AES notified Global that it was terminating the Stock
Purchase Agreement. In the Notice of Termination, AES alleged that a "Political
Risk Event", within the meaning of the Stock Purchase Agreement, has occurred,
by virtue of certain decrees of the Government of Argentina, thereby giving AES
the right to terminate. Global disagrees that a "Political Risk Event", as
defined in the Stock Purchase Agreement, has occurred and has so notified AES.
Global will pursue its rights under the Stock Purchase Agreement and continue
ongoing discussions with AES to successfully resolve the matter. PSEG cannot
predict the ultimate outcome.
Global has total investment exposure in Argentina of approximately $632
million. The investments include the following minority interests, with
investment exposure of approximately $420 million, jointly owned by Global and
AES, which are the subject of the Stock Purchase Agreement: a 30% interest in
three Argentine electric distribution companies, Empresa Distribuidora de
Energia Norte S.A. (EDEN), Empresa Distribuidora de Energia Sur S.A. (EDES), and
Empresa Distribuidora La Plata S.A. (EDELAP); a 19% share in the 650 MW Central
Termica San Nicolas power plant (CTSN); and a 33% interest in the 850 MW Parana
power plant (Parana) nearing completion of construction. In addition to these
investments, Global owns a 90% interest in another Argentine company, Empresa
Distribuidora de Electricidad de Entre Rios S.A. (EDEERSA), with about $212
million of investment exposure.
Global's Argentine properties continue to operate, but are faced with
considerable fiscal and cash flow uncertainties due to economic and political
conditions in Argentina. Under a worst case scenario, if PSEG Global were to
cease all operations in Argentina, it would require a pre-tax write off of
approximately $632 million and loss of an anticipated annual earnings
contribution of 16 cents per share of Common Stock. However, even a loss of all
earnings from Argentine operations would not change PSEG's prior 2002 earnings
guidance that it will earn between $3.90 to $4.10 per share, exclusive of the
effect of any asset impairment.
This report includes forward-looking statements. Although PSEG and Holdings
believe that their expectations are based on reasonable assumptions, no
assurances can be given that these expectations will be achieved. For further
information, with respect to Forward-Looking Statements, please refer to their
reports on Forms 10-K and Forms 10-Q filed with the Securities and Exchange
Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(Registrant)
By: Patricia A. Rado
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Patricia A. Rado
Vice President and Controller
(Principal Accounting Officer)
Date: February 7, 2002
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PSEG ENERGY HOLDINGS INC.
(Registrant)
By: Derek DiRisio
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Derek DiRisio
Vice President and Controller
(Principal Accounting Officer)
Date: February 7, 2002