EXHIBIT 99
[LOGO OF PSEG] Investor News NYSE:PEG
For further information, contact:
o Brian Smith, Director, Investor Relations Phone: 973-430-6564
o Sue Carson, Director, Financial Communications Phone: 973-430-6565
o Greg McLaughlin, Sr. Investor Relations Analyst Phone: 973-430-6568
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July 30, 2004
PSEG ANNOUNCES SECOND QUARTER EARNINGS:
50 CENTS PER SHARE OF COMMON STOCK
FROM CONTINUING OPERATIONS
Results Reflect Unplanned Replacement Power, Congestion and Maintenance Costs
At PSEG Power's Nuclear and Fossil Generating Units
Additional Expenses Emphasize Focus
On Improving Operations For Long-Term Reliability
2004 Earnings Guidance Revised to $3.15 to $3.35 per share
From Continuing Operations
Public Service Enterprise Group (PSEG) announced today (July 30) that
earnings from continuing operations for the second quarter of 2004 were $119
million or 50 cents per share of common stock, based on 238 million average
shares outstanding. These results exclude a gain of $5 million or 2 cents per
share from discontinued operations at PSEG Global. Including this item, PSEG's
reported earnings for the quarter were $124 million or 52 cents per share.
Comparatively, PSEG's earnings from continuing operations for the second
quarter of 2003 were $156 million or 69 cents per share of common stock, based
on 227 million average shares outstanding. These results exclude two
below-the-line items. The first is an extraordinary charge of $18 million or 8
cents per share related to the conclusion of Public Service Electric and Gas
Company's (PSE&G) last electric base rate case. The second item is a loss of 5
million or 2 cents per share related to discontinued operations at PSEG Energy
Technologies and PSEG Global. Including these items, PSEG's reported earnings
for the quarter were $133 million or 59 cents per share.
For the six months through June 30, 2004, PSEG produced earnings from
continuing operations of $390 million or $1.64 per share, based on 238 million
average shares outstanding. These results exclude a gain of $5 million or 2
cents per share from discontinued operations at PSEG Global. Including this
item, PSEG's reported earnings for the first half of the year were $395 million
or $1.66 per share.
For the comparable six-month period in 2003, earnings from continuing
operations were $480 million or $2.12 per share, based on 226 million average
shares outstanding. These results exclude a net benefit of $334 million or $1.48
per share related to the adoption of a new accounting standard for fossil and
nuclear decommissioning, the effect of an extraordinary charge due to the
finalization of PSE&G's electric base rate case and discontinued operations at
PSEG Energy Technologies. Including this net benefit, PSEG's reported earnings
for the first half of 2003 were $814 million or $3.60 per share.
Attachments to this release provide a summary of quarterly and year-to-date
results for 2004 and 2003 and consolidating financial statements for the same
time periods for PSEG and its principal subsidiaries - PSE&G, PSEG Power and
PSEG Energy Holdings.
E. James Ferland, chairman of the board, said the quarterly results
reflected a sharply lower contribution by PSEG Power, the wholesale energy
business. Power's quarterly results were down $57 million or 26 cents per share
of common stock, as compared to earnings in the second quarter of 2003.
He said a major impact on quarterly results was replacement power costs
totaling about $39 million or 16 cents per share, about a third of which was
attributable to higher congestion in New Jersey. Congestion is generally caused
by restrictions in the movement of electricity. This occurred as a result of a
30% de-rating of PSE&G's electric transformer in Branchburg, NJ, which caused
higher energy prices in the vicinity. The de-rated transformer is scheduled to
be replaced and returned to full service by mid-2005.
The primary reasons for the replacement power requirements were
longer-than-planned or unexpected refurbishment outages at the Salem 1 and Hope
Creek nuclear stations and a delay in the return to service of the 600-megawatt
Mercer coal-fired station from the installation of technology to reduce nitrogen
oxide emissions.
Ferland said PSEG Power's quarterly results were also affected by several
other factors: the absence of $34 million or 14 cents per share from market
transition charges (MTC) revenues collected over a four-year period ended July
31, 2003; comparatively higher O&M and other costs of about $10 million or 4
cents per share, and comparatively lower operating margins, including trading,
of about $10 million or 4 cents per share.
Partially offsetting these decreases at Power was comparatively higher
income of about $19 million or 8 cents per share from its nuclear
decommissioning trust fund. This increased income represents realized gains that
resulted from the change in investment styles within the fund.
Ferland said Public Service Electric and Gas Company's (PSE&G) quarterly
performance was comparatively better by $41 million or 17 cents per share,
primarily as a result of a $159.5 million electric distribution rate case that
became effective in August 2003. This improvement at PSE&G also helped offset
the decline at Power as well as a decrease of $18 million or 8 cents per share
in quarterly earnings at PSEG Energy
Holdings due primarily to lower project income at PSEG Global and lower lease
income at PSEG Resources.
"Although all of our nuclear units were returned to service in early June,
the outages reduced PSEG's aggregate capacity factor over the first six months
of 2004 to about 85% compared to our plan of 93%. We now expect our combined
annual capacity factor to be at about 86% for 2004."
"These refurbishment outages occurred largely in April and May when we had
some particularly hot weather days that drove up electric demand volumes as well
as energy prices to levels some 20% higher than initially forecasted," Ferland
said. "Higher energy prices generally benefit PSEG Power when its generating
facilities are operating steadily, but we experienced the opposite result this
spring because of the overlapping nature of the nuclear and coal outages that
created the need to buy replacement power at these higher prices."
On the positive side, Ferland noted that the steam turbine replacement
accomplished during the Salem 1 outage would enable the unit to boost its output
by 63 megawatts. He also said that the installation of state-of-the-art
equipment to control nitrogen oxide emissions at the Mercer station has enabled
its two units to remain in compliance with environmental regulations.
Ferland said Power's higher unanticipated expenses totaled $48 million or
19 cents per share in the second quarter. He said Power, during the balance of
the year, is likely to sustain additional impacts of approximately $50 to $60
million or 20 to 25 cents per share on its projected 2004 earnings for several
reasons: A recent decision to extend the Hope Creek refueling outage in the fall
by two weeks to perform preventive maintenance, the ongoing impact of congestion
around the Branchburg transformer, and lower-than-planned trading revenues.
"As a result of all these factors, PSEG is revising its 2004 earnings
guidance from a range of $3.60 to $3.80 per share to a range of $3.15 to $3.35
per share," he said.
"The Hope Creek work in the spring and the work planned for later this year
strongly support our key objective of strengthening the reliability of our
nuclear operations," he said. "This objective is critical to our long-term
success and is well worth a short-term earnings impact."
In revising the 2004 guidance, Ferland said PSEG Power now expects to earn
in the range of $300 to $350 million, down from an original estimate of $400 to
$450 million. He said expectations for PSE&G have improved by $20 million,
reflective of an improvement in the economy and higher weather-related energy
sales, to a range of $340 to $360 million. PSEG Energy Holdings' target remains
unchanged at $130 to $150 million.
"All of our businesses remain fundamentally solid," Ferland said. "In
particular, PSE&G, our delivery company, is performing very well, with its
contribution for 2004 expected to represent almost 45% of PSEG's total
earnings."
In looking ahead, Ferland said PSEG has initiated its annual business
planning process. "While we will not provide specific 2005 guidance until this
process is completed, early indications are that several 2004 factors will carry
over to next year," he said. "They include higher nuclear and fossil O&M
expenses, more modest revenues from our trading operations and the ongoing
impacts of the Branchburg de-rating. These factors, combined with an oversupply
of generation capacity and volatility in the energy markets, will continue to
affect earnings."
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FORWARD-LOOKING STATEMENT
Readers are cautioned that statements contained in this press release about our
and our subsidiaries' future performance, including future revenues, earnings,
strategies, prospects and all other statements that are not purely historical,
are forward-looking statements for purposes of the safe harbor provisions under
The Private Securities Litigation Reform Act of 1995. Although we believe that
our expectations are based on reasonable assumptions, we can give no assurance
they will be achieved. The results or events predicted in these statements may
differ materially from actual results or events. Factors which could cause
results or events to differ from current expectations include, among other
things: the effects of weather; the performance of generating units and
transmission systems; the availability and prices for oil, gas, coal, nuclear
fuel, capacity and electricity; changes in the markets for electricity and other
energy-related commodities; changes in the number of participants and the risk
profile of such participants in the energy marketing and trading business; the
effectiveness of our risk management and internal controls systems; the effects
of regulatory decisions and changes in law; changes in competition in the
markets we serve; the ability to recover regulatory assets and other potential
stranded costs; the outcomes of litigation and regulatory proceedings or
inquiries; the timing and success of efforts to develop domestic and
international power projects; conditions of the capital markets and equity
markets; advances in technology; changes in accounting standards; changes in
interest rates and in financial and foreign currency markets generally; the
economic and political climate and growth in the areas in which we conduct our
activities; and changes in corporate strategies. For further information, please
refer to our Annual Report on Form 10-K and subsequent reports on Form 10-Q and
Form 8-K filed with the Securities and Exchange Commission. These documents
address in further detail our business, industry issues and other factors that
could cause actual results to differ materially from those indicated in this
release. In addition, any forward-looking statements included herein represent
our estimates only as of today and should not be relied upon as representing our
estimates as of any subsequent date. While we may elect to update
forward-looking statements from time to time, we specifically disclaim any
obligation to do so, even if our estimates change, unless otherwise required by
applicable securities laws.
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Attachment 1
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------
For the Quarter Ended For the Six Months Ended
June 30, June 30,
------------------------------------------------
As Restated As Restated
(Note 3) (Note 3)
2004 2003 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Earnings Results (in Millions)
Income from Continuing Operations
PSE&G $ 62 $ 21 $ 186 $ 121
PSEG Power 52 109 161 286
PSEG Energy Holdings
PSEG Global 5 12 50 57
PSEG Resources 13 22 13 34
PSEG Energy Holdings (2) -- (4) (2)
------------------------------------------------
Total PSEG Energy Holdings 16 34 59 89
------------------------------------------------
PSEG (11) (8) (16) (16)
- -----------------------------------------------------------------------------------------------------------------------
Income from Continuing Operations $ 119 $ 156 $ 390 $ 480
- -----------------------------------------------------------------------------------------------------------------------
Income (Loss) from Discontinued Operations, including Gain (Loss) on
Disposal 5 (5) 5 (18)
Extraordinary Item -- (18) -- (18)
Cumulative Effect of a Change in Accounting Principle -- -- -- 370
- -----------------------------------------------------------------------------------------------------------------------
PSEG Net Income $ 124 $ 133 $ 395 $ 814
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Fully Diluted Average Shares Outstanding (in Millions) 238 227 238 226
- -----------------------------------------------------------------------------------------------------------------------
Per Share Results (Diluted)
Income from Continuing Operations
PSE&G $ 0.26 $ 0.09 $ 0.78 $ 0.53
PSEG Power 0.22 0.48 0.68 1.27
PSEG Energy Holdings
PSEG Global 0.02 0.05 0.21 0.26
PSEG Resources 0.06 0.10 0.05 0.15
PSEG Energy Holdings (0.01) -- (0.01) (0.01)
------------------------------------------------
Total PSEG Energy Holdings 0.07 0.15 0.25 0.40
------------------------------------------------
PSEG (0.05) (0.03) (0.07) (0.08)
- -----------------------------------------------------------------------------------------------------------------------
Income from Continuing Operations $ 0.50 $ 0.69 $ 1.64 $ 2.12
- -----------------------------------------------------------------------------------------------------------------------
Income (Loss) from Discontinued Operations, including Gain (Loss) on
Disposal 0.02 (0.02) 0.02 (0.08)
Extraordinary Item -- (0.08) -- (0.08)
Cumulative Effect of a Change in Accounting Principle -- -- -- 1.64
- -----------------------------------------------------------------------------------------------------------------------
PSEG Net Income $ 0.52 $ 0.59 $ 1.66 $ 3.60
- -----------------------------------------------------------------------------------------------------------------------
Note 1:
Income from Continuing Operations include preferred stock dividends / preference
units distributions relating to PSE&G of $1 million and $1 million, Global of $4
million and $4 million and Resources of $1 million and $2 million for the
quarters ended June 30, 2004 and 2003, respectively. Income from Continuing
Operations include preferred stock dividends / preference units distributions
relating to PSE&G of $2 million and $2 million, Global of $8 million and $9
million and Resources of $2 million and $3 million for the six months ended June
30, 2004 and 2003, respectively.
Note 2:
Basic Earnings per Share from Net Income was $0.52 and $0.59 per share for the
quarters ended June 30, 2004 and 2003, respectively.
Basic Earnings per Share from Net Income was $1.67 and $3.61 per share for the
six months ended June 30, 2004 and 2003, respectively.
Note 3:
2003 results reflect the restatement to correct foreign currency translation
impacts of Energy Holdings' equity method investment in RGE, a distribution
company in Brazil, and other minor items. The total impact of the restatement
for the quarter and six months ended June 30, 2003 resulted in an increase in
PSEG's and Energy Holdings' net income of approximately $0.02 and $0.03 per
share, respectively.
Attachment 2
PUBLIC SERVICE ENTERPRISE GROUP
CONSOLIDATING STATEMENT OF OPERATIONS
For the Quarter Ended June 30, 2004
(Unaudited, $ Millions)
PSEG PSEG ENERGY
PSEG OTHER PSE&G POWER HOLDINGS
------ -------- ------ ----- -----------
(Note 3)
OPERATING REVENUES $2,290 $(298) $1,418 $993 $177
OPERATING EXPENSES
Energy Costs 1,254 (299) 824 681 48
Operation and Maintenance 537 (8) 258 237 50
Depreciation and Amortization 170 4 126 28 12
Taxes Other Than Income Taxes 28 -- 28 -- --
------ ----- ------ ---- ----
Total Operating Expenses 1,989 (303) 1,236 946 110
------ ----- ------ ---- ----
Income from Equity Method Investments 33 -- -- -- 33
------ ----- ------ ---- ----
OPERATING INCOME 334 5 182 47 100
Other Income 83 1 3 77 2
Other Deductions (31) -- -- (22) (9)
Interest Expense (214) (28) (91) (28) (67)
Preferred Securities Dividends (1) 5 (1) -- (5)
------ ----- ------ ---- ----
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (Note 1) 171 (17) 93 74 21
Income Taxes (52) 6 (31) (22) (5)
------ ----- ------ ---- ----
INCOME FROM CONTINUING OPERATIONS 119 (11) 62 52 16
Gain on Disposal of Discontinued Operations,
net of tax 5 -- -- -- 5
------ ----- ------ ---- ----
NET INCOME $ 124 $ (11) $ 62 $ 52 $ 21
====== ===== ====== ==== ====
For the Quarter Ended June 30, 2003
(Unaudited, $ Millions)
PSEG PSEG ENERGY
PSEG OTHER PSE&G POWER HOLDINGS
-------- -------- ------ ------ -----------
(Note 2) (Note 3) (Note 2)
OPERATING REVENUES $2,401 $(347) $1,342 $1,235 $171
OPERATING EXPENSES
Energy Costs 1,400 (347) 919 787 41
Operation and Maintenance 488 (5) 224 228 41
Depreciation and Amortization 98 1 63 24 10
Taxes Other Than Income Taxes 28 -- 28 -- --
------ ----- ------ ------ ----
Total Operating Expenses 2,014 (351) 1,234 1,039 92
------ ----- ------ ------ ----
Income from Equity Method Investments 31 -- -- -- 31
------ ----- ------ ------ ----
OPERATING INCOME 418 4 108 196 110
Other Income 30 (1) 3 25 3
Other Deductions (9) 4 -- (10) (3)
Interest Expense (210) (32) (97) (28) (53)
Preferred Securities Dividends (1) 6 (1) -- (6)
------ ----- ------ ------ ----
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (Note 1) 228 (19) 13 183 51
Income Taxes (72) 11 8 (74) (17)
------ ----- ------ ------ ----
INCOME FROM CONTINUING OPERATIONS 156 (8) 21 109 34
Loss from Discontinued Operations, net of tax (5) -- -- -- (5)
------ ----- ------ ------ ----
INCOME BEFORE EXTRAORDINARY ITEM 151 (8) 21 109 29
Extraordinary Item, net of tax (18) -- (18) -- --
------ ----- ------ ------ ----
NET INCOME $ 133 $ (8) $ 3 $ 109 $ 29
====== ===== ====== ====== ====
Note 1:
Income from Continuing Operations before Income Taxes include preferred stock
dividends / preference units distributions relating to PSE&G of $1 million and
$1 million, Global of $4 million and $4 million and Resources of $1 million and
$2 million for the quarters ended June 30, 2004 and 2003, respectively.
Note 2:
2003 results reflect the restatement to correct foreign currency impacts of
Energy Holdings' equity method investment in RGE, a distribution company in
Brazil, and other minor items.
Note 3:
Primarily includes financing activities at the parent and intercompany
eliminations.
Attachment 3
PUBLIC SERVICE ENTERPRISE GROUP
CONSOLIDATING STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2004
(Unaudited, $ Millions)
PSEG PSEG ENERGY
PSEG OTHER PSE&G POWER HOLDINGS
------- -------- ------ ------ -----------
(Note 3)
OPERATING REVENUES $5,511 $(1,164) $3,600 $2,685 $ 390
OPERATING EXPENSES
Energy Costs 3,077 (1,165) 2,243 1,905 94
Operation and Maintenance 1,083 (19) 536 467 99
Depreciation and Amortization 342 9 253 55 25
Taxes Other Than Income Taxes 73 -- 73 -- --
------ ------- ------ ------ -----
Total Operating Expenses 4,575 (1,175) 3,105 2,427 218
------ ------- ------ ------ -----
Income from Equity Method Investments 61 -- -- -- 61
------ ------- ------ ------ -----
OPERATING INCOME 997 11 495 258 233
Other Income 118 (3) 6 112 3
Other Deductions (54) -- (1) (42) (11)
Interest Expense (437) (51) (187) (69) (130)
Preferred Securities Dividends (2) 10 (2) -- (10)
------ ------- ------ ------ -----
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (Note 1) 622 (33) 311 259 85
Income Taxes (232) 17 (125) (98) (26)
------ ------- ------ ------ -----
INCOME FROM CONTINUING OPERATIONS 390 (16) 186 161 59
Income from Discontinued Operations, including
Gain on Disposal, net of tax 5 -- -- -- 5
------ ------- ------ ------ -----
NET INCOME $ 395 $ (16) $ 186 $ 161 $ 64
====== ======= ====== ====== =====
For the Six Months Ended June 30, 2003
(Unaudited, $ Millions)
PSEG PSEG ENERGY
PSEG OTHER PSE&G POWER HOLDINGS
-------- -------- ------- ------- -----------
(Note 2) (Note 3) (Note 2)
OPERATING REVENUES $ 5,689 $(1,227) $ 3,490 $ 3,065 $ 361
OPERATING EXPENSES
Energy Costs 3,353 (1,227) 2,426 2,078 76
Operation and Maintenance 1,007 (9) 510 430 76
Depreciation and Amortization 197 3 129 47 18
Taxes Other Than Income Taxes 72 -- 72 -- --
------- ------- ------- ------- -----
Total Operating Expenses 4,629 (1,233) 3,137 2,555 170
------- ------- ------- ------- -----
Income from Equity Method Investments 51 -- -- -- 51
------- ------- ------- ------- -----
OPERATING INCOME 1,111 6 353 510 242
Other Income 89 -- 13 69 7
Other Deductions (52) -- (1) (40) (11)
Interest Expense (408) (57) (194) (56) (101)
Preferred Securities Dividends (2) 12 (2) -- (12)
------- ------- ------- ------- -----
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (Note 1) 738 (39) 169 483 125
Income Taxes (258) 23 (48) (197) (36)
------- ------- ------- ------- -----
INCOME FROM CONTINUING OPERATIONS 480 (16) 121 286 89
Loss from Discontinued Operations, including
Loss on Disposal, net of tax (18) -- -- -- (18)
------- ------- ------- ------- -----
INCOME BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE 462 (16) 121 286 71
Extraordinary Item, net of tax (18) -- (18) -- --
Cumulative Effect of a Change in Accounting
Principle, net of tax 370 -- -- 370 --
------- ------- ------- ------- -----
NET INCOME $ 814 $ (16) $ 103 $ 656 $ 71
======= ======= ======= ======= =====
Note 1:
Income from Continuing Operations before Income Taxes include preferred stock
dividends / preference units distributions relating to PSE&G of $2 million and
$2 million, Global of $8 million and $9 million and Resources of $2 million and
$3 million for the six months ended June 30, 2004 and 2003, respectively.
Note 2:
2003 results reflect the restatement to correct foreign currency impacts of
Energy Holdings' equity method investment in RGE, a distribution company in
Brazil, and other minor items.
Note 3:
Primarily includes financing activities at the parent and intercompany
eliminations.
Attachment 4
PUBLIC SERVICE ENTERPRISE GROUP
CONSOLIDATING BALANCE SHEETS
As of June 30, 2004
(Unaudited, $ Millions)
PSEG PSEG ENERGY
PSEG OTHER PSE&G POWER HOLDINGS
------- -------- ------- ------ -----------
(Note 3)
CURRENT ASSETS
Cash and Cash Equivalents $ 253 $ 3 $ 21 $ 17 $ 212
Accounts Receivable (Note 1) 1,490 (184) 768 795 111
Other Current Assets 1,510 (110) 488 891 241
------- ------- ------- ------ ------
Total Current Assets 3,253 (291) 1,277 1,703 564
------- ------- ------- ------ ------
NET PROPERTY, PLANT AND EQUIPMENT 12,696 129 6,592 4,795 1,180
------- ------- ------- ------ ------
NONCURRENT ASSETS
Regulatory Assets 4,625 -- 4,625 -- --
Long-Term Investments 4,534 47 135 37 4,315
Nuclear Decommissioning Trust Funds 983 -- -- 983 --
Other Noncurrent Assets 1,316 (2) 350 369 599
------- ------- ------- ------ ------
Total Noncurrent Assets 11,458 45 5,110 1,389 4,914
------- ------- ------- ------ ------
TOTAL ASSETS $27,407 $ (117) $12,979 $7,887 $6,658
======= ======= ======= ====== ======
CURRENT LIABILITIES
Short -Term Debt $ 954 $ 361 $ 364 $ 191 $ 38
Accounts Payable (Note 1) 1,055 (287) 571 687 84
Other Current Liabilities 1,079 141 321 476 141
------- ------- ------- ------ ------
Total Current Liabilities 3,088 215 1,256 1,354 263
------- ------- ------- ------ ------
NONCURRENT LIABILITIES
Deferred Income Taxes and ITC 4,108 (24) 2,636 -- 1,496
Regulatory Liabilities 523 -- 523 -- --
OPEB Costs 558 5 532 18 3
Other Noncurrent Liabilities (Note 2) 1,097 93 227 618 159
------- ------- ------- ------ ------
Total Noncurrent Liabilities 6,286 74 3,918 636 1,658
------- ------- ------- ------ ------
LONG-TERM DEBT - excluding amounts
due within one year 12,523 1,454 5,080 3,316 2,673
------- ------- ------- ------ ------
SUBSIDIARIES' PREFERRED SECURITIES 80 (359) 80 -- 359
------- ------- ------- ------ ------
COMMON STOCKHOLDERS' EQUITY 5,430 (1,501) 2,645 2,581 1,705
------- ------- ------- ------ ------
TOTAL LIABILITIES AND CAPITALIZATION $27,407 $ (117) $12,979 $7,887 $6,658
======= ======= ======= ====== ======
Note 1:
Includes amounts related to transactions with affiliates.
Note 2:
Other noncurrent liabilities for PSEG Energy Holdings include minority
interests.
Note 3:
Primarily includes PSEG (parent company), PSEG Services Corp. and intercompany
eliminations.
Attachment 5
PUBLIC SERVICE ENTERPRISE GROUP
CONSOLIDATING BALANCE SHEETS
As of December 31, 2003
(Unaudited, $ Millions)
PSEG PSEG ENERGY
PSEG OTHER PSE&G POWER HOLDINGS
------- -------- ------- ------ -----------
(Note 3)
CURRENT ASSETS
Cash and Cash Equivalents $ 452 $ 181 $ 140 $ 27 $ 104
Accounts Receivable (Note 1) 1,549 (393) 804 843 295
Other Current Assets 1,662 (276) 377 909 652
------- ------- ------- ------ ------
Total Current Assets 3,663 (488) 1,321 1,779 1,051
------- ------- ------- ------ ------
NET PROPERTY, PLANT AND EQUIPMENT 12,422 128 6,535 4,581 1,178
------- ------- ------- ------ ------
NONCURRENT ASSETS
Regulatory Assets 4,801 -- 4,801 -- --
Long-Term Investments 4,808 51 131 43 4,583
Nuclear Decommissioning Trust Funds 985 -- -- 985 --
Other Noncurrent Assets 1,382 17 374 343 648
------- ------- ------- ------ ------
Total Noncurrent Assets 11,976 68 5,306 1,371 5,231
------- ------- ------- ------ ------
TOTAL ASSETS $28,061 $ (292) $13,162 $7,731 $7,460
======= ======= ======= ====== ======
CURRENT LIABILITIES
Short -Term Debt $ 1,027 $ 299 $ 423 $ -- $ 305
Accounts Payable (Note 1) 1,216 (358) 717 800 57
Other Current Liabilities 1,100 55 377 265 403
------- ------- ------- ------ ------
Total Current Liabilities 3,343 (4) 1,517 1,065 765
------- ------- ------- ------ ------
NONCURRENT LIABILITIES
Deferred Income Taxes and ITC 4,196 (6) 2,715 -- 1,487
Regulatory Liabilities 536 -- 536 -- --
OPEB Costs 532 4 509 16 3
Other Noncurrent Liabilities (Note 2) 900 92 216 429 163
------- ------- ------- ------ ------
Total Noncurrent Liabilities 6,164 90 3,976 445 1,653
------- ------- ------- ------ ------
LONG-TERM DEBT - excluding amounts
due within one year 12,945 1,462 5,129 3,616 2,738
------- ------- ------- ------ ------
SUBSIDIARIES' PREFERRED SECURITIES 80 (509) 80 -- 509
------- ------- ------- ------ ------
COMMON STOCKHOLDERS' EQUITY 5,529 (1,331) 2,460 2,605 1,795
------- ------- ------- ------ ------
TOTAL LIABILITIES AND CAPITALIZATION $28,061 $ (292) $13,162 $7,731 $7,460
======= ======= ======= ====== ======
Note 1:
Includes amounts related to transactions with affiliates.
Note 2:
Other noncurrent liabilities for PSEG Energy Holdings include minority
interests.
Note 3:
Primarily includes PSEG (parent company), PSEG Services Corp. and intercompany
eliminations.
Attachment 6
PUBLIC SERVICE ENTERPRISE GROUP
CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2004
(Unaudited, $ Millions)
PSEG PSEG ENERGY
PSEG OTHER PSE&G POWER HOLDINGS
------ -------- ----- ----- -----------
(Note 1)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Note 2) $ 395 $ (16) $ 186 $ 161 $ 64
Adjustments to Reconcile Net Income to Net Cash Flows
From Operating Activities:
Depreciation and Amortization 342 9 253 55 25
Amortization of Nuclear Fuel 41 -- -- 41 --
Non-Cash Items (14) 6 45 45 (110)
Net Change in Certain Current Assets and Liabilities 61 (9) (254) 105 219
Other 3 -- (53) (34) 90
------- ----- ----- ----- -----
Net Cash Provided by (Used In) Operating Activities 828 (10) 177 373 288
------- ----- ----- ----- -----
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to Property, Plant, and Equipment (578) (7) (187) (335) (49)
Proceeds from the Sale of Investments 292 -- -- -- 292
Other 3 (211) 1 73 140
------- ----- ----- ----- -----
Net Cash (Used In) Provided By Investing Activities (283) (218) (186) (262) 383
------- ----- ----- ----- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Net Change in Short-Term Debt 474 61 222 191 --
Issuance of Project-Level/Securitization Long-Term Debt 671 -- 175 488 8
Redemption of LTD and Project-Level/Securitization LTD (1,643) -- (507) (800) (336)
Return of Capital -- 150 -- -- (150)
Issuance of Common Stock/Contributed Capital 42 42 -- -- --
Cash Dividends Paid on Common Stock (260) (185) -- -- (75)
Other (27) (18) -- -- (9)
------- ----- ----- ----- -----
Net Cash (Used In) Provided by Financing Activities (743) 50 (110) (121) (562)
------- ----- ----- ----- -----
Effect of Exchange Rate Changes on Cash (1) -- -- -- (1)
------- ----- ----- ----- -----
Net Decrease in Cash and Cash Equivalents (199) (178) (119) (10) 108
Cash and Cash Equivalents at Beginning of Period 452 181 140 27 104
------- ----- ----- ----- -----
Cash and Cash Equivalents at End of Period $ 253 $ 3 $ 21 $ 17 $ 212
======= ===== ===== ===== =====
For the Six Months Ended June 30, 2003
(Unaudited, $ Millions)
PSEG PSEG ENERGY
PSEG OTHER PSE&G POWER HOLDINGS
----- -------- ----- ----- -----------
(Note 1)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Note 2) $ 814 $ (16) $ 103 $ 656 $ 71
Adjustments to Reconcile Net Income to Net Cash Flows
From Operating Activities:
Depreciation and Amortization 197 3 129 47 18
Amortization of Nuclear Fuel 46 -- -- 46 --
Non-Cash Items (126) 18 134 (287) 9
Net Change in Certain Current Assets and Liabilities (226) (10) (261) 133 (88)
Other (123) (18) (149) (15) 59
----- ----- ----- ----- -----
Net Cash Provided by (Used In) Operating Activities 582 (23) (44) 580 69
----- ----- ----- ----- -----
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to Property, Plant, and Equipment (661) (4) (215) (330) (112)
Proceeds from the Sale of Investments 2 -- -- -- 2
Other (48) 69 9 (16) (110)
----- ----- ----- ----- -----
Net Cash (Used In) Provided By Investing Activities (707) 65 (206) (346) (220)
----- ----- ----- ----- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Net Change in Short-Term Debt 421 333 278 (235) 45
Issuance of Project-Level/Securitization Long-Term Debt 840 -- 150 -- 690
Redemption of LTD and Project-Level/Securitization LTD (934) -- (358) -- (576)
Return of Capital -- (170) 170 -- --
Issuance of Common Stock/Contributed Capital 42 42 -- -- --
Cash Dividends Paid on Common Stock (244) (244) -- -- --
Other (35) (3) (3) -- (29)
----- ----- ----- ----- -----
Net Cash Provided by (Used In) Financing Activities 90 (42) 237 (235) 130
----- ----- ----- ----- -----
Effect of Exchange Rate Changes on Cash -- -- -- -- --
----- ----- ----- ----- -----
Net Decrease in Cash and Cash Equivalents (35) -- (13) (1) (21)
Cash and Cash Equivalents at Beginning of Period 150 1 35 26 88
----- ----- ----- ----- -----
Cash and Cash Equivalents at End of Period $ 115 $ 1 $ 22 $ 25 $ 67
===== ===== ===== ===== =====
Note 1:
Primarily includes activities at the parent and intercompany eliminations.
Note 2:
Net Income includes preferred stock dividends / preference units distributions
relating to PSE&G of $2 million and $2 million, Global of $8 million and $9
million and Resources of $2 million and $3 million for the six months ended June
30, 2004 and 2003, respectively.
Attachment 7
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Quarter-to-Quarter EPS Reconciliation
June 30, 2004 vs. June 30, 2003
(Unaudited)
- -------------------------------------------------------------------------------------------------------
PSEG 2nd Quarter 2003 Net Income (as restated)* $ 0.59
- -------------------------------------------------------------------------------------------------------
Loss from Discontinued Operations (ET and Global's investments in CPC) 0.02
Extraordinary Loss (relating to rate case) 0.08
- -------------------------------------------------------------------------------------------------------
PSEG 2nd Quarter 2003 Income from Continuing Operations (as restated)*: $ 0.69
- -------------------------------------------------------------------------------------------------------
PSE&G B/(W)
------
2nd Quarter 2003 $ 0.09
------
Electric Rate Case 0.16
Weather (0.03)
Electric Demand and Volume margin increase 0.02
Other 0.03
Additional Shares Outstanding (2003 Issuance, DRIP) (0.01)
------
2nd Quarter 2004 $ 0.26 $ 0.17
------
PSEG Power
------
2nd Quarter 2003 $ 0.48
------
Energy Replacement Costs (includes congestion) (0.16)
Lower Operating Margins including Trading (0.04)
MTC (ended August 2003) (0.14)
O&M and Depreciation (0.04)
NDT Income 0.08
Other 0.05
Additional Shares Outstanding (2003 Issuance, DRIP) (0.01)
------
2nd Quarter 2004 $ 0.22 $(0.26)
------
PSEG Energy Holdings
------
2nd Quarter 2003 (as restated)* $ 0.15
------
Global
Operations (foreign currency losses and lower results
from TIE and Electroandes, partially offset by stronger
results from LDS and RGE) (0.03)
Resources
Loss of Earnings due to Termination of EME-Collins Lease (0.02)
Operations (losses on KKR portfolio and higher interest costs) (0.02) (0.04)
-----
Energy Holdings (Parent) (0.01)
------
2nd Quarter 2004 $ 0.07 $(0.08)
------
Public Service Enterprise Group
------
2nd Quarter 2003 $(0.03)
------
Other - Taxes (0.02)
------
2nd Quarter 2004 $(0.05) $(0.02)
------
- -------------------------------------------------------------------------------------------------------
PSEG 2nd Quarter 2004 Income from Continuing Operations $ 0.50
- -------------------------------------------------------------------------------------------------------
Income from Discontinued Operations (Global's gain on sale of CPC) 0.02
- -------------------------------------------------------------------------------------------------------
PSEG 2nd Quarter 2004 Net Income $ 0.52
- -------------------------------------------------------------------------------------------------------
* See Attachment 1, Note 3 for further details regarding the 2003 restatement.
Attachment 8
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
YTD-to-YTD EPS Reconciliation
June 30, 2004 vs. June 30, 2003
(Unaudited)
- ----------------------------------------------------------------------------------------------------
PSEG Year to Date June 30, 2003 Net Income (as restated)* $ 3.60
- ----------------------------------------------------------------------------------------------------
Loss from Discontinued Operations (ET and Global's investments in CPC) 0.08
Extraordinary Loss (relating to rate case) 0.08
Cumulative Effect of a Change in Accounting Principle (adoption of
Asset Retirement Obligation at Power) (1.64)
- ----------------------------------------------------------------------------------------------------
PSEG Year to Date June 30, 2003 Income from Continuing Operations
(as restated)*: $ 2.12
- ----------------------------------------------------------------------------------------------------
PSE&G B/(W)
------
Year to Date June 30, 2003 $ 0.53
------
Electric Rate Case 0.26
Weather (0.04)
Electric Demand and Volume margin increase 0.04
Other 0.03
Additional Shares Outstanding (2003 Issuance, DRIP) (0.04)
------
Year to Date June 30, 2004 $ 0.78 $ 0.25
------
PSEG Power
------
Year to Date June 30, 2003 $ 1.27
------
MTC (ended August 2003) (0.26)
Energy Replacement Costs (includes congestion) (0.16)
Lower Operating Margins including Trading (0.10)
O&M and Depreciation (0.12)
Interest Expense (0.04)
NDT Income 0.08
Other 0.04
Additional Shares Outstanding (2003 Issuance, DRIP) (0.03)
------
Year to Date June 30, 2004 $ 0.68 $(0.59)
------
PSEG Energy Holdings
------
Year to Date June 30, 2003 $ 0.40
------
Global
Operations (foreign currency losses and lower results from TIE, GWF
and Electroandes, partially offset by stronger results from LDS,
SAESA and RGE) (0.05)
Resources
Termination of EME-Collins Lease (0.07)
Operations (lower lease income) (0.03) (0.10)
-----
Energy Holdings (Parent) --
------
Year to Date June 30, 2004 $ 0.25 $(0.15)
------
Public Service Enterprise Group
------
Year to Date June 30, 2003 $(0.08)
------
Interest Income 0.02
Other (0.01)
------
Year to Date June 30, 2004 $(0.07) $ 0.01
------
- ----------------------------------------------------------------------------------------------------
PSEG Year to Date June 30, 2004 Income from Continuing Operations $ 1.64
- ----------------------------------------------------------------------------------------------------
Income from Discontinued Operations (Global's gain on sale of CPC) 0.02
- ----------------------------------------------------------------------------------------------------
PSEG Year to Date June 30, 2004 Net Income $ 1.66
- ----------------------------------------------------------------------------------------------------
* See Attachment 1, Note 3 for further details regarding the 2003 restatement.
Attachment 9
PSEG Global L.L.C.
Investment Results
For the Quarter and Six Months Ended June 30, 2004
(Unaudited, $ Millions)
As of For the Quarter Ended For the Six Months Ended
June 30, 2004 June 30, 2004 June 30, 2004
------------- ----------------------- ------------------------
Capital At Non-Recourse Non-Recourse
Region Risk (A) EBIT (B) Interest (C) EBIT (B) Interest (C)
- ------------------------ ------------- -------- ------------ -------- -------------
North America $ 402 $ 9 $-- $ 64 $--
Latin America 1,573 35 4 70 10
Asia Pacific 191 3 -- 8 --
Europe 237 7 8 20 16
India and Oman 94 3 4 10 8
Global G&A - Unallocated -- (8) -- (16) --
------ --- --- ---- ---
Total $2,497 $49 $16 $156 $34
====== === === ==== ===
For the Quarter and Six Months Ended June 30, 2003
(Unaudited, $ Millions)
As of For the Quarter Ended For the Six Months Ended
December 31, 2003 June 30, 2003 June 30, 2003
----------------- ----------------------- ------------------------
Capital Non-Recourse Non-Recourse
Region At Risk (A) EBIT (B) Interest (C) EBIT (B) Interest (C)
- ------------------------ ----------------- -------- ------------ -------- -------------
North America $ 424 $21 $-- $ 76 $--
Latin America 1,575 34 5 66 8
Asia Pacific 180 2 -- 5 --
Europe 309 -- -- 10 --
India and Oman 91 2 -- 2 --
Global G&A - Unallocated -- (7) -- (15) --
------ --- --- ----- ---
Total $2,579 $52 $ 5 $ 144 $ 8
====== === === ===== ===
Reconciliation of EBIT to Income from Continuing Operations
For the Quarters Ended For the Six Months Ended
----------------------------- -----------------------------
June 30, 2004 June 30, 2003 June 30, 2004 June 30, 2003
------------- ------------- ------------- -------------
Total Global EBIT $ 49 $ 52 $156 $144
Interest Expense (38) (28) (77) (54)
Income Taxes (2) (6) (19) (17)
Minority Interest -- (2) (2) (7)
Preference Units Distributions (4) (4) (8) (9)
---- ---- ---- ----
Income from Continuing Operations $ 5 $ 12 $ 50 $ 57
==== ==== ==== ====
(A) Total Capital at Risk includes Global's gross investments, net of equity
adjustments, non-recourse debt at the project level and equity commitment
guarantees.
(B) Includes Global's share of net earnings, including interest expense and
income taxes, for investments accounted for under the equity method of
accounting.
(C) Non-recourse Interest is interest expense paid on debt that is non-recourse
to Global.
Attachment 10
PUBLIC SERVICE ELECTRIC & GAS
Sales and Revenues to Customers
June 2004
(Unaudited, $ Millions)
Electric Sales
Three Change vs. Six Change vs. Twelve Change vs.
Sales (millions kwh) Months Ended 2003 Months Ended 2003 Months Ended 2003
- --------------------- ------------ ---------- ------------ ---------- ------------ ----------
Residential 3,049 11.0% 6,194 6.1% 13,158 0.5%
Commercial 5,719 8.3% 11,381 6.8% 23,005 4.1%
Industrial 1,650 -1.7% 3,205 -1.1% 6,586 -1.9%
Street Lighting 73 -6.2% 176 -2.0% 362 -1.6%
Interdepartmental 5 55.5% 19 170.4% 24 80.5%
------- ------- -------
Total 10,496 7.3% 20,975 5.3% 43,135 2.0%
Revenue (in millions)
Residential $ 348 32.3% $ 704 27.7% $ 1,493 17.2%
Commercial 479 12.4% 886 4.9% 1,873 4.5%
Industrial 89 -22.5% 160 -27.3% 352 -24.2%
Street Lighting 14 13.6% 30 15.3% 60 14.2%
Other 74 55.1% 142 48.5% 250 49.1%
------- ------- -------
Total $ 1,004 16.3% $ 1,922 10.6% $ 4,028 7.4%
Gas Sold and Transported
Three Change vs. Six Change vs. Twelve Change vs.
Sales (millions therms) Months Ended 2003 Months Ended 2003 Months Ended 2003
- ----------------------- ------------ ---------- ------------ ---------- ------------ ----------
Residential Sales 185 -20.9% 916 -6.0% 1,481 -5.7%
Commercial - Firm Sales 78 -19.2% 376 -5.9% 588 -7.0%
Commercial - Interr. & Cogen 11 -9.3% 23 7.8% 48 -5.2%
Industrial - Firm Sales 8 -11.4% 35 -4.9% 55 -8.4%
Industrial - Interr. & Cogen 97 -28.2% 181 -29.0% 436 -18.7%
Other 3 170.8% 5 126.0% 6 77.8%
---- ------ ------
Total 382 -21.8% 1,536 -9.1% 2,614 -8.4%
Gas Transported 235 -21.1% 505 -32.3% 1,101 -17.1%
Revenue (in millions)
Residential Sales $133 -15.8% $ 660 5.9% $1,085 13.3%
Commercial - Firm Sales 61 -12.9% 297 -7.5% 447 -1.7%
Commercial - Interr. & Cogen 6 -18.2% 16 -0.2% 32 5.7%
Industrial - Firm Sales 6 -3.5% 28 -7.1% 42 -2.6%
Industrial - Interr. & Cogen 72 -16.9% 130 -26.9% 279 -9.2%
Other Operating Revenues 30 4.8% 57 3.2% 116 3.6%
---- ------ ------
Total $308 -13.7% $1,188 -2.9% $2,001 5.0%
Gas Transported $106 -12.7% $ 490 -7.3% $ 822 -5.0%
Three Change vs. Six Change vs. Twelve Change vs.
Weather Data Months Ended 2003 Months Ended 2003 Months Ended 2003
- ------------ ------------ ---------- ------------ ---------- ------------ ----------
Degree Days - Actual 408 -40.1% 3,184 -9.1% 4,839 -9.5%
Degree Days - Normal 509 3,143 4,867
THI Hours - Actual 4,390 70.8% 4,393 70.0% 16,624 0.8%
THI Hours - Normal 3,542 3,570 14,878
Attachment 11
PUBLIC SERVICE ENTERPRISE GROUP
STATISTICAL MEASURES
Quarters Ending Year to Date
------------------- -------------------
June 30 June 30 June 30 June 30
2004 2003 2004 2003
-------- -------- -------- --------
Weighted Average Common Shares Outstanding (000's)
Basic 236,705 225,909 236,449 225,627
Diluted 238,001 226,582 238,321 226,108
Stock Price at End of Period $ 40.03 $ 42.25
Dividends Paid per Share of Common Stock $ 0.55 $ 0.54 $ 1.10 $ 1.08
Dividend Payout Ratio* 67.9% 50.7%
Dividend Yield 5.5% 5.1%
Price/Earnings Ratio* 12.4 9.9
Rate of Return on Average Common Equity* 15.2% 21.3%
Ratio of Earnings to Fixed Charges 1.55 1.82 2.10 2.40
Book Value per Common Share $ 22.89 $ 20.79
Market Price as a Percent of Book Value 175% 203%
Total Shareholder Return - QTR Ending -13.7% 16.6%
Total Shareholder Return - YTD -6.3% 35.4%
Total Shareholder Return - 12 Months Ending 0.0% 3.9%
- ---------------------------------------------------------------------------------------
Quarters Ending June 30, Six Months Ending June 30,
------------------------ --------------------------
Generation by Fuel Type 2004 2003 2004 2003
- ----------------------- ---- ---- ---- ----
Nuclear - NJ 31% 40% 34% 39%
Nuclear - PA 23% 22% 21% 21%
--- --- --- ---
Total Nuclear 54% 62% 55% 60%
Fossil - Coal - NJ 10% 7% 10% 11%
Fossil - Coal - PA 13% 13% 13% 12%
Fossil - Coal - CT 6% 7% 6% 6%
--- --- --- ---
Total Coal 29% 27% 29% 29%
Fossil - Oil & Natural Gas - NJ 15% 9% 12% 8%
Fossil - Oil & Natural Gas - NY 0% 1% 1% 0%
Fossil - Oil & Natural Gas - CT 1% 0% 2% 2%
--- --- --- ---
Total Oil & Natural Gas 16% 10% 15% 10%
Fossil - Pumped Storage 1% 1% 1% 1%
--- --- --- ---
100% 100% 100% 100%
- ---------------------------------------------------------------------------------------
*Calculation based on earnings from continuing operations for 12-month period
ending