ML18102A961
| ML18102A961 | |
| Person / Time | |
|---|---|
| Site: | Salem, Hope Creek  |
| Issue date: | 12/31/1996 |
| From: | Ferland E PUBLIC SERVICE ENTERPRISE GROUP |
| To: | |
| Shared Package | |
| ML18102A960 | List: |
| References | |
| NUDOCS 9704150102 | |
| Download: ML18102A961 (28) | |
Text
~.;ZTZ NOTICE
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THE ATTACHED FILES ARE OFFICIAL RECORDS OF THE INFORMATION &
RECORDS MANAGEMENT BRANCH.
THEY HAVE BEEN CHARGED TO YOU FOR A LIMITED TIME PERIOD AND MUST BE RETURNED TO THE RECORDS & ARCHIVES SERVICES SECTION, TS C3. PLEASE DO NOT SEND DOCUMENTS CHARGED OUT THROUGH THE MAIL. REMOVAL OF ANY PAGE(S) FROM DOCUMENT FOR REPRODUCTION MUST BE REFERRED TO FILE PERSONNEL.
- NOTICE -
success Letter to Shareholders 2
Investing for Growth 14 Directors and Officers 23 Ata Glance 4
Operational Highlights 18 Stockholder Information 24 Getting the Rules Right 6
Consolidated Financial Statistics 19 www.pseg.com 25 Operational Excellence 10 Condensed Consolidated Financials 20
92 93 94 95 96 (dollars in milli.ons)
Enterprise Net Income Financial Highlights Dollars in thousands where applicable 1996 Total Operating Revenues
$ 6,041,249 Total Operating Expenses
$ 4,984,290 Net Income 611,596 Common Stock Shares Outstanding-Year-end (Thousands) 233,470 Shares Outstanding-Average (Thousands) 242,401 Earnings per Average Share
$ 2.52 Dividends Paid per Share
$ 2.16 Book Value per Share -
Year-end
$22.33 Market Price per Share -
Year-end
$27.25 Ratio of Earnings to Fixed Charges -
ENTERPRISE( A) 2.68 Ratio of Earnings to Fixed Charges -
PSE&a(A) 2.62 Gross Additions to Utility Plant 602,783 Gross Utility Plant
$17,327,635 (A) Includes Preferred Securities Dividend Requirements.
~::£
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- £
- £
- £ NN N
N N
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92 93 94 95 96 (dollars)
Enterprise Annual Earnings and DivUlend Payout per Share 1995 5,893,662 4,798,472 662,323 244,698 244,698
$ 2.71
$ 2.16
$22.22
$30.63 2.78 2.77 686,150 Earnings per Share Annual Dividend Payout
% Change 3
4 (8)
(5)
(1)
(7)
(11)
$16,925,280 (12) 2 The detailed consolidated financial statements and related discussi.on appear in Appendix A of the Proxy Statement.
1
I n 1996, we produced solid financial results, despite the ongoing expenses associated with the refurbishment of the Salem nuclear units.
1996 earnings reflect the benefits of our ongoing cost management efforts, the strong New Jersey economy and a good contribution from our off-system gas sales that helped offset relatively flat electric sales caused by cool summer weather. We also experienced a sharp increase in earnings at our non-utility investment company, Public Service Resources Corporation (PSRC).
Public Service Enterprise Group (Enterprise) consoli-dated earnings for the year were $611.6 million, or $2.52 per common share. That compares with earnings of
$662.3 million, or $2.71 per share in 1995.
Results for 1996 reflect two one-time gains recorded during the year -
$18 mil-lion, or seven cents per share, from the repurchase of pre-ferred stock, and $13.5 mil-lion, or six cents per share, resulting from the sale of our Houston-based oil and gas sub-sidiary, Energy Development Corporation (EDC).
The 1996 results also reflect a one-time charge of$59 million, or 25 cents per share, stemming from customer refunds required by Public Service Electric and Gas Company's (PSE&G) resolu-tion of outstanding Salem regula-tory issues.
Financial Outlook Looking ahead, we have estab-lished a target of five percent compound annual growth in earn-ings per share. We intend to grow income in both our utility and non-utility businesses through effective cost manage-ment and development of new revenue streams. We are further strengthening our capital struc-ture by applying our strong cash flow to the retirement of maturing long-term debt and also are using internally gener-ated funds to provide financial support to our more rapidly growing companies, Energis Resources Incorporated (Energis Resources) and Community Energy Alternatives Incorporated (CEA).
Through continued commit-ment to our core utility busi-ness, and establishing new non-regulated businesses, such as Energis Resources, we aim to enhance the value of your com-pany and continue our record of paying dividends annually for nine decades.
2 Freedom of Choice For the past five years, I've talked to you in our annual and quarterly reports about the dra-matic changes facing our indus-try and about the ways we have been preparing for that new era.
This year the new era begins.
In January 1997, the New Jersey Board of Public Utilities (BPU) issued its proposed find-ings and recommendations for restructuring the electric power industry in New Jersey. This proposed Energy Master Plan requires our principal subsidiary, PSE&G, and the state's other electric utilities, to develop pro-posals that allow customers to choose electric suppliers. It sets an aggressive timetable requir-ing that customer choice be provided to a minimum of five percent of customers beginning in October 1998 and progressing to full competition for 100 per-cent of customers no later than April 2001.
Freedom of choice is coming and we are ready for it. We wel-come it and believe we are in position to succeed in this new marketplace.
We have been preparing for this change by doing what suc-cessful competitors must do:
redesign and refocus operations; concentrate on cost containment; emphasize a strong customer focus; forge strong, productive partnerships with employees and suppliers; participate actively and decisively in the shaping of public policies related to governing our industry; and seek new sources of revenue.
Three Goals We intend to prosper in this new marketplace by advancing the three goals we set in 1996:
getting the rules right; achiev-ing operational excellence; and investing for growth.
In our efforts to get the rules right, we continue to provide leadership at the state and fed-eral levels where we are working aggressively to establish rules for competition that will be fair to our customers, our employees and our shareholders.
We are working to ensure that the new rules on industry restructuring provide customer choice and lower cost without endangering service reliability or compromising air quality and environmental progress.
Working to achieve opera-tional excellence means concen-trating on what we do best and striving to do even better. We are creating partnerships with suppliers to increase efficiency and reduce costs; recognizing employees, individually and in teams, whose best practices, in the form of their ideas and actions, are serving as role mod-els for the entire corporation; and implementing new informa-tion technology to help manage work more efficiently across the corporation.
We remain committed to the reliability and quality of our service. This commitment con-tinues to grow in significance as customers gain freedom in choosing suppliers. PSE&G con-tinues to offer pioneering money-back service guarantees. If we fail to keep our service promises to customers, they can request and receive direct bill credits. It is no longer enough to satisfy customers; the standard for cus-tomer service has been raised and will be raised ever higher in the years ahead.
Our commitment to opera-tional excellence, and success in the new deregulated environment resulted in our decision in 1995 to take the nearly twenty-year-old
A key Enterprise objective is to keep its co=on stock dividend secure, as it has been over the last five decades.
2.50 2.00 I.SO 1.00 0.50 0.00 111111I11111111I11111111111111111 1946 1956 Salem nuclear units out of service and make fundamental changes necessary to improve perfor-mance of the station to the end of its 40-year license. Salem Unit 2 is expected to return to service in the second quarter of this year and Salem Unit 1 is expected to return in the fall. In any case, the units will be restarted only when we are certain they are ready for reliable operation over the long term.
The Hope Creek nuclear plant, meanwhile, has achieved outstanding performance since its return from a refueling and maintenance outage in early 1996.
Safety has been, and will con-tinue to be, the first priority in operations of all our nuclear units.
Investing for growth is our third goal. A key component of this strategy is our interna-tional independent power com-pany, CEA. The demand for new electric generation in the inter-national market will exceed 800 gigawatts over the next 10 years. That's the equivalent of 800 very large generating stations. CEA will continue to pursue financially attractive opportunities here in the United States, but because of the tremendous demand over-seas, it will emphasize interna-tional markets.
We have also launched a new total energy services subsidiary, Energis Resources, which posi-tions Enterprise to compete for market opportunities spawned by deregulation -
both within 1966 1976 1986 1996 (dolln.rs)
Dividend History, Adjusted for Stock Splits and outside our traditional serv-ice territory. We plan for it to be an engine of growth in the future and to be a billion dollar business in five years.
On the utility side, we have expanded our portfolio of tradi-tional products and services by expanding our appliance busi-ness to include several new competitive service offerings, as well as off-system electric and gas sales.
Working Smarter In addition, six-year contracts ratified by our unions utilized mutual gains bargaining and enhanced our ability to compete in the future by removing some of the constraints that previ-ously hindered our operational flexibility. The contracts allow our gas and electric employees to do crossover work, which trans-lates to a faster response to cus-tomers, increases the efficiency of our work force and helps us find better ways to satisfy customers.
Continued investment in the professional growth of our 11,000 employees also contributes to our long-term health. We are commit-ted to establishing an organiza-tion that fosters an environment of continuous learning; we have made a major investment in employee development and tech-nical training, as well as tuition reimbursement for college and post-graduate studies. We realize working smarter demands contin-uous learning by all of us, and that for Enterprise to be success-ful in a changing environment, 3
our work force skills must be well-matched with the new requirements demanded by a competitive market.
Our associates are also an invaluable resource that can help us recognize the needs of the marketplace. Harnessing their life experiences and per-spectives to help shape business decisions will ultimately help us satisfy the energy service needs of an expanding range of cus-tomers. We are committed to creating a work environment of mutual respect, where associ-ates are empowered to unleash their many, cliverse talents and insights to the fullest.
In this annual report, you will find some excellent exam-ples of how we are working towards getting the rules right, achieving operational excellence and meeting our vision for investing for growth.
I am grateful to you for your continued support. As freedom of choice continues to evolve, I assure you that all of us at Enterprise are dedicated to deliv-ering to you the results of our hard work in the years ahead.
E. James Ferland Chairman of the Board, President and Chief Executive Officer, Public Service Enterprise Group Incorporated February 14, 1997 Allocati,on of Assets at December 31, 1996 Enterprise 'lbtal Assets -
$16.9 billion PSE&G O Electric 74%
0 Gas 14%
EDHI 0 PSRC 9%
CEA 2%
0 EGDC 1%
Sources of Consolidated Earnings per Share Enterprise Earnings per Average Share -
$2.52 Earnings per Share PSE&G 0 Electric Gas EDC*
CEA EGDC
$1.79
$.40
$.23
$.10
$.04
$ (.01)
Energis Resources$ (.03)
(*Discontinued operations-Gain on Sale-$.06; Income from Operations-$.04)
PSE&G serves the intensely developed corridor between New York City and Philadelphia.
Community Energy Alternatives has power plant interests in the Americas, Asia, the Pacific Rim and Europe.
Public Service Enterprise Group Incorporated Public Service Electric and Gas Company Enterprise Diversified Holdings Incorporated 4
Enterprise PSE&G O PS~G EDHI Energis Resources E~RGIS Community Energy Alternatives Public Service Resources Corporation
-u-r*na..
E. James Ferland Chairman of the Board, President and Chief Executive Officer PO. Box570 80 Park Plaza, T4B Newark, NJ 07101 (201) 430-7000 www.pseg.com Lawrence R. Codey President and Chief Operating Officer PSE&G PO. Box 570 80 Park Plaza, T4B Newark, NJ 07101 (201) 430-7000 www.pseg.com Robert J. Dougherty, Jr.
President and Chief Operating Officer EDHI The Legal Center One Riverfront Plaza 9th Floor Newark, NJ 07102 (201) 596-6760 Frank Cassidy President and Chief Executive Officer Energis Resources Incorporated 499 Thornall Street 5th Floor Edison, NJ 08837 (8881-3-ENERGIS www.energisresources.com Michael J. Thomson President and Chief Executive Officer Community Energy Alternatives Incorporate0 1200 East Ridgewood Avenue Ridgewood, NJ 07450 (201) 612-2772 Eileen A. Moran President Public Service Resources Corporation The Legal Center One Riverfront Plaza 9th Floor Newark, NJ 07102 (201) 596-6710 I
I
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Publicly-traded diversified energy and energy services company located in New Jersey with annual revenues of more than $6 bimon, consisting of two main subsidiaries:
Public Service Electric and Gas Company and Enterpr ise Diversified Holdings Incorporated.
Serves more than 5.5 million New Jersey residents in more than 300 urban, suburban and rural communities with electricity, gas and energy alternatives in a 2,600 square-mile diagonal corridor across the state.
Operates Enterprise's non-utiljty businesses seeking to maintain and expand its energy services in the world. Consists of three primary subsidiaries: Energis Resources, Community Energy Alternatives, and Public Service Resources Corporation.
Provides a full menu of energy management solutions for busi-nesses in the Northeast.
Develops, acquires, owns and oper-ates cogeneration and independent power facilities in the U.S., Asia, the Pacific Rim, Europe, and South Amer ica.
Enhances EDHI's financial strength with a strong, diverse portfolio of more than 60 separate investments across a wide spectrum of industry sectors and asset types, including leveraged and direct financing leases, project financing, venture capital funds, leveraged buy-outs, real estate limited partnerships and securities.
Collectively, PSE&G and Community Energy Alternatives, a subsidiary of EDHI, have more than 90 years of power plant operating experience with active investments in 40 power plants fueled by coal, natural gas, oil, petroleum coke and nuclear.
PSE&G provides the lowest cost, most reliable electric and gas service of any New Jersey utility. It maintains a staff of over 600 highly trained service technicians on cal I 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a day, 365 days a year to repair a broad range of gas and electric appliances and HVAC equipment and backs up its performance with nine guarantees of service. Through its Sunburst Customer Solutions product offuring, PSE&G provides meter reading, bi I ling and collection services.
EDHI builds on the nearly 100-year tradition of Enterprise by seeking out and developing additional energy-related services as deregu-lation of the industry progresses.
In addition to offering several new services, Energis Resources brings the expertise off unctions previ-ously performed by a number of Enterprise subsidiaries to Northeast markets which it knows well.
More than 200 experts in project development and financing, engi-neering, and plant operations and maintenance create effective teams that understand the dynamics of the areas they serve.
PSRC's well-balanced portfolio provides diversification, earrungs stability and continued incremental earn.i ngs growth to shareholders.
5
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- Electricity and Gas
- Industrial and Commercial Gas
- Industrial, Commercial and Residential Electric
- Energy Consulting and Planning
- Integrated Energy Management Services
- Operations and Maintenance Support
- Residential Gas Products and Services
- Electricity and Gas
- Industrial and Commercial Electric
- Energy Consulting and Planning
- Industrial and Commercial Gas
- Residential Gas Products and Services
- Sunburst Customer Solutions
- 'fradelillk export assistance program
- Business Enhancement Program
- Residential Electric
- Electricity and Gas
- Industrial and Commercial Gas
- Energy Consulting and Planrung
- Integrated Energy Management Services
- Operations and Maintenance Support
- Electricity and Gas
- Energy Consulting and Planning
- Integrated Energy Management Services
- Operations and Maintenance Support
- Financing Solutions
- Electric Generation Solutions
- Investments in assets which pro-vide funds for future growth and incremental earnings Success in meeting our strategic objectives will be measured in terms of earnings per share growth. The objective for the Enterprise portfolio is a compound growth rate of five percent annually over the next five years.
While new business ventures will play a vital role in the long-term growth and strength of Enterprise, PSE&G remains Enterprise's core business and currently comprises approxi-mately 97 percent of total Enterprise revenues.
EDHI will enter new markets in the energy arena where its experi-ence and knowledge can be brought to bear and when market needs and opportunities can be pursued on a sound and profitable basis.
Energis Resources will serve industrial and commercial cus-tomers in the New England and Mid-Atlantic region through three product platforms: energy supply, consulting, engineering and oper-ations services, and financing solutions.
As the opportunities for growth in the domestic generation business shrink due to overcapacity and potentially low profit margins, CEA will pursue investments in international generation in strategic markets.
PSRC plans to build on its expertise in risk management and mitigation, transaction analysis and closing and investment management to exploit new opportunities that arise from industry deregulation.
Getting the Rules Right Many of the rules governing our industry were written at a time when the utility franchise was the best way to ensure universal, safe and reliable service. However, now that the infrastructure has been built and as economic conditions change, we need to make sure all energy providers operate on a level playing field.
We are working to foster rules Master Plan would require rate reductions of five to ten the high level of service relia-that are fair to our customers, utilities to develop plans to percent for customers. We are bility that exists today.
shareholders, the State of offer retail competition to five committed to working toward A significant issue in the New Jersey and its economy.
percent of all customers by that target rate reduction in a restructuring process is the Enterprise has dramati-October 1998. This would manner that protects the envi-recovery of transition costs.
cally increased its efforts to increase incrementally until ronment and our investors,
'fransition costs result from affect the deregulation debate full competition for all con-without creating a category of the utilities' historical legal in both New Jersey and sumers is reached by April second-class consumers who obligation to serve all cus-Washington, D.C. Getting the 2001. The state's electric utili-do not share in the benefits of tomers. Utilities have been rules right is of crucial impor-ties have until July 15 to file competition.
required to plan, build and tance if Enterprise is to com-their own restructuring plans.
While dedicated to imple-maintain generation and a pete effectively in the evolving PSE&G shares the BPU's menting the Energy Master delivery infrastructure to reli-energy market.
broad objectives in the restruc-Plan, we are also urging the ably meet customer needs. In turing process and will work BPU to provide utilities with exchange for this obligation, Energy Master Plan vigorously toward the goal of flexibility to propose benefi-utilities have been allowed a In January 1997, the BPU opening the New Jersey mar-cial changes, as different unveiled its blueprint for ketplace to competition, with utilities face different circum-introducing customer choice stances and challenges in into New Jersey's electricity restructuring. We are also market. The proposed Energy stressing the need to maintain 7
PSE&G Net Utility Plant In-Service Fossil 18.6%
Nuclear 40.0%
Transmission
& Distribution 38.8%
}other The net e/,ectric and gas plant in-seruice arrwunted to $10. 7 billwn at December 31, 1996.
2.6%
8 reasonable opportunity to recover investments through regulated rates. As rates become competitive, they may no longer be sufficient to per-mit recovery of all such costs, which then become "stranded."
Considerations of fairness, efficiency and law warrant recovery of these costs.
Restructuring and the environment Lower cost electric power A significant amount of the pollution transported into the Northeast is produced by coal-burning power plants in the Midwest and Ohio Valley, plants that are allowed to operate with minimal environ-mental controls. An electric industry restructuring plan that encourages increased pro-duction of this cheap, dirty Midwest electric power will, as a result, send hundreds of thousands of tons of addi-must not come at the expense tional pollution drifting into of environmental quality or our region.
sound public health policy.
Our concern over this issue New Jersey and the Northeast is shared by officials at the are burdened by the impact highest levels of state govern-of air pollution created to the West and South, which is transported by prevailing wind currents.
ment, as well as statehouse and congressional members of both parties throughout the Northeast. We have worked hard to increase their recogni-tion of the strong link between
energy and the environment and there are encouraging indications that the message is being heard. Vice President Al Gore has clearly stated that environmental degrada-tion should not be the price the nation pays for lower energy costs. The Federal Energy Regulatory Commission, the Environmental Protection Agency and the White House Council on Environmental Quality have also acknowl-edged the potential negative environmental impact of restructuring. We are encour-aged by this support and are working to translate it into appropriate action.
Energy taxes After a year of study, a BPU/
New Jersey 'freasury Department joint task force has recommended a major overhaul of the Gross Receipts and Franchise Tux (GRFT) paid by all customers of New Jersey utilities. Because customers of non-utility energy providers do not pay this tax, utilities are at a competitive disadvantage. A new tax plan that treats all energy providers equally -
giving utilities and new market entrants the same opportuni-ties to compete for business -
has been recommended.
9 The proposal calls for the 13 percent GRFT to be replaced by existing sales and corporate taxes and a tempo-rary new tax that would be phased out over seven years, causing a 45 percent reduction in taxes paid by consumers.
Energy tax reform is long over-due and essential if New Jersey is to compete with other states for business and jobs. It's also good news for New Jersey consumers, who currently pay among the high-est energy taxes in the nation.
Operational Excellence Achieving operational excellence doesn't happen overnight. It means questioning tradition, finding smarter ways to serve customers, streamlining work processes, and keeping an unblinking eye on the bottom line.
In 1996, Enterprise employees continued their commitment to excellence. As we transform ourselves into a global energy services company, their ideas and actions remain critical to our success.
Here are some examples of how individuals, teams and organizations are helping to set a standard of excellence for the entire corporation.
Shared vis ions, shared rewards Aviation Agency bid out to replace 30,000 feet of cable snaking under a runway at Newark International Airport -
one of the nation's busiest -
PSE&G's Metropolitan electric distribution division did the work. The work might be considered traditional, but PSE&G's approach wasn't.
Project leaders and repre-sented employees planned out a schedule that would not interfere with high air traffic periods. Much of the work was Taking time at Hope Creek Our Hope Creek nuclear sta-tion in Salem, New Jersey, got back to the business of making electricity following an outage early in 1996. The refueling outage was expected to last 30 days; but station manage-ment expanded the original work scope to include more than 13,500 individual work activities, all aimed at ensur-ing safe and reliable long-term operations at the plant.
Hope Creek has enjoyed an Replacing underground distri-done on weekends. Despite the extremely reliable period bution cable and splicing is the scheduling complications, the of operation since its return type of work on which PSE&G job was completed on time.
to service.
has built its reputation for excellence. When the Federal The project marked a new approach to generating rev-enue and helped increase our employees' awareness of the importance of meeting cus-tomer needs as we face the new reality of competition.
11 Reduction, recovery, recycling A major corporate initiative, driven by the need to improve our bottom line as well as our commitment to the environ-ment, was the establishment of a materials management process. The process empha-sizes not only the recovery of usable waste, but also the reduction of waste by design-ing out as much as possible from the start. The results have been gratifying: waste disposal costs have fallen more than $5 million, more than 90 percent of our non-haz-ardous solid waste is being recycled and PSE&G was for-mally honored by the federal Environmental Protection Agency (EPA) as one of 280 Fortune 1000 companies named charter members of the EPA's WasteWi$e program.
87 88 89 90 91 92 93 94 95 96 92 93 94 95 96 PSE&G supplies electricity at the lowest cost per kwh of all the utilities in The ratio of customers to PSE&G permanent employees, a measure of efficiency, New Jersey, and intends to continue the trend.
(Average revenue per kwh adjusted for inflation.
has grown 23% over the past five years.
Base year 1995-1996. Cents per kwh.)
New perspectives, new energy PSE&G gained recognition for its promotion and support of minority and women-owned business development when it was named 1996 Corporation of the Year by the minority busi-ness members of the New York/
New Jersey Minority Purchasing Council. PSE&G's efforts in this area include establishing a Supplier Diversity Council comprised of employees and representatives from minority businesses to advise the com-pany on its supplier diversity policies and results, and to fos-ter communications between PSE&G and its suppliers.
12 Meeting monthly, the council has formulated recommenda-tions to increase minority sup-plier participation in high-dollar volume and strategic products and services. PSE&G's supplier diversity process is a customer-driven business strategy. Just as success requires a workforce that is reflective of the society we serve, we also need suppliers who can provide insights and new ideas to help us better meet our customers' needs.
Making the power of information work for us Business Integration is a cor-poratewide effort to improve our operating efficiencies through the use of integrated business software. An inte-grated internal information system will allow for quicker accessing of information and improved capabilities for plan-ning and management of work in providing energy services.
But Business Integration must be more than just jar-gon. PSE&G will be joining some 6,000 companies world-wide who are using an infor-mation system known as SAP Systems, Applications and Products in Data Processing -
to achieve major gains in performance. The rollout of Business Integration starts with Fossil Generation in 1998.
Customer service:
a hallmark of success Customers today are becoming more sophisticated -
and demanding -
consumers.
With the coming of customer choice, building a relationship with our customers has never been more critical. At PSE&G we hear from our customers daily through regular surveys, feedback and personal interac-tions. We listen, then improve our products and services based on what we hear. As part of this constant feedback, we've learned that the exper-tise and integrity of our work-force have been major factors in maintaining customer loyalty.
A residential customer in South Jersey, for example, was dissatisfied with the service she received from a competi-tor of our appliance service business. This competitor tried to use unethical tactics to sell a major repair job that wasn't needed. When the cus-tomer called PSE&G for a second opinion, our service technician quickly discovered the problem to be simply a clogged pilot light. Daily inter-actions such as these help build customer loyalty and awareness.
A pact for the 21st century PSE&G's five unions signed contracts in 1996 that extend to the year 2002. These agree-ments balance the needs of the company in an emerging com-petitive marketplace with the needs of employees and unions 13 for good jobs with fair wages, benefits and working condi-tions. The new agreements address the requirements of a fast-changing industry head-on, including provisions that allow gas and electric employees to work in each other's areas.
Other provisions address cut-ting non-productive time and reducing costs. Mutual-gains bargaining, a process of side-by-side problem-solving, allowed the unions and company to help each other recognize shared interests.
A united front of employer and employees is essential for pre-serving customers and jobs.
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Investing For Growth In 1996, Enterprise reorganized to take maximum benefit of the opportunities arising out of the deregulation of the electric and gas industries. This reorganization also results in a clearer division between Enterprise's regulated and unregulated businesses.
Bob Dougherty now serves as president and chief operat-ing officer of an expanded Enterprise Diversified Holdings Incorporated (EDHI). In addi-tion to PSRC, which will con-tinue to search for passive, energy-related investments to add to its portfolio, Dougherty will manage and develop CEA, Enterprise's independent power company, and a new business, Energis Resources, which provides a full range of Going global Business plans for CEA target new investments of approxi-mately $700 million over a five-year horizon. Plans for 1997 call for closure on several projects, among them a 220-megawatt simple-cycle plant in Colombia, South America.
This plant will burn natural gas and sell its electrical out-put on the Colombian spot market. The project is part of a joint venture formed with standards, and is delivering electricity to the country's power grid. The second unit is scheduled to go on-line in late 1997; both units will supply a substantial amount of electric-ity to this rapidly-developing rural area.
Last year CEA and its partner AES, a developer and operator of power plants, suc-cessfully closed project financing for Central Termica San Nicolas, a 650-megawatt CEA also enjoys a well-established reputation in the U.S. The JFK Energy Center, which is owned and operated by CEA and Gas Energy, Inc.,
a wholly-owned subsidiary of Brooklyn Union Gas Company, completed its first full year of commercial operation. The center is a 105-megawatt plant that supplies electricity and hot and chilled water for New York's Kennedy International Airport. Addi-energy-management solutions.
Amoco Power Resources. The Through these unregulated project is intended to enter plant located in Argentina.
tional electrical capacity is The ability to refinance with a sold to the local utility, companies, and by expanding a construction during the first
$60 million non-recourse loan Consolidated Edison.
number of traditional products quarter of 1997 and be in com-in the Argentine market CEA has investments in and services found in our reg-mercial operation by late 1997.
demonstrates a high degree of 22 cogeneration and power ulated utility, Enterprise seeks The year 1996 was one of bank confidence in Argentina's plants around the world to increase shareholder value.
progress. CEA holds a minority power sector reforms and in interest in two 300-megawatt San Nicolas' viability as a key coal-fired units located in the energy producer.
interior province of Gansu, China. The first unit success-fully passed its first perfor-mance test in 1996, meeting all national environmental 15 totalling 2,400 megawatts of electric generation capacity.
Operating from offices in Hong Kong, Argentina, Thailand, India and the U.S.,
CEA professionals are pursu-ing nearly 70 potential projects in more than twelve countries.
EDHI's net income reached a record high in 1996.
Net income from continuing operations increased 28.5%
as compared to 1995 primarily due to a strong performance by Puhlic Service Resources Corporation.
- Without EGDC impairment of $(50.4) million.
92 93 94 95 96 (dollars in millions)
Income from Continuing Operations Income from Discontinued Operations Smarter energy*M Drawing on Enterprise's depth of experience and financial strength, Energis Resources, our newest subsidiary, pro-vides a single source for reli-able, top-quality service focused on customer needs.
The company is concentrating on industrial and commercial customers throughout the Northeast and Mid-Atlantic states.
Energis Resources offers customers a wide range of services to improve business operations and performance through more cost-efficient energy utilization, energy process redesign, optimized energy investment strategies and unique financing options for energy-related projects.
The company has absorbed two Enterprise companies with proven track records:
U.S. Energy Partners, which sold natural gas, and Enterprise Strategic Energy Solutions, which provided con-sulting, engineering and repair services. In addition, the financing of energy-savings, or demand-side management projects, formerly offered by the utility subsidiary, Public Service Conservation Resources Corporation, will now be supplied by Energis Resources.
Energis Resources offers an impressive array of products and services, beginning with the sale of natural gas. In 1996, U.S. Energy Partners sold more than $67 million of gas to some 3,600 customers in New Jersey, New York and states as far south as the Carolinas. New Jersey has been a pioneer in the deregu-lation of natural gas sales, allowing the customer to buy the gas itself from suppliers like Energis Resources, with delivery arranged through the local utility.
The company is already marketing natural gas to a number of customers, includ-ing more than 50 Boston 16 Market restaurants through-out the Northeast, as well as more than 40 branch offices of a major Manhattan-based bank.
Similarly, deregulation of electricity is proceeding throughout the U.S. and at a particularly fast clip in the Northeast -
Energis Resources' home territory.
New Jersey customers will begin gaining the ability to choose their electricity sup-plier in October 1998. Retail customers in Rhode Island and Pennsylvania will be able to choose in 1997. Since the fed-eral Energy Policy Act of 1992 deregulated the wholesale elec-tricity market, Enterprise has been one of the most active and aggressive participants in that market. Energis Resources will draw on this expertise to serve retail markets afforded freedom of choice.
Along with energy supply, Energis Resources provides consulting, engineering and operations services and financ-ing solutions. The ultimate objective is to successfully provide total energy manage-ment to customers in the Northeast, allowing them to completely outsource their energy functions.
Energis Resources is already working on energy projects with a number of major customers. It is installing and maintaining power supply equipment for a major telecommunications company's fiber optic network.
For a national food processor, the company is financing third-party installation of high-efficiency lighting at 200 of its locations.
Expanding a traditional portfolio PSE&G, through its Sunburst Customer Solutions program, offers its meter reading, billing, payment processing and collection services to municipalities and other investor-owned utilities.
Municipalities and other utili-ties can reduce costs and increase efficiencies by utiliz-ing PSE&G's sophisticated customer service operations and extensive meter reading experience. As of January 1997, seven municipalities and two regional water utilities have signed on.
PSE&G's appliance service business is the only region-wide provider of premium service and service contracts for all major appliance brands with 24-hour service. 365-days-a-year availability. Banking on a strong name awareness 17 within its service territory and a well-trained staff of service technicians, the appli-ance service business has expanded its traditional port-folio of service offerings. These new services create added opportunities for bringing in additional revenues. The busi-ness has also gained efficien-cies and sharpened its competitive advantage with the introduction ofhome-based reporting, which allows service technicians to report directly to their first job in the morning instead of stopping first at the office.
In addition, PSE&G, with its long-established rights-of-way, extensive network of wires, and long-term customer relationships, is also exploring the possibility of adding wire and wireless telecommunica-tions services to its broad por t-folio of products and services.
Public Service Enterprise Group continues to pursue a strategy of enhancing stockholder value through retention and reinvestment of earnings and payment of an annual dividend.
g
~
I
\\
i I
91 92 93 94 95 96 (dollars)
This shows the value on December 31 of each year of $100 invested in Enterprise on December 31, 1991 (assumes reinvested dividends).
I
' l I
I I
I I
I I
95 96 97" 98' 9
PSE&G n EDHI
- Projected (dollars in milliorm) r I
I 99' Declining utility capital expenditures are expected to be funned through internally generated cash, while growing EDHI needs are expected to be met by additional debt and internally generated cash.
92 93 94 95 96 (percent)
Return on Average Common Equity for 1996 was 11.3%, which reflects various one-time adjustments, as discussed in the Chairman's letter of tlus annual report.
g 8
g g
g CD 95 96 Common Equity 0...-
97*
98*
99*
Preferred 11 Long-Term Securioes lJ Debt
- Projected (percent)
One of our key objectives, as reflected in Enterprise'.~ capitalization ratio, is to strengthen the bal.ance sheet by delet*eraging PSE&G.
'I
Consolidated Financial Statistics rAJ Dollars in thousands where applicable 1996 1995 1994 1993 1992 Selected Income Information Operating Revenues:
Electric
$ 3,944,362
$ 4,020,842
$ 3,739,713
$ 3,696,114
$ 3,407,830 Gas 1,880,994 1,686,403 1,778,528 1,594,341 1,586,181 Nonutility Activities 215,893 186,417 177,082 137,069 112,268 Thtal Operating Revenues
$ 6,041,249
$ 5,893,662
$ 5,695,323
$ 5,427,524
$ 5,106,279 Income from Continuing Operations 587,358 627,287 666,521 549,178 475,150 Cumulative effect of change in accounting for income taxes 5,414 Income from Discontinued Operations 24,238 35,036 12,512 46,341 28,967 Net Income 611,596 662,323 679,033 600,933 504,117 Earnings per Average Share:
From Continuing Operations
$ 2.42
$ 2.57
$ 2.73
$ 2.29
$ 2.05 From Cumulative effect of change in accounting for income taxes
.02 From Discontinued Operations
.10
.14
.05
.19
.12 Thtal Earnings per Average Share
$ 2.52
$ 2.71
$ 2.78
$ 2.50
$ 2.17 Dividends Paid per Share
$ 2.16
$ 2.16
$ 2.16
$ 2.16
$ 2.16 Payout Ratio 86%
80%
78%
86%
100%
Rate of Return on Average Common Equity(BJ 11.28%
12.32%
12.94%
11.91%
10.69%
Ratio of Earnings to Fixed Charges 2.68 2.78 2.84 2.57 2.33 Book Value per Common Share(CJ
$22.33
$22.22
$21.68
$21.07
$20.32 Gross Utility Plant
$17,327,635
$16,925,280
$16,566,058
$15,861,484
$15,081,907 Accumulated Depreciation and Amortization of Utility Plant
$ 6,148,482
$ 5,737,849
$ 5,467,813
$ 5,057,104
$ 4,610,595 Thtal Assets
$16,915,331
$16,816,491
$16,312,734
$15,995,433
$14,543,696 Consolidated Capitalization Common Stock
$ 3,626,792
$ 3,801,157
$ 3,801,157
$ 3,772,662
$ 3,499,183 Retained Earnings 1,586,256 1,636,971 1,505,010 1,361,018 1,282,931 Common Equity 5,213,048 5,438,128 5,306,167 5,133,680 4,782,114 Preferred Stock Without Mandatory Redemption 113,392 324,994 384,994 429,994 429,994 Preferred Stock With Mandatory Redemption 150,000 150,000 150,000 150,000 75,000 Monthly Guaranteed Preferred Beneficial Interest in PSE&G's Subordinated Debentures 210,000 210,000 150,000 Quarterly Guaranteed Preferred Beneficial Interest in PSE&G's Subordinated Debentures 208,000 Long-Turm Debt 4,580,231 5,189,791 5,110,022 5,100,228 4,962,884 Thtal Capitalization
$10,474,671
$11,312,913
$11,101,183
$10,813,902
$10,249,992 (A) The dewikd consolidated financial swtements and related discussion appear in Appendix A of the Proxy Statement.
(BJ Net Income for a twelve-rrwnth period divided by the thirteen-mnnth average of Commnn Equity.
(CJ 1hta1 Comrrwn Equity divided by end-of-period Comrrwn Shares outswnding.
19
Condensed Consolidated Statements of Income
~
In thousands (except per share data) for the years ended December 31, 1996 1995 1994 Operating Revenues Electric
$3,944,362
$4,020,842
$3,739,713 Gas 1,880,994 1,686,403 1,778,528 I
Nonutility Activities 215,893 186,417 177,082
~
Total Operating Revenues 6,041,249 5,893,662 5,695,323 Operating Expenses Fuel for Electric Generation and Interchanged Power 918,514 891,782 695,763 l
Gas Purchased 1,117,716 961,539 1,023,956 Operation and Maintenance 1,371,800 1,320,345 1,323,886 1:
Depreciation and Amortization 607,293 596,966 555,461 Taxes 968,967 1,027,840 974,418 I
Total Operating Expenses 4,984,290 4,798,472 4,573,484 l
Operating Income 1,056,959 1,095,190 1,121,839 l
Allowance for Funds Used During Construction and Capitalized Interest 18,155 38,163 42,588 Other Income -
Net (1,920) 8,041 6,430 Interest Charges 453,111 464,207 462,189
'I Preferred Securities Dividend Requirements and Premium 32,725 49,900 42,147 I
Income from Continuing Operations 587,358 627,287 666,521 I
Income from Discontinued Operations 24,238 35,036 12,512 Net Income
$ 611,596
$ 662,323
$ 679,033 Shares of Common Stock Outstanding End of Period 233,470,291 244,697,930 244,697,930 Average for Period 242,400, 755 244,697,930 244,4 70, 794 I
Earnings per Average Share:
From Continuing Operations
$2.42
$2.57
$2.73 From Discontinued Operations
.10
.14
.05 Total Earnings per Average Share
$2.52
$2.71
$2.78 Dividends Paid per Share of Common Stock
$2.16
$2.16
$2.16 The detail.ed consolidated financial statemenls and related discussion appear in Appendix A of the Proxy Statement.
Condensed Consolidated Statements of Cash Flows i
In thousands for the years ended December 31, 1996 1995 1994 Net Income 611,596
$ 662,323 679,033 Adjustments to net income, primarily depreciation and amortization 822,864 872,550 564,745 Net cash provided by operating activities 1,434,460 1,534,873 1,243,778 Net cash used in investing activities, primarily additions to utility plant (offset by the net proceeds from the sale 1
of Discontinued Operations in 1996)
(9,225)
(935,305)
(1,010,420)
Net cash used in financing activities (1,208,296)
(603,093)
(237,200) i Net increase (decrease) in Cash and Cash Equivalents 216,939 (3,525)
(3,842)
Cash and Cash Equivalents at Beginning of Period 61,964 65,489 69,331 Cash and Cash Equivalents at End of Period 278,903 61,964 65,489 The detail.ed consolidated financial statements and related discussion appear in Appendix A of the Proxy Statement.
1 20
I Condensed Consolidated Balance Sheets I
In thousands at December 31, 1996 1995 I
Assets r
Utility Plant:
Utility Plant (including Nuclear Fuel)
$16,858,348
$16,532,232 I
Less: Accumulated Depreciation and Amortization 6,148,482 5,737,849 Net Utility Plant in Service 10,709,866 10,794,383 I
Construction Work in Progress (including Nuclear Fuel) 445,321 369,082 Plant Held for Future Use 23,966 23,966 I
Net Utility Plant 11,179,153 11,187,431 Investments and Other NoncurrentAssets 2,351,984 2,242,744 Current Assets 1,744,427 1,828,477 I
Deferred Debits 1,639,767 1,557,839 I
I Total
$16,915,331
$16,816,491 Capitalization and Liabilities Capitalization:
Common Equity
$ 5,213,048
$ 5,438,128 Subsidiaries' Preferred Securities:
Preferred Stock Without Mandatory Redemption 113,392 324,994 Preferred Stock With Mandatory Redemption 150,000 150,000 Monthly Guaranteed Preferred Beneficial Interest in PSE&G's Subordinated Debentures 210,000 210,000 Quarterly Guaranteed Preferred Beneficial Interest in PSE&G's Subordinated Debentures 208,000 Long-Turm Debt 4,580,231 5,189,791 Total Capitalization 10,474,671 11,312,913 Other Long-Turm Liabilities 184,769 199,832 Current Liabilities 2,271,754 1,548,026 Deferred Credits 3,984,137 3,755,720 Total
$16,915,331
$16,816,491 The detailed consolidated financial statements and related discussion appear in Appendix A of the Proxy Statement.
Condensed Consolidated Statements of Retained Earnings In thousands for the years ended December 31, 1996 1995 1994 Balance January 1
$1,636,971
$1,505,010
$1,361,018 Add Net Income 611,596 662,323 679,033 Total 2,248,567 2,167,333 2,040,051 Deduct Dividends on Common Stock 522,565 528,548 528,071 Retirement of Common Stock 133,047 Preferred Securities Issuance Expenses 6,699 1,814 6,970 Total Deductions 662,311 530,362 535,041 Balance December 31
$1,586,256
$1,636,971
$1,505,010 The detailed consolidated financial statements and related discussion appear in Appendix A of the Proxy Statement.
Notes to Consolidated Financial Statements For full text of Organization and Summary of Significant Accounting Fblicies refer to Note 1 to Consolidated Financial Statements in Appendix A of the Proxy Statement.
For full text of Commitments and Contingent Liabilities refer to Note 13 to Consolidated Financial Statements in Appendix A of the Proxy Statement.
21
Financial Statement of Responsibility To the Stockholders of Public Service Enterprise Group Incorporated:
The condensed financial statements in this Summary Annual Report were derived from the consolidated financial statements included in the Public Service Enterprise Group Incorporated (the "Company") Proxy Statement for the 1997 Annual Meeting of Stockholders, which has been enclosed in the same mailing as this Summary Annual Report. The integrity and objectivity of the financial information presented in the Proxy Statement and this Summary Annual Report are the responsibility of the Company's management. The financial statements report on management's accountability for corporate operations and assets. Tu this end, management maintains a highly developed system of internal con-trols and procedures designed to provide reasonable assurance that the Company's assets are protected and that all transactions are accounted for in conformity with generally accepted accounting principles. The system includes documented policies, guidelines and self-assessments, aug-mented by a comprehensive program of internal and independent audits conducted to monitor overall accuracy of financial information and com-pliance with established procedures. The consolidated financial statements included in the Proxy Statement were audited by Deloitte & Thuche LLP, independent auditors, whose report on the condensed consolidated financial statements appears herein.
E. James Ferland Chairman of the Board, President and Chief Executive Officer February 14, 1997 We~~
Robert C. Murray Vice President and Chief Financial Officer Independent Auditors' Report To the Stockholders and the Board of Directors of Public Service Enterprise Group Incorporated:
Patricia A. Rado Vice President and Controller, Principal Accounting Officer Deloitte&
ToucheLLP We have audited the consolidated balance sheets of Public Service Enterprise Group Incorporated and its subsidiaries (the "Company") as of December 31, 1996 and 1995, and the related consolidated statements of income, retained earnings 0
and cash flows for each of the three years in the period ended December 31, 1996. Such consolidated financial statements and our report thereon dated February 14, 1997, expressing an unqualified opinion (which are not presented herein) are included in Appendix A of the Proxy Statement for the 1997 Annual Meeting of Stockholders. The accompanying condensed consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on such condensed consolidated financial statements in relation to the complete consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed consolidated balance sheets as of December 31, 1996 and 1995 and the related condensed consolidated statements of income, retained earnings and cash flows for each of the three years in the period ended December 31, 1996 is fairly stated in all material respects in relation to the basic consolidated financial statements from which it has been derived.
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February 14, 1997 Parsippany, New Jersey 22
l I
Lawrence R. Codey has been a clirector since 1991. Has been President and Chief Operating Officer of PSE&G since September 1991. Member of Executive Committee and Finance Committee.
Director of PSE&G, Sealed Air Corporation, The 'frust Company of New Jersey, United Water Resources Inc. and Blue Cross & Blue Shield of New Jersey.
Ernest H. Drew has been a clirector since 1993. Has been a member, Board of Management ofHoechstAG, Frankfurt, Germany, a manufacturer of pharmaceuticals, chemicals, fibers, film, specialities and advanced materials, since January 1995. Was Chairman of the Board and Chief Executive Officer of Hoechst Celanese Corporation of Somerville, New Jersey from May 1994 until January 1995 and was President and Chief Executive Officer from January 1988 to May 1994.
Member of Executive Committee, Auclit Committee and Finance Committee. Director ofEDHI and Thomas & Betts Corporation.
T. J. Der mot Dunphy has been a clirector since 1980. Has been Chairman of the Board and Chief Executive Officer of Sealed Air Corporation, a Saddle Brook, New Jersey manufacturer of protec-tive packaging products and systems, since November 1996. Was President and Chief Executive Officer of Sealed Air Corporation from 1971 to November 1996. Chairman of Finance Committee and member of the Auclit Committee and Organization and Compensation Committee. Director of EDHI, Sealed Air Corporation, Summit Bancorp and Summit Bank.
E. J ames Ferland Chairman of the Board, President and Chief Executive Officer; Chairman of the Board and Chief Executive Officer ofPSE&G; Chairman of the Board and Chief Executive Officer ofEDHI.
Lawrence R. Codey President and Chief Operating Officer ofPSE&G.
E. James F erland has been a clirector since 1986.
Has been Chairman of the Board, President and Chief Executive Officer of Enterprise since July 1986, Chairman of the Board and Chief Executive Officer of PSE&G since September 1991, and Chairman of the Board and Chief Executive Officer of EDHI since June 1989. Chairman of Executive Committee. Director of PSE&G, EDHI, and EDHI's principal subsicliaries, and of Foster Wheeler Corporation and The Hartford Steam Boiler Inspection and Insurance Company.
R aymond V. Gilmartin has been a clirector since 1993. Has been Chairman of the Board, President and Chief Executive Officer of Merck & Co., Inc. of Whitehouse, New Jersey, a global pharmaceutical firm that discovers, develops, produces and markets human and animal health products, since November 1994. Was President and Chief Executive Officer of Merck & Co., Inc. from June 1994 to November 1994. Was Chairman of the Board, President and Chief Executive Officer of Becton Dickinson and Company from November 1992 to June 1994. Chairman of Nominating Committee and member of Finance Committee and Organization and Compensation Committee. Director of PSE&G, Merck & Co., Inc. and Proviclian Corporation.
Irwin Lerner has been a clirector since 1981.
Retired Chairman, President and Chief Executive Officer of Hoffmann-La Roche Inc., of Nutley, New Jersey, a manufacturer of pre-scription pharmaceuticals, vitamins and fine chemicals, and cliagnostic products and services. Chairman of the Organization and Compensation Committee and member of the Auclit Committee, Finance Committee and Nuclear Committee. Director of PSE&G, Humana, Inc., Sequana Therapeutics, Inc. and Medarex Inc.
Marilyn M. Pfaltz has been a clirector since 1980. Has been a partner of P and R Associates of Summit, New Jersey, a communica-tions firm, since 1968. Chair of Auclit Committee and member of Nominating Committee and Organization and Compensation Committee. Director of EDHI and AAA National Association.
James C. Pitney has been a clirector since 1979. Has been a partner in the law firm of Pitney, Harclin, Kipp & Szuch of Morristown, New Jersey, since 1958.
Member of Executive Committee, Auclit Committee, Finance Committee and Nominating Committee. Director of PSE&G,
'!Ti-Continental Corporation, sixteen funds of the Seligman family of funds and Seligman Quality, Inc.
For rest J. Remick has been a clirector since 1995. Has been an engineering consultant since July 1994. Retired Commissioner of the United States Nuclear Regulatory Commission. Was Associate Vice President - Research and Professor of Nuclear Engineering at Pennsylvania State University, from 1985 to 1989.
Chairman of Nuclear Committee and member of Auclit Committee and Nominating Committee. Director ofPSE&G.
Executive Officers of Enterprise Leon R. Eliason Chief Nuclear Officer and President-Nuclear Business Unit of PSE&G.
Robert J. Dougherty, Jr.
President and Chief Operating Officer ofEDHI.
Alfred C. Koeppe Senior Vice President-Corporate Services and External Affairs ofPSE&G.
23 Robert C. Murray Vice President and Chief Financial Officer; Senior Vice President and Chief Financial Officer of PSE&G.
R. Edwin Selover Vice President and General Counsel; Senior Vice President and General Counsel of PSE&G.
Richard J. Swift has been a clirector since 1994.
Has been Chairman of the Board, President and Chief Executive Officer of Foster Wheeler Corporation, of Clinton, New Jersey, a firm provicling design, engineering, construction, manu-facturing, management, plant oper-ations and environmental services, since May 1994. Member of Finance Committee, Nominating Committee and Nuclear Committee. Director ofEDHI, Foster Wheeler Corporation and Ingersoll-Rand Company.
Josh S. Weston has been a clirector since 1984.
Has been Chairman of the Board of Automatic Data Processing, Inc.,
of Roseland, New Jersey, since April 1986 and was Chief Executive Officer of Automatic Data Processing, Inc. from January 1983 to August 1996.
Member of Executive Committee, Nuclear Committee and Organization and Compensation Committee. Director ofEDHI, Automatic Data Processing Inc.,
Olsten Corporation, Vanstar Corporation and Shared Meclical Systems Corporation.
Frank Cassidy President and Chief Executive Officer of Energis Resources.
Patricia A. Rado Vice President and Controller; Vice President and Controller ofPSE&G.
Michael J. Thomson President and Chief Executive Officer of CEA.
Stock Exchange Listings New York (Enterprise common and PSE&G preferred)
Philadelphia (Enterprise common)
Trading Symbol: PEG Annual Meeting Please note that the annual meeting of stockholders of Public Service Enterprise Group Incorporated will be held at Newark Symphony Hall, 1020 Broad Street, Newark, New Jersey, on Tuesday, April 15, 1997 at 2 p.m.
Stockholder Services Stockholder inquiries about stock transfer, dividends, dividend rein-vestment, clirect deposit, missing or lost certificates, change of address notification and other account information should be directed to: Stockholder Services Department, Public Service Electric & Gas Company, P.O.
Box 1171, Newark, NJ 07101-1171.
Please include your account num-ber or social security number.
Stockholders can also phone our toll-free number 800-242-0813, Monday through Friday, with questions about stock transfer and registration, shares held in Enterprise Direct and our other stockholder services. Hours are:
10 a.m. to 3:30 p.m. Eastern time.
The telephone number for the hearing impaired with special equipment is TDD 800-732-3241.
Please have your account number or Social Security number ready when you call.
Stockholders can reach us by Internet e-mail at:
stkserv@pseg.com Stockholders can also reach us by FAX at: 201-824-7056
@Printed on recycled paper, using soy ink.
Stockholder Information Transfer Agents The transfer agents for the com-mon and preferred stocks are:
Stockholder Services Department Public Service Electric and Gas Company P.O. Box 1171 Newark, NJ 07101-1171 First Chicago Trust Company of New York P.O. Box 2506 Jersey City, NJ 07303-2506 Enterprise Direct -
Stock Purchase and Dividend Reinvestment Plan Enterprise offers Enterprise Direct, a Stock Purchase and Dividend Reinvestment Plan. For adclitional information, inclucling a prospectus and enrollment form, contact us through Internet e-mail at stkserv@pseg.com or call 800-242-0813.
Dividends Dividends on the common stock of Enterprise, as declared by the Board of Directors, are generally payable on the last business day of March, June, September and December of each year. Regular quarterly dividends on PSE&G's preferred stock are payable on the last business day of March, June, September and December of each year.
Direct Deposit of Dividends No more dividend checks delayed in the mail. No waiting in bank lines. Your quarterly common and preferred stock dividend payments can be deposited electronically to your personal checking or savings account. To use this free service, call us at 800-242-0813.
24 Security Analysts and Institutional Investors For information contact:
Director -
Investor Relations 201-430-6564 Available Publications Form 10-K: A copy of Enterprise's 1996 Annual Report to the Securities and Exchange Commission, filed on Form 10-K, may be obtained by calling 201-430-6503 or writing to:
Director -
Investor Relations Public Service Electric and Gas Company T6B P.O. Box 570 Newark, NJ 07101 The copy so provided will be with-out exhibits. Exhibits may be pur-chased for a specified fee.
Financial and Statistical Review:
A comprehensive statistical report containing historical financial and operating data may also be obtained from the Director -
Investor Relations.
Common Stock-Market Price and Dividends per Share 1996 1995 High Low Div.
High Low First Quarter
$32\\il
$25Y.
$.54
$29Ys
$26 Second Quarter 27%
25\\il
.54 30Y.
26%
Third Quarter 27%
25%
.54 29%
26%
Fourth Quarter 29 26%
.54 30%
28%
Div.
$.54
.54
.54
.54 The number of holders ofrecord of Public Service Enterprise Group Incorporated common stock as of December 31, 1996 was 167,205.
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