|
Exhibit
99.2
|
|
Table
1: PG&E Corporation Business Priorities
2007-2011
|
|
1. Advance
business transformation
|
|
2. Provide
attractive shareholder returns
|
|
3.
Increase investment in utility
infrastructure
|
|
4. Implement
an effective energy procurement
plan
|
|
5. Improve
reputation through more effective
communications
|
|
6. Evaluate
the evolving industry and related investment
opportunities
|
|
Table
2: Reconciliation of PG&E Corporation’s Earnings from Operations to
Consolidated Net Income in Accordance with Generally Accepted Accounting
Principles (“GAAP”)
|
|
Third
Quarter and Year-to-Date, 2007 vs.
2006
|
|
(in
millions, except per share amounts)
|
|
Three
months ended September 30,
|
Nine
months ended September 30,
|
|||||||||||||||||||||||||||||||
|
Earnings
|
Earnings
per Common Share (Diluted)
|
Earnings
(Loss)
|
Earnings
(Loss) per Common Share (Diluted)
|
|||||||||||||||||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||||||||||||||
|
PG&E
Corporation Earnings from Operations (1)
|
$ |
278
|
$ |
310
|
$ |
0.77
|
$ |
0.86
|
$ |
803
|
$ |
752
|
$ |
2.22
|
$ |
2.09
|
||||||||||||||||
|
Items
Impacting Comparability (2)
|
||||||||||||||||||||||||||||||||
|
Scheduling
Coordinator Cost Recovery (3)
|
-
|
55
|
-
|
0.15
|
-
|
77
|
-
|
0.21
|
||||||||||||||||||||||||
|
Environmental
Remediation Liability (4)
|
-
|
-
|
-
|
-
|
-
|
(18 | ) |
-
|
(0.05 | ) | ||||||||||||||||||||||
|
Recovery
of Interest on PX Liability (5)
|
-
|
28
|
-
|
0.08
|
-
|
28
|
-
|
0.08
|
||||||||||||||||||||||||
|
Total
|
-
|
83
|
-
|
0.23
|
-
|
87
|
-
|
0.24
|
||||||||||||||||||||||||
|
PG&E
Corporation Earnings on a GAAP basis
|
$ |
278
|
$ |
393
|
$ |
0.77
|
$ |
1.09
|
$ |
803
|
$ |
839
|
$ |
2.22
|
$ |
2.33
|
||||||||||||||||
|
1.
|
|
Earnings
from operations exclude items impacting comparability.
|
|
2.
|
Items
impacting comparability reconcile earnings from operations with
consolidated net income as reported in accordance with
GAAP. For the three and nine months ended September 30, 2007,
PG&E Corporation did not have any items impacting comparability to
report.
|
|
|
3.
|
Items
impacting comparability for the three and nine months ended September
30,
2006 reflect the recovery of approximately $55 million ($0.15 per
common
share) and $77 million ($0.21 per common share), after tax, respectively,
of Scheduling Coordinator (“SC”) costs incurred from April 1998 through
September 2006, which were determined by the Federal Energy Regulatory
Commission (“FERC”) to be recoverable through the transmission revenue
balancing account (“TRBA”).
|
|
|
4.
|
Items
impacting comparability for the nine months ended September 30,
2006
reflect an increase of approximately $18 million ($0.05 per common
share),
after-tax, in the estimated cost of environmental remediation associated
with the Utility’s gas compressor station located near Hinkley,
California, as a result of changes in the California Regional Water
Quality Control Board’s imposed remediation
levels.
|
|
|
5.
|
Items
impacting comparability for the three and nine months ended September
30,
2006 reflect the recovery of approximately $28 million ($0.08 per
common
share), after-tax, of previously recorded net interest expense
on the
Power Exchange Corporation (“PX”) liability from April 12, 2004 to
February 10, 2005, in the Energy Recovery Bond Balancing Account
as a
result of completion of the verification audit by the California
Public
Utilities Commission (“CPUC”) in the Utility's 2005 annual electric
true-up proceeding.
|
|
Third
Quarter and Year-to-Date, 2007 vs.
2006
|
|
(in
millions)
|
|
Three
months ended September 30,
|
Nine
months ended September 30,
|
|||||||||||||||
|
Earnings
|
Earnings
(Loss)
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||
|
Pacific
Gas and Electric Company
Earnings
from Operations (1)
|
$ |
279
|
$ |
292
|
$ |
808
|
$ |
729
|
||||||||
|
Items
Impacting Comparability (2)
|
||||||||||||||||
|
Scheduling
Coordinator Cost Recovery (3)
|
-
|
55
|
-
|
77
|
||||||||||||
|
Environmental
Remediation Liability (4)
|
-
|
-
|
-
|
(18 | ) | |||||||||||
|
Recovery
of Interest on PX Liability (5)
|
-
|
28
|
-
|
28
|
||||||||||||
|
Total
|
-
|
83
|
-
|
87
|
||||||||||||
|
Pacific
Gas and Electric Company Earnings
on
a GAAP basis
|
$ |
279
|
$ |
375
|
$ |
808
|
$ |
816
|
||||||||
|
1.
|
|
Earnings
from operations exclude items impacting comparability.
|
|
2.
|
Items
impacting comparability reconcile earnings from operations with
consolidated net income as reported in accordance with
GAAP. For the three and nine months ended September 30, 2007,
Pacific Gas and Electric Company did not have any items impacting
comparability to report.
|
|
|
3.
|
Items
impacting comparability for the three and nine months ended September
30,
2006 reflect the recovery of approximately $55 million and $77
million,
after tax, respectively, of SC costs incurred from April 1998 through
September 2006, which were determined by the FERC to be recoverable
through the TRBA.
|
|
|
4.
|
Items
impacting comparability for the nine months ended September 30,
2006
reflect an increase of approximately $18 million, after-tax, in
the
estimated cost of environmental remediation associated with the
Utility’s
gas compressor station located near Hinkley, California, as a result
of
changes in the California Regional Water Quality Control Board’s imposed
remediation levels.
|
|
|
5.
|
Items
impacting comparability for the three and nine months ended September
30,
2006 reflect the recovery of approximately $28 million, after-tax,
of
previously recorded net interest expense on the PX liability from
April
12, 2004 to February 10, 2005, in the Energy Recovery Bond Balancing
Account as a result of completion of the verification audit by
the CPUC in
the Utility's 2005 annual electric true-up proceeding.
|
|
|
Table
4: PG&E Corporation Earnings per Common Share (EPS) from
Operations
|
|
Third
Quarter 2007 vs. Third Quarter 2006
|
|
($/Share,
Diluted)
|
|
Q3
2006 EPS from Operations (1)
|
$ |
0.86
|
||
|
Rate
base revenue increase
|
0.09
|
|||
|
Tax
benefit for capital loss utilization (2)
|
(0.05 | ) | ||
|
Recovery
of energy supplier litigation costs (2)
|
(0.03 | ) | ||
|
LTD
Plan savings (2)
|
(0.02 | ) | ||
|
Billing
OII
|
(0.02 | ) | ||
|
Gas
transmission revenue
|
(0.01 | ) | ||
|
Storm
and outage costs
|
(0.01 | ) | ||
|
Miscellaneous
items
|
(0.04 | ) | ||
|
Q3
2007 EPS from Operations (1)
|
$ |
0.77
|
||
|
Year-to-Date
2007 vs. Year-to-Date 2006
|
|
($/Share,
Diluted)
|
|
Q3
2006 YTD EPS from Operations (1)
|
$ |
2.09
|
||
|
Rate
base revenue increase
|
0.25
|
|||
|
Gas
transmission revenue
|
0.01
|
|||
|
Storm
and outage costs (3)
|
0.01
|
|||
|
Miscellaneous
items
|
0.01
|
|||
|
Tax
benefit for capital loss utilization (2)
|
(0.05 | ) | ||
|
Recovery
of energy supplier litigation costs (2)
|
(0.03 | ) | ||
|
LTD
Plan savings (2)
|
(0.02 | ) | ||
|
Billing
OII
|
(0.02 | ) | ||
|
Environmental
remediation
|
(0.02 | ) | ||
|
Share
variance
|
(0.01 | ) | ||
|
Q3
2007 YTD EPS from Operations (1)
|
$ |
2.22
|
||
|
1.
|
See
Table 2 for a reconciliation of EPS from operations to EPS on a
GAAP
basis.
|
|
2.
|
Benefits
realized in 2006 with no similar benefits in 2007.
|
|
3.
|
Costs
incurred in 2006 with lower level of costs in
2007.
|
|
Table
5: PG&E Corporation Share
Statistics
|
|
Third
Quarter 2007 vs. Third Quarter 2006
|
|
(in
millions, except per share amounts)
|
|
|
Third
Quarter
2007
|
Third
Quarter
2006
|
%
Change
|
|||||||||
|
Common
Stock Data
|
||||||||||||
|
Book
Value per share – end of period (1)
|
$ |
22.58
|
$ |
21.15
|
6.76 | % | ||||||
|
Weighted
average common shares outstanding, basic
|
352
|
347
|
1.44 | % | ||||||||
|
Employee
stock-based compensation
|
1
|
2
|
(50.00 | )% | ||||||||
|
Weighted
average common shares outstanding, diluted
|
353
|
349
|
1.15 | % | ||||||||
|
9.5%
Convertible Subordinated Notes (participating securities)
|
19
|
19
|
-
|
|||||||||
|
Weighted
average common shares outstanding and participating securities,
diluted
|
372
|
368
|
1.09 | % | ||||||||
|
1. Common
shareholders’ equity per common share outstanding at period
end.
|
|
Source: PG&E
Corporation’s Condensed Consolidated Financial Statements and Notes
thereto included in PG&E Corporation’s and Pacific Gas and Electric
Company's combined Quarterly Report on Form 10-Q for the quarter
ended
September 30, 2007.
|
|
Table
6: Operational Performance Metrics
|
|
Third
Quarter Actual 2007 vs. Targets
2007
|
|
2007
|
||||||||||||||||
|
Percentage
Weight (1)
|
Q3
YTD Actual
|
Q3
YTD Target
|
EOY
Target
|
|||||||||||||
|
1.
Earnings from operations (in millions)
(Earnings
from ongoing core operations)
|
50 | % | $ |
803
|
See
note (2)
|
See
note (2)
|
||||||||||
|
2.
J.D. Power Customer Satisfaction Index
(Composite
of J.D. Power residential and business customer
surveys)
|
20 | % |
691
|
675
|
676
|
|||||||||||
|
3.
Business Transformation Performance
(Composite
of five Transformation metrics)
|
20 | % |
0.973
|
1.000
|
1.000
|
|||||||||||
|
4.
Employee Engagement Premier Survey
(Measurement
of employee engagement at PG&E)
|
5 | % |
See
note (3)
|
N/A
|
66 | % | ||||||||||
|
5.
Safety Performance
(Measurement
of occupational injury or illness based on OSHA
Recordables)
|
5 | % |
4.353
|
4.500
|
4.500
|
|||||||||||
|
1.
|
Represents
weighting used in calculating PG&E Corporation Short-Term Incentive
Plan performance for management employees.
|
|
2.
|
Internal
target not publicly disclosed but is consistent with publicly disclosed
guidance for 2007 EPS from operations of $2.70-$2.80.
|
|
3.
|
The
Employee Engagement Premier Survey will be administered in December
2007
with results available in February 2008.
|
|
DEFINITIONS
OF 2007 OPERATIONAL PERFORMANCE METRICS FROM TABLE
6:
|
|
1.
|
Earnings
from Operations:
|
|
|
|
|
Earnings
from operations measures PG&E Corporation’s earnings power from
ongoing core operations. It allows investors to compare the
underlying financial performance of the business from one period
to
another, exclusive of items that management believes do not reflect
the
normal course of operations (items impacting
comparability). The measurement is not in accordance with
GAAP. For a reconciliation of earnings from operations to
consolidated net income in accordance with GAAP, see Tables 2 and
3
above.
The
2007 target for earnings from operations is based on the Utility’s 2007
authorized return on equity. This target is not publicly
reported but is consistent with PG&E Corporation’s publicly disclosed
guidance range provided for 2007 EPS from operations of
$2.70-$2.80.
|
|
|
2.
|
J.D.
Power Customer Satisfaction Index:
|
|
Pacific
Gas and Electric Company measures residential and business customer
satisfaction with annual industry-wide surveys conducted by J.D.
Power and
Associates, as well as with proprietary studies using the same
survey
methodology in interim periods. The overall customer
satisfaction metric represents the year-to-date average of the
residential
and business overall customer satisfaction scores from both the
J.D.
Power-administered and proprietary surveys. The metric is calculated
by
first combining the available residential and business satisfaction
scores
(weighted 60% and 40%, respectively) in each period surveyed and
then
averaging all available composite scores for the year-to-date metric
value.
|
|
|
3.
|
Business
Transformation Performance:
|
|
The
Business Transformation (BT) index is comprised of five measurement
points
that define success in achieving key BT operational, financial,
and
post-BT implementation objectives. These five measurement
points are:
a. Overall
BT cost performance in comparison to budgeted amounts;
b. Overall
BT benefit performance in comparison to planned/budgeted
amounts;
c. New
business customer connection performance improvement for cycle
time and
number of customer commitments met;
d. SmartMeterTM
project
performance for number of meters installed and activated; and
e. BT
Foundational release schedule and scope
success.
The
measurement points are individually scored on an index scaled from
0 to
2. These scores then are averaged with equal weighting to
calculate the overall BT performance index score.
|
|
|
4.
|
Employee
Engagement Premier Survey:
|
|
|
|
|
The
employee engagement premier survey is designed around 15 key drivers
of
employee engagement. The average overall employee engagement
score provides a comprehensive metric that is derived by averaging
the
percent favorable responses from all 40 core survey items (all
fall into
one of the 15 key drivers).
|
|
|
5.
|
Safety
Performance:
|
|
The
OSHA Recordable Rate measures the number of OSHA Recordable injuries,
illnesses, or exposures that (1) satisfy OSHA requirements for
recordability, and (2) occur in the current year. In general,
an injury must result in medical treatment beyond first aid or
result in
work restrictions, death, or loss of consciousness to be OSHA
Recordable. The rate measures how frequently OSHA Recordable
cases occur for every 200,000 hours worked, or for approximately
every 100
employees.
|
|
|
Table
7: Pacific Gas and Electric Company Operating
Statistics
|
|
Third
Quarter and Year-to-Date, 2007 vs.
2006
|
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||
|
Electric
Sales (in millions kWh)
|
||||||||||||||||
|
Residential
|
8,641
|
8,929
|
23,580
|
23,770
|
||||||||||||
|
Commercial
|
9,304
|
9,276
|
25,597
|
25,211
|
||||||||||||
|
Industrial
|
4,145
|
4,025
|
11,285
|
11,407
|
||||||||||||
|
Agricultural
|
2,025
|
1,559
|
4,252
|
2,875
|
||||||||||||
|
BART,
public street and highway lighting
|
208
|
204
|
616
|
609
|
||||||||||||
|
Other
electric utilities
|
-
|
8
|
2
|
14
|
||||||||||||
|
Sales
from Energy Deliveries
|
24,323
|
24,001
|
65,332
|
63,886
|
||||||||||||
|
|
||||||||||||||||
|
Total
Electric Customers at September 30
|
5,099,634
|
5,054,722
|
||||||||||||||
|
|
||||||||||||||||
|
Bundled
Gas Sales (in millions MCF)
|
||||||||||||||||
|
Residential
|
24
|
24
|
149
|
147
|
||||||||||||
|
Commercial
|
12
|
12
|
52
|
55
|
||||||||||||
|
Total
Bundled Gas Sales
|
36
|
36
|
201
|
202
|
||||||||||||
|
Transportation
Only
|
199
|
185
|
454
|
405
|
||||||||||||
|
Total
Gas Sales
|
235
|
221
|
655
|
607
|
||||||||||||
|
Total
Gas Customers at September 30
|
4,252,349
|
4,214,606
|
||||||||||||||
|
|
||||||||||||||||
|
|
||||||||||||||||
|
Sources
of Electric Energy (in millions kWh)
|
||||||||||||||||
|
Utility
Generation
|
||||||||||||||||
|
Nuclear
|
4,775
|
5,018
|
13,718
|
13,622
|
||||||||||||
|
Hydro
(net)
|
2,087
|
2,964
|
5,778
|
10,924
|
||||||||||||
|
Fossil
|
114
|
107
|
348
|
514
|
||||||||||||
|
Total
Utility Generation
|
6,976
|
8,089
|
19,844
|
25,060
|
||||||||||||
|
Purchased
Power
|
||||||||||||||||
|
Qualifying
Facilities
|
4,611
|
4,543
|
12,617
|
12,254
|
||||||||||||
|
Irrigation
Districts
|
913
|
1,092
|
2,195
|
4,544
|
||||||||||||
|
Other
Purchased Power
|
1,647
|
1,036
|
2,186
|
1,892
|
||||||||||||
|
Spot
Market Purchases/Sales, net
|
3,658
|
3,605
|
10,939
|
4,767
|
||||||||||||
|
Total
Purchased Power (1)
|
10,829
|
10,276
|
27,937
|
23,457
|
||||||||||||
|
Delivery
from DWR
|
5,635
|
5,357
|
15,689
|
14,414
|
||||||||||||
|
|
||||||||||||||||
|
Delivery
to Direct Access Customers
|
1,714
|
1,981
|
5,114
|
5,862
|
||||||||||||
|
|
||||||||||||||||
|
Other
(includes energy loss)
|
(831 | ) | (1,702 | ) | (3,252 | ) | (4,907 | ) | ||||||||
|
|
||||||||||||||||
|
Total
Electric Energy Delivered
|
24,323
|
24,001
|
65,332
|
63,886
|
||||||||||||
|
|
||||||||||||||||
|
Diablo
Canyon Performance
|
||||||||||||||||
|
Overall
capacity factor (including refuelings)
|
97 | % | 103 | % | 94 | % | 95 | % | ||||||||
|
Refueling
outage period
|
None
|
None
|
4/30/07-5/29/07
|
4/17/06-5/25/06
|
||||||||||||
|
Refueling
outage duration during the period (days)
|
None
|
None
|
29.8
|
38.8
|
||||||||||||
|
1.
|
For
the three months ended September 30, 2007 and 2006, Total Purchased
Power
is net of Spot Market Sales of 462 million kWh and 761 million
kWh,
respectively. For the nine months ended September 30, 2007 and
2006, Total Purchased Power is net of Spot Market Sales of
2,038 million
kWh and 5,838 million kWh,
respectively.
|
|
Table
8: PG&E Corporation EPS
Guidance
|
|
2007
EPS Guidance
|
|
|
Low
|
High
|
||||||
|
EPS
Guidance on an Earnings from Operations Basis
|
$ |
2.70
|
$ |
2.80
|
||||
|
Estimated
Items Impacting Comparability
|
$ |
0.00
|
$ |
0.00
|
||||
|
EPS
Guidance on a GAAP Basis
|
$ |
2.70
|
$ |
2.80
|
||||
|
2008
EPS Guidance
|
|
|
Low
|
High
|
||||||
|
EPS
Guidance on an Earnings from Operations Basis
|
$ |
2.90
|
$ |
3.00
|
||||
|
Estimated
Items Impacting Comparability
|
$ |
0.00
|
$ |
0.00
|
||||
|
EPS
Guidance on a GAAP Basis
|
$ |
2.90
|
$ |
3.00
|
||||
|
Table
9: Rate Base - Pacific Gas and Electric
Company
|
|
2006
|
2007
|
2008
|
||||||||||
|
Recorded
|
Estimated
|
Estimated
|
||||||||||
|
Total
Weighted Average Rate Base (in billions)
|
$ |
15.9
|
$ |
16.9
|
$ |
18.7
|
||||||
|
Table
10: General Earnings Sensitivities for 2007 and
2008
|
|
PG&E
Corporation and Pacific Gas and Electric
Company
|
|
Variable
|
Description
of Change
|
Estimated
Earnings Impact for 2007
|
Estimated
Earnings Impact for 2008
|
|
Rate
base
|
+/-
$100 million change in rate base (1)
|
+/-
$6 million
|
+/-
$6 million
|
|
Return
on equity (ROE)
|
+/-
0.1% change in earned ROE
|
+/-
$9 million
|
+/-
$10 million
|
|
Share
count
|
+/-
1% change in average shares outstanding
|
-/+
$0.03 per share
|
-/+
$0.03 per share
|
|
Revenues
|
+/-
$7 million change in revenues (pre-tax), including Electric Transmission
and California Gas Transmission
|
+/-
$0.01 per share
|
+/-
$0.01 per share
|
|
1. Assumes
earning 11.35% on equity portion
(52%).
|
|
DISCUSSION
RELATED TO TABLES 8, 9, and 10:
|
|
·
|
the
Utility’s ability to timely recover costs through
rates;
|
|
·
|
the
outcome of regulatory proceedings, including ratemaking proceedings
pending at the CPUC and the FERC;
|
|
·
|
the
adequacy and price of electricity and natural gas supplies, and
the
ability of the Utility to manage and respond to the volatility
of the
electricity and natural gas markets;
|
|
·
|
the
effect of weather, storms, earthquakes, fires, floods, disease,
other
natural disasters, explosions, accidents, mechanical breakdowns,
acts of
terrorism, and other events or hazards on the Utility’s facilities and
operations, its customers, and third parties on which the Utility
relies;
|
|
·
|
the
potential impacts of climate change on the Utility’s electricity and
natural gas businesses;
|
|
·
|
changes
in customer demand for electricity and natural gas resulting from
unanticipated population growth or decline, general economic and
financial
market conditions, changes in technology, including the development
of
alternative energy sources, or other reasons;
|
|
·
|
operating
performance of the Utility’s Diablo Canyon nuclear generating facilities
(“Diablo Canyon”), the occurrence of unplanned outages at Diablo Canyon,
or the temporary or permanent cessation of operations at Diablo
Canyon;
|
|
·
|
the
ability of the Utility to recognize benefits from its initiatives
to
improve its business processes and systems and customer
service;
|
|
·
|
whether
the Utility’s planned capital investment projects are completed within
authorized cost amounts;
|
|
·
|
the
impact of changes in federal or state laws, or their interpretation,
on
energy policy and the regulation of utilities and their holding
companies;
|
|
·
|
the
impact of changing wholesale electric or gas market rules, including
new
rules of the California Independent System Operator to restructure
the
California wholesale electricity market;
|
|
·
|
how
the CPUC administers the conditions imposed on PG&E Corporation when
it became the Utility’s holding company;
|
|
·
|
the
extent to which PG&E Corporation or the Utility incurs costs and
liabilities in connection with litigation that are not recoverable
through
rates;
|
|
·
|
the
ability of PG&E Corporation and/or the Utility to access capital
markets and other sources of credit;
|
|
·
|
the
impact of environmental laws and regulations and the costs of compliance
and remediation;
|
|
·
|
the
effect of municipalization, direct access, community choice aggregation,
or other forms of bypass; and
|
|
·
|
other
factors and risks disclosed in PG&E Corporation’s and Pacific Gas and
Electric Company’s SEC reports.
|
|
Table
11: Cash Flow Sources and Uses
|
|
Year-to-Date
2007
|
|
PG&E
Corporation
|
|
(in
millions)
|
|
Cash
and Cash Equivalents, December 31, 2006
|
$ |
456
|
||
|
|
||||
|
Sources
of Cash
|
||||
|
Cash
from operations
|
$ |
2,078
|
||
|
Net
proceeds from sale of assets
|
15
|
|||
|
Net
proceeds from issuance of commercial paper
|
91
|
|||
|
Net
proceeds from issuance of long-term debt
|
690
|
|||
|
Borrowings
under credit facilities
|
600
|
|||
|
Common
stock issued
|
120
|
|||
|
Other
|
38
|
|||
|
|
$ |
3,632
|
||
|
|
||||
|
Uses
of Cash
|
||||
|
Capital
expenditures
|
$ |
2,035
|
||
|
Increase
in restricted cash
|
32
|
|||
|
Investments
in and proceeds from nuclear decommissioning trust, net
|
102
|
|||
|
Repayments
under credit facilities
|
300
|
|||
|
Rate
reduction bonds matured
|
217
|
|||
|
Energy
recovery bonds matured
|
251
|
|||
|
Common
stock dividends paid
|
367
|
|||
|
|
$ |
3,304
|
||
|
|
||||
|
Cash
and Cash Equivalents, September 30, 2007
|
$ |
784
|
|
Table
12: PG&E Corporation’s and Pacific Gas and Electric Company’s
Consolidated Cash Position
|
|
Third
Quarter 2007 vs. Third Quarter 2006
|
|
(in
millions)
|
|
|
2007
|
2006
|
Change
|
|||||||||
|
|
||||||||||||
|
Cash
Flow from Operating Activities (YTD September 30)
|
||||||||||||
|
PG&E
Corporation
|
$ | (15 | ) | $ |
129
|
$ | (144 | ) | ||||
|
Pacific
Gas and Electric Company
|
2,093
|
2,111
|
(18 | ) | ||||||||
| $ |
2,078
|
$ |
2,240
|
$ | (162 | ) | ||||||
|
Consolidated
Cash Balance (at September 30)
|
||||||||||||
|
PG&E
Corporation
|
$ |
324
|
$ |
354
|
$ | (30 | ) | |||||
|
Pacific
Gas and Electric Company
|
460
|
68
|
392
|
|||||||||
| $ |
784
|
$ |
422
|
$ |
362
|
|||||||
|
Consolidated
Restricted Cash Balance (at September 30)
|
||||||||||||
|
PG&E
Corporation
|
$ |
-
|
$ |
-
|
$ |
-
|
||||||
|
Pacific
Gas and Electric Company (1)
|
1,464
|
1,488
|
(24 | ) | ||||||||
| $ |
1,464
|
$ |
1,488
|
$ | (24 | ) | ||||||
|
1. Includes
$18 million and $43 million of restricted cash classified as Other
Noncurrent Assets – Other at September 30, 2007 and 2006,
respectively.
|
|
Source: PG&E
Corporation’s and Pacific Gas and Electric Company’s Condensed
Consolidated Financial Statements
included
|
|
in
PG&E Corporation’s and Pacific Gas and Electric Company’s combined
Quarterly Reports on Form 10-Q for the
quarters
|
|
ended
September 30, 2007 and September 30,
2006.
|
|
Table
13: PG&E Corporation’s and Pacific Gas and Electric Company’s
Long-Term Debt
|
|
Third
Quarter 2007 vs. Year-End 2006
|
|
(in
millions)
|
|
|
Balance
At
|
|||||||
|
|
September
30,
2007
|
December
31, 2006
|
||||||
|
|
||||||||
|
PG&E
Corporation
|
|
|
||||||
|
Convertible
subordinated notes, 9.50%, due 2010
|
$ |
280
|
$ |
280
|
||||
|
Less:
current portion(1)
|
-
|
(280 | ) | |||||
|
|
280
|
-
|
||||||
|
Utility
|
||||||||
|
Senior
notes:
|
||||||||
|
3.60%
to 6.05% bonds, due 2009-2037
|
5,800
|
5,100
|
||||||
|
Unamortized
discount, net of premium
|
(19 | ) | (16 | ) | ||||
|
Total
senior notes
|
5,781
|
5,084
|
||||||
|
Pollution
control bond loan agreements, variable rates(2),
due
2026(3)
|
614
|
614
|
||||||
|
Pollution
control bond loan agreement, 5.35%, due 2016
|
200
|
200
|
||||||
|
Pollution
control bond loan agreements, 4.75%, due 2023
|
345
|
345
|
||||||
|
Pollution
control bond loan agreements, variable rates(4),
due
2016-2026
|
454
|
454
|
||||||
|
Other
|
-
|
1
|
||||||
|
Less:
current portion
|
-
|
(1 | ) | |||||
|
Long-term
debt, net of current portion
|
7,394
|
6,697
|
||||||
|
Total
consolidated long-term debt, net of current
portion
|
$ |
7,674
|
$ |
6,697
|
||||
|
1.
|
Since
no holders of the Convertible Subordinated Notes exercised
the one-time
right to require PG&E Corporation to repurchase the Convertible
Subordinated Notes on June 30, 2007, PG&E Corporation reclassified the
Convertible Subordinated Notes as a noncurrent liability (in
Noncurrent
Liabilities - Long-Term Debt) in PG&E Corporation’s Condensed
Consolidated Balance Sheets effective as of that date.
|
|
2.
|
At
September 30, 2007, interest rates on these loans ranged from
3.88% to
4.05%.
|
|
|
|
|
3.
|
These
bonds are supported by $620 million of letters of credit which
expire on
February 24, 2012. Although the stated maturity date is 2026,
the bonds will remain outstanding only if the Utility extends
or replaces
the letters of credit.
|
|
4.
|
At
September 30, 2007, interest rates on these loans ranged from
3.20 % to
4.00%.
|
|
Table
14: PG&E Corporation and Pacific Gas and Electric Company Repayment
Schedule and Interest Rates -
Long-Term
|
|
Debt,
Rate Reduction Bonds and Energy Recovery Bonds as of September
30,
2007
|
|
(in
millions, except interest rates)
|
|
2007
|
2008
|
2009
|
2010
|
2011
|
Thereafter
|
Total
|
||||||||||||||||||||||
|
Long-term
debt:
|
||||||||||||||||||||||||||||
|
PG&E
Corporation
|
||||||||||||||||||||||||||||
|
Average
fixed interest rate
|
-
|
-
|
-
|
9.50 | % |
-
|
-
|
9.50 | % | |||||||||||||||||||
|
Fixed
rate obligations
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
280
|
$ |
-
|
$ |
-
|
$ |
280
|
||||||||||||||
|
Utility
|
||||||||||||||||||||||||||||
|
Average
fixed interest rate
|
-
|
-
|
3.60 | % |
-
|
4.20 | % | 5.67 | % | 5.36 | % | |||||||||||||||||
|
Fixed
rate obligations
|
$ |
-
|
$ |
-
|
$ |
600
|
$ |
-
|
$ |
500
|
$ |
5,245
|
$ |
6,345
|
||||||||||||||
|
Variable
interest rate as of September 30, 2007
|
-
|
-
|
-
|
-
|
-
|
3.88 | % | 3.88 | % | |||||||||||||||||||
|
Variable
rate obligations
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
1,068
|
$ |
1,068
|
||||||||||||||
|
Less:
current portion
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
||||||||||||||
|
Total
consolidated long-term debt
|
$ |
-
|
$ |
-
|
$ |
600
|
$ |
280
|
$ |
500
|
$ |
6,313
|
$ |
7,693
|
||||||||||||||
|
2007
|
2008
|
2009
|
2010
|
2011
|
Thereafter
|
Total
|
||||||||||||||||||||||
|
Utility
|
||||||||||||||||||||||||||||
|
Average
fixed interest rate
|
6.48 | % |
-
|
-
|
-
|
-
|
-
|
6.48 | % | |||||||||||||||||||
|
Rate
reduction bonds
|
$ |
73
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
73
|
||||||||||||||
|
Average
fixed interest rate
|
4.17 | % | 4.19 | % | 4.36 | % | 4.49 | % | 4.61 | % | 4.64 | % | 4.46 | % | ||||||||||||||
|
Energy
recovery bonds
|
$ |
88
|
$ |
354
|
$ |
370
|
$ |
386
|
$ |
424
|
$ |
403
|
$ |
2,025
|
||||||||||||||
|
Table
15: Pacific Gas and Electric
Company
|
|
Docket
Numbers of Selected Regulatory
Cases
|
|
Name
|
Brief
Description
|
Docket
Number
|
|
Gas
Accord IV
|
CPUC
proceeding to set rates, terms and conditions for gas transmission
and
storage services effective January 1, 2008 through
2010. Settlement filed on March 15, 2007. CPUC issued a final
decision on September 20, 2007 approving the settlement.
|
A.07-03-012
D.07-09-045
|
|
Cost
of Capital 2008
|
CPUC
proceeding to establish capital structure and increase the currently
authorized rate of return on equity and rate base for
2008. Final decision on rate of return expected by year-end
2007.
|
A.07-05-008
|
|
2006
Long Term Procurement Plan (2006 LTPP)
|
CPUC
proceeding to determine need for new generation in the 10-year
period 2007
through 2016. Also determines how costs associated with new
generation will be recovered from customers. In 2006 plan,
PG&E seeks approval to procure up to 2,300 MW of new
generation. Final decision expected by year-end
2007.
|
R.06-02-013
|
|
Billing
and Collection Investigation
|
On
September 20, 2007, the CPUC ordered the Utility to refund, at
shareholder
expense, approximately $35 million to customers and refund
reconnection fees and pay credits to approximately 3,000 customers
whose
service was shut off for nonpayment of illegal backbills. PG&E
Corporation and the Utility do not expect that the payment of such
refunds
will have a material adverse effect on their financial condition
or
results of operations.
|
I.03-01-012
D.07-09-041
|
|
QF
Pricing and Policy
|
On
September 20, 2007, the CPUC issued a decision that modifies the
CPUC’s
policies
and pricing mechanisms applicable to the investor-owned electric
utilities’ purchase of energy and capacity from certain QFs. Among
other
changes, the decision modifies the current formula for determining
the utilities’ short-run avoided
costs
(“SRAC”) (i.e., the cost of energy, which, in the absence of a QF’s
generation, the utilities would otherwise generate or purchase
from
another source). The modified SRAC formula uses a market
index formula based in part on forward market price
estimates. The Utility is evaluating the new SRAC pricing
formula to determine its effect on the energy payments that will
be made
to the non-settling QFs. On October 25, 2007, the Utility,
along with the other investor-owned electric utilities, The Utility
Reform
Network and the CPUC's Division of Ratepayer Advocates, filed an
application for rehearing of the decision.
|
R.04-04-003
D.07-09-040
|
|
Table
15 (continued): Pacific Gas and Electric
Company
|
|
Docket
Numbers of Selected Regulatory
Cases
|
|
Name
|
Brief
Description
|
Docket
Number
|
|
Transmission
Owner 10 Rate Case (TO10)
|
Primary
FERC rate-making proceeding to determine electric transmission
revenues
and wholesale and retail transmission rates effective October 1,
2007. Application filed on July 30, 2007. Order
issued September 28, 2007, accepting proposed rate subject to hearing
and
refund effective March 1, 2008. Final decision expected by second
quarter
2008.
|
ER07-1213-000
|
|
2007
Renewable Resources Solicitation and
Implementation
|
2007
Renewable Portfolio Standards solicitation approved in February
2007. Contracts are expected to be executed by year-end
2007. Decisions on the use of short-term contracts and on the
use of tradable Renewable Energy Credits are expected by year-end
2007.
|
R.06-05-027
D.07-02-011
R.06-02-012
D.07-07-027
|
|
Energy
Efficiency Order Instituting Rulemaking (OIR) Post-2005
|
Rulemaking
to determine Energy Efficiency policies and programs including
shareholder
risk/return mechanism. On September 20, 2007, the CPUC voted to
establish incentive ratemaking mechanisms applicable to the California
investor-owned utilities’ implementation of their energy efficiency
programs funded for the 2006-2008 and 2009-2011 program
cycles. The CPUC will review the adopted mechanisms in 2011
prior to continuation to subsequent program cycles. On October 31,
2007, the Utility, along with other investor-owned electric utilities,
filed a petition for modification of the shareholder incentive
mechanism
to reduce the possibility of utilities having to pay back interim
earnings
as long as the final measured energy savings stay above 65% of
the CPUC
savings goals.
|
R.06-04-010
D.07-10-032
|
|
Catastrophic
Event Memorandum Account (CEMA)
|
CPUC
proceeding to recover costs of responding to the 2005-2006 winter
storms
and the July 2006 “heat storm.” A decision denying heat storm costs
was issued in July 2007. On September 21, 2007, PG&E and
the CPUC Staff jointly filed a settlement agreement, resolving
the winter
storm cost issues.
|
A.06-11-005
D.07-07-041
|
|
Table
16: PG&E Corporation
|
|
Condensed
Consolidated Statements of Income
|
|
(in
millions, except per share amounts)
|
|
(Unaudited)
|
||||||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(in
millions, except per share amounts)
|
September
30,
|
September
30,
|
||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||
|
Operating
Revenues
|
||||||||||||||||
|
Electric
|
$ |
2,574
|
$ |
2,470
|
$ |
7,107
|
$ |
6,547
|
||||||||
|
Natural
gas
|
705
|
698
|
2,714
|
2,786
|
||||||||||||
|
Total
operating revenues
|
3,279
|
3,168
|
9,821
|
9,333
|
||||||||||||
|
Operating
Expenses
|
||||||||||||||||
|
Cost
of electricity
|
998
|
884
|
2,606
|
2,195
|
||||||||||||
|
Cost
of natural gas
|
281
|
298
|
1,431
|
1,539
|
||||||||||||
|
Operating
and maintenance
|
953
|
795
|
2,794
|
2,639
|
||||||||||||
|
Depreciation,
amortization, and decommissioning
|
465
|
456
|
1,325
|
1,291
|
||||||||||||
|
Total
operating expenses
|
2,697
|
2,433
|
8,156
|
7,664
|
||||||||||||
|
Operating
Income
|
582
|
735
|
1,665
|
1,669
|
||||||||||||
|
Interest
income
|
36
|
40
|
125
|
104
|
||||||||||||
|
Interest
expense
|
(196 | ) | (152 | ) | (571 | ) | (470 | ) | ||||||||
|
Other
income (expense), net
|
7
|
(22 | ) |
22
|
6
|
|||||||||||
|
Income
Before Income Taxes
|
429
|
601
|
1,241
|
1,309
|
||||||||||||
|
Income
tax provision
|
151
|
208
|
438
|
470
|
||||||||||||
|
Net
Income
|
$ |
278
|
$ |
393
|
$ |
803
|
$ |
839
|
||||||||
|
Weighted
Average Common Shares Outstanding, Basic
|
352
|
347
|
350
|
345
|
||||||||||||
|
Net
Earnings Per Common Share, Basic
|
$ |
0.77
|
$ |
1.09
|
$ |
2.23
|
$ |
2.36
|
||||||||
|
Net
Earnings Per Common Share, Diluted
|
$ |
0.77
|
$ |
1.09
|
$ |
2.22
|
$ |
2.33
|
||||||||
|
Dividends
Declared Per Common Share
|
$ |
0.36
|
$ |
0.33
|
$ |
1.08
|
$ |
0.99
|
||||||||
|
Table
17: PG&E Corporation
|
|
Condensed
Consolidated Balance Sheets
|
|
(in
millions)
|
|
Balance
At
|
||||||||
|
(in
millions)
|
September
30,
2007
(Unaudited)
|
December
31, 2006
|
||||||
|
ASSETS
|
||||||||
|
Current
Assets
|
||||||||
|
Cash
and cash equivalents
|
$ |
784
|
$ |
456
|
||||
|
Restricted
cash
|
1,446
|
1,415
|
||||||
|
Accounts
receivable:
|
||||||||
|
Customers
(net of allowance for doubtful accounts of $54 million in 2007
and $50 million in 2006)
|
2,424
|
2,343
|
||||||
|
Regulatory
balancing accounts
|
601
|
607
|
||||||
|
Inventories:
|
||||||||
|
Gas
stored underground and fuel oil
|
262
|
181
|
||||||
|
Materials
and supplies
|
160
|
149
|
||||||
|
Income
taxes receivable
|
-
|
-
|
||||||
|
Prepaid
expenses and other
|
404
|
716
|
||||||
|
Total
current assets
|
6,081
|
5,867
|
||||||
|
Property,
Plant, and Equipment
|
||||||||
|
Electric
|
25,028
|
24,036
|
||||||
|
Gas
|
9,380
|
9,115
|
||||||
|
Construction
work in progress
|
1,398
|
1,047
|
||||||
|
Other
|
16
|
16
|
||||||
|
Total
property, plant, and equipment
|
35,822
|
34,214
|
||||||
|
Accumulated
depreciation
|
(12,788 | ) | (12,429 | ) | ||||
|
Net
property, plant, and equipment
|
23,034
|
21,785
|
||||||
|
Other
Noncurrent Assets
|
||||||||
|
Regulatory
assets
|
4,530
|
4,902
|
||||||
|
Nuclear
decommissioning funds
|
1,978
|
1,876
|
||||||
|
Other
|
458
|
373
|
||||||
|
Total
other noncurrent assets
|
6,966
|
7,151
|
||||||
|
TOTAL
ASSETS
|
$ |
36,081
|
$ |
34,803
|
||||
|
Table
17 (continued): PG&E
Corporation
|
|
Condensed
Consolidated Balance Sheets
|
|
(in
millions)
|
|
Balance
At
|
||||||||
|
(in
millions)
|
September
30,
2007
(Unaudited)
|
December
31, 2006
|
||||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
|
Current
Liabilities
|
||||||||
|
Short-term
borrowings
|
$ |
1,165
|
$ |
759
|
||||
|
Long-term
debt, classified as current
|
-
|
281
|
||||||
|
Rate
reduction bonds, classified as current
|
73
|
290
|
||||||
|
Energy
recovery bonds, classified as current
|
350
|
340
|
||||||
|
Accounts
payable:
|
||||||||
|
Trade
creditors
|
772
|
1,075
|
||||||
|
Disputed
claims and customer refunds
|
1,648
|
1,709
|
||||||
|
Regulatory
balancing accounts
|
708
|
1,030
|
||||||
|
Other
|
418
|
420
|
||||||
|
Interest
payable
|
605
|
583
|
||||||
|
Income
taxes payable
|
118
|
102
|
||||||
|
Deferred
income taxes
|
88
|
148
|
||||||
|
Other
|
1,546
|
1,513
|
||||||
|
Total
current liabilities
|
7,491
|
8,250
|
||||||
|
Noncurrent
Liabilities
|
||||||||
|
Long-term
debt
|
7,674
|
6,697
|
||||||
|
Energy
recovery bonds
|
1,675
|
1,936
|
||||||
|
Regulatory
liabilities
|
3,879
|
3,392
|
||||||
|
Asset
retirement obligations
|
1,511
|
1,466
|
||||||
|
Income
taxes payable
|
233
|
-
|
||||||
|
Deferred
income taxes
|
2,874
|
2,840
|
||||||
|
Deferred
tax credits
|
101
|
106
|
||||||
|
Other
|
1,993
|
2,053
|
||||||
|
Total
noncurrent liabilities
|
19,940
|
18,490
|
||||||
|
Commitments
and Contingencies (Notes 4, 5, 9, and 10)
|
||||||||
|
Preferred
Stock of Subsidiaries
|
252
|
252
|
||||||
|
Preferred
Stock
|
||||||||
|
Preferred
stock, no par value, authorized 80,000,000 shares, $100 par value,
authorized 5,000,000 shares, none issued
|
-
|
-
|
||||||
|
Common
Shareholders' Equity
|
||||||||
|
Common
stock, no par value, authorized 800,000,000 shares, issued 377,063,946
common and 1,235,467 restricted shares in 2007 and issued 372,803,521
common and 1,377,538 restricted shares in 2006
|
6,044
|
5,877
|
||||||
|
Common
stock held by subsidiary, at cost, 24,665,500 shares
|
(718 | ) | (718 | ) | ||||
|
Reinvested
earnings
|
3,076
|
2,671
|
||||||
|
Accumulated
other comprehensive loss
|
(4 | ) | (19 | ) | ||||
|
Total
common shareholders' equity
|
8,398
|
7,811
|
||||||
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$ |
36,081
|
$ |
34,803
|
||||
|
Table
18: PG&E Corporation
|
|
Condensed
Consolidated Statements of Cash
Flows
|
|
(in
millions)
|
|
(Unaudited)
|
||||||||
|
Nine
Months Ended
|
||||||||
|
(in
millions)
|
September
30,
|
|||||||
|
2007
|
2006
|
|||||||
|
Cash
Flows From Operating Activities
|
||||||||
|
Net
income
|
$ |
803
|
$ |
839
|
||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation,
amortization, decommissioning, and allowance for equity funds used
during
construction
|
1,419
|
1,343
|
||||||
|
Deferred
income taxes and tax credits, net
|
(33 | ) | (172 | ) | ||||
|
Other
deferred charges and noncurrent liabilities
|
281
|
(37 | ) | |||||
|
Gain
on sale of assets
|
(1 | ) | (15 | ) | ||||
|
Net
effect of changes in operating assets and liabilities:
|
||||||||
|
Accounts
receivable
|
(80 | ) |
239
|
|||||
|
Inventories
|
(92 | ) | (8 | ) | ||||
|
Accounts
payable
|
(322 | ) | (175 | ) | ||||
|
Accrued
taxes and income taxes receivable
|
234
|
212
|
||||||
|
Regulatory
balancing accounts, net
|
(238 | ) |
404
|
|||||
|
Other
current assets
|
120
|
(71 | ) | |||||
|
Other
current liabilities
|
19
|
(325 | ) | |||||
|
Other
|
(32 | ) |
6
|
|||||
|
Net
cash provided by operating activities
|
2,078
|
2,240
|
||||||
|
Cash
Flows From Investing Activities
|
||||||||
|
Capital
expenditures
|
(2,035 | ) | (1,729 | ) | ||||
|
Net
proceeds from sale of assets
|
15
|
11
|
||||||
|
Decrease
(increase) in restricted cash
|
(32 | ) |
58
|
|||||
|
Proceeds
from nuclear decommissioning trust sales
|
703
|
942
|
||||||
|
Purchases
of nuclear decommissioning trust investments
|
(805 | ) | (1,040 | ) | ||||
|
Net
cash used in investing activities
|
(2,154 | ) | (1,758 | ) | ||||
|
Cash
Flows From Financing Activities
|
||||||||
|
Borrowings
under accounts receivable facility and working capital
facility
|
600
|
50
|
||||||
|
Repayments
under accounts receivable facility
|
(300 | ) | (310 | ) | ||||
|
Net
issuance of commercial paper, net of $2 million discount in
2007
|
91
|
281
|
||||||
|
Proceeds
from issuance of long-term debt, net of discount and issuance costs
of $10
million in 2007
|
690
|
-
|
||||||
|
Rate
reduction bonds matured
|
(217 | ) | (214 | ) | ||||
|
Energy
recovery bonds matured
|
(251 | ) | (224 | ) | ||||
|
Common
stock issued
|
120
|
108
|
||||||
|
Common
stock repurchased
|
-
|
(114 | ) | |||||
|
Common
stock dividends paid
|
(367 | ) | (342 | ) | ||||
|
Other
|
38
|
(8 | ) | |||||
|
Net
cash provided by (used in) financing activities
|
404
|
(773 | ) | |||||
|
Net
change in cash and cash equivalents
|
328
|
(291 | ) | |||||
|
Cash
and cash equivalents at January 1
|
456
|
713
|
||||||
|
Cash
and cash equivalents at September 30
|
$ |
784
|
$ |
422
|
||||
|
Supplemental
disclosures of cash flow information
|
||||||||
|
Cash
paid for:
|
||||||||
|
Interest
(net of amounts capitalized)
|
$ |
443
|
$ |
450
|
||||
|
Income
taxes paid, net
|
307
|
428
|
||||||
|
Supplemental
disclosures of noncash investing and financing
activities
|
||||||||
|
Common
stock dividends declared but not yet paid
|
$ |
127
|
$ |
116
|
||||
|
Assumption
of capital lease obligation
|
-
|
408
|
||||||
|
Table
19: Pacific Gas and Electric
Company
|
|
Condensed
Consolidated Statements of Income
|
|
(in
millions)
|
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
(in
millions)
|
September
30,
|
September
30,
|
||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||
|
Operating
Revenues
|
||||||||||||||||
|
Electric
|
$ |
2,574
|
$ |
2,470
|
$ |
7,107
|
$ |
6,547
|
||||||||
|
Natural
gas
|
705
|
698
|
2,714
|
2,786
|
||||||||||||
|
Total
operating revenues
|
3,279
|
3,168
|
9,821
|
9,333
|
||||||||||||
|
Operating
Expenses
|
||||||||||||||||
|
Cost
of electricity
|
998
|
884
|
2,606
|
2,195
|
||||||||||||
|
Cost
of natural gas
|
281
|
298
|
1,431
|
1,539
|
||||||||||||
|
Operating
and maintenance
|
950
|
793
|
2,788
|
2,637
|
||||||||||||
|
Depreciation,
amortization, and decommissioning
|
465
|
456
|
1,325
|
1,290
|
||||||||||||
|
Total
operating expenses
|
2,694
|
2,431
|
8,150
|
7,661
|
||||||||||||
|
Operating
Income
|
585
|
737
|
1,671
|
1,672
|
||||||||||||
|
Interest
income
|
33
|
36
|
116
|
94
|
||||||||||||
|
Interest
expense
|
(189 | ) | (144 | ) | (549 | ) | (447 | ) | ||||||||
|
Other
income (expense), net
|
13
|
(15 | ) |
38
|
16
|
|||||||||||
|
Income
Before Income Taxes
|
442
|
614
|
1,276
|
1,335
|
||||||||||||
|
Income
tax provision
|
159
|
236
|
458
|
509
|
||||||||||||
|
Net
Income
|
283
|
378
|
818
|
826
|
||||||||||||
|
Preferred
stock dividend requirement
|
4
|
3
|
10
|
10
|
||||||||||||
|
Income
Available for Common Stock
|
$ |
279
|
$ |
375
|
$ |
808
|
$ |
816
|
||||||||
|
Table
20: Pacific Gas and Electric
Company
|
|
Condensed
Consolidated Balance Sheets
|
|
(in
millions)
|
|
Balance
at
|
||||||||
|
(in
millions)
|
September
30,
2007
(Unaudited)
|
December
31,
2006
|
||||||
|
ASSETS
|
||||||||
|
Current
Assets
|
||||||||
|
Cash
and cash equivalents
|
$ |
460
|
$ |
70
|
||||
|
Restricted
cash
|
1,446
|
1,415
|
||||||
|
Accounts
receivable:
|
||||||||
|
Customers
(net of allowance for doubtful accounts of $54 million in 2007
and $50
million in 2006)
|
2,424
|
2,343
|
||||||
|
Related
parties
|
7
|
6
|
||||||
|
Regulatory
balancing accounts
|
601
|
607
|
||||||
|
Inventories:
|
||||||||
|
Gas
stored underground and fuel oil
|
262
|
181
|
||||||
|
Materials
and supplies
|
160
|
149
|
||||||
|
Income
taxes receivable
|
-
|
20
|
||||||
|
Prepaid
expenses and other
|
402
|
714
|
||||||
|
Total
current assets
|
5,762
|
5,505
|
||||||
|
Property,
Plant, and Equipment
|
||||||||
|
Electric
|
25,028
|
24,036
|
||||||
|
Gas
|
9,380
|
9,115
|
||||||
|
Construction
work in progress
|
1,397
|
1,047
|
||||||
|
Total
property, plant, and equipment
|
35,805
|
34,198
|
||||||
|
Accumulated
depreciation
|
(12,773 | ) | (12,415 | ) | ||||
|
Net
property, plant, and equipment
|
23,032
|
21,783
|
||||||
|
Other
Noncurrent Assets
|
||||||||
|
Regulatory
assets
|
4,530
|
4,902
|
||||||
|
Nuclear
decommissioning funds
|
1,978
|
1,876
|
||||||
|
Related
parties receivable
|
24
|
25
|
||||||
|
Other
|
359
|
280
|
||||||
|
Total
other noncurrent assets
|
6,891
|
7,083
|
||||||
|
TOTAL
ASSETS
|
$ |
35,685
|
$ |
34,371
|
||||
|
Table
20 (continued): Pacific Gas and Electric
Company
|
|
Condensed
Consolidated Balance Sheets
|
|
(in
millions)
|
|
Balance
At
|
||||||||
|
(in
millions, except share amounts)
|
September
30,
2007
(Unaudited)
|
December
31,
2006
|
||||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
|
Current
Liabilities
|
||||||||
|
Short-term
borrowings
|
$ |
1,165
|
$ |
759
|
||||
|
Long-term
debt, classified as current
|
-
|
1
|
||||||
|
Rate
reduction bonds, classified as current
|
73
|
290
|
||||||
|
Energy
recovery bonds, classified as current
|
350
|
340
|
||||||
|
Accounts
payable:
|
||||||||
|
Trade
creditors
|
772
|
1,075
|
||||||
|
Disputed
claims and customer refunds
|
1,648
|
1,709
|
||||||
|
Related
parties
|
43
|
40
|
||||||
|
Regulatory
balancing accounts
|
708
|
1,030
|
||||||
|
Other
|
403
|
402
|
||||||
|
Interest
payable
|
599
|
570
|
||||||
|
Income
taxes payable
|
157
|
-
|
||||||
|
Deferred
income taxes
|
92
|
118
|
||||||
|
Other
|
1,374
|
1,346
|
||||||
|
Total
current liabilities
|
7,384
|
7,680
|
||||||
|
Noncurrent
Liabilities
|
||||||||
|
Long-term
debt
|
7,394
|
6,697
|
||||||
|
Energy
recovery bonds
|
1,675
|
1,936
|
||||||
|
Regulatory
liabilities
|
3,879
|
3,392
|
||||||
|
Asset
retirement obligations
|
1,511
|
1,466
|
||||||
|
Income
taxes payable
|
103
|
-
|
||||||
|
Deferred
income taxes
|
2,936
|
2,972
|
||||||
|
Deferred
tax credits
|
101
|
106
|
||||||
|
Other
|
1,867
|
1,922
|
||||||
|
Total
noncurrent liabilities
|
19,466
|
18,491
|
||||||
|
Commitments
and Contingencies (Notes 4, 5, 10 and 11)
|
||||||||
|
Shareholders'
Equity
|
||||||||
|
Preferred
stock without mandatory redemption provisions:
|
||||||||
|
Nonredeemable,
5.00% to 6.00%, outstanding 5,784,825 shares
|
145
|
145
|
||||||
|
Redeemable,
4.36% to 5.00%, outstanding 4,534,958 shares
|
113
|
113
|
||||||
|
Common
stock, $5 par value, authorized 800,000,000 shares, issued 279,624,823
shares
|
1,398
|
1,398
|
||||||
|
Common
stock held by subsidiary, at cost, 19,481,213 shares
|
(475 | ) | (475 | ) | ||||
|
Additional
paid-in capital
|
2,036
|
1,822
|
||||||
|
Reinvested
earnings
|
5,619
|
5,213
|
||||||
|
Accumulated
other comprehensive loss
|
(1 | ) | (16 | ) | ||||
|
Total
shareholders' equity
|
8,835
|
8,200
|
||||||
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$ |
35,685
|
$ |
34,371
|
||||
|
Table
21: Pacific Gas and Electric
Company
|
|
Condensed
Consolidated Statements of Cash
Flows
|
|
(in
millions)
|
|
(Unaudited)
|
||||||||
|
Nine
Months Ended
|
||||||||
|
(in
millions)
|
September
30,
|
|||||||
|
2007
|
2006
|
|||||||
|
Cash
Flows From Operating Activities
|
||||||||
|
Net
income
|
$ |
818
|
$ |
826
|
||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
|
Depreciation,
amortization, decommissioning, and allowance for equity funds used
during
construction
|
1,417
|
1,342
|
||||||
|
Deferred
income taxes and tax credits, net
|
(35 | ) | (172 | ) | ||||
|
Other
deferred charges and noncurrent liabilities
|
270
|
(65 | ) | |||||
|
Gain
on sale of assets
|
(1 | ) | (15 | ) | ||||
|
Net
effect of changes in operating assets and liabilities:
|
||||||||
|
Accounts
receivable
|
(82 | ) |
239
|
|||||
|
Inventories
|
(92 | ) | (8 | ) | ||||
|
Accounts
payable
|
(315 | ) | (176 | ) | ||||
|
Accrued
taxes and income taxes receivable
|
228
|
113
|
||||||
|
Regulatory
balancing accounts, net
|
(238 | ) |
404
|
|||||
|
Other
current assets
|
120
|
(71 | ) | |||||
|
Other
current liabilities
|
35
|
(301 | ) | |||||
|
Other
|
(32 | ) | (5 | ) | ||||
|
Net
cash provided by operating activities
|
2,093
|
2,111
|
||||||
|
Cash
Flows From Investing Activities
|
||||||||
|
Capital
expenditures
|
(2,035 | ) | (1,729 | ) | ||||
|
Net
proceeds from sale of assets
|
15
|
11
|
||||||
|
Decrease
(increase) in restricted cash
|
(32 | ) |
58
|
|||||
|
Proceeds
from nuclear decommissioning trust sales
|
703
|
942
|
||||||
|
Purchases
of nuclear decommissioning trust investments
|
(805 | ) | (1,040 | ) | ||||
|
Net
cash used in investing activities
|
(2,154 | ) | (1,758 | ) | ||||
|
Cash
Flows From Financing Activities
|
||||||||
|
Borrowings
under accounts receivable facility and working capital
facility
|
600
|
50
|
||||||
|
Repayments
under accounts receivable facility
|
(300 | ) | (310 | ) | ||||
|
Net
issuance of commercial paper, net of $2 million discount in
2007
|
91
|
281
|
||||||
|
Proceeds
from issuance of long-term debt, net of discount and issuance costs
of $10
million in 2007
|
690
|
-
|
||||||
|
Rate
reduction bonds matured
|
(217 | ) | (214 | ) | ||||
|
Energy
recovery bonds matured
|
(251 | ) | (224 | ) | ||||
|
Common
stock dividends paid
|
(381 | ) | (345 | ) | ||||
|
Preferred
stock dividends paid
|
(10 | ) | (10 | ) | ||||
|
Equity
infusion from PG&E Corporation
|
200
|
-
|
||||||
|
Other
|
29
|
24
|
||||||
|
Net
cash provided by (used in) financing activities
|
451
|
(748 | ) | |||||
|
Net
change in cash and cash equivalents
|
390
|
(395 | ) | |||||
|
Cash
and cash equivalents at January 1
|
70
|
463
|
||||||
|
Cash
and cash equivalents at September 30
|
$ |
460
|
$ |
68
|
||||
|
Supplemental
disclosures of cash flow information
|
||||||||
|
Cash
paid for:
|
||||||||
|
Interest
(net of amounts capitalized)
|
$ |
416
|
$ |
423
|
||||
|
Income
taxes paid, net
|
403
|
562
|
||||||
|
Supplemental
disclosures of noncash investing and financing
activities
|
||||||||
|
Assumption
of capital lease obligation
|
$ |
-
|
$ |
408
|
||||