|
|
Three
months ended December 31,
|
Twelve
months ended December 31,
|
||||||||||||||||||||||||||||||
|
|
Earnings
|
Earnings
per Common Share (Diluted)
|
Earnings
|
Earnings
per
Common
Share
(Diluted)
|
||||||||||||||||||||||||||||
|
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
||||||||||||||||||||||||
|
PG&E
Corporation Earnings from Operations
(1)
|
$ | 260 | $ | 203 | $ | 0.70 | $ | 0.56 | $ | 1,081 | $ | 1,006 | $ | 2.95 | $ | 2.78 | ||||||||||||||||
|
Items
Impacting Comparability (2)
|
||||||||||||||||||||||||||||||||
|
Tax
settlement
|
257 | - | 0.67 | - | 257 | - | 0.68 | - | ||||||||||||||||||||||||
|
PG&E
Corporation Earnings on a GAAP basis
|
$ | 517 | $ | 203 | $ | 1.37 | $ | 0.56 | $ | 1,338 | $ | 1,006 | $ | 3.63 | $ | 2.78 | ||||||||||||||||
|
1.
|
“Earnings
from operations” is not calculated in accordance with GAAP and excludes
items impacting comparability as described in Note (2) below.
|
|
|
2.
|
Items
impacting comparability reconcile earnings from operations with
consolidated net income as reported in accordance with
GAAP. For the three and twelve months ended December 31, 2008,
PG&E Corporation recognized $257 million of net income resulting from
a settlement of tax audits for tax years 2001 through 2004. Of
this amount, $154 million was related to PG&E Corporation’s former
subsidiary, National Energy & Gas Transmission, Inc., and was recorded
as income from discontinued operations.
|
|
|
|
Three
months ended December 31,
|
Twelve
months ended December 31,
|
||||||||||||||
|
|
Earnings
|
Earnings
|
||||||||||||||
|
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
|
Pacific
Gas and Electric Company Earnings from Operations (1)
|
$ | 265 | $ | 203 | $ | 1,125 | $ | 1,010 | ||||||||
|
Items
Impacting Comparability (2)
|
||||||||||||||||
|
Tax
settlement
|
60 | - | 60 | - | ||||||||||||
|
Pacific
Gas and Electric Company Earnings on a GAAP basis
|
$ | 325 | $ | 203 | $ | 1,185 | $ | 1,010 | ||||||||
|
1.
|
“Earnings
from operations”
is not calculated in accordance with GAAP and excludes items impacting
comparability as described in Note (2) below.
|
||
|
2.
|
Items
impacting comparability reconcile earnings from operations with
consolidated net income as reported in accordance with
GAAP. For the three and twelve months ended December 31, 2008,
Pacific Gas and Electric Company recognized net income of $60 million, a
portion of the $257 million in net income recognized by PG&E
Corporation resulting from a settlement of tax audits for tax years 2001
through 2004.
|
||
|
Q4
2007 EPS from Operations (1)
|
$ | 0.56 | ||
|
Increase
in rate base revenues
|
0.07 | |||
|
Energy
efficiency incentive revenues
|
0.07 | |||
|
Recovery
of storm and outage expenses
|
0.02 | |||
|
Miscellaneous
items
|
0.02 | |||
|
Increase
in shares outstanding
|
(0.02 | ) | ||
|
Operating
and maintenance – gas system
|
(0.01 | ) | ||
|
Expenses
for statewide and local initiatives
|
(0.01 | ) | ||
|
Q4
2008 EPS from Operations (1)
|
$ | 0.70 |
|
2007
YTD EPS from Operations (1)
|
$ | 2.78 | ||
|
Increase
in rate base revenues
|
0.27 | |||
|
Energy
efficiency incentive revenues
|
0.07 | |||
|
Recovery
of storm and outage expenses
|
0.02 | |||
|
Billing
OII (2)
|
0.02 | |||
|
Gas
transmission revenues
|
0.01 | |||
|
Miscellaneous
items
|
0.03 | |||
|
Storm
and outage expenses
|
(0.08 | ) | ||
|
Operating
and maintenance – gas system
|
(0.06 | ) | ||
|
Increase
in shares outstanding
|
(0.05 | ) | ||
|
Expenses
for statewide and local initiatives
|
(0.04 | ) | ||
|
Nuclear
refueling outage (3)
|
(0.02 | ) | ||
|
2008
YTD EPS from Operations (1)
|
$ | 2.95 |
|
1.
|
See
Table 2 for a reconciliation of EPS from operations to EPS on a GAAP
basis.
|
|
2.
|
Charge
for customer refunds related to a delayed billing investigation that was
incurred in 2007. There was no similar charge in
2008.
|
|
3.
|
There
were no refueling outages during the three months ended December 31, 2008
and 2007. During the twelve months ended December 31, 2008, the
refueling outage to replace the steam generators lasted for 69 days
compared to the same period in 2007 when the outage lasted only 30
days.
|
|
|
Year-to-Date
2008
|
Year-to-Date
2007
|
%
Change
|
|||||||||
|
Common
Stock Data
|
||||||||||||
|
Book
Value per share – end of period (1)
|
$ | 24.64 | $ | 22.91 | 7.55 | % | ||||||
|
Weighted
average common shares outstanding, basic
|
357 | 351 | 1.71 | % | ||||||||
|
Employee
share-based compensation
|
1 | 2 | (50.00 | )% | ||||||||
|
Weighted
average common shares outstanding, diluted
|
358 | 353 | 1.42 | % | ||||||||
|
9.5%
Convertible Subordinated Notes (participating securities)
|
19 | 19 | - | |||||||||
|
Weighted
average common shares outstanding and participating securities,
diluted
|
377 | 372 | 1.34 | % | ||||||||
|
1.
|
Common shareholders’ equity per common share outstanding at period end (includes the effect of participating securities). |
|
Source:
|
PG&E
Corporation’s Consolidated Financial Statements and the Notes thereto
included in PG&E Corporation and Pacific Gas and Electric Company's
combined Annual Report on Form 10-K for the year ended December 31,
2008.
|
|
2008
|
|||||||||||||||
|
|
Percentage
Weight (1)
|
YTD
Actual
|
YTD
Target
|
||||||||||||
| 1. |
Earnings
from Operations (in millions)
|
40 | % | $ | 1,081 |
See
note (2)
|
|||||||||
| 2. |
Customer
Satisfaction & Brand Health Index
|
20 | % | 76.1 | 77.0 | ||||||||||
| 3. |
Reliable
Energy Delivery Index
|
20 | % | 1.443 | 1.000 | ||||||||||
| 4. |
Employee
Engagement Premier Survey
|
10 | % | 68.6 | % | 66.0 | % | ||||||||
| 5. |
Safety
Performance
|
10 | % | 3.241 | 3.483 | ||||||||||
|
1.
|
Represents
weighting used in calculating performance under the PG&E Corporation
Short-Term Incentive Plan for management employees.
|
|
|
2.
|
Internal
target not publicly disclosed but is consistent with publicly disclosed
guidance for 2008 EPS from operations of $2.90-$3.00.
|
|
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.
The
2008 target for earnings from operations is based on the Utility’s 2008
authorized return on equity. This target is not publicly
reported but is consistent with PG&E Corporation’s publicly disclosed
guidance range provided for 2008 EPS from operations of
$2.90-$3.00.
|
|
|
2.
|
Customer
Satisfaction & Brand Health Index:
|
|
The
Customer Satisfaction & Brand Health Index is a combination of a
Customer Satisfaction Score, which has a 75 percent weighting and a Brand
Favorability Score, which has a 25 percent weighting in the
composite. The Customer Satisfaction Score is a measure of
overall satisfaction with PG&E’s operational performance in delivering
services such as reliability, pricing of services, and customer service
experience. The Brand Favorability Score is a measure of the
overall favorability towards the PG&E brand, and measures the
emotional connection that customers have with the brand and is based on
assessing perceptions regarding PG&E’s images, such as trust,
heritage, and social responsibility. The Brand Favorability
Score will measure residential, small business, and medium business
customer perceptions, with weightings based on revenue: 60
percent for residential customers and 40 percent for business
customers.
|
|
|
3.
|
Reliable
Energy Delivery Index:
|
|
Reliable
Energy Delivery Index is a composite of four categories outlined
below. Overall, these metrics provide a balanced view on the
number and duration of electric systems unplanned interruptions, the
integrity of the gas transmission and distribution system, and performance
of the appropriate level of maintenance and focused investment on the
system infrastructure.
1. System
Average Interruption Frequency Index (SAIFI)
2. Customer
Average Interruption Duration Index (CAIDI)
3. Execution
of Electric-Based Work Units
4. Gas
Transmission and Distribution Integrity
|
|
|
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
Occupational Safety & Health Administration (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.
|
|
|
Three
Months Ended December 31,
|
Twelve
Months Ended December 31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Electric
Sales (in millions kWh)
|
||||||||||||||||
|
Residential
|
7,421 | 7,216 | 31,454 | 30,796 | ||||||||||||
|
Commercial
|
8,360 | 8,389 | 34,053 | 33,986 | ||||||||||||
|
Industrial
|
4,126 | 3,874 | 16,148 | 15,159 | ||||||||||||
|
Agricultural
|
1,222 | 1,150 | 5,594 | 5,402 | ||||||||||||
|
BART,
public street and highway lighting
|
213 | 217 | 877 | 833 | ||||||||||||
|
Other
electric utilities
|
1 | - | 1 | 3 | ||||||||||||
|
Sales
from Energy Deliveries
|
21,343 | 20,846 | 88,127 | 86,179 | ||||||||||||
|
|
||||||||||||||||
|
Total
Electric Customers at December 31
|
5,134,423 | 5,118,593 | ||||||||||||||
|
|
||||||||||||||||
|
Bundled
Gas Sales (in millions MCF)
|
||||||||||||||||
|
Residential
|
46 | 48 | 199 | 197 | ||||||||||||
|
Commercial
|
15 | 15 | 64 | 67 | ||||||||||||
|
Total
Bundled Gas Sales
|
61 | 63 | 263 | 264 | ||||||||||||
|
Transportation
Only
|
133 | 151 | 570 | 605 | ||||||||||||
|
Total
Gas Sales
|
194 | 214 | 833 | 869 | ||||||||||||
|
Total
Gas Customers at December 31
|
4,271,214 | 4,270,270 | ||||||||||||||
|
|
||||||||||||||||
|
Sources
of Electric Energy (in millions kWh)
|
||||||||||||||||
|
Utility
Generation
|
||||||||||||||||
|
Nuclear
|
4,846 | 4,870 | 17,096 | 18,588 | ||||||||||||
|
Hydro
(net)
|
1,645 | 1,874 | 7,865 | 7,652 | ||||||||||||
|
Fossil
|
125 | 135 | 518 | 483 | ||||||||||||
|
Total
Utility Generation
|
6,616 | 6,879 | 25,479 | 26,723 | ||||||||||||
|
Purchased
Power
|
||||||||||||||||
|
Qualifying
Facilities
|
3,579 | 3,962 | 15,758 | 16,579 | ||||||||||||
|
Irrigation
Districts
|
285 | 302 | 2,094 | 2,497 | ||||||||||||
|
Other
Purchased Power
|
500 | 204 | 2,562 | 2,390 | ||||||||||||
|
Spot
Market Purchases/Sales, net
|
6,751 | 3,752 | 27,254 | 14,691 | ||||||||||||
|
Total
Purchased Power (1)
|
11,115 | 8,220 | 47,668 | 36,157 | ||||||||||||
|
Delivery
from DWR
|
3,220 | 5,504 | 13,344 | 21,193 | ||||||||||||
|
|
||||||||||||||||
|
Delivery
to Direct Access Customers
|
1,505 | 1,610 | 6,191 | 6,724 | ||||||||||||
|
|
||||||||||||||||
|
Other
(includes energy loss)
|
(1,113 | ) | (1,367 | ) | (4,555 | ) | (4,618 | ) | ||||||||
|
|
||||||||||||||||
|
Total
Electric Energy Delivered
|
21,343 | 20,846 | 88,127 | 86,179 | ||||||||||||
|
|
||||||||||||||||
|
Diablo
Canyon Performance
|
||||||||||||||||
|
Overall
capacity factor (including refuelings)
|
98 | % | 99 | % | 87 | % | 95 | % | ||||||||
|
Refueling
outage period
|
None
|
None
|
2/3/08-4/12/08
|
4/30/07-5/29/07
|
||||||||||||
|
Refueling
outage duration during the period (days)
|
None
|
None
|
68.9 | 29.8 | ||||||||||||
|
1.
|
For
the three months ended December 31, 2008 and 2007, Total Purchased Power
is net of Spot Market Sales of 608 million kWh and 633 million kWh,
respectively. For the twelve months ended December 31, 2008 and
2007, Total Purchased Power is net of Spot Market Sales of 3,432 million
kWh and 2,671 million kWh,
respectively.
|
|
2009
EPS Guidance
|
Low
|
High
|
||||||
|
EPS
Guidance on an Earnings from Operations Basis
|
$ | 3.15 | $ | 3.25 | ||||
|
Estimated
Items Impacting Comparability
|
||||||||
|
Tax
refunds (1)
|
0.13 | 0.16 | ||||||
|
Recovery
of hydro divestiture costs (2)
|
0.07 | 0.07 | ||||||
|
Accelerated
work on gas system (3)
|
(0.15 | ) | (0.12 | ) | ||||
|
Estimated
EPS on a GAAP Basis
|
$ | 3.20 | $ | 3.36 | ||||
|
1.
|
Tentative agreement to resolve federal tax refund claims related to tax years 1998 and 1999. |
|
2.
|
Anticipated recovery of costs incurred in connection with efforts to determine the market value of hydroelectric generation facilities. |
|
|
|
|
3.
|
Forecasted costs to accelerate the performance of system-wide gas integrity surveys and remedial work. |
|
·
|
the
Utility’s ability to manage capital expenditures and its operating and
maintenance expenses within authorized levels;
|
|
·
|
the
outcome of pending and future regulatory proceedings and
whether the Utility is able to timely recover its costs through
rates;
|
|
·
|
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, including the ability of the Utility
and its counterparties to post or return collateral;
|
|
·
|
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 Diablo Canyon, the availability of nuclear fuel, the
occurrence of unplanned outages at Diablo Canyon, or the temporary or
permanent cessation of operations at Diablo Canyon;
|
|
·
|
whether
the Utility can maintain the cost savings it has recognized from operating
efficiencies it has achieved and identify and successfully implement
additional sustainable cost-saving measures;
|
|
·
|
whether
the Utility incurs substantial expense to improve the safety and
reliability of its electric and natural gas systems;
|
|
·
|
whether
the Utility achieves the CPUC’s energy efficiency targets and recognizes
any incentives the Utility may earn in a timely manner;
|
|
·
|
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 (“CAISO”) 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, from insurance, or from other third parties;
|
|
·
|
the
ability of PG&E Corporation, the Utility, and counterparties, to
access capital markets and other sources of credit in a timely manner on
acceptable terms, especially given the recent deteriorating conditions in
the economy and financial markets;
|
|
·
|
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;
|
|
·
|
the
impact of changes in federal or state tax laws, policies, or regulations;
and
|
|
·
|
other
factors and risks discussed in PG&E Corporation and Pacific Gas and
Electric Company’s 2008 Annual Report on Form 10-K and other reports
filed with the Securities and Exchange Commission.
|
|
2008
|
2009
|
|||||||
|
Recorded
|
Estimated
|
|||||||
|
Total
Weighted Average Rate Base (in billions)
|
$ | 18.2 | $ | 20.1 | ||||
|
|
The estimate of rate base for 2009 and the forecast of capital expenditures that the estimate is based on are forward-looking statements that are subject to various risks and uncertainties, including whether the amount and timing of actual expenditures are consistent with the forecasted amount and timing. Actual results may differ materially. For a discussion of the factors that may affect future results, see the factors listed in Table 8 and the discussion of risk factors in PG&E Corporation and Pacific Gas and Electric Company's Annual Report on Form 10-K for the year ended December 31, 2008. |
|
Variable
|
Description
of Change
|
Estimated
2009
Earnings
Impact
|
|
Rate
base
|
+/-
$100 million change in rate base (1)
|
+/-
$6 million
|
|
Return
on equity (ROE)
|
+/-
0.1% change in earned ROE
|
+/-
$10 million
|
|
Share
count
|
+/-
1% change in average shares outstanding
|
-/+
$0.03 per share
|
|
Revenues
|
+/-
$7 million change in revenues (pre-tax), including Electric Transmission
and California Gas Transmission
|
+/-
$0.01 per share
|
|
1.
|
Assumes earning an 11.45% combined CPUC- and FERC-authorized weighted average return on 52% equity portion of capital structure. |
|
Cash
and Cash Equivalents, December 31, 2007
|
$ | 345 | ||
|
|
||||
|
Sources
of Cash
|
||||
|
Cash
from operations
|
$ | 2,749 | ||
|
Net
proceeds from sale of assets
|
26 | |||
|
Decrease
in restricted cash
|
36 | |||
|
Net
proceeds from issuance of long-term debt
|
2,185 | |||
|
Borrowings
under credit facilities
|
533 | |||
|
Borrowings
of commercial paper, net
|
6 | |||
|
Common
stock issued
|
225 | |||
|
|
$ | 5,760 | ||
|
|
||||
|
Uses
of Cash
|
||||
|
Capital
expenditures
|
$ | (3,628 | ) | |
|
Investments
in and proceeds from nuclear decommissioning trust, net
|
(49 | ) | ||
|
Repayments
under credit facilities
|
(783 | ) | ||
|
Long-term
debt repurchased
|
(454 | ) | ||
|
Energy
recovery bonds matured
|
(354 | ) | ||
|
Common
stock dividends paid
|
(546 | ) | ||
|
Other
|
(72 | ) | ||
|
|
$ | (5,886 | ) | |
|
|
||||
|
Cash
and Cash Equivalents, December 31, 2008
|
$ | 219 |
|
|
2008
|
2007
|
Change
|
|||||||||
|
|
||||||||||||
|
Cash
Flow from Operating Activities (YTD December 31)
|
||||||||||||
|
PG&E
Corporation
|
$ | (17 | ) | $ | 5 | $ | (22 | ) | ||||
|
Pacific
Gas and Electric Company
|
2,766 | 2,541 | 225 | |||||||||
| $ | 2,749 | $ | 2,546 | $ | 203 | |||||||
|
Consolidated
Cash Balance (at December 31)
|
||||||||||||
|
PG&E
Corporation
|
$ | 167 | $ | 204 | $ | (37 | ) | |||||
|
Pacific
Gas and Electric Company
|
52 | 141 | (89 | ) | ||||||||
| $ | 219 | $ | 345 | $ | (126 | ) | ||||||
|
Consolidated
Restricted Cash Balance (at December 31)
|
||||||||||||
|
PG&E
Corporation
|
$ | - | $ | - | $ | - | ||||||
|
Pacific
Gas and Electric Company(1)
|
1,309 | 1,315 | (6 | ) | ||||||||
| $ | 1,309 | $ | 1,315 | $ | (6 | ) | ||||||
|
1.
|
Includes $19 million and $18 million of restricted cash classified as Other Noncurrent Assets – Other in 2008 and 2007, respectively. |
|
Source:
|
PG&E
Corporation and Pacific Gas and Electric Company’s Consolidated Financial
Statements and Notes thereto included in PG&E Corporation and Pacific
Gas and Electric Company’s combined Annual Report on Form 10-K for the
year ended December 31, 2008.
|
|
Balance
at
December
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
PG&E
Corporation
|
||||||||
|
Convertible
subordinated notes, 9.50%, due 2010
|
$ | 280 | $ | 280 | ||||
|
Utility
|
||||||||
|
Senior
notes:
|
||||||||
|
3.60%
due 2009
|
600 | 600 | ||||||
|
4.20%
due 2011
|
500 | 500 | ||||||
|
6.25%
due 2013
|
400 | - | ||||||
|
4.80%
due 2014
|
1,000 | 1,000 | ||||||
|
5.625%
due 2017
|
700 | 500 | ||||||
|
8.25%
due 2018
|
800 | - | ||||||
|
6.05%
due 2034
|
3,000 | 3,000 | ||||||
|
5.80%
due 2037
|
700 | 700 | ||||||
|
6.35%
due 2038
|
400 | - | ||||||
|
Less:
current portion
|
(600 | ) | - | |||||
|
Unamortized
discount, net of premium
|
(22 | ) | (22 | ) | ||||
|
Total
senior notes
|
7,478 | 6,278 | ||||||
|
Pollution
control bonds:
|
||||||||
|
Series
1996 C, E, F, 1997 B, variable rates(1),
due 2026(2)
|
614 | 614 | ||||||
|
Series
1996 A, 5.35%, due 2016
|
200 | 200 | ||||||
|
Series
2004 A-D, 4.75%, due 2023
|
345 | 345 | ||||||
|
Series
2005 A-G, variable rates, due 2016 and 2026(3)
|
- | 454 | ||||||
|
Series
2008 A-D, variable rates(4),
due 2016 and 2026(5)
|
309 | - | ||||||
|
Series
2008 F and G, 3.75%(6),
due 2018 and 2026
|
95 | - | ||||||
|
Total
pollution control bonds
|
1,563 | 1,613 | ||||||
|
Total
Utility long-term debt, net of current portion
|
9,041 | 7,891 | ||||||
|
Total
consolidated long-term debt, net of current portion
|
$ | 9,321 | $ | 8,171 | ||||
|
|
||||||||
|
(1) At
December 31, 2008, interest rates on these bonds and the related loans
ranged from 0.75% to 1.20%.
|
||||||||
|
(2) Each
series of these bonds is supported by a separate letter of credit which
expires on February 24, 2012. Although the stated maturity date is
2026, each series will remain outstanding only if the Utility extends or
replaces the letter of credit related to the series or otherwise obtains a
consent from the issuer to the continuation of the series without a credit
facility.
|
||||||||
|
(3) During
2008, the credit rating of the insurer of these bonds was downgraded or
put on review for possible downgrade by several credit agencies, resulting
in increased interest rates. To reduce interest expense, the Utility
repurchased $300 million of the 2005 bonds in March 2008 and the remaining
$154 million in April 2008. In September and October 2008, all of
these series, except for the Series 2005 E bonds, were refunded through
the issuance of the Series 2008 A-D and F and G bonds. See footnotes
4 and 5.
|
||||||||
|
(4)
At December 31, 2008, interest rates on these bonds and the related loans
ranged from 0.57% to 0.85%.
|
||||||||
|
(5)
Each series of these bonds is supported by a separate direct-pay letter of
credit which expires on October 29, 2011. The Utility may choose to
provide a substitute letter of credit for any series of these bonds,
subject to a rating requirement.
|
||||||||
|
(6)
These bonds bear interest at 3.75% per year through September 19, 2010,
are subject to mandatory tender on September 10, 2010, and may be
remarketed in a fixed or variable rate mode.
|
||||||||
|
2009
|
2010
|
2011
|
2012
|
2013
|
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 | % | 3.75 | % | 4.20 | % | - | 6.25 | % | 5.99 | % | 5.71 | % | |||||||||||||||
|
Fixed
rate obligations
|
$ | 600 | $ | 95 | $ | 500 | - | $ | 400 | $ | 7,145 | $ | 8,740 | |||||||||||||||
|
Variable
interest rate as of December 31, 2008
|
- | - | 0.75 | % | 0.92 | % | - | - | 0.87 | % | ||||||||||||||||||
|
Variable
rate obligations
|
- | - | $ | 309 | (1) | $ | 614 | (2) | - | - | $ | 923 | ||||||||||||||||
|
Total
consolidated long-term debt
|
$ | 600 | $ | 375 | $ | 809 | $ | 614 | $ | 400 | $ | 7,145 | $ | 9,943 | ||||||||||||||
|
(1)
These bonds, due in 2016-2026, are backed by a direct-pay letter of credit
which expires on October 29, 2011. The bonds will be subject to a
mandatory redemption unless the letter of credit is extended or replaced
or the issuer consents to the continuation of these series without a
credit facility. Accordingly, the bonds have been classified for
repayment purposes in 2011.
|
||||||||||||||||||||||||||||
|
(2)
The $614 million pollution control bonds, due in 2026, are backed by
letters of credit which expire on February 24, 2012. The bonds will
be subject to a mandatory redemption unless the letters of credit are
extended or replaced. Accordingly, the bonds have been classified for
repayment purposes in 2012.
|
||||||||||||||||||||||||||||
|
ENERGY
RECOVERY BONDS (3):
|
2009
|
2010
|
2011
|
2012
|
Total
|
|||||||||||||||
|
Utility
|
|
|||||||||||||||||||
|
Average
fixed interest rate
|
4.36 | % | 4.49 | % | 4.59 | % | 4.66 | % |
4.53
|
% | ||||||||||
|
Energy
recovery bonds
|
$ | 370 | $ | 386 | $ | 404 | $ | 423 | $ | 1,583 | ||||||||||
|
|
||||||||||||||||||||
|
(3) These bonds were
issued by PG&E Energy Recovery Funding LLC (“PERF”), a wholly owned
consolidated subsidiary of Pacific Gas and Electric Company. The
proceeds were used by PERF to purchase from Pacific Gas and Electric
Company the right, known as "recovery property," to be paid a specified
amount from a dedicated rate component. While PERF is a wholly owned
subsidiary of Pacific Gas and Electric Company, it is legally separate
from Pacific Gas and Electric Company. The assets, including recovery
property, of PERF are not available to creditors of PG&E Corporation
or Pacific Gas and Electric Company, and recovery property is not legally
an asset of PG&E Corporation or Pacific Gas and Electric
Company.
|
|
Name
|
Brief
Description
|
Docket
Number
|
|||
|
Request
for New Generation Offers and Potential New Utility-Owned
Generation
|
Pacific
Gas and Electric Company has developed a shortlist of participants who
responded to the Utility’s request for offers (“RFO”) solicitation for 800
to 1,200 megawatts of dispatchable and operationally flexible new
generation resources to be on-line no later than May 2015. The
Utility anticipates executing contracts and requesting CPUC approval of
the executed contracts in the first half of 2009.
|
R.06-02-013 | |||
|
Energy
Efficiency Order Instituting Rulemaking
(OIR)
Post-2005
|
CPUC
proceeding to establish incentive ratemaking mechanisms applicable to the
California investor-owned utilities’ implementation of their 2006-2008 and
2009-2011 energy efficiency program cycles.
|
R.09-01-019
D.07-09-043
D.08-01-042
D.08-12-059
R.06-04-010
D.07-10-032
|
|||
|
Cost
of Capital 2008
|
CPUC
proceeding to establish capital structure and cost of capital for the
California investor-owned electric utilities. The CPUC issued a
final decision on December 20, 2007, maintaining Pacific Gas and Electric
Company’s authorized ROE at 11.35% and its common equity ratio at
52%.
|
A.07-05-008
D.07-12-049
|
|||
|
Three-Year
Cost of Capital Mechanism
|
On
May 29, 2008, the CPUC adopted a uniform three-year cost of capital
mechanism to replace the annual cost of capital proceeding. The
Utility’s capital structure, including an equity component of 52%, and its
cost of capital, including an 11.35% ROE, is set until 2011 and will only
be changed before 2011 if the annual automatic adjustment mechanism
established by the CPUC is triggered.
|
D.08-05-035
|
|||
|
Transmission
Owner 10 Rate Case
|
On
October 22, 2008, the FERC approved an all-party settlement in the
Utility’s TO rate case that sets an annual wholesale base transmission
revenue requirement of $706 million and a retail base transmission revenue
requirement of $718 million, effective March 1, 2008.
|
ER07-1213-000
|
|||
|
SmartMeterTM
Program Upgrade Application
|
Pacific
Gas and Electric Company has requested CPUC approval to upgrade elements
of the SmartMeterTM
program and to recover additional capital expenditures related to the
proposed upgrade.
|
A.07-12-009
|
|||
|
Catastrophic
Event Memorandum Account Application
|
The
CPUC approved a settlement on November 21, 2008 that permits the Utility
to collect approximately $15 million through 2010 to recover costs to
restore service and repair facilities following the January 2008 winter
storm.
|
A.08-03-017
D.08-11-045
|
|||
|
Application
to Recover Hydroelectric Generation Facility Divestiture
Costs
|
Pacific
Gas and Electric Company has requested CPUC authorization to recover
approximately $47 million of hydroelectric generation facility divestiture
costs.
|
A.08-04-022
|
|||
|
Proposed
Electric Distribution Reliability Program (Cornerstone Improvement
Program)
|
Pacific
Gas and Electric Company has requested CPUC authorization to recover $2.3
billion in costs associated with electric distribution reliability capital
expenditures and operating and maintenance expense incremental to amounts
recovered in the 2007 General Rate Case.
|
A.08-05-023
|
|||
|
SmartGrid
OIR
|
Order
Instituting Rulemaking to consider Smart Grid technologies pursuant to
federal legislation and the CPUC’s motion to actively guide policy in
California's development of a Smart Grid system.
|
R.08-12-009
|
|||
|
Year
ended December 31,
|
||||||||||||
|
2008
|
2007
|
2006
|
||||||||||
|
Operating
Revenues
|
||||||||||||
|
Electric
|
$ | 10,738 | $ | 9,480 | $ | 8,752 | ||||||
|
Natural
gas
|
3,890 | 3,757 | 3,787 | |||||||||
|
Total
operating revenues
|
14,628 | 13,237 | 12,539 | |||||||||
|
Operating
Expenses
|
||||||||||||
|
Cost
of electricity
|
4,425 | 3,437 | 2,922 | |||||||||
|
Cost
of natural gas
|
2,090 | 2,035 | 2,097 | |||||||||
|
Operating
and maintenance
|
4,201 | 3,881 | 3,703 | |||||||||
|
Depreciation,
amortization, and decommissioning
|
1,651 | 1,770 | 1,709 | |||||||||
|
Total
operating expenses
|
12,367 | 11,123 | 10,431 | |||||||||
|
Operating
Income
|
2,261 | 2,114 | 2,108 | |||||||||
|
Interest
income
|
94 | 164 | 188 | |||||||||
|
Interest
expense
|
(728 | ) | (762 | ) | (738 | ) | ||||||
|
Other
income (expense), net
|
(18 | ) | 29 | (13 | ) | |||||||
|
Income
Before Income Taxes
|
1,609 | 1,545 | 1,545 | |||||||||
|
Income
tax provision
|
425 | 539 | 554 | |||||||||
|
Income
From Continuing Operations
|
1,184 | 1,006 | 991 | |||||||||
|
Discontinued
Operations
|
||||||||||||
|
NEGT
income tax benefit
|
154 | - | - | |||||||||
|
Net
Income
|
$ | 1,338 | $ | 1,006 | $ | 991 | ||||||
|
Weighted
Average Common Shares Outstanding, Basic
|
357 | 351 | 346 | |||||||||
|
Weighted
Average Common Shares Outstanding, Diluted
|
358 | 353 | 349 | |||||||||
|
Earnings
Per Common Share from Continuing Operations, Basic
|
$ | 3.23 | $ | 2.79 | $ | 2.78 | ||||||
|
Net
Earnings Per Common Share, Basic
|
$ | 3.64 | $ | 2.79 | $ | 2.78 | ||||||
|
Earnings
Per Common Share from Continuing Operations, Diluted
|
$ | 3.22 | $ | 2.78 | $ | 2.76 | ||||||
|
Net
Earnings Per Common Share, Diluted
|
$ | 3.63 | $ | 2.78 | $ | 2.76 | ||||||
|
Dividends
Declared Per Common Share
|
$ | 1.56 | $ | 1.44 | $ | 1.32 | ||||||
|
Balance
at December 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
ASSETS
|
||||||||
|
Current
Assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 219 | $ | 345 | ||||
|
Restricted
cash
|
1,290 | 1,297 | ||||||
|
Accounts
receivable:
|
||||||||
|
Customers
(net of allowance for doubtful accounts of $76 million in 2008 and $58
million in 2007)
|
1,751 | 1,599 | ||||||
|
Accrued
unbilled revenue
|
685 | 750 | ||||||
|
Regulatory
balancing accounts
|
1,197 | 771 | ||||||
|
Inventories:
|
||||||||
|
Gas
stored underground and fuel oil
|
232 | 205 | ||||||
|
Materials
and supplies
|
191 | 166 | ||||||
|
Income
taxes receivable
|
120 | 61 | ||||||
|
Prepaid
expenses and other
|
718 | 255 | ||||||
|
Total
current assets
|
6,403 | 5,449 | ||||||
|
Property, Plant, and
Equipment
|
||||||||
|
Electric
|
27,638 | 25,599 | ||||||
|
Gas
|
10,155 | 9,620 | ||||||
|
Construction
work in progress
|
2,023 | 1,348 | ||||||
|
Other
|
17 | 17 | ||||||
|
Total
property, plant, and equipment
|
39,833 | 36,584 | ||||||
|
Accumulated
depreciation
|
(13,572 | ) | (12,928 | ) | ||||
|
Net
property, plant, and equipment
|
26,261 | 23,656 | ||||||
|
Other Noncurrent
Assets
|
||||||||
|
Regulatory
assets
|
5,996 | 4,459 | ||||||
|
Nuclear
decommissioning funds
|
1,718 | 1,979 | ||||||
|
Other
|
482 | 1,089 | ||||||
|
Total
other noncurrent assets
|
8,196 | 7,527 | ||||||
|
TOTAL
ASSETS
|
$ | 40,860 | $ | 36,632 | ||||
|
Balance
at December 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
|
Current
Liabilities
|
||||||||
|
Short-term
borrowings
|
$ | 287 | $ | 519 | ||||
|
Long-term
debt, classified as current
|
600 | - | ||||||
|
Energy
recovery bonds, classified as current
|
370 | 354 | ||||||
|
Accounts
payable:
|
||||||||
|
Trade
creditors
|
1,096 | 1,067 | ||||||
|
Disputed
claims and customer refunds
|
1,580 | 1,629 | ||||||
|
Regulatory
balancing accounts
|
730 | 673 | ||||||
|
Other
|
343 | 394 | ||||||
|
Interest
payable
|
802 | 697 | ||||||
|
Deferred
income taxes
|
251 | - | ||||||
|
Other
|
1,567 | 1,374 | ||||||
|
Total
current liabilities
|
7,626 | 6,707 | ||||||
|
Noncurrent
Liabilities
|
||||||||
|
Long-term
debt
|
9,321 | 8,171 | ||||||
|
Energy
recovery bonds
|
1,213 | 1,582 | ||||||
|
Regulatory
liabilities
|
3,657 | 4,448 | ||||||
|
Pension
and other postretirement benefits
|
2,088 | - | ||||||
|
Asset
retirement obligations
|
1,684 | 1,579 | ||||||
|
Income
taxes payable
|
35 | 234 | ||||||
|
Deferred
income taxes
|
3,397 | 3,053 | ||||||
|
Deferred
tax credits
|
94 | 99 | ||||||
|
Other
|
2,116 | 1,954 | ||||||
|
Total
noncurrent liabilities
|
23,605 | 21,120 | ||||||
|
Commitments
and Contingencies
|
||||||||
|
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 361,059,116
common and 1,287,569 restricted shares in 2008 and issued 378,385,151
common and 1,261,125 restricted shares in 2007
|
5,984 |
6,110
|
||||||
|
Common
stock held by subsidiary, at cost, 24,665,500 shares in
2007
|
- |
(718
|
) | |||||
|
Reinvested
earnings
|
3,614 | 3,151 | ||||||
|
Accumulated
other comprehensive income (loss)
|
(221 | ) | 10 | |||||
|
Total
common shareholders' equity
|
9,377 | 8,553 | ||||||
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$ | 40,860 | $ | 36,632 | ||||
|
Year
ended December 31,
|
||||||||||
|
2008
|
2007
|
2006
|
||||||||
|
Cash
Flows From Operating Activities
|
||||||||||
|
Net
income
|
$
|
1,338
|
$
|
1,006
|
$
|
991
|
||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||
|
Depreciation,
amortization, and decommissioning
|
1,863
|
1,959
|
1,803
|
|||||||
|
Allowance
for equity funds used during construction
|
(70)
|
(64)
|
(47)
|
|||||||
|
Gain
on sale of assets
|
(1)
|
(1)
|
(11)
|
|||||||
|
Deferred
income taxes and tax credits, net
|
590
|
55
|
(285)
|
|||||||
|
Other
changes in noncurrent assets and liabilities
|
(126)
|
192
|
151
|
|||||||
|
Effect
of changes in operating assets and liabilities:
|
||||||||||
|
Accounts
receivable
|
(87)
|
(6)
|
130
|
|||||||
|
Inventories
|
(59)
|
(41)
|
32
|
|||||||
|
Accounts
payable
|
(140)
|
(178)
|
17
|
|||||||
|
Income
taxes receivable/payable
|
(59)
|
56
|
124
|
|||||||
|
Regulatory
balancing accounts, net
|
(394)
|
(567)
|
329
|
|||||||
|
Other
current assets
|
(221)
|
172
|
(273)
|
|||||||
|
Other
current liabilities
|
120
|
8
|
(233)
|
|||||||
|
Other
|
(5)
|
(45)
|
(14)
|
|||||||
|
Net
cash provided by operating activities
|
2,749
|
2,546
|
2,714
|
|||||||
|
Cash
Flows From Investing Activities
|
||||||||||
|
Capital
expenditures
|
(3,628)
|
(2,769)
|
(2,402)
|
|||||||
|
Net
proceeds from sale of assets
|
26
|
21
|
17
|
|||||||
|
Decrease
in restricted cash
|
36
|
185
|
115
|
|||||||
|
Proceeds from
nuclear decommissioning trust sales
|
1,635
|
830
|
1,087
|
|||||||
|
Purchases of
nuclear decommissioning trust investments
|
(1,684)
|
(933)
|
(1,244)
|
|||||||
|
Other
|
(37)
|
-
|
-
|
|||||||
|
Net
cash used in investing activities
|
(3,652)
|
(2,666)
|
(2,427)
|
|||||||
|
Cash
Flows From Financing Activities
|
||||||||||
|
Borrowings
under accounts receivable facility and revolving credit
facility
|
533
|
850
|
350
|
|||||||
|
Repayments
under accounts receivable facility and revolving credit
facility
|
(783)
|
(900)
|
(310)
|
|||||||
|
Net
issuance (repayments) of commercial paper, net of discount of $11 million
in 2008, $1 million in 2007 and $2 million in 2006
|
6
|
(209)
|
458
|
|||||||
|
Proceeds
from issuance of long-term debt, net of discount, premium and issuance
costs of $19 million in 2008 and $16 million in 2007
|
2,185
|
1,184
|
-
|
|||||||
|
Long-term
debt repurchased
|
(454)
|
-
|
-
|
|||||||
|
Rate
reduction bonds matured
|
-
|
(290)
|
(290)
|
|||||||
|
Energy
recovery bonds matured
|
(354)
|
(340)
|
(316)
|
|||||||
|
Common
stock issued
|
225
|
175
|
131
|
|||||||
|
Common
stock repurchased
|
-
|
-
|
(114)
|
|||||||
|
Common
stock dividends paid
|
(546)
|
(496)
|
(456)
|
|||||||
|
Other
|
(35)
|
35
|
3
|
|||||||
|
Net
cash provided by (used in) financing activities
|
777
|
9
|
(544)
|
|||||||
|
Net
change in cash and cash equivalents
|
(126)
|
(111)
|
(257)
|
|||||||
|
Cash
and cash equivalents at January 1
|
345
|
456
|
713
|
|||||||
|
Cash
and cash equivalents at December 31
|
$
|
219
|
$
|
345
|
$
|
456
|
||||
|
Supplemental
disclosures of cash flow information
|
||||||||||
|
Cash
paid (received) for:
|
||||||||||
|
Interest
(net of amounts capitalized)
|
$
|
523
|
$
|
514
|
$
|
503
|
||||
|
Income
taxes, net
|
(112)
|
537
|
736
|
|||||||
|
Supplemental
disclosures of noncash investing and financing activities
|
||||||||||
|
Common
stock dividends declared but not yet paid
|
$
|
143
|
$
|
129
|
$
|
117
|
||||
|
Capital
expenditures financed through accounts payable
|
348
|
279
|
215
|
|||||||
|
Stock
issued in lieu of dividend
|
20
|
5
|
-
|
|||||||
|
Assumption
of capital lease obligation
|
-
|
-
|
408
|
|||||||
|
Transfer
of Gateway Generating Station asset
|
-
|
-
|
69
|
|||||||
|
Common
Stock Shares
|
Common
Stock Amount
|
Common
Stock Held by
Subsidiary
|
Unearned
Compensation
|
Reinvested
Earnings
|
Accumulated
Other Comprehensive Income (Loss)
|
Total
Common Share-holders' Equity
|
Comprehensive
Income
|
|||||||||||||||||||||||||
|
Balance
at December 31, 2005
|
368,268,502 | $ | 5,827 | $ | (718 | ) | $ | (22 | ) | $ | 2,139 | $ | (8 | ) | $ | 7,218 | ||||||||||||||||
|
Net
income
|
- | - | - | - | 991 | - | 991 | $ | 991 | |||||||||||||||||||||||
|
Comprehensive
income
|
$ | 991 | ||||||||||||||||||||||||||||||
|
Common
stock issued
|
5,399,707 | 110 | - | - | - | - | 110 | |||||||||||||||||||||||||
|
Accelerated
share repurchase settlement of stock repurchased in 2005
|
- | (114 | ) | - | - | - | - | (114 | ) | |||||||||||||||||||||||
|
Common
stock warrants exercised
|
51,890 | - | - | - | - | - | - | |||||||||||||||||||||||||
|
Common
restricted stock, unearned compensation reversed in accordance with SFAS
No. 123R
|
- | (22 | ) | - | 22 | - | - | - | ||||||||||||||||||||||||
|
Common
restricted stock issued
|
566,255 | 21 | - | - | - | - | 21 | |||||||||||||||||||||||||
|
Common
restricted stock cancelled
|
(105,295 | ) | (1 | ) | - | - | - | - | (1 | ) | ||||||||||||||||||||||
|
Common
restricted stock amortization
|
- | 20 | - | - | - | - | 20 | |||||||||||||||||||||||||
|
Common
stock dividends declared and paid
|
- | - | - | - | (342 | ) | - | (342 | ) | |||||||||||||||||||||||
|
Common
stock dividends declared but not yet paid
|
- | - | - | - | (117 | ) | - | (117 | ) | |||||||||||||||||||||||
|
Tax
benefit from employee stock plans
|
- | 35 | - | - | - | - | 35 | |||||||||||||||||||||||||
|
Adoption
of SFAS No. 158 (net of income tax benefit of $8 million)
|
- | - | - | - | - | (11 | ) | (11 | ) | |||||||||||||||||||||||
|
Other
|
- | 1 | - | - | - | - | 1 | |||||||||||||||||||||||||
|
Balance
at December 31, 2006
|
374,181,059 | 5,877 | (718 | ) | - | 2,671 | (19 | ) | 7,811 | |||||||||||||||||||||||
|
Net
income
|
- | - | - | - | 1,006 | - | 1,006 | $ | 1,006 | |||||||||||||||||||||||
|
Employee
benefit plan adjustment in accordance with SFAS No. 158 (net of income tax
expense of $17 million)
|
- | - | - | - | - | 29 | 29 | 29 | ||||||||||||||||||||||||
|
Comprehensive
income
|
$ | 1,035 | ||||||||||||||||||||||||||||||
|
Common
stock issued, net
|
5,465,217 | 175 | - | - | - | - | 175 | |||||||||||||||||||||||||
|
Stock-based
compensation amortization
|
- | 31 | - | - | - | - | 31 | |||||||||||||||||||||||||
|
Common
stock dividends declared and paid
|
- | - | - | - | (379 | ) | - | (379 | ) | |||||||||||||||||||||||
|
Common
stock dividends declared but not yet paid
|
- | - | - | - | (129 | ) | - | (129 | ) | |||||||||||||||||||||||
|
Tax
benefit from employee stock plans
|
- | 27 | - | - | - | - | 27 | |||||||||||||||||||||||||
|
Adoption
of FIN 48
|
- | - | - | - | (18 | ) | - | (18 | ) | |||||||||||||||||||||||
|
Balance
at December 31, 2007
|
379,646,276 | 6,110 | (718 | ) | - | 3,151 | 10 | 8,553 | ||||||||||||||||||||||||
|
Net
income
|
- | - | - | - | 1,338 | - | 1,338 | $ | 1,338 | |||||||||||||||||||||||
|
Employee
benefit plan adjustment in accordance with SFAS No. 158 (net of income tax
benefit of $156 million)
|
(231 | ) | (231 | ) | (231 | ) | ||||||||||||||||||||||||||
|
Comprehensive
income
|
- | - | - | - | - | - | - | $ | 1,107 | |||||||||||||||||||||||
|
Common
stock issued, net
|
7,365,909 | 247 | - | - | - | - | 247 | |||||||||||||||||||||||||
|
Common
stock cancelled
|
(24,665,500 | ) | (403 | ) | 718 | - | (315 | ) | - | - | ||||||||||||||||||||||
|
Stock-based
compensation amortization
|
- | 24 | - | - | - | - | 24 | |||||||||||||||||||||||||
|
Common
stock dividends declared and paid
|
- | - | - | - | (417 | ) | - | (417 | ) | |||||||||||||||||||||||
|
Common
stock dividends declared but not yet paid
|
- | - | - | - | (143 | ) | - | (143 | ) | |||||||||||||||||||||||
|
Tax
benefit from employee stock plans
|
- | 6 | - | - | - | - | 6 | |||||||||||||||||||||||||
|
Balance
at December 31, 2008
|
362,346,685 | $ | 5,984 | $ | - | $ | - | $ | 3,614 | $ | (221 | ) | $ | 9,377 | ||||||||||||||||||
|
Year
ended December 31,
|
||||||||||||
|
2008
|
2007
|
2006
|
||||||||||
|
Operating
Revenues
|
||||||||||||
|
Electric
|
$ | 10,738 | $ | 9,481 | $ | 8,752 | ||||||
|
Natural
gas
|
3,890 | 3,757 | 3,787 | |||||||||
|
Total
operating revenues
|
14,628 | 13,238 | 12,539 | |||||||||
|
Operating
Expenses
|
||||||||||||
|
Cost
of electricity
|
4,425 | 3,437 | 2,922 | |||||||||
|
Cost
of natural gas
|
2,090 | 2,035 | 2,097 | |||||||||
|
Operating
and maintenance
|
4,197 | 3,872 | 3,697 | |||||||||
|
Depreciation,
amortization and decommissioning
|
1,650 | 1,769 | 1,708 | |||||||||
|
Total
operating expenses
|
12,362 | 11,113 | 10,424 | |||||||||
|
Operating
Income
|
2,266 | 2,125 | 2,115 | |||||||||
|
Interest
income
|
91 | 150 | 175 | |||||||||
|
Interest
expense
|
(698 | ) | (732 | ) | (710 | ) | ||||||
|
Other
income, net
|
28 | 52 | 7 | |||||||||
|
Income
Before Income Taxes
|
1,687 | 1,595 | 1,587 | |||||||||
|
Income
tax provision
|
488 | 571 | 602 | |||||||||
|
Net
Income
|
1,199 | 1,024 | 985 | |||||||||
|
Preferred
stock dividend requirement
|
14 | 14 | 14 | |||||||||
|
Income
Available for Common Stock
|
$ | 1,185 | $ | 1,010 | $ | 971 | ||||||
|
Balance
at December 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
ASSETS
|
||||||||
|
Current
Assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 52 | $ | 141 | ||||
|
Restricted
cash
|
1,290 | 1,297 | ||||||
|
Accounts
receivable:
|
||||||||
|
Customers
(net of allowance for doubtful accounts of $76 million in 2008 and $58
million in 2007)
|
1,751 | 1,599 | ||||||
|
Accrued
unbilled revenue
|
685 | 750 | ||||||
|
Related
parties
|
2 | 6 | ||||||
|
Regulatory
balancing accounts
|
1,197 | 771 | ||||||
|
Inventories:
|
||||||||
|
Gas
stored underground and fuel oil
|
232 | 205 | ||||||
|
Materials
and supplies
|
191 | 166 | ||||||
|
Income
taxes receivable
|
25 | 15 | ||||||
|
Prepaid
expenses and other
|
705 | 252 | ||||||
|
Total
current assets
|
6,130 | 5,202 | ||||||
|
Property, Plant, and
Equipment
|
||||||||
|
Electric
|
27,638 | 25,599 | ||||||
|
Gas
|
10,155 | 9,620 | ||||||
|
Construction
work in progress
|
2,023 | 1,348 | ||||||
|
Total
property, plant, and equipment
|
39,816 | 36,567 | ||||||
|
Accumulated
depreciation
|
(13,557 | ) | (12,913 | ) | ||||
|
Net
property, plant, and equipment
|
26,259 | 23,654 | ||||||
|
Other Noncurrent
Assets
|
||||||||
|
Regulatory
assets
|
5,996 | 4,459 | ||||||
|
Nuclear
decommissioning funds
|
1,718 | 1,979 | ||||||
|
Related
parties receivable
|
27 | 23 | ||||||
|
Other
|
407 | 993 | ||||||
|
Total
other noncurrent assets
|
8,148 | 7,454 | ||||||
|
TOTAL
ASSETS
|
$ | 40,537 | $ | 36,310 | ||||
|
Balance
at December 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
|
Current
Liabilities
|
||||||||
|
Short-term
borrowings
|
$ | 287 | $ | 519 | ||||
|
Long-term
debt, classified as current
|
600 | - | ||||||
|
Energy
recovery bonds, classified as current
|
370 | 354 | ||||||
|
Accounts
payable:
|
||||||||
|
Trade
creditors
|
1,096 | 1,067 | ||||||
|
Disputed
claims and customer refunds
|
1,580 | 1,629 | ||||||
|
Related
parties
|
25 | 28 | ||||||
|
Regulatory
balancing accounts
|
730 | 673 | ||||||
|
Other
|
325 | 370 | ||||||
|
Interest
payable
|
802 | 697 | ||||||
|
Income
tax payable
|
53 | - | ||||||
|
Deferred
income taxes
|
257 | 4 | ||||||
|
Other
|
1,371 | 1,200 | ||||||
|
Total
current liabilities
|
7,496 | 6,541 | ||||||
|
Noncurrent
Liabilities
|
||||||||
|
Long-term
debt
|
9,041 | 7,891 | ||||||
|
Energy
recovery bonds
|
1,213 | 1,582 | ||||||
|
Regulatory
liabilities
|
3,657 | 4,448 | ||||||
|
Pension
and postretirement benefits
|
2,040 | - | ||||||
|
Asset
retirement obligations
|
1,684 | 1,579 | ||||||
|
Income
taxes payable
|
12 | 103 | ||||||
|
Deferred
income taxes
|
3,449 | 3,104 | ||||||
|
Deferred
tax credits
|
94 | 99 | ||||||
|
Other
|
2,064 | 1,838 | ||||||
|
Total
noncurrent liabilities
|
23,254 | 20,644 | ||||||
|
Commitments
and Contingencies
|
||||||||
|
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 264,374,809
shares in 2008 and issued 282,916,485 shares in 2007
|
1,322 | 1,415 | ||||||
|
Common
stock held by subsidiary, at cost, 19,481,213 shares in
2007
|
- | (475 | ) | |||||
|
Additional
paid-in capital
|
2,331 | 2,220 | ||||||
|
Reinvested
earnings
|
6,092 | 5,694 | ||||||
|
Accumulated
other comprehensive income (loss)
|
(216 | ) | 13 | |||||
|
Total
shareholders' equity
|
9,787 | 9,125 | ||||||
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$ | 40,537 | $ | 36,310 | ||||
|
Year
ended December 31,
|
||||||||||||
|
2008
|
2007
|
2006
|
||||||||||
|
Cash Flows From Operating
Activities
|
||||||||||||
|
Net
income
|
$ | 1,199 | $ | 1,024 | $ | 985 | ||||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||
|
Depreciation,
amortization, and decommissioning
|
1,838 | 1,956 | 1,802 | |||||||||
|
Allowance
for equity funds used during construction
|
(70 | ) | (64 | ) | (47 | ) | ||||||
|
Gain
on sale of assets
|
(1 | ) | (1 | ) | (11 | ) | ||||||
|
Deferred
income taxes and tax credits, net
|
593 | 43 | (287 | ) | ||||||||
|
Other
changes in noncurrent assets and liabilities
|
(25 | ) | 188 | 116 | ||||||||
|
Effect
of changes in operating assets and liabilities:
|
||||||||||||
|
Accounts
receivable
|
(83 | ) | (6 | ) | 128 | |||||||
|
Inventories
|
(59 | ) | (41 | ) | 34 | |||||||
|
Accounts
payable
|
(137 | ) | (196 | ) | 21 | |||||||
|
Income
taxes receivable/payable
|
43 | 56 | 28 | |||||||||
|
Regulatory
balancing accounts, net
|
(394 | ) | (567 | ) | 329 | |||||||
|
Other
current assets
|
(223 | ) | 170 | (273 | ) | |||||||
|
Other
current liabilities
|
90 | 24 | (235 | ) | ||||||||
|
Other
|
(5 | ) | (45 | ) | (13 | ) | ||||||
|
Net
cash provided by operating activities
|
2,766 | 2,541 | 2,577 | |||||||||
|
Cash Flows From Investing
Activities
|
||||||||||||
|
Capital
expenditures
|
(3,628 | ) | (2,768 | ) | (2,402 | ) | ||||||
|
Net
proceeds from sale of assets
|
26 | 21 | 17 | |||||||||
|
Decrease
in restricted cash
|
36 | 185 | 115 | |||||||||
|
Proceeds from
nuclear decommissioning trust sales
|
1,635 | 830 | 1,087 | |||||||||
|
Purchases of
nuclear decommissioning trust investments
|
(1,684 | ) | (933 | ) | (1,244 | ) | ||||||
|
Other
|
(25 | ) | - | 1 | ||||||||
|
Net
cash used in investing activities
|
(3,640 | ) | (2,665 | ) | (2,426 | ) | ||||||
|
Cash Flows From Financing
Activities
|
||||||||||||
|
Borrowings
under accounts receivable facility and revolving credit
facility
|
533 | 850 | 350 | |||||||||
|
Repayments
under accounts receivable facility and revolving credit
facility
|
(783 | ) | (900 | ) | (310 | ) | ||||||
|
Net
issuance (repayments) of commercial paper, net of discount of $11 million
in 2008, $1 million in 2007 and $2 million in 2006
|
6 | (209 | ) | 458 | ||||||||
|
Proceeds
from issuance of long-term debt, net of discount, premium and issuance
costs of $19 million in 2008 and $16 million in 2007
|
2,185 | 1,184 | - | |||||||||
|
Long-term
debt repurchased
|
(454 | ) | - | - | ||||||||
|
Rate
reduction bonds matured
|
- | (290 | ) | (290 | ) | |||||||
|
Energy
recovery bonds matured
|
(354 | ) | (340 | ) | (316 | ) | ||||||
|
Preferred
stock dividends paid
|
(14 | ) | (14 | ) | (14 | ) | ||||||
|
Common
stock dividends paid
|
(568 | ) | (509 | ) | (460 | ) | ||||||
|
Equity
contribution
|
270 | 400 | - | |||||||||
|
Other
|
(36 | ) | 23 | 38 | ||||||||
|
Net
cash provided by (used in) financing activities
|
785 | 195 | (544 | ) | ||||||||
|
Net
change in cash and cash equivalents
|
(89 | ) | 71 | (393 | ) | |||||||
|
Cash
and cash equivalents at January 1
|
141 | 70 | 463 | |||||||||
|
Cash
and cash equivalents at December 31
|
$ | 52 | $ | 141 | $ | 70 | ||||||
|
Supplemental disclosures of
cash flow information
|
||||||||||||
|
Cash
paid (received) for:
|
||||||||||||
|
Interest
(net of amounts capitalized)
|
$ | 496 | $ | 474 | $ | 476 | ||||||
|
Income
taxes, net
|
(95 | ) | 594 | 897 | ||||||||
|
Supplemental disclosures of
noncash investing and financing activities
|
||||||||||||
|
Capital
expenditures financed through accounts payable
|
$ | 348 | $ | 279 | $ | 215 | ||||||
|
Assumption
of capital lease obligation
|
- | - | 408 | |||||||||
|
Transfer
of Gateway Generating Station asset
|
- | - | 69 | |||||||||
|
Preferred
Stock Without Mandatory Redemption Provisions
|
Common
Stock
|
Additional
Paid-in Capital
|
Common
Stock Held by Subsidiary
|
Reinvested
Earnings
|
Accumulated
Other Comprehensive Income (Loss)
|
Total
Share- holders' Equity
|
Comprehensive
Income
|
|||||||||||||||||||||||||
|
Balance
at December 31, 2005
|
$ | 258 | $ | 1,398 | $ | 1,776 | $ | (475 | ) | $ | 4,702 | $ | (9 | ) | $ | 7,650 | ||||||||||||||||
|
Net
income
|
- | - | - | - | 985 | - | 985 | $ | 985 | |||||||||||||||||||||||
|
Minimum
pension liability adjustment (net of income tax expense of $2
million)
|
- | - | - | - | - | 3 | 3 | 3 | ||||||||||||||||||||||||
|
Comprehensive
income
|
$ | 988 | ||||||||||||||||||||||||||||||
|
Tax
benefit from employee stock plans
|
- | - | 46 | - | - | - | 46 | |||||||||||||||||||||||||
|
Common
stock dividend
|
- | - | - | - | (460 | ) | - | (460 | ) | |||||||||||||||||||||||
|
Preferred
stock dividend
|
- | - | - | - | (14 | ) | - | (14 | ) | |||||||||||||||||||||||
|
Adoption
of SFAS No. 158 (net of income tax benefit of $7 million)
|
- | - | - | - | - | (10 | ) | (10 | ) | |||||||||||||||||||||||
|
Balance
at December 31, 2006
|
258 | 1,398 | 1,822 | (475 | ) | 5,213 | (16 | ) | 8,200 | |||||||||||||||||||||||
|
Net
income
|
- | - | - | - | 1,024 | - | 1,024 | $ | 1,024 | |||||||||||||||||||||||
|
Employee
benefit plan adjustment in accordance with SFAS No. 158 (net of income tax
expense of $17 million)
|
- | - | - | - | - | 29 | 29 | 29 | ||||||||||||||||||||||||
|
Comprehensive
income
|
$ | 1,053 | ||||||||||||||||||||||||||||||
|
Equity
contribution
|
- | 17 | 383 | - | - | - | 400 | |||||||||||||||||||||||||
|
Tax
benefit from employee stock plans
|
- | - | 15 | - | - | - | 15 | |||||||||||||||||||||||||
|
Common
stock dividend
|
- | - | - | - | (509 | ) | - | (509 | ) | |||||||||||||||||||||||
|
Preferred
stock dividend
|
- | - | - | - | (14 | ) | - | (14 | ) | |||||||||||||||||||||||
|
Adoption
of FIN 48
|
- | - | - | - | (20 | ) | - | (20 | ) | |||||||||||||||||||||||
|
Balance
at December 31, 2007
|
258 | 1,415 | 2,220 | (475 | ) | 5,694 | 13 | 9,125 | ||||||||||||||||||||||||
|
Net
income
|
- | - | - | - | 1,199 | - | 1,199 | $ | 1,199 | |||||||||||||||||||||||
|
Employee
benefit plan adjustment in accordance with SFAS No. 158 (net of income tax
expense of $159 million)
|
- | - | - | - | - | (229 | ) | (229 | ) | (229 | ) | |||||||||||||||||||||
|
Comprehensive
income
|
- | - | - | - | - | - | - | $ | 970 | |||||||||||||||||||||||
|
Equity
contribution
|
- | 4 | 266 | - | - | - | 270 | |||||||||||||||||||||||||
|
Tax
benefit from employee stock plans
|
- | - | 4 | - | - | - | 4 | |||||||||||||||||||||||||
|
Common
stock dividend
|
- | - | - | - | (568 | ) | - | (568 | ) | |||||||||||||||||||||||
|
Common
stock cancelled
|
- | (97 | ) | (159 | ) | 475 | (219 | ) | - | - | ||||||||||||||||||||||
|
Preferred
stock dividend
|
- | - | - | - | (14 | ) | - | (14 | ) | |||||||||||||||||||||||
|
Balance
at December 31, 2008
|
$ | 258 | $ | 1,322 | $ | 2,331 | $ | - | $ | 6,092 | $ | (216 | ) | $ | 9,787 | |||||||||||||||||