2010 FERC Form 1 - Pacific Gas and Electric Company

Name of Respondent
PACIFIC GAS AND ELECTRIC COMPANY
This Report is:
(1) X An Original
(2) A Resubmission
Date of Report
(Mo, Da, Yr)
04/08/2011
Year/Period of Report
2010/Q4
NOTES TO FINANCIAL STATEMENTS (Continued)
(in millions) 2011 2012 Total
Utility
Average fixed interest rate 4.59% 4.66% 4.63%
Energy recovery bonds $ 404 $ 423 $ 827
While PERF is a wholly owned consolidated subsidiary of the Utility, it is legally separate from the Utility. The assets
(including the recovery property) of PERF are not available to creditors of the Utility or PG&E Corporation, and the recovery property
is not legally an asset of the Utility or PG&E Corporation.
NOTE 6: COMMON STOCK AND SHARE-BASED COMPENSATION
PG&E Corporation
Of the 395,227,205 shares of PG&E Corporation common stock outstanding at December 31, 2010, 475,880 shares were
granted as restricted stock under the PG&E Corporation Long-Term Incentive Program and the 2006 Long-Term Incentive Plan
(“2006 LTIP”) and 5,105,505 shares were issued for the accounts of participants in PG&E Corporation’s 401(k) plan and Dividend
Reinvestment and Stock Purchase Plan (“DRSPP”). In addition, between June 23 and June 29, 2010, PG&E Corporation issued
16,370,779 shares of common stock upon conversion of the $247 million principal amount of Convertible Subordinated Notes. (See
Note 4 above.)
On November 4, 2010, PG&E Corporation entered into an Equity Distribution Agreement pursuant to which PG&E
Corporation's sales agents may offer and sell, from time to time, PG&E Corporation common stock having an aggregate gross offering
price of up to $400 million. Sales of the shares are made by means of ordinary brokers’ transactions on the New York Stock
Exchange, or in such other transactions as agreed upon by PG&E Corporation and the sales agents and in conformance with applicable
securities laws. As of December 31, 2010, PG&E Corporation had issued 2,357,796 shares of its common stock pursuant to the Equity
Distribution Agreement for cash proceeds of $110 million, net of fees and commissions paid of $1 million.
Utility
Dividends
As of December 31, 2010, PG&E Corporation held all of the Utility’s outstanding common stock.
The Boards of Directors of PG&E Corporation and the Utility have each adopted a dividend policy. Under the Utility’s
Articles of Incorporation, the Utility cannot pay common stock dividends unless all cumulative preferred dividends on the Utility’s
preferred stock have been paid.
PG&E Corporation and the Utility each have revolving credit facilities that require the company to maintain a ratio of
consolidated total debt to consolidated capitalization of at most 65%. This covenant, along with the CPUC’s requirement for the
Utility to maintain the 52% equity component of its capital structure, are considered to be restrictions on the payment of dividends.
Based on the calculation of these ratios for each company, no amount of PG&E Corporation’s retained earnings and $5.3 billion of the
Utility’s retained earnings were restricted at December 31, 2010.
In addition, the Utility was required to maintain at least $9.7 billion of its net assets as equity in order to maintain the capital
structure of at least 52% equity at December 31, 2010. As a result, $9.7 billion of the Utility’s net assets are restricted and may not be
transferred to PG&E Corporation in the form of cash dividends.
The Boards of Directors of PG&E Corporation and the Utility declare dividends quarterly. On December 15, 2010, the
Board of Directors of PG&E Corporation declared a quarterly dividend of $0.455 per share, totaling $183 million, which was paid on
January 15, 2011 to shareholders of record on December 31, 2010.
Long-Term Incentive Plan
FERC FORM NO. 1 (ED. 12-88) Page 123.18