PAGE
|
||||||||
GLOSSARY | ii | |||||||
PART I.
|
FINANCIAL INFORMATION
|
|||||||
PG&E Corporation
|
||||||||
1
|
||||||||
2
|
||||||||
3
|
||||||||
5
|
||||||||
Pacific Gas and Electric Company
|
||||||||
6
|
||||||||
7
|
||||||||
8
|
||||||||
10
|
||||||||
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||||||
11
|
||||||||
11
|
||||||||
13
|
||||||||
14
|
||||||||
15
|
||||||||
15
|
||||||||
16
|
||||||||
18
|
||||||||
24
|
||||||||
25
|
||||||||
32
|
||||||||
34
|
||||||||
37
|
||||||||
41
|
||||||||
46
|
||||||||
46
|
||||||||
49
|
||||||||
51
|
||||||||
51
|
||||||||
52
|
||||||||
Critical Accounting Policies | 52 | |||||||
Accounting Standards Issued But Not Yet Adopted |
52
|
|||||||
53
|
||||||||
53
|
||||||||
PART II.
|
OTHER INFORMATION
|
|||||||
54
|
||||||||
55
|
||||||||
55
|
||||||||
55
|
||||||||
56
|
||||||||
57
|
PG&E Corporation's and Pacific Gas and Electric Company's combined 2012 Annual Report on Form 10-K
|
|
ALJ
|
administrative law judge
|
ARO(s)
|
asset retirement obligation(s)
|
ASU
|
Accounting Standards Update
|
CAISO
|
California Independent System Operator
|
CARB
|
California Air Resources Board
|
CPUC
|
California Public Utilities Commission
|
CRRs
|
congestion revenue rights
|
DTSC
|
California Department of Toxic Substances Control
|
ERBs
|
Energy Recovery Bonds
|
EPS
|
earnings per common share
|
FASB
|
Financial Accounting Standards Board
|
FERC
|
Federal Energy Regulatory Commission
|
GAAP
|
generally accepted accounting principles
|
GHG
|
greenhouse gas
|
GRC
|
General Rate Case
|
GT&S
|
Gas Transmission and Storage
|
IRS
|
Internal Revenue Service
|
kWh(s)
|
kilowatt-hour(s)
|
NEIL
|
Nuclear Electric Insurance Limited
|
NRC
|
Nuclear Regulatory Commission
|
NTSB
|
National Transportation Safety Board
|
ROE
|
return on equity
|
San Bruno accident
|
On September 9, 2010, an underground 30-inch natural gas transmission pipeline owned and operated by the Utility, ruptured in a residential area located in the City of San Bruno, California. The ensuing explosion and fire resulted in the deaths of eight people, numerous personal injuries, and extensive property damage.
|
SED
|
Safety and Enforcement Division of the CPUC, formerly known as the Consumer Protection and Safety Division or CPSD
|
TO
|
Transmission Owner
|
Utility
|
Pacific Gas and Electric Company
|
VIE(s)
|
variable interest entity(ies)
|
(Unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
(in millions, except per share amounts)
|
2013
|
2012
|
||||||
Operating Revenues
|
||||||||
Electric
|
$ | 2,799 | $ | 2,772 | ||||
Natural gas
|
873 | 869 | ||||||
Total operating revenues
|
3,672 | 3,641 | ||||||
Operating Expenses
|
||||||||
Cost of electricity
|
983 | 859 | ||||||
Cost of natural gas
|
346 | 343 | ||||||
Operating and maintenance
|
1,338 | 1,368 | ||||||
Depreciation, amortization, and decommissioning
|
503 | 584 | ||||||
Total operating expenses
|
3,170 | 3,154 | ||||||
Operating Income
|
502 | 487 | ||||||
Interest income
|
2 | 1 | ||||||
Interest expense
|
(176 | ) | (174 | ) | ||||
Other income, net
|
28 | 26 | ||||||
Income Before Income Taxes
|
356 | 340 | ||||||
Income tax provision
|
114 | 104 | ||||||
Net Income
|
242 | 236 | ||||||
Preferred stock dividend requirement of subsidiary
|
3 | 3 | ||||||
Income Available for Common Shareholders
|
$ | 239 | $ | 233 | ||||
Weighted Average Common Shares Outstanding, Basic
|
434 | 414 | ||||||
Weighted Average Common Shares Outstanding, Diluted
|
435 | 416 | ||||||
Net Earnings Per Common Share, Basic
|
$ | 0.55 | $ | 0.56 | ||||
Net Earnings Per Common Share, Diluted
|
$ | 0.55 | $ | 0.56 | ||||
Dividends Declared Per Common Share
|
$ | 0.46 | $ | 0.46 | ||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
(Unaudited)
|
||||||||
Three Months Ended March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Net Income
|
$ | 242 | $ | 236 | ||||
Other Comprehensive Income
|
||||||||
Pension and other postretirement benefit plans
|
||||||||
Unrecognized prior service credit (net of income tax of $5 during respective
periods)
|
6 | 6 | ||||||
Unrecognized net gain (net of income tax of $11 during respective periods)
|
17 | 21 | ||||||
Unrecognized net transition obligation (net of income tax of $2 in 2012)
|
- | 4 | ||||||
Transfer to regulatory account (net of income tax of $13 and $15 during
respective periods)
|
(19 | ) | (21 | ) | ||||
Other (net of income tax of $4 in 2013)
|
6 | - | ||||||
Total other comprehensive income
|
10 | 10 | ||||||
Comprehensive Income
|
252 | 246 | ||||||
Preferred stock dividend requirement of subsidiary
|
3 | 3 | ||||||
Comprehensive Income Attributable to Common Shareholders
|
$ | 249 | $ | 243 | ||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
(Unaudited)
|
||||||||
Balance At
|
||||||||
March 31,
|
December 31,
|
|||||||
(in millions)
|
2013
|
2012
|
||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 278 | $ | 401 | ||||
Restricted cash
|
304 | 330 | ||||||
Accounts receivable
|
||||||||
Customers (net of allowance for doubtful accounts of $84 and $87at respective dates)
|
943 | 937 | ||||||
Accrued unbilled revenue
|
600 | 761 | ||||||
Regulatory balancing accounts
|
1,241 | 936 | ||||||
Other
|
298 | 365 | ||||||
Regulatory assets
|
486 | 564 | ||||||
Inventories
|
||||||||
Gas stored underground and fuel oil
|
73 | 135 | ||||||
Materials and supplies
|
316 | 309 | ||||||
Income taxes receivable
|
166 | 211 | ||||||
Other
|
187 | 172 | ||||||
Total current assets
|
4,892 | 5,121 | ||||||
Property, Plant, and Equipment
|
||||||||
Electric
|
40,356 | 39,701 | ||||||
Gas
|
12,786 | 12,571 | ||||||
Construction work in progress
|
2,100 | 1,894 | ||||||
Other
|
1 | 1 | ||||||
Total property, plant, and equipment
|
55,243 | 54,167 | ||||||
Accumulated depreciation
|
(16,961 | ) | (16,644 | ) | ||||
Net property, plant, and equipment
|
38,282 | 37,523 | ||||||
Other Noncurrent Assets
|
||||||||
Regulatory assets
|
6,778 | 6,809 | ||||||
Nuclear decommissioning trusts
|
2,233 | 2,161 | ||||||
Income taxes receivable
|
202 | 176 | ||||||
Other
|
675 | 659 | ||||||
Total other noncurrent assets
|
9,888 | 9,805 | ||||||
TOTAL ASSETS
|
$ | 53,062 | $ | 52,449 | ||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
(Unaudited)
|
||||||||
Balance At
|
||||||||
March 31,
|
December 31,
|
|||||||
(in millions, except share amounts)
|
2013
|
2012
|
||||||
LIABILITIES AND EQUITY
|
||||||||
Current Liabilities
|
||||||||
Short-term borrowings
|
$ | 489 | $ | 492 | ||||
Long-term debt, classified as current
|
1,399 | 400 | ||||||
Accounts payable
|
||||||||
Trade creditors
|
1,043 | 1,241 | ||||||
Disputed claims and customer refunds
|
156 | 157 | ||||||
Regulatory balancing accounts
|
1,102 | 634 | ||||||
Other
|
488 | 444 | ||||||
Interest payable
|
831 | 870 | ||||||
Income taxes payable
|
10 | 6 | ||||||
Deferred income taxes
|
44 | - | ||||||
Other
|
1,486 | 2,012 | ||||||
Total current liabilities
|
7,048 | 6,256 | ||||||
Noncurrent Liabilities
|
||||||||
Long-term debt
|
11,518 | 12,517 | ||||||
Regulatory liabilities
|
5,187 | 5,088 | ||||||
Pension and other postretirement benefits
|
3,626 | 3,575 | ||||||
Asset retirement obligations
|
2,924 | 2,919 | ||||||
Deferred income taxes
|
6,870 | 6,748 | ||||||
Other
|
2,065 | 2,020 | ||||||
Total noncurrent liabilities
|
32,190 | 32,867 | ||||||
Commitments and Contingencies (Note 10)
|
||||||||
Equity
|
||||||||
Shareholders' Equity
|
||||||||
Preferred stock
|
- | - | ||||||
Common stock, no par value, authorized 800,000,000 shares, 441,509,054 and 430,718,293 shares outstanding at respective dates
|
8,879 | 8,428 | ||||||
Reinvested earnings
|
4,784 | 4,747 | ||||||
Accumulated other comprehensive loss
|
(91 | ) | (101 | ) | ||||
Total shareholders' equity
|
13,572 | 13,074 | ||||||
Noncontrolling Interest - Preferred Stock of Subsidiary
|
252 | 252 | ||||||
Total equity
|
13,824 | 13,326 | ||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 53,062 | $ | 52,449 | ||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
(Unaudited)
|
||||||||
Three Months Ended March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$ | 242 | $ | 236 | ||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||
Depreciation, amortization, and decommissioning
|
503 | 584 | ||||||
Allowance for equity funds used during construction
|
(26 | ) | (27 | ) | ||||
Deferred income taxes and tax credits, net
|
166 | 146 | ||||||
Other
|
57 | 73 | ||||||
Effect of changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
209 | 221 | ||||||
Inventories
|
55 | 50 | ||||||
Accounts payable
|
(56 | ) | (213 | ) | ||||
Income taxes receivable/payable
|
49 | 29 | ||||||
Other current assets and liabilities
|
(242 | ) | (70 | ) | ||||
Regulatory assets, liabilities, and balancing accounts, net
|
(133 | ) | (171 | ) | ||||
Other noncurrent assets and liabilities
|
45 | 73 | ||||||
Net cash provided by operating activities
|
869 | 931 | ||||||
Cash Flows from Investing Activities
|
||||||||
Capital expenditures
|
(1,249 | ) | (1,094 | ) | ||||
Decrease (increase) in restricted cash
|
26 | (5 | ) | |||||
Proceeds from sales and maturities of nuclear decommissioning trust investments
|
363 | 351 | ||||||
Purchases of nuclear decommissioning trust investments
|
(364 | ) | (370 | ) | ||||
Other
|
17 | 25 | ||||||
Net cash used in investing activities
|
(1,207 | ) | (1,093 | ) | ||||
Cash Flows from Financing Activities
|
||||||||
Net repayments of commercial paper, net of discount of $1 in 2012
|
(2 | ) | (245 | ) | ||||
Energy recovery bonds matured
|
- | (102 | ) | |||||
Common stock issued
|
426 | 387 | ||||||
Common stock dividends paid
|
(191 | ) | (182 | ) | ||||
Other
|
(18 | ) | 48 | |||||
Net cash provided by (used in) financing activities
|
215 | (94 | ) | |||||
Net change in cash and cash equivalents
|
(123 | ) | (256 | ) | ||||
Cash and cash equivalents at January 1
|
401 | 513 | ||||||
Cash and cash equivalents at March 31
|
$ | 278 | $ | 257 | ||||
Supplemental disclosures of cash flow information
|
||||||||
Cash received (paid) for:
|
||||||||
Interest, net of amounts capitalized
|
$ | (197 | ) | $ | (204 | ) | ||
Income taxes, net
|
36 | - | ||||||
Supplemental disclosures of noncash investing and financing activities
|
||||||||
Common stock dividends declared but not yet paid
|
$ | 201 | $ | 193 | ||||
Capital expenditures financed through accounts payable
|
257 | 276 | ||||||
Noncash common stock issuances
|
6 | 6 | ||||||
Terminated capital leases
|
- | 136 | ||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
(Unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Operating Revenues
|
||||||||
Electric
|
$ | 2,798 | $ | 2,771 | ||||
Natural gas
|
873 | 869 | ||||||
Total operating revenues
|
3,671 | 3,640 | ||||||
Operating Expenses
|
||||||||
Cost of electricity
|
983 | 859 | ||||||
Cost of natural gas
|
346 | 343 | ||||||
Operating and maintenance
|
1,336 | 1,366 | ||||||
Depreciation, amortization, and decommissioning
|
503 | 584 | ||||||
Total operating expenses
|
3,168 | 3,152 | ||||||
Operating Income
|
503 | 488 | ||||||
Interest income
|
1 | 1 | ||||||
Interest expense
|
(170 | ) | (168 | ) | ||||
Other income, net
|
24 | 23 | ||||||
Income Before Income Taxes
|
358 | 344 | ||||||
Income tax provision
|
121 | 113 | ||||||
Net Income
|
237 | 231 | ||||||
Preferred stock dividend requirement
|
3 | 3 | ||||||
Income Available for Common Stock
|
$ | 234 | $ | 228 | ||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
(Unaudited)
|
||||||||
Three Months Ended March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Net Income
|
$ | 237 | $ | 231 | ||||
Other Comprehensive Income
|
||||||||
Pension and other postretirement benefit plans
|
||||||||
Unrecognized prior service credit (net of income tax of $5 during respective
periods)
|
6 | 6 | ||||||
Unrecognized net gain (net of income tax of $10 and $11 during respective
periods)
|
18 | 21 | ||||||
Unrecognized net transition obligation (net of income tax of $2 in 2012)
|
- | 4 | ||||||
Transfer to regulatory account (net of income tax of $13 and $15 during
respective periods)
|
(19 | ) | (21 | ) | ||||
Total other comprehensive income
|
5 | 10 | ||||||
Comprehensive Income
|
$ | 242 | $ | 241 | ||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
(Unaudited)
|
||||||||
Balance At
|
||||||||
March 31,
|
December 31,
|
|||||||
(in millions)
|
2013
|
2012
|
||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 53 | $ | 194 | ||||
Restricted cash
|
304 | 330 | ||||||
Accounts receivable
|
||||||||
Customers (net of allowance for doubtful accounts of $84 and $87
at respective dates)
|
943 | 937 | ||||||
Accrued unbilled revenue
|
600 | 761 | ||||||
Regulatory balancing accounts
|
1,241 | 936 | ||||||
Other
|
305 | 366 | ||||||
Regulatory assets
|
486 | 564 | ||||||
Inventories
|
||||||||
Gas stored underground and fuel oil
|
73 | 135 | ||||||
Materials and supplies
|
316 | 309 | ||||||
Income taxes receivable
|
140 | 186 | ||||||
Other
|
161 | 160 | ||||||
Total current assets
|
4,622 | 4,878 | ||||||
Property, Plant, and Equipment
|
||||||||
Electric
|
40,356 | 39,701 | ||||||
Gas
|
12,786 | 12,571 | ||||||
Construction work in progress
|
2,100 | 1,894 | ||||||
Total property, plant, and equipment
|
55,242 | 54,166 | ||||||
Accumulated depreciation
|
(16,960 | ) | (16,643 | ) | ||||
Net property, plant, and equipment
|
38,282 | 37,523 | ||||||
Other Noncurrent Assets
|
||||||||
Regulatory assets
|
6,778 | 6,809 | ||||||
Nuclear decommissioning trusts
|
2,233 | 2,161 | ||||||
Income taxes receivable
|
197 | 171 | ||||||
Other
|
403 | 381 | ||||||
Total other noncurrent assets
|
9,611 | 9,522 | ||||||
TOTAL ASSETS
|
$ | 52,515 | $ | 51,923 | ||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
(Unaudited)
|
||||||||
Balance At
|
||||||||
March 31,
|
December 31,
|
|||||||
(in millions, except share amounts)
|
2013
|
2012
|
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current Liabilities
|
||||||||
Short-term borrowings
|
$ | 369 | $ | 372 | ||||
Long-term debt, classified as current
|
1,399 | 400 | ||||||
Accounts payable
|
||||||||
Trade creditors
|
1,044 | 1,241 | ||||||
Disputed claims and customer refunds
|
156 | 157 | ||||||
Regulatory balancing accounts
|
1,102 | 634 | ||||||
Other
|
520 | 419 | ||||||
Interest payable
|
820 | 865 | ||||||
Income taxes payable
|
17 | 12 | ||||||
Deferred income taxes
|
36 | - | ||||||
Other
|
1,267 | 1,794 | ||||||
Total current liabilities
|
6,730 | 5,894 | ||||||
Noncurrent Liabilities
|
||||||||
Long-term debt
|
11,168 | 12,167 | ||||||
Regulatory liabilities
|
5,187 | 5,088 | ||||||
Pension and other postretirement benefits
|
3,546 | 3,497 | ||||||
Asset retirement obligations
|
2,924 | 2,919 | ||||||
Deferred income taxes
|
7,066 | 6,939 | ||||||
Other
|
2,005 | 1,959 | ||||||
Total noncurrent liabilities
|
31,896 | 32,569 | ||||||
Commitments and Contingencies (Note 10)
|
||||||||
Shareholders' Equity
|
||||||||
Preferred stock
|
258 | 258 | ||||||
Common stock, $5 par value, authorized 800,000,000 shares, 264,374,809
shares outstanding at respective dates
|
1,322 | 1,322 | ||||||
Additional paid-in capital
|
5,051 | 4,682 | ||||||
Reinvested earnings
|
7,346 | 7,291 | ||||||
Accumulated other comprehensive loss
|
(88 | ) | (93 | ) | ||||
Total shareholders' equity
|
13,889 | 13,460 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$ | 52,515 | $ | 51,923 | ||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
(Unaudited)
|
||||||||
Three Months Ended March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$ | 237 | $ | 231 | ||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||
Depreciation, amortization, and decommissioning
|
503 | 584 | ||||||
Allowance for equity funds used during construction
|
(26 | ) | (27 | ) | ||||
Deferred income taxes and tax credits, net
|
163 | 153 | ||||||
Other
|
37 | 57 | ||||||
Effect of changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
203 | 218 | ||||||
Inventories
|
55 | 50 | ||||||
Accounts payable
|
2 | (182 | ) | |||||
Income taxes receivable/payable
|
51 | 30 | ||||||
Other current assets and liabilities
|
(230 | ) | (69 | ) | ||||
Regulatory assets, liabilities, and balancing accounts, net
|
(133 | ) | (171 | ) | ||||
Other noncurrent assets and liabilities
|
45 | 75 | ||||||
Net cash provided by operating activities
|
907 | 949 | ||||||
Cash Flows from Investing Activities
|
||||||||
Capital expenditures
|
(1,249 | ) | (1,094 | ) | ||||
Decrease (increase) in restricted cash
|
26 | (5 | ) | |||||
Proceeds from sales and maturities of nuclear decommissioning
trust investments
|
363 | 351 | ||||||
Purchases of nuclear decommissioning trust investments
|
(364 | ) | (370 | ) | ||||
Other
|
5 | 3 | ||||||
Net cash used in investing activities
|
(1,219 | ) | (1,115 | ) | ||||
Cash Flows from Financing Activities
|
||||||||
Net repayments of commercial paper, net of discount of $1 in 2012
|
(2 | ) | (245 | ) | ||||
Energy recovery bonds matured
|
- | (102 | ) | |||||
Preferred stock dividends paid
|
(3 | ) | (3 | ) | ||||
Common stock dividends paid
|
(179 | ) | (179 | ) | ||||
Equity contribution
|
370 | 385 | ||||||
Other
|
(15 | ) | 51 | |||||
Net cash provided by (used in) financing activities
|
171 | (93 | ) | |||||
Net change in cash and cash equivalents
|
(141 | ) | (259 | ) | ||||
Cash and cash equivalents at January 1
|
194 | 304 | ||||||
Cash and cash equivalents at March 31
|
$ | 53 | $ | 45 | ||||
Supplemental disclosures of cash flow information
|
||||||||
Cash received (paid) for:
|
||||||||
Interest, net of amounts capitalized
|
$ | (197 | ) | $ | (204 | ) | ||
Income taxes, net
|
36 | - | ||||||
Supplemental disclosures of noncash investing and financing activities
|
||||||||
Capital expenditures financed through accounts payable
|
$ | 257 | $ | 276 | ||||
Terminated capital leases
|
- | 136 | ||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
|
Pension Benefits
|
Other Benefits
|
|||||||||||||||
Three Months Ended
|
Three Months Ended
|
|||||||||||||||
March 31,
|
March 31,
|
|||||||||||||||
(in millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Service cost for benefits earned
|
$ | 115 | $ | 99 | $ | 13 | $ | 12 | ||||||||
Interest cost
|
156 | 164 | 19 | 21 | ||||||||||||
Expected return on plan assets
|
(162 | ) | (149 | ) | (20 | ) | (19 | ) | ||||||||
Amortization of transition obligation
|
- | - | - | 6 | ||||||||||||
Amortization of prior service cost
|
5 | 5 | 6 | 6 | ||||||||||||
Amortization of unrecognized loss
|
27 | 31 | 1 | 1 | ||||||||||||
Net periodic benefit cost
|
141 | 150 | 19 | 27 | ||||||||||||
Less: transfer to regulatory account
(1)
|
(57 | ) | (75 | ) | - | - | ||||||||||
Total
|
$ | 84 | $ | 75 | $ | 19 | $ | 27 | ||||||||
Pension and
|
|||||||||
Other
|
|||||||||
Postretirement
|
|||||||||
(in millions)
|
Benefit Plans
|
Other
|
Total
|
||||||
Beginning balance (net of total income tax of $101)
|
$ | (105 | ) | $ | 4 | $ | (101 | ) | |
Other comprehensive income before reclassifications (net of total income tax of $9)
|
(19 | ) | 6 | (13 | ) | ||||
Amounts reclassified from other comprehensive income:
|
|||||||||
Amortization of prior service cost (net of total income tax of $5)
(1)
|
6 | - | 6 | ||||||
Amortization of actuarial gains (net of total income tax of $11)
(1)
|
17 | - | 17 | ||||||
Net current period other comprehensive income
|
4 | 6 | 10 | ||||||
Ending balance (net of total income tax of $94)
|
$ | (101 | ) | $ | 10 | $ | (91 | ) | |
Balance at
|
||||||||
March 31,
|
December 31,
|
|||||||
(in millions)
|
2013
|
2012
|
||||||
Pension benefits
|
$ | 3,299 | $ | 3,275 | ||||
Deferred income taxes
|
1,668 | 1,627 | ||||||
Utility retained generation
|
539 | 552 | ||||||
Environmental compliance costs
|
596 | 604 | ||||||
Price risk management
|
185 | 210 | ||||||
Electromechanical meters
|
179 | 194 | ||||||
Unamortized loss, net of gain, on reacquired debt
|
136 | 141 | ||||||
Other
|
176 | 206 | ||||||
Total long-term regulatory assets
|
$ | 6,778 | $ | 6,809 |
Balance at
|
||||||||
March 31,
|
December 31,
|
|||||||
(in millions)
|
2013
|
2012
|
||||||
Cost of removal obligations
|
$ | 3,709 | $ | 3,625 | ||||
Recoveries in excess of AROs
|
673 | 620 | ||||||
Public purpose programs
|
539 | 590 | ||||||
Other
|
266 | 253 | ||||||
Total long-term regulatory liabilities
|
$ | 5,187 | $ | 5,088 |
Receivable (Payable)
|
||||||||
Balance at
|
||||||||
March 31,
|
December 31,
|
|||||||
(in millions)
|
2013
|
2012
|
||||||
Distribution revenue adjustment mechanism
|
$ | 359 | $ | 219 | ||||
Utility generation
|
321 | 117 | ||||||
Hazardous substance
|
76 | 56 | ||||||
Public purpose programs
|
(69 | ) | (83 | ) | ||||
Gas fixed cost
|
(81 | ) | 44 | |||||
Energy recovery bonds
|
(192 | ) | (43 | ) | ||||
Energy procurement
|
(31 | ) | 77 | |||||
U.S. Department of Energy Settlement
|
(250 | ) | (250 | ) | ||||
Greenhouse gas allowance auction proceeds
(1)
|
(141 | ) | - | |||||
Other
|
147 | 165 | ||||||
Total regulatory balancing accounts, net
|
$ | 139 | $ | 302 | ||||
PG&E Corporation
|
Utility
|
|||||||
Total
|
Total
|
|||||||
(in millions)
|
Equity
|
Shareholders' Equity
|
||||||
Balance at December 31, 2012
|
$ | 13,326 | $ | 13,460 | ||||
Comprehensive income
|
252 | 242 | ||||||
Common stock issued
|
432 | - | ||||||
Share-based compensation expense
|
19 | (1 | ) | |||||
Common stock dividends declared
|
(202 | ) | (179 | ) | ||||
Preferred stock dividend requirement
|
- | (3 | ) | |||||
Preferred stock dividend requirement of subsidiary
|
(3 | ) | - | |||||
Equity contributions
|
- | 370 | ||||||
Balance at March 31, 2013
|
$ | 13,824 | $ | 13,889 | ||||
Three Months Ended March 31,
|
||||||||
(in millions, except per share amounts)
|
2013
|
2012
|
||||||
Income available for common shareholders
|
$ | 239 | $ | 233 | ||||
Weighted average common shares outstanding, basic
|
434 | 414 | ||||||
Add incremental shares from assumed conversions:
|
||||||||
Employee share-based compensation
|
1 | 2 | ||||||
Weighted average common share outstanding, diluted
|
435 | 416 | ||||||
Total earnings per common share, diluted
|
$ | 0.55 | $ | 0.56 |
Commodity Risk
|
||||||||||||||||
Gross Derivative
|
Total Derivative
|
|||||||||||||||
(in millions)
|
Balance
|
Netting
|
Cash Collateral
|
Balance
|
||||||||||||
Current assets – other
|
$ | 47 | $ | (27 | ) | $ | 33 | $ | 53 | |||||||
Other noncurrent assets – other
|
92 | (4 | ) | - | 88 | |||||||||||
Current liabilities – other
|
(182 | ) | 27 | 55 | (100 | ) | ||||||||||
Noncurrent liabilities – other
|
(188 | ) | 4 | 11 | (173 | ) | ||||||||||
Total commodity risk
|
$ | (231 | ) | $ | - | $ | 99 | $ | (132 | ) |
Commodity Risk
|
||||||||||||||||
Gross Derivative
|
Total Derivative
|
|||||||||||||||
(in millions)
|
Balance
|
Netting
|
Cash Collateral
|
Balance
|
||||||||||||
Current assets – other
|
$ | 48 | $ | (25 | ) | $ | 36 | $ | 59 | |||||||
Other noncurrent assets – other
|
99 | (11 | ) | - | 88 | |||||||||||
Current liabilities – other
|
(255 | ) | 25 | 115 | (115 | ) | ||||||||||
Noncurrent liabilities – other
|
(221 | ) | 11 | 14 | (196 | ) | ||||||||||
Total commodity risk
|
$ | (329 | ) | $ | - | $ | 165 | $ | (164 | ) |
Commodity Risk
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Unrealized gain/(loss) - regulatory assets and liabilities
(1)
|
$ | 98 | $ | (54 | ) | |||
Realized loss - cost of electricity
(2)
|
(48 | ) | (151 | ) | ||||
Realized loss - cost of natural gas
(2)
|
(8 | ) | (22 | ) | ||||
Total commodity risk
|
$ | 42 | $ | (227 | ) | |||
Contract Volume
(1)
|
|||||||||||||||||
1 Year or
|
3 Years or
|
||||||||||||||||
Greater but
|
Greater but
|
||||||||||||||||
Less Than 1
|
Less Than 3
|
Less Than 5
|
5 Years or
|
||||||||||||||
Underlying Product
|
Instruments
|
Year
|
Years
|
Years
|
Greater
(2)
|
||||||||||||
Natural Gas
(3)
|
Forwards and
|
||||||||||||||||
(MMBtus
(4)
)
|
Swaps
|
311,804,316 | 85,857,500 | 4,812,500 | - | ||||||||||||
Options
|
209,274,282 | 166,356,071 | 7,050,000 | - | |||||||||||||
Electricity
|
Forwards and
|
||||||||||||||||
(Megawatt-hours)
|
Swaps
|
2,537,023 | 3,164,680 | 2,008,046 | 2,402,346 | ||||||||||||
Options
|
21,002 | 239,233 | 239,015 | 98,505 | |||||||||||||
Congestion
|
|||||||||||||||||
Revenue Rights
|
63,826,023 | 74,481,760 | 74,358,484 | 17,972,340 | |||||||||||||
Contract Volume
(1)
|
|||||||||||||||||
1 Year or
|
3 Years or
|
||||||||||||||||
Greater but
|
Greater but
|
||||||||||||||||
Less Than 1
|
Less Than 3
|
Less Than 5
|
5 Years or
|
||||||||||||||
Underlying Product
|
Instruments
|
Year
|
Years
|
Years
|
Greater
(2)
|
||||||||||||
Natural Gas
(3)
|
Forwards and
|
||||||||||||||||
(MMBtus
(4)
)
|
Swaps
|
329,466,510 | 98,628,398 | 5,490,000 | - | ||||||||||||
Options
|
221,587,431 | 216,279,767 | 10,050,000 | - | |||||||||||||
Electricity
|
Forwards and
|
||||||||||||||||
(Megawatt-hours)
|
Swaps
|
2,537,023 | 3,541,046 | 2,009,505 | 2,538,718 | ||||||||||||
Options
|
- | 239,015 | 239,233 | 119,508 | |||||||||||||
Congestion
|
|||||||||||||||||
Revenue Rights
|
74,198,690 | 74,187,803 | 74,240,147 | 25,699,804 | |||||||||||||
Balance at
|
||||||||
March 31,
|
December 31,
|
|||||||
(in millions)
|
2013
|
2012
|
||||||
Derivatives in a liability position with credit risk-related
contingencies that are not fully collateralized
|
$ | (191 | ) | $ | (266 | ) | ||
Related derivatives in an asset position
|
59 | 59 | ||||||
Collateral posting in the normal course of business related to these derivatives
|
63 | 103 | ||||||
Net position of derivative contracts/additional collateral posting requirements
(1)
|
$ | (69 | ) | $ | (104 | ) | ||
·
|
Level 1 –
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
·
|
Level 2 –
Other inputs that are directly or indirectly observable in the marketplace.
|
·
|
Level 3 –
Unobservable inputs which are supported by little or no market activities.
|
Fair Value Measurements
|
||||||||||||||||||||
At March 31, 2013
|
||||||||||||||||||||
(in millions)
|
Level 1
|
Level 2
|
Level 3
|
Netting
(1)
|
Total
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Money market investments
|
$ | 205 | $ | - | $ | - | $ | - | $ | 205 | ||||||||||
Nuclear decommissioning trusts
|
||||||||||||||||||||
Money market investments
|
25 | - | - | - | 25 | |||||||||||||||
U.S. equity securities
|
984 | 10 | - | - | 994 | |||||||||||||||
Non-U.S. equity securities
|
394 | - | - | - | 394 | |||||||||||||||
U.S. government and agency securities
|
692 | 159 | - | - | 851 | |||||||||||||||
Municipal securities
|
- | 65 | - | - | 65 | |||||||||||||||
Other fixed-income securities
|
- | 177 | - | - | 177 | |||||||||||||||
Total nuclear decommissioning trusts
(2)
|
2,095 | 411 | - | - | 2,506 | |||||||||||||||
Price risk management instruments
|
||||||||||||||||||||
(Note 7)
|
||||||||||||||||||||
Electricity
|
4 | 53 | 76 | 7 | 140 | |||||||||||||||
Gas
|
- | 4 | 2 | (5 | ) | 1 | ||||||||||||||
Total price risk management instruments
|
4 | 57 | 78 | 2 | 141 | |||||||||||||||
Rabbi trusts
|
||||||||||||||||||||
Fixed-income securities
|
- | 30 | - | - | 30 | |||||||||||||||
Life insurance contracts
|
- | 72 | - | - | 72 | |||||||||||||||
Total rabbi trusts
|
- | 102 | - | - | 102 | |||||||||||||||
Long-term disability trust
|
||||||||||||||||||||
Money market investments
|
4 | - | - | - | 4 | |||||||||||||||
U.S. equity securities
|
- | 12 | - | - | 12 | |||||||||||||||
Non-U.S. equity securities
|
- | 12 | - | - | 12 | |||||||||||||||
Fixed-income securities
|
- | 136 | - | - | 136 | |||||||||||||||
Total long-term disability trust
|
4 | 160 | - | - | 164 | |||||||||||||||
Total assets
|
$ | 2,308 | $ | 730 | $ | 78 | $ | 2 | $ | 3,118 | ||||||||||
Liabilities:
|
||||||||||||||||||||
Price risk management instruments
|
||||||||||||||||||||
(Note 7)
|
||||||||||||||||||||
Electricity
|
$ | 89 | $ | 119 | $ | 153 | $ | (92 | ) | $ | 269 | |||||||||
Gas
|
5 | 4 | - | (5 | ) | 4 | ||||||||||||||
Total liabilities
|
$ | 94 | $ | 123 | $ | 153 | $ | (97 | ) | $ | 273 | |||||||||
Fair Value Measurements
|
||||||||||||||||||||
At December 31, 2012
|
||||||||||||||||||||
(in millions)
|
Level 1
|
Level 2
|
Level 3
|
Netting
(1)
|
Total
|
|||||||||||||||
Assets:
|
||||||||||||||||||||
Money market investments
|
$ | 209 | $ | - | $ | - | $ | - | $ | 209 | ||||||||||
Nuclear decommissioning trusts
|
||||||||||||||||||||
Money market investments
|
21 | - | - | - | 21 | |||||||||||||||
U.S. equity securities
|
940 | 9 | - | - | 949 | |||||||||||||||
Non-U.S. equity securities
|
379 | - | - | - | 379 | |||||||||||||||
U.S. government and agency securities
|
681 | 139 | - | - | 820 | |||||||||||||||
Municipal securities
|
- | 59 | - | - | 59 | |||||||||||||||
Other fixed-income securities
|
- | 173 | - | - | 173 | |||||||||||||||
Total nuclear decommissioning trusts
(2)
|
2,021 | 380 | - | - | 2,401 | |||||||||||||||
Price risk management instruments
|
||||||||||||||||||||
(Note 7)
|
||||||||||||||||||||
Electricity
|
1 | 60 | 80 | 6 | 147 | |||||||||||||||
Gas
|
- | 5 | 1 | (6 | ) | - | ||||||||||||||
Total price risk management instruments
|
1 | 65 | 81 | - | 147 | |||||||||||||||
Rabbi trusts
|
||||||||||||||||||||
Fixed-income securities
|
- | 30 | - | - | 30 | |||||||||||||||
Life insurance contracts
|
- | 72 | - | - | 72 | |||||||||||||||
Total rabbi trusts
|
- | 102 | - | - | 102 | |||||||||||||||
Long-term disability trust
|
||||||||||||||||||||
Money market investments
|
10 | - | - | - | 10 | |||||||||||||||
U.S. equity securities
|
- | 14 | - | - | 14 | |||||||||||||||
Non-U.S. equity securities
|
- | 11 | - | - | 11 | |||||||||||||||
Fixed-income securities
|
- | 136 | - | - | 136 | |||||||||||||||
Total long-term disability trust
|
10 | 161 | - | - | 171 | |||||||||||||||
Total assets
|
$ | 2,241 | $ | 708 | $ | 81 | $ | - | $ | 3,030 | ||||||||||
Liabilities:
|
||||||||||||||||||||
Price risk management instruments
|
||||||||||||||||||||
(Note 7)
|
||||||||||||||||||||
Electricity
|
$ | 155 | $ | 144 | $ | 160 | $ | (156 | ) | $ | 303 | |||||||||
Gas
|
8 | 9 | - | (9 | ) | 8 | ||||||||||||||
Total liabilities
|
$ | 163 | $ | 153 | $ | 160 | $ | (165 | ) | $ | 311 | |||||||||
Fair Value at
|
||||||||||||||
(in millions)
|
March 31, 2013
|
|||||||||||||
Fair Value Measurement
|
Assets
|
Liabilities
|
Valuation Technique
|
Unobservable Input
|
Range
(1)
|
|||||||||
Congestion revenue rights
|
$ | 76 | $ | 15 |
Market approach
|
CRR auction prices
|
$ | (11.30) - 7.93 | ||||||
Power purchase agreements
|
$ | - | $ | 139 |
Discounted cash flow
|
Forward prices
|
$ | 10.54 - 58.08 | ||||||
Fair Value at
|
||||||||||||||
(in millions)
|
December 31, 2012
|
|||||||||||||
Fair Value Measurement
|
Assets
|
Liabilities
|
Valuation Technique
|
Unobservable Input
|
Range
(1)
|
|||||||||
Congestion revenue rights
|
$ | 80 | $ | 16 |
Market approach
|
CRR auction prices
|
$ | (9.04) - 55.15 | ||||||
Power purchase agreements
|
$ | - | $ | 145 |
Discounted cash flow
|
Forward prices
|
$ | 8.59 - 62.90 | ||||||
Price Risk Management Instruments
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Liability balance as of January 1
|
$ | (79 | ) | $ | (74 | ) | ||
Realized and unrealized gains (losses):
|
||||||||
Included in regulatory assets and liabilities or balancing accounts
(1)
|
4 | (25 | ) | |||||
Transfers out of Level 3
|
- | - | ||||||
Liability balance as of March 31
|
$ | (75 | ) | $ | (99 | ) | ||
·
|
The fair values of cash, restricted cash, net accounts receivable, short-term borrowings, accounts payable, customer deposits, and the Utility’s variable rate pollution control bond loan agreements approximate their carrying values at March 31, 2013 and December 31, 2012, as they are short-term in nature or have interest rates that reset daily.
|
·
|
The fair values of the Utility’s fixed-rate senior notes and fixed-rate pollution control bond loan agreements and PG&E Corporation’s fixed-rate senior notes were based on quoted market prices at March 31, 2013 and December 31, 2012.
|
March 31, 2013
|
December 31, 2012
|
|||||||||||||||
(in millions)
|
Carrying Amount
|
Level 2 Fair Value
|
Carrying Amount
|
Level 2 Fair Value
|
||||||||||||
Debt (Note 4)
|
||||||||||||||||
PG&E Corporation
|
$ | 350 | $ | 367 | $ | 349 | $ | 371 | ||||||||
Utility
|
11,645 | 13,757 | 11,645 | 13,946 |
Total
|
Total
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Total Fair
|
|||||||||||||
(in millions)
|
Cost
|
Gains
|
Losses
|
Value
(1)
|
||||||||||||
As of March 31, 2013
|
||||||||||||||||
Money market investments
|
$ | 25 | $ | - | $ | - | $ | 25 | ||||||||
Equity securities
|
||||||||||||||||
U.S.
|
289 | 705 | - | 994 | ||||||||||||
Non-U.S.
|
199 | 196 | (1 | ) | 394 | |||||||||||
Debt securities
|
||||||||||||||||
U.S. government and agency securities
|
762 | 89 | - | 851 | ||||||||||||
Municipal securities
|
61 | 4 | - | 65 | ||||||||||||
Other fixed-income securities
|
173 | 4 | - | 177 | ||||||||||||
Total
|
$ | 1,509 | $ | 998 | $ | (1 | ) | $ | 2,506 | |||||||
As of December 31, 2012
|
||||||||||||||||
Money market investments
|
$ | 21 | $ | - | $ | - | $ | 21 | ||||||||
Equity securities
|
||||||||||||||||
U.S.
|
331 | 618 | - | 949 | ||||||||||||
Non-U.S.
|
199 | 181 | (1 | ) | 379 | |||||||||||
Debt securities
|
||||||||||||||||
U.S. government and agency securities
|
723 | 97 | - | 820 | ||||||||||||
Municipal securities
|
56 | 4 | (1 | ) | 59 | |||||||||||
Other fixed-income securities
|
168 | 5 | - | 173 | ||||||||||||
Total
|
$ | 1,498 | $ | 905 | $ | (2 | ) | $ | 2,401 | |||||||
As of
|
||||
(in millions)
|
March 31, 2013
|
|||
Less than 1 year
|
$ | 28 | ||
1–5 years
|
448 | |||
5–10 years
|
237 | |||
More than 10 years
|
380 | |||
Total maturities of debt securities
|
$ | 1,093 |
Three Months Ended
|
||||||||
March 31, 2013
|
March 31, 2012
|
|||||||
(in millions)
|
||||||||
Proceeds from sales and maturities of nuclear decommissioning trust investments
|
$ | 363 | $ | 351 | ||||
Gross realized gains on sales of securities held as available-for-sale
|
12 | 7 | ||||||
Gross realized losses on sales of securities held as available-for-sale
|
(1 | ) | (3 | ) |
Balance at January 1, 2010
|
$ | - | ||
Loss accrued
|
220 | |||
Less: Payments
|
(6 | ) | ||
Balance at December 31, 2010
|
214 | |||
Additional loss accrued
|
155 | |||
Less: Payments
|
(92 | ) | ||
Balance at December 31, 2011
|
277 | |||
Additional loss accrued
|
80 | |||
Less: Payments
|
(211 | ) | ||
Balance at December 31, 2012
|
146 | |||
Additional loss accrued
|
- | |||
Less: Payments
|
(73 | ) | ||
Balance at March 31, 2013
|
$ | 73 |
Balance at
|
||||||||
(in millions)
|
March 31, 2013
|
December 31, 2012
|
||||||
Utility-owned natural gas compressor site near Topock, Arizona
(1)
|
$ | 271 | $ | 239 | ||||
Utility-owned natural gas compressor site near Hinkley, California
(1)
|
217 | 226 | ||||||
Former manufactured gas plant sites owned by the Utility or third parties
|
187 | 181 | ||||||
Utility-owned generation facilities (other than for fossil fuel-fired),
other facilities, and third-party disposal sites
|
172 | 158 | ||||||
Fossil fuel-fired generation facilities formerly owned by the Utility
|
88 | 87 | ||||||
Decommissioning fossil fuel-fired generation facilities and sites
|
19 | 19 | ||||||
Total environmental remediation liability
|
$ | 954 | $ | 910 | ||||
·
|
The Outcome of Matters Related to the Utility’s Natural Gas System.
The Utility forecasts that it will incur total pipeline-related costs ranging from $400 million to $500 million in 2013 that will not be recoverable through rates, including $62 million incurred during the three months ended March 31, 2013. (See “Operating and Maintenance” below.) Additionally, the CPUC could impose penalties that are materially higher than the $200 million accrued in connection with three pending CPUC investigations and other matters that were self-reported by the Utility related to the safety of its natural gas operations. The Utility may also incur costs to implement any remedial actions the CPUC may order the Utility to perform. On May 6, 2013, the SED and other parties are expected to file briefs to recommend the amount of penalties and other remedial actions to be imposed on the Utility based on the violations the SED alleges that the Utility committed. Based on the current procedural schedule, the Utility expects that the pending investigations will be resolved by the third quarter of 2013. (See “Pending CPUC Investigations and Enforcement Matters” below.) In addition, an ongoing investigation of the San Bruno accident by federal, state, and local authorities may result in the imposition of penalties and remedial measures on the Utility. (See “Criminal Investigation” below.) Finally, PG&E Corporation and the Utility believe it is reasonably possible that they may incur additional charges of up to $145 million for estimated third-party claims related to the San Bruno accident. (See “Third-Party Claims” below.)
|
·
|
The Amount and Timing of the Utility’s Equity Financing Needs
. PG&E Corporation contributes equity to the Utility as needed by the Utility to maintain its CPUC-authorized capital structure. The Utility has incurred significant expenses that are not recoverable through rates, which has increased the Utility’s equity needs. For the three months ended March 31, 2013, PG&E Corporation made equity contributions to the Utility of $370 million, which were funded primarily through common stock issuances. The Utility’s future financing needs will be affected by the ultimate amount of unrecoverable costs and penalties incurred in connection with natural gas matters above. The Utility’s financing needs also will be affected by other factors, including the timing and amount of the Utility’s capital expenditures, operating expenses, and collateral requirements associated with price risk management activities. Additional equity issued by PG&E Corporation in the future to fund the Utility’s equity needs attributable to unrecoverable costs, including the ultimate amount of penalties associated with the pending investigations, is expected to have a material dilutive effect on its EPS. PG&E Corporation’s and the Utility’s ability to access the capital markets and the terms and rates of future financings could be affected by changes in their respective credit ratings, the outcome of natural gas matters, general economic and market conditions, and other factors. (See “Liquidity and Financial Resources” below.)
|
·
|
The Timing and Outcome of Ratemaking Proceedings
. The Utility’s financial results are affected by the timing and outcome of ratemaking proceedings. During 2013, the CPUC is scheduled to determine the amount of revenue requirements the Utility is authorized to recover beginning in 2014 for its electric and natural gas distribution operations and its electric generation operations in the 2014 GRC. The Utility has requested that the CPUC increase the Utility’s base revenues for 2014 by $1.28 billion over the comparable revenues for 2013 that were previously authorized. (See “2014 General Rate Case” below.) The FERC is also considering proposed changes in the Utility’s electric transmission rates in the pending TO rate case. Although the proposed rate changes became effective on May 1, 2013, the Utility’s collection of the increased rates is subject to refund following the issuance of a final decision by the FERC. (See “FERC Transmission Owner Rate Case” below.) The Utility expects to file an application with the CPUC in late 2013 to initiate the Utility’s 2015 GT&S rate case in which the CPUC will determine the rates, and terms and conditions of the Utility’s gas transmission and storage services beginning January 1, 2015. The Utility expects to address the scope, timing, and cost recovery of continuing work to enhance the safety and reliability of its gas pipeline system in the 2015 GT&S rate case. The outcome of these ratemaking proceedings can be affected by many factors, including general economic conditions, the level of customer rates, regulatory policies, and political considerations.
|
·
|
The Ability of the Utility to Control Operating Costs and Capital Expenditures.
Rates are primarily set based on forecasts and assumptions about the amount of operating costs and capital expenditures the Utility will incur in future periods. PG&E Corporation’s and the Utility’s net income is negatively affected when the revenues provided by rates are not sufficient for the Utility to recover the costs it actually incurs. In 2013, in addition to the non-recoverable costs related to the Utility’s natural gas system described above, the Utility forecasts that it will incur approximately $250 million to improve the safety and reliability of its electric and natural gas operations that it will not recover through rates. (See “Operating and Maintenance” below.) Any future increase in the Utility’s environmental-related liabilities that are not recoverable through rates, such as costs associated with its natural gas compressor station located in Hinkley, California, also will negatively affect PG&E Corporation’s and the Utility’s net income. (See “Environmental Matters” below.) Other differences between the amount or timing of the Utility’s actual costs and forecasted or authorized amounts may also affect the Utility’s ability to earn its authorized ROE.
|
Earnings Per
|
||||||||
Common Share
|
||||||||
(in millions, except per share amounts)
|
Earnings
|
(Diluted)
|
||||||
Income Available for Common Shareholders - March 31, 2012
|
$ | 233 | $ | 0.56 | ||||
Natural gas matters
(1)
|
60 | 0.15 | ||||||
Environmental-related costs
|
42 | 0.10 | ||||||
Growth in rate base earnings
|
21 | 0.05 | ||||||
Reduction in authorized cost of capital
|
(44 | ) | (0.10 | ) | ||||
Nuclear refueling outage
|
(27 | ) | (0.06 | ) | ||||
Timing of incremental work
|
(13 | ) | (0.03 | ) | ||||
Gas transmission revenues
|
(3 | ) | (0.01 | ) | ||||
Increase in shares outstanding
(2)
|
- | (0.04 | ) | |||||
Other
|
(30 | ) | (0.07 | ) | ||||
Income Available for Common Shareholders - March 31, 2013
|
$ | 239 | $ | 0.55 | ||||
|
(1)
The Utility incurred charges related to natural gas matters of $62 million and $163 million, pre-tax, for the three months ended March 31, 2013 and 2012, respectively. The amount shown above represents the favorable impact attributable to the lower amount of expenses recorded in 2013. See “Operating and Maintenance” below for additional information.
|
|
(2)
Represents the impact of a higher number of shares outstanding at March 31, 2013, compared to the number of shares outstanding at March 31, 2012. PG&E Corporation issues shares to fund its equity contributions to the Utility to maintain the Utility’s capital structure and fund operations, including expenses related to natural gas matters. This has no dollar impact on earnings.
|
·
|
the timing and terms of the resolution of pending investigations and enforcement matters related to the Utility’s natural gas system operating practices and the San Bruno accident, including the ultimate amount of penalties the Utility will be required to pay, the cost of any remedial actions the Utility may be ordered to perform, and whether the resolution is reached through settlement negotiations, or a fully litigated proceeding; the ultimate amount of third-party claims associated with the San Bruno accident and the timing and amount of related insurance recoveries; the ultimate amount of punitive damages, if any, the Utility may incur related to third-party claims; and the ultimate amount of civil or criminal penalties, if any, the Utility may incur related to the criminal investigation;
|
·
|
the outcomes of current ratemaking proceedings, such as the 2014 GRC and the pending TO rate case; the outcome of future ratemaking and regulatory proceedings, such as the 2015 GT&S rate case; and the outcomes of other ratemaking and regulatory proceedings;
|
·
|
the ultimate amount of costs the Utility incurs in the future that are not recovered through rates, including pipeline-related expenses to validate safe operating pressure, conduct strength tests, and to identify and remove encroachments from transmission pipeline easements, and costs to perform incremental work to improve the safety and reliability of electric and natural gas operations;
|
·
|
the outcome of future investigations or proceedings that may be commenced by the CPUC or other regulatory authorities relating to the Utility’s compliance with laws, rules, regulations, or orders applicable to the operation, inspection, and maintenance of its electric and gas facilities;
|
·
|
whether PG&E Corporation and the Utility are able to repair the reputational harm that they have suffered, and may suffer in the future, due to the negative publicity surrounding the San Bruno accident, the related civil litigation, and the pending investigations, including any charge or finding of criminal liability;
|
·
|
the level of equity contributions that PG&E Corporation must make to the Utility to enable the Utility to maintain its authorized capital structure as the Utility incurs charges and costs, including costs associated with natural gas matters and penalties imposed in connection with the pending investigations, that are not recoverable through rates or insurance;
|
·
|
the impact of environmental remediation laws, regulations, and orders; the ultimate amount of costs incurred to discharge the Utility’s known and unknown remediation obligations; the extent to which the Utility is able to recover compliance and remediation costs from third parties or through rates or insurance; and the ultimate amount of costs the Utility incurs in connection with environmental remediation liabilities that are not recoverable through rates or insurance, such as the remediation costs associated with the Utility’s natural gas compressor station site located near Hinkley, California;
|
·
|
the impact of new legislation or NRC regulations, recommendations, policies, decisions, or orders relating to the operations, seismic design, security, safety, or decommissioning of nuclear facilities, including the Utility’s Diablo Canyon nuclear power plant, or relating to the storage of spent nuclear fuel, cooling water intake, or other issues; and the ability of the Utility to relicense the Diablo Canyon units;
|
·
|
the impact of weather-related conditions or events (such as storms, tornadoes, floods, drought, solar or electromagnetic events, and wildland and other fires), natural disasters (such as earthquakes, tsunamis, and pandemics), and other events (such as explosions, fires, accidents, mechanical breakdowns, equipment failures, human errors, and labor disruptions), as well as acts of terrorism, war, or vandalism, including cyber-attacks, that can cause unplanned outages, reduce generating output, disrupt the Utility’s service to customers, or damage or disrupt the facilities, operations, or information technology and systems owned by the Utility, its customers, or third parties on which the Utility relies; and subject the Utility to third-party liability for property damage or personal injury, or result in the imposition of civil, criminal, or regulatory penalties on the Utility;
|
·
|
the impact of environmental laws and regulations aimed at the reduction of carbon dioxide and GHGs, and whether the Utility is able to recover associated compliance costs, including the cost of emission allowances and offsets, that the Utility may incur under cap-and-trade regulations;
|
·
|
changes in customer demand for electricity and natural gas resulting from unanticipated population growth or decline in the Utility’s service area, general and regional economic and financial market conditions, the extent of municipalization of the Utility’s electric distribution facilities, changing levels of “direct access” customers who procure electricity from alternative energy providers, changing levels of customers who purchase electricity from governmental bodies that act as “community choice aggregators,” and the development of alternative energy technologies including self-generation and distributed generation technologies;
|
·
|
the adequacy and price of electricity, natural gas, and nuclear fuel supplies; the extent to which the Utility can manage and respond to the volatility of energy commodity prices; the ability of the Utility and its counterparties to post or return collateral in connection with price risk management activities; and whether the Utility is able to recover timely its energy commodity costs through rates;
|
·
|
whether the Utility’s information technology, operating systems and networks, including the advanced metering system infrastructure, customer billing, financial, and other systems, can continue to function accurately while meeting regulatory requirements; whether the Utility is able to protect its operating systems and networks from damage, disruption, or failure caused by cyber-attacks, computer viruses, or other hazards; whether the Utility’s security measures are sufficient to protect confidential customer, vendor, and financial data contained in such systems and networks; and whether the Utility can continue to rely on third-party vendors and contractors that maintain and support some of the Utility’s operating systems;
|
·
|
the extent to which costs incurred in connection with third-party claims or litigation are not recoverable through insurance, rates, or from other third parties;
|
·
|
the ability of PG&E Corporation and the Utility to access capital markets and other sources of debt and equity financing in a timely manner on acceptable terms;
|
·
|
the impact on the availability and costs of borrowing if the Utility were to lose its investment grade credit ratings;
|
·
|
the impact of federal or state laws or regulations, or their interpretation, on energy policy and the regulation of utilities and their holding companies, including how the CPUC interprets and enforces the financial and other conditions imposed on PG&E Corporation when it became the Utility’s holding company, and whether the outcome of proceedings and investigations relating to the Utility’s natural gas operations affects the Utility’s ability to make distributions to PG&E Corporation in the form of dividends or share repurchases; and, in turn, PG&E Corporation’s ability to pay dividends;
|
·
|
the outcome of federal or state tax audits and the impact of any changes in federal or state tax laws, policies, or regulations; and
|
·
|
the impact of changes in GAAP, standards, rules, or policies, including those related to regulatory accounting, and the impact of changes in their interpretation or application.
|
Three Months Ended March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Utility
|
||||||||
Electric operating revenues
|
$ | 2,798 | $ | 2,771 | ||||
Natural gas operating revenues
|
873 | 869 | ||||||
Total operating revenues
|
3,671 | 3,640 | ||||||
Cost of electricity
|
983 | 859 | ||||||
Cost of natural gas
|
346 | 343 | ||||||
Operating and maintenance
|
1,336 | 1,366 | ||||||
Depreciation, amortization, and decommissioning
|
503 | 584 | ||||||
Total operating expenses
|
3,168 | 3,152 | ||||||
Operating income
|
503 | 488 | ||||||
Interest income
|
1 | 1 | ||||||
Interest expense
|
(170 | ) | (168 | ) | ||||
Other income, net
|
24 | 23 | ||||||
Income before income taxes
|
358 | 344 | ||||||
Income tax provision
|
121 | 113 | ||||||
Net income
|
237 | 231 | ||||||
Preferred stock dividend requirement
|
3 | 3 | ||||||
Income Available for Common Stock
|
$ | 234 | $ | 228 | ||||
PG&E Corporation, Eliminations, and Other
(1)
|
||||||||
Operating revenues
|
$ | 1 | $ | 1 | ||||
Operating expenses
|
2 | 2 | ||||||
Operating loss
|
(1 | ) | (1 | ) | ||||
Interest income
|
1 | - | ||||||
Interest expense
|
(6 | ) | (6 | ) | ||||
Other income, net
|
4 | 3 | ||||||
Loss before income taxes
|
(2 | ) | (4 | ) | ||||
Income tax benefit
|
(7 | ) | (9 | ) | ||||
Net income
|
$ | 5 | $ | 5 | ||||
Consolidated Total
|
||||||||
Operating revenues
|
$ | 3,672 | $ | 3,641 | ||||
Operating expenses
|
3,170 | 3,154 | ||||||
Operating income
|
502 | 487 | ||||||
Interest income
|
2 | 1 | ||||||
Interest expense
|
(176 | ) | (174 | ) | ||||
Other income, net
|
28 | 26 | ||||||
Income before income taxes
|
356 | 340 | ||||||
Income tax provision
|
114 | 104 | ||||||
Net income
|
242 | 236 | ||||||
Preferred stock dividend requirement of subsidiary
|
3 | 3 | ||||||
Income Available for Common Shareholders
|
$ | 239 | $ | 233 | ||||
(1)
PG&E Corporation eliminates all intercompany transactions in consolidation.
|
Three Months Ended March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Revenues excluding passed-through costs
|
$ | 1,597 | $ | 1,575 | ||||
Revenues for recovery of passed-through costs
|
1,201 | 1,196 | ||||||
Total electric operating revenues
|
$ | 2,798 | $ | 2,771 |
Three Months Ended March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Cost of purchased power
|
$ | 910 | $ | 776 | ||||
Fuel used in own generation facilities
|
73 | 83 | ||||||
Total cost of electricity
|
$ | 983 | $ | 859 | ||||
Average cost of purchased power per kWh
|
$ | 0.084 | $ | 0.075 | ||||
Total purchased power (in millions of kWh)
|
10,886 | 10,290 | ||||||
Three Months Ended March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Revenues excluding passed-through costs
|
$ | 442 | $ | 439 | ||||
Revenues for recovery of passed-through costs
|
431 | 430 | ||||||
Total natural gas operating revenues
|
$ | 873 | $ | 869 |
Three Months Ended March 31,
|
||||||||
(in millions)
|
2013
|
2012
|
||||||
Pipeline-related expenses
|
$ | 62 | $ | 104 | ||||
Insurance recoveries
|
- | (11 | ) | |||||
Contribution to City of San Bruno
|
- | 70 | ||||||
Total natural gas matters
|
$ | 62 | $ | 163 | ||||
Letters of
|
|||||||||||||||
Termination
|
Facility
|
Credit
|
Commercial
|
Facility
|
|||||||||||
Date
|
Limit
|
Outstanding
|
Borrowings
|
Paper
|
Availability
|
||||||||||
(in millions)
|
|||||||||||||||
PG&E Corporation
|
May 2016
|
$
|
300
|
(1)
|
$
|
-
|
$
|
120
|
$
|
-
|
$
|
180
|
|||
Utility
|
May 2016
|
3,000
|
(2)
|
243
|
-
|
368
|
(3)
|
2,389
|
(3)
|
||||||
Total revolving credit facilities
|
$
|
3,300
|
$
|
243
|
$
|
120
|
$
|
368
|
$
|
2,569
|
|||||
·
|
7,200,000 shares were sold in an underwritten public offering for cash proceeds of $300 million, net of fees and commissions;
|
·
|
2,109,980 shares that were issued for cash proceeds of $63 million under the PG&E Corporation 401(k) plan, the Dividend Reinvestment and Stock Purchase Plan, and share-based compensation plans; and
|
·
|
1,480,900 shares were sold for cash proceeds of $63 million, net of fees of $1 million, exhausting the remaining capacity under the equity distribution agreement executed in November 2011.
|
·
|
the amount of cash internally generated through normal business operations;
|
·
|
the timing and amount of forecasted capital expenditures;
|
·
|
the timing and amount of payments made to third parties in connection with the San Bruno accident, and the timing and amount of related insurance recoveries (see “Natural Gas Matters” below);
|
·
|
the timing and amount of penalties imposed on the Utility in connection with the pending investigations and other potential enforcement matters related to the San Bruno accident and the Utility’s natural gas operations (see “Natural Gas Matters” below);
|
·
|
the timing and amount of pipeline-related expenses and other expenses to improve the safety and reliability of the Utility’s electric and natural gas operations that are not recoverable through rates (see “Operating and Maintenance” above);
|
·
|
the timing of the resolution of the Chapter 11 disputed claims and the amount of interest on these claims that the Utility will be required to pay (see Note 9 of the Notes to the Condensed Consolidated Financial Statements);
|
·
|
the amount of future tax payments;
|
·
|
the conditions in the capital markets, and other factors; and
|
·
|
the maturity date of existing debt instruments, including the $1.0 billion of senior notes due in March 2014.
|
2013
|
2012
|
|||||||
Net income
|
$ | 237 | $ | 231 | ||||
Adjustments to reconcile net income to net cash provided by operating
|
||||||||
activities:
|
||||||||
Depreciation, amortization, and decommissioning
|
503 | 584 | ||||||
Allowance for equity funds used during construction
|
(26 | ) | (27 | ) | ||||
Deferred income taxes and tax credits, net
|
163 | 153 | ||||||
Other
|
37 | 57 | ||||||
Net effect of changes in operating assets and liabilities
|
(7 | ) | (49 | ) | ||||
Net cash provided by operating activities
|
$ | 907 | $ | 949 |
2013
|
2012
|
|||||||
Capital expenditures
|
$ | (1,249 | ) | $ | (1,094 | ) | ||
Decrease (increase) in restricted cash
|
26 | (5 | ) | |||||
Proceeds from sales and maturities of nuclear decommissioning trust investments
|
363 | 351 | ||||||
Purchases of nuclear decommissioning trust investments
|
(364 | ) | (370 | ) | ||||
Other
|
5 | 3 | ||||||
Net cash used in investing activities
|
$ | (1,219 | ) | $ | (1,115 | ) |
2013
|
2012
|
|||||||
Net repayments of commercial paper, net of discount of $1 in 2012
|
$ | (2 | ) | $ | (245 | ) | ||
Energy recovery bonds matured
|
- | (102 | ) | |||||
Preferred stock dividends paid
|
(3 | ) | (3 | ) | ||||
Common stock dividends paid
|
(179 | ) | (179 | ) | ||||
Equity contribution
|
370 | 385 | ||||||
Other
|
(15 | ) | 51 | |||||
Net cash provided by (used in) financing activities
|
$ | 171 | $ | (93 | ) |
Three Months Ended March 31,
|
Cumulative
|
|||||||||||
(in millions)
|
2013
|
2012
|
Charges
(5)
|
|||||||||
Pipeline-related expenses
(1)
|
$ | 62 | $ | 104 | $ | 1,085 | ||||||
Disallowed capital expenditures
(1)
|
- | - | 353 | |||||||||
Accrued penalties
(2)
|
- | - | 217 | |||||||||
Third-party claims
(3)
|
- | - | 455 | |||||||||
Insurance recoveries
(3)
|
- | (11 | ) | (284 | ) | |||||||
Contribution to City of San Bruno
(4)
|
- | 70 | 70 | |||||||||
Total natural gas matters
|
$ | 62 | $ | 163 | $ | 1,896 | ||||||
10.1
|
Amended and restated credit agreement dated April 1, 2013 among (1) PG&E Corporation as borrower, (2) Bank of America, N.A., as administrative agent and a lender, (3) J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBS Securities Inc. and Wells Fargo Securities LLC as joint lead arrangers and joint bookrunners, (4) Citibank N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents and lenders, (5) The Royal Bank of Scotland plc and Wells Fargo Bank, National Association as co-documentation agents and lenders, and (6) the following other lenders: Barclays Bank PLC, BNP Paribas, Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc., The Bank of New York Mellon, N.A., Mizuho Corporate Bank, Ltd., Royal Bank of Canada, U.S. Bank National Association, Union Bank, N.A., TD Bank, N.A., Canadian Imperial Bank of Commerce, and Sumitomo Mitsui Banking Corporation
|
10.2
|
Amended and restated credit agreement dated April 1, 2013 among (1) Pacific Gas and Electric Company as borrower, (2) Citibank N.A., as administrative agent and a lender, (3) Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, RBS Securities Inc. and Wells Fargo Securities LLC as joint lead arrangers and joint bookrunners, (4) Bank of America, N.A. and JPMorgan Chase Bank, N.A. as co-syndication agents and lenders, (5) The Royal Bank of Scotland plc and Wells Fargo Bank, National Association as co-documentation agents and lenders, and (6) the following other lenders: Barclays Bank PLC, BNP Paribas, Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc., The Bank of New York Mellon, N.A., Mizuho Corporate Bank, Ltd., Royal Bank of Canada, U.S. Bank National Association, Union Bank, N.A., TD Bank, N.A., Canadian Imperial Bank of Commerce, and Sumitomo Mitsui Banking Corporation
|
*10.3
|
Form of Restricted Stock Unit Agreement for 2013 grants under the PG&E Corporation 2006 Long-Term Incentive Plan
|
*10.4
|
Form of Performance Share Agreement for 2013 grants under the PG&E Corporation 2006 Long-Term Incentive Plan
|
*10.5
|
Restricted Stock Unit Agreement between Anthony F. Earley, Jr. and PG&E Corporation for 2013 grant under the PG&E Corporation 2006 Long-Term Incentive Plan
|
*10.6
|
Performance Share Agreement between Anthony F. Earley, Jr. and PG&E Corporation for 2013 grant under the PG&E Corporation 2006 Long-Term Incentive Plan
|
12.1
|
Computation of Ratios of Earnings to Fixed Charges for Pacific Gas and Electric Company
|
12.2
|
Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends for Pacific Gas and Electric Company
|
12.3
|
Computation of Ratios of Earnings to Fixed Charges for PG&E Corporation
|
31.1
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&E Corporation required by Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of Pacific Gas and Electric Company required by Section 302 of the Sarbanes-Oxley Act of 2002
|
**32.1
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&E Corporation required by Section 906 of the Sarbanes-Oxley Act of 2002
|
**32.2
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of Pacific Gas and Electric Company required by Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*
|
Management contract or compensatory agreement.
|
**
|
Pursuant to Item 601(b)(32) of SEC Regulation S-K, these exhibits are furnished rather than filed with this report.
|
PG&E CORPORATION
|
KENT M. HARVEY
|
Kent M. Harvey
Senior Vice President and Chief Financial Officer
(duly authorized officer and principal financial officer)
|
PACIFIC GAS AND ELECTRIC COMPANY
|
DINYAR B. MISTRY
|
Dinyar B. Mistry
Vice President, Chief Financial Officer and Controller
(duly authorized officer and principal financial officer)
|
10.1
|
Amended and restated credit agreement dated April 1, 2013 among (1) PG&E Corporation as borrower, (2) Bank of America, N.A., as administrative agent and a lender, (3) J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBS Securities Inc. and Wells Fargo Securities LLC as joint lead arrangers and joint bookrunners, (4) Citibank N.A. and JPMorgan Chase Bank, N.A., as co-syndication agents and lenders, (5) The Royal Bank of Scotland plc and Wells Fargo Bank, National Association as co-documentation agents and lenders, and (6) the following other lenders: Barclays Bank PLC, BNP Paribas, Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc., The Bank of New York Mellon, N.A., Mizuho Corporate Bank, Ltd., Royal Bank of Canada, U.S. Bank National Association, Union Bank, N.A., TD Bank, N.A., Canadian Imperial Bank of Commerce, and Sumitomo Mitsui Banking Corporation
|
10.2
|
Amended and restated credit agreement dated April 1, 2013 among (1) Pacific Gas and Electric Company as borrower, (2) Citibank N.A., as administrative agent and a lender, (3) Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, RBS Securities Inc. and Wells Fargo Securities LLC as joint lead arrangers and joint bookrunners, (4) Bank of America, N.A. and JPMorgan Chase Bank, N.A. as co-syndication agents and lenders, (5) The Royal Bank of Scotland plc and Wells Fargo Bank, National Association as co-documentation agents and lenders, and (6) the following other lenders: Barclays Bank PLC, BNP Paribas, Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc., The Bank of New York Mellon, N.A., Mizuho Corporate Bank, Ltd., Royal Bank of Canada, U.S. Bank National Association, Union Bank, N.A., TD Bank, N.A., Canadian Imperial Bank of Commerce, and Sumitomo Mitsui Banking Corporation
|
*10.3
|
Form of Restricted Stock Unit Agreement for 2013 grants under the PG&E Corporation 2006 Long-Term Incentive Plan
|
*10.4
|
Form of Performance Share Agreement for 2013 grants under the PG&E Corporation 2006 Long-Term Incentive Plan
|
*10.5
|
Restricted Stock Unit Agreement between Anthony F. Earley, Jr. and PG&E Corporation for 2013 grant under the PG&E Corporation 2006 Long-Term Incentive Plan
|
*10.6
|
Performance Share Agreement between Anthony F. Earley, Jr. and PG&E Corporation for 2013 grant under the PG&E Corporation 2006 Long-Term Incentive Plan
|
12.1
|
Computation of Ratios of Earnings to Fixed Charges for Pacific Gas and Electric Company
|
12.2
|
Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends for Pacific Gas and Electric Company
|
12.3
|
Computation of Ratios of Earnings to Fixed Charges for PG&E Corporation
|
31.1
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&E Corporation required by Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of Pacific Gas and Electric Company required by Section 302 of the Sarbanes-Oxley Act of 2002
|
**32.1
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of PG&E Corporation required by Section 906 of the Sarbanes-Oxley Act of 2002
|
**32.2
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of Pacific Gas and Electric Company required by Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
SECTION 1.
|
DEFINITIONS
|
1
|
|
1.1
|
Defined Terms
|
1
|
|
1.2
|
Other Definitional Provisions and Interpretative Provisions
|
19
|
SECTION 2.
|
AMOUNT AND TERMS OF COMMITMENTS
|
20
|
|
2.1
|
Commitments
|
20
|
|
2.2
|
Procedure for Revolving Loan Borrowing
|
20
|
|
2.3
|
Commitment Increases
|
21
|
|
2.4
|
Swingline Commitment
|
22
|
|
2.5
|
Procedure for Swingline Borrowing; Refunding of Swingline Loans
|
23
|
|
2.6
|
Facility Fees, Etc
|
24
|
|
2.7
|
Termination or Reduction of Commitments; Extension of Termination Date
|
25
|
|
2.8
|
Optional Prepayments
|
27
|
|
2.9
|
Conversion and Continuation Options
|
27
|
|
2.10
|
Limitations on Eurodollar Tranches
|
28
|
|
2.11
|
Interest Rates and Payment Dates
|
28
|
|
2.12
|
Computation of Interest and Fees
|
29
|
|
2.13
|
Inability to Determine Interest Rate
|
29
|
|
2.14
|
Pro Rata Treatment and Payments; Notes
|
29
|
|
2.15
|
Change of Law
|
31
|
|
2.16
|
Taxes
|
32
|
|
2.17
|
Indemnity
|
37
|
|
2.18
|
Change of Lending Office
|
37
|
|
2.19
|
Replacement of Lenders
|
37
|
|
2.20
|
Defaulting Lenders
|
38
|
SECTION 3.
|
LETTERS OF CREDIT
|
40
|
|
3.1
|
L/C Commitment
|
40
|
|
3.2
|
Procedure for Issuance of Letters of Credit
|
41
|
|
3.3
|
Fees and Other Charges
|
41
|
|
3.4
|
L/C Participations
|
42
|
|
3.5
|
Reimbursement Obligation of the Borrower
|
43
|
|
3.6
|
Obligations Absolute
|
44
|
|
3.7
|
Letter of Credit Payments
|
44
|
|
3.8
|
Applications
|
44
|
|
3.9
|
Actions of Issuing Lenders
|
44
|
|
3.10
|
Borrower’s Indemnification
|
45
|
|
3.11
|
Lenders’ Indemnification
|
45
|
SECTION 4.
|
REPRESENTATIONS AND WARRANTIES
|
46
|
|
4.1
|
Financial Condition
|
46
|
|
4.2
|
No Change
|
46
|
|
4.3
|
Existence; Compliance with Law
|
46
|
|
4.4
|
Power; Authorization; Enforceable Obligations
|
46
|
|
4.5
|
No Legal Bar
|
47
|
|
4.6
|
Litigation
|
47
|
|
4.7
|
No Default
|
47
|
|
4.8
|
Taxes
|
47
|
|
4.9
|
Federal Regulations
|
48
|
|
4.10
|
ERISA
|
48
|
|
4.11
|
Investment Company Act; Other Regulations
|
48
|
|
4.12
|
Use of Proceeds
|
48
|
|
4.13
|
Environmental Matters
|
48
|
|
4.14
|
Regulatory Matters
|
49
|
SECTION 5.
|
CONDITIONS PRECEDENT
|
49
|
|
5.1
|
Conditions to the Effective Date
|
49
|
|
5.2
|
Conditions to Each Credit Event
|
50
|
SECTION 6.
|
AFFIRMATIVE COVENANTS
|
51
|
|
6.1
|
Financial Statements
|
51
|
|
6.2
|
Certificates; Other Information
|
51
|
|
6.3
|
Payment of Taxes
|
52
|
|
6.4
|
Maintenance of Existence; Compliance
|
52
|
|
6.5
|
Maintenance of Property; Insurance
|
52
|
|
6.6
|
Inspection of Property; Books and Records; Discussions
|
52
|
|
6.7
|
Notices
|
53
|
|
6.8
|
Maintenance of Licenses, etc
|
53
|
SECTION 7.
|
NEGATIVE COVENANTS
|
54
|
|
7.1
|
Consolidated Capitalization Ratio
|
54
|
|
7.2
|
Liens
|
54
|
|
7.3
|
Fundamental Changes
|
55
|
|
7.4
|
Ownership of PG&E Utility Common Stock
|
55
|
SECTION 8.
|
EVENTS OF DEFAULT
|
55
|
SECTION 9.
|
THE AGENTS
|
58
|
|
9.1
|
Appointment and Authority
|
58
|
|
9.2
|
Delegation of Duties
|
59
|
|
9.3
|
Exculpatory Provisions
|
59
|
|
9.4
|
Reliance by Administrative Agent
|
60
|
|
9.5
|
Notice of Default
|
60
|
|
9.6
|
Non-Reliance on Agents and Other Lenders
|
60
|
|
9.7
|
Indemnification
|
61
|
|
9.8
|
Agent in Its Individual Capacity
|
61
|
|
9.9
|
Successor Administrative Agent
|
61
|
|
9.10
|
Co-Documentation Agents and Syndication Agents
|
63
|
|
9.11
|
Administrative Agent May File Proofs of Claim
|
63
|
SECTION 10.
|
MISCELLANEOUS
|
64
|
|
10.1
|
Amendments and Waivers
|
64
|
|
10.2
|
Notices
|
65
|
|
10.3
|
No Waiver; Cumulative Remedies
|
68
|
|
10.4
|
Survival of Representations and Warranties
|
68
|
|
10.5
|
Payment of Expenses and Taxes
|
68
|
|
10.6
|
Successors and Assigns; Participations and Assignments
|
69
|
|
10.7
|
Adjustments; Set off
|
73
|
|
10.8
|
Counterparts
|
74
|
|
10.9
|
Severability
|
74
|
|
10.10
|
Integration
|
74
|
|
10.11
|
GOVERNING LAW
|
74
|
|
10.12
|
Submission to Jurisdiction; Waivers
|
74
|
|
10.13
|
Acknowledgement
|
75
|
|
10.14
|
Confidentiality
|
75
|
|
10.15
|
WAIVERS OF JURY TRIAL
|
76
|
|
10.16
|
USA Patriot Act
|
76
|
|
10.17
|
Judicial Reference
|
76
|
|
10.18
|
No Advisory or Fidiciary Responsibility
|
76
|
|
10.19
|
Amendment and Restatement
|
77
|
1.1A
|
Commitments
|
A
|
Form of New Lender Supplement
|
B
|
Form of Commitment Increase Supplement
|
C
|
Form of Compliance Certificate
|
D
|
Form of Closing Certificate
|
E
|
Form of Assignment and Assumption
|
F
|
Form of Legal Opinion of Orrick, Herrington & Sutcliffe LLP
|
G
|
Forms of U.S. Tax Compliance Certificates
|
H
|
Form of Note
|
Level
|
Applicable Rating
S&P/Moody’s
|
Applicable Margin
for
ABR Loans
|
Applicable Margin
for
Eurodollar Loans
|
1
|
Higher than A-/A3
|
0.000%
|
0.900%
|
2
|
A-/A3
|
0.000%
|
1.000%
|
3
|
BBB+/Baa1
|
0.075%
|
1.075%
|
4
|
BBB/Baa2
|
0.275%
|
1.275%
|
5
|
BBB-/Baa3
|
0.475%
|
1.475%
|
6
|
Lower than BBB-/Baa3
|
0.650%
|
1.650%
|
Eurodollar Base Rate
|
1.00 - Eurocurrency Reserve Requirements
|
Level
|
Applicable Rating
S&P/Moody’s
|
Facility Fee Rate
|
1
|
Higher than A-/A3
|
0.100%
|
2
|
A-/A3
|
0.125%
|
3
|
BBB+/Baa1
|
0.175%
|
4
|
BBB/Baa2
|
0.225%
|
5
|
BBB-/Baa3
|
0.275%
|
6
|
Lower than BBB-/Baa3
|
0.350%
|
Borrower:
|
PG&E Corporation
|
|
P.O. Box 770000
|
|
San Francisco, California 94177
|
|
Attention: Treasurer
|
|
Telecopy: (415) 973-8968
|
|
Telephone: (415) 973-9771
|
with a copy to:
|
Pacific Gas and Electric Company
|
|
c/o PG&E Corporation
|
|
P.O. Box 770000
|
|
San Francisco, California 94177
|
|
Attention: General Counsel
|
|
Telecopy: (415) 973-6374
|
Administrative Agent (Payments and Loans
|
|
|
Bank of America, N.A.
|
|
901 Main St
|
|
Mail Code: TX1-492-14-04
|
|
Dallas, TX 75202-3714
|
|
Attention: Jennifer A. Ollek
|
|
Telephone: 214-209-2642
|
|
Telecopier: 214-290-8374
|
|
Electronic Mail:
Jennifer.a.ollek@baml.com
|
|
Account No.: 1292000883
|
|
Ref: PG&E Corporation
|
|
ABA# 026009593
|
Administrative Agent (Other Notices):
|
|
|
Bank of America, N.A.
|
|
Agency Management
|
|
101 S. Tryon Street
|
|
Mail Code: NC1-002-15-36
|
|
Charlotte, NC 28255
|
|
Attention: Cindy Jordan
|
|
Telephone: 980-386-2359
|
|
Telecopier: 704-409-0883
|
|
Electronic Mail:
cynthia.t.jordan@baml.com
|
Issuing Lenders:
|
As notified by each Issuing Lender to the Administrative Agent and the Borrower.
|
provided
that any notice, request or demand to or upon the Administrative Agent, the Issuing Lenders or any Lender shall not be effective until received.
|
PG&E CORPORATION
|
|
By:
NICHOLAS M. BIJUR
|
|
Name:
Nicholas M. Bijur
|
|
Title: Vice President and Treasurer
|
|
BANK OF AMERICA, N.A.,
as Administrative Agent, an Issuing Lender and as a Lender
|
|
By:
JERRY WELLS
|
|
Name: Jerry Wells
|
|
Title: Vice President
|
|
CITIBANK, N.A.,
as Co-Syndication Agent, an Issuing Lender and as a Lender
|
|
By:
MAUREEN P. MARONEY
|
|
Name: Maureen P. Maroney
|
|
Title: Vice President
|
|
JPMORGAN CHASE BANK, N.A.,
as Co-Syndication Agent, an Issuing Lender and as a Lender
|
|
By:
BRIDGET KILLACKEY
|
|
Name: Bridget Killackey
|
|
Title: Vice President
|
|
THE ROYAL BANK OF SCOTLAND PLC, as Co-Documentation Agent, an Issuing Lender and as a Lender
|
|
By:
EMILY FREEDMAN
|
|
Name: Emily Freedman
|
|
Title: Vice President
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agent, an Issuing Lender and as a Lender
|
|
By:
YANN BLINDERT
|
|
Name: Yann Blindert
|
|
Title: Director
|
|
BARCLAYS BANK PLC,
as a Lender
|
|
By:
SREEDHAR R. KONA
|
|
Name: Sreedhar R. Kona
|
|
Title: Vice President
|
|
BNP PARIBAS,
|
|
as a Lender
|
|
By:
DENIS O’MEARA
|
|
Name: Denis O’Meara
|
|
Title: Managing Director
|
|
By:
PASQUALE PERRAGLIA
|
|
Name: Pasquale Perraglia
|
|
Title: Director
|
|
GOLDMAN SACHS BANK USA,
|
|
as a Lender
|
|
By:
MARK WALTON
|
|
Name: Mark Walton
|
|
Title: Authorized Signatory
|
|
MORGAN STANLEY BANK, N.A.,
|
|
as a Lender
|
|
By:
KELLY CHIN
|
|
Name: Kelly Chin
|
|
Title: Authorized Signatory
|
|
MORGAN STANLEY SENIOR FUNDING, INC.,
|
|
as a Lender
|
|
By:
KELLY CHIN
|
|
Name: Kelly Chin
|
|
Title: Vice President
|
|
RBC CAPITAL MARKETS,
|
|
as a Lender
|
|
By:
KYLE HOFFMAN
|
|
Name: Kyle Hoffman
|
|
Title: Authorized Signatory
|
|
THE BANK OF NEW YORK MELLON,
|
|
as a Lender
|
|
By:
MARK W. ROGERS
|
|
Name: Mark W. Rogers
|
|
Title: Vice President
|
|
MIZUHO CORPORATE BANK, LTD.,
|
|
as a Lender
|
|
By:
RAYMOND VENTURA
|
|
Name: Raymond Ventura
|
|
Title: Deputy General Manager
|
US BANK, NATIONAL ASSOCIATION,
|
|
as a Lender
|
|
By:
RAYMOND J. PALMER
|
|
Name: Raymond J. Palmer
|
|
Title: Senior Vice President
|
UNION BANK, N.A.,
|
|
as a Lender
|
|
By:
DENNIS BLANK
|
|
Name: Dennis Blank
|
|
Title: Vice President
|
TD BANK, N.A.,
|
|
as a Lender
|
|
By:
BETTY CHANG
|
|
Name: Betty Chang
|
|
Title: Senior Vice President
|
SUMITOMO MITSUI BANKING CORPORATION,
|
|
as a Lender
|
|
By:
SHUJI YABE
|
|
Name: Shuji Yabe
|
|
Title: Managing Director
|
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY,
|
|
as a Lender
|
|
By:
ROBERT CASEY
|
|
Name: Robert Casey
Title: Authorized Signatory
|
|
By:
GORDON EADON
|
|
Name: Gordon Eadon
|
|
Title: Authorized Signatory
|
|
1.1
|
Defined Terms
|
1
|
|
1.2
|
Other Definitional Provisions and Interpretative Provisions.
|
20
|
SECTION 2.
|
AMOUNT AND TERMS OF COMMITMENTS
|
20
|
|
2.1
|
Commitments
|
20
|
|
2.2
|
Procedure for Revolving Loan Borrowing
|
21
|
|
2.3
|
Commitment Increases
|
21
|
|
2.4
|
Swingline Commitment
|
23
|
|
2.5
|
Procedure for Swingline Borrowing; Refunding of Swingline Loans
|
24
|
|
2.6
|
Facility Fees, Etc
|
25
|
|
2.7
|
Termination or Reduction of Commitments; Extension of Termination Date
|
25
|
|
2.8
|
Optional Prepayments
|
27
|
|
2.9
|
Conversion and Continuation Options
|
28
|
|
2.10
|
Limitations on Eurodollar Tranches
|
29
|
|
2.11
|
Interest Rates and Payment Dates
|
29
|
|
2.12
|
Computation of Interest and Fees
|
29
|
|
2.13
|
Inability to Determine Interest Rate
|
30
|
|
2.14
|
Pro Rata Treatment and Payments; Notes
|
30
|
|
2.15
|
Change of Law
|
32
|
|
2.16
|
Taxes
|
33
|
|
2.17
|
Indemnity
|
38
|
|
2.18
|
Change of Lending Office
|
38
|
|
2.19
|
Replacement of Lenders
|
38
|
|
2.20
|
Defaulting Lenders
|
39
|
SECTION 3.
|
LETTERS OF CREDIT
|
41
|
|
3.1
|
L/C Commitment
|
41
|
|
3.2
|
Procedure for Issuance of Letters of Credit
|
42
|
|
3.3
|
Fees and Other Charges
|
42
|
|
3.4
|
L/C Participations
|
43
|
|
3.5
|
Reimbursement Obligation of the Borrower
|
44
|
|
3.6
|
Obligations Absolute
|
45
|
|
3.7
|
Letter of Credit Payments
|
45
|
|
3.8
|
Applications
|
45
|
|
3.9
|
Actions of Issuing Lenders
|
45
|
|
3.10
|
Borrower’s Indemnification
|
46
|
|
3.11
|
Lenders’ Indemnification
|
46
|
SECTION 4.
|
REPRESENTATIONS AND WARRANTIES
|
47
|
|
4.1
|
Financial Condition
|
47
|
|
4.2
|
No Change
|
47
|
|
4.3
|
Existence; Compliance with Law
|
47
|
|
4.4
|
Power; Authorization; Enforceable Obligations
|
47
|
|
4.5
|
No Legal Bar
|
48
|
|
4.6
|
Litigation
|
48
|
|
4.7
|
No Default
|
48
|
|
4.8
|
Taxes
|
48
|
|
4.9
|
Federal Regulations
|
49
|
|
4.10
|
ERISA
|
49
|
|
4.11
|
Investment Company Act; Other Regulations
|
49
|
|
4.12
|
Use of Proceeds
|
50
|
|
4.13
|
Environmental Matters
|
50
|
|
4.14
|
Regulatory Matters
|
50
|
SECTION 5.
|
CONDITIONS PRECEDENT
|
50
|
|
5.1
|
Conditions to the Effective Date
|
50
|
|
5.2
|
Conditions to Each Credit Event
|
51
|
SECTION 6.
|
AFFIRMATIVE COVENANTS
|
51
|
|
6.1
|
Financial Statements
|
52
|
|
6.2
|
Certificates; Other Information
|
52
|
|
6.3
|
Payment of Taxes
|
53
|
|
6.4
|
Maintenance of Existence; Compliance
|
53
|
|
6.5
|
Maintenance of Property; Insurance
|
53
|
|
6.6
|
Inspection of Property; Books and Records; Discussions
|
53
|
|
6.7
|
Notices
|
54
|
|
6.8
|
Maintenance of Licenses, etc
|
54
|
SECTION 7.
|
NEGATIVE COVENANTS
|
54
|
|
7.1
|
Consolidated Capitalization Ratio
|
55
|
|
7.2
|
Liens
|
55
|
|
7.3
|
Fundamental Changes
|
55
|
SECTION 8.
|
EVENTS OF DEFAULT
|
55
|
SECTION 9.
|
THE AGENTS
|
58
|
|
9.1
|
Appointment and Authority
|
58
|
|
9.2
|
Delegation of Duties
|
58
|
|
9.3
|
Exculpatory Provisions
|
59
|
|
9.4
|
Reliance by Administrative Agent
|
60
|
|
9.5
|
Notice of Default
|
60
|
|
9.6
|
Non-Reliance on Agents and Other Lenders
|
60
|
|
9.7
|
Indemnification
|
61
|
|
9.8
|
Agent in Its Individual Capacity
|
61
|
|
9.9
|
Successor Administrative Agent
|
61
|
|
9.10
|
Co-Documentation Agents and Syndication Agents
|
63
|
|
9.11
|
Administrative Agent May File Proofs of Claim
|
63
|
SECTION 10.
|
MISCELLANEOUS
|
63
|
|
10.1
|
Amendments and Waivers
|
63
|
|
10.2
|
Notices
|
65
|
|
10.3
|
No Waiver; Cumulative Remedies
|
67
|
|
10.4
|
Survival of Representations and Warranties
|
67
|
|
10.5
|
Payment of Expenses and Taxes
|
67
|
|
10.6
|
Successors and Assigns; Participations and Assignments68
|
|
10.7
|
Adjustments; Set off
|
72
|
|
10.8
|
Counterparts
|
73
|
|
10.9
|
Severability
|
73
|
|
10.10
|
Integration
|
74
|
|
10.11
|
GOVERNING LAW
|
74
|
|
10.12
|
Submission to Jurisdiction; Waivers
|
74
|
|
10.13
|
Acknowledgement
|
75
|
|
10.14
|
Confidentiality
|
75
|
|
10.15
|
WAIVERS OF JURY TRIAL
|
76
|
|
10.16
|
USA Patriot Act
|
76
|
|
10.17
|
Judicial Reference
|
76
|
|
10.18
|
No Advisory or Fidiciary Responsibility
|
76
|
|
10.19
|
Amendment and Restatement
|
77
|
1.1A
|
Commitments
|
A
|
Form of New Lender Supplement
|
B
|
Form of Commitment Increase Supplement
|
C
|
Form of Compliance Certificate
|
D
|
Form of Closing Certificate
|
E
|
Form of Assignment and Assumption
|
F
|
Form of Legal Opinion of Orrick, Herrington & Sutcliffe LLP
|
G
|
Forms of U.S. Tax Compliance Certificates
|
H
|
Form of Note
|
Level
|
Rating
S&P/Moody’s
|
Applicable Margin
for
ABR Loans
|
Applicable Margin
for
Eurodollar Loans
|
1
|
Higher than A-/A3
|
0.000%
|
0.900%
|
2
|
A-/A3
|
0.000%
|
1.000%
|
3
|
BBB+/Baa1
|
0.075%
|
1.075%
|
4
|
BBB/Baa2
|
0.275%
|
1.275%
|
5
|
BBB-/Baa3
|
0.475%
|
1.475%
|
6
|
Lower than BBB-/Baa3
|
0.650%
|
1.650%
|
Eurodollar Base Rate
|
1.00 - Eurocurrency Reserve Requirements
|
Level
|
Rating
S&P/Moody’s
|
Facility Fee Rate
|
1
|
Higher than A-/A3
|
0.100%
|
2
|
A-/A3
|
0.125%
|
3
|
BBB+/Baa1
|
0.175%
|
4
|
BBB/Baa2
|
0.225%
|
5
|
BBB-/Baa3
|
0.275%
|
6
|
Lower than BBB-/Baa3
|
0.350%
|
Borrower:
|
Pacific Gas and Electric Company
|
|
c/o PG&E Corporation
|
|
P.O. Box 770000
|
|
San Francisco, California 94177
|
|
Attention: Treasurer
|
|
Telecopy: (415) 973-8968
|
|
Telephone: (415) 973-9771
|
with a copy to:
|
Pacific Gas and Electric Company
|
|
c/o PG&E Corporation
|
|
P.O. Box 770000
|
|
San Francisco, California 94177
|
|
Attention: General Counsel
|
|
Telecopy: (415) 973-6374
|
Administrative Agent:
|
Citibank N.A.
|
|
1615 Brett Road, Ops III
|
|
New Castle, DE 19720
|
|
Attention: Mark Rosenthal
|
|
Telecopy: (212) 994-0961
|
|
Telephone: (302) 323-3157
|
|
Email:
|
global.loans.support@citi.com
|
Issuing Lenders:
|
As notified by each Issuing Lender to the Administrative Agent and the Borrower.
|
PG&E CORPORATION
|
|
By: |
By:
NICHOLAS M. BIJUR
|
Name:
Nicholas M. Bijur
|
|
Title: Vice President and Treasurer
|
|
BANK OF AMERICA, N.A.,
as Administrative Agent, an Issuing Lender and as a Lender
|
|
By:
JERRY WELLS
|
|
Name: Jerry Wells
|
|
Title: Vice President
|
|
CITIBANK, N.A.,
as Co-Syndication Agent, an Issuing Lender and as a Lender
|
|
By:
MAUREEN P. MARONEY
|
|
Name: Maureen P. Maroney
|
|
Title: Vice President
|
|
JPMORGAN CHASE BANK, N.A.,
as Co-Syndication Agent, an Issuing Lender and as a Lender
|
|
By:
BRIDGET KILLACKEY
|
|
Name: Bridget Killackey
|
|
Title: Vice President
|
|
THE ROYAL BANK OF SCOTLAND PLC, as Co-Documentation Agent, an Issuing Lender and as a Lender
|
|
By:
EMILY FREEDMAN
|
|
Name: Emily Freedman
|
|
Title: Vice President
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agent, an Issuing Lender and as a Lender
|
|
By:
YANN BLINDERT
|
|
Name: Yann Blindert
|
|
Title: Director
|
|
BARCLAYS BANK PLC,
as a Lender
|
|
By:
SREEDHAR R. KONA
|
|
Name: Sreedhar R. Kona
|
|
Title: Vice President
|
|
BNP PARIBAS,
|
|
as a Lender
|
|
By:
DENIS O’MEARA
|
|
Name: Denis O’Meara
|
|
Title: Managing Director
|
|
By:
PASQUALE PERRAGLIA
|
|
Name: Pasquale Perraglia
|
|
Title: Director
|
|
GOLDMAN SACHS BANK USA,
|
|
as a Lender
|
|
By:
MARK WALTON
|
|
Name: Mark Walton
|
|
Title: Authorized Signatory
|
|
MORGAN STANLEY BANK, N.A.,
|
|
as a Lender
|
|
By:
KELLY CHIN
|
|
Name: Kelly Chin
|
|
Title: Authorized Signatory
|
|
MORGAN STANLEY SENIOR FUNDING, INC.,
|
|
as a Lender
|
|
By:
KELLY CHIN
|
|
Name: Kelly Chin
|
|
Title: Vice President
|
|
RBC CAPITAL MARKETS,
|
|
as a Lender
|
|
By:
KYLE HOFFMAN
|
|
Name: Kyle Hoffman
|
|
Title: Authorized Signatory
|
|
THE BANK OF NEW YORK MELLON,
|
|
as a Lender
|
|
By:
MARK W. ROGERS
|
|
Name: Mark W. Rogers
|
|
Title: Vice President
|
|
MIZUHO CORPORATE BANK, LTD.,
|
|
as a Lender
|
|
By:
RAYMOND VENTURA
|
|
Name: Raymond Ventura
|
|
Title: Deputy General Manager
|
US BANK, NATIONAL ASSOCIATION,
|
|
as a Lender
|
|
By:
RAYMOND J. PALMER
|
|
Name: Raymond J. Palmer
|
|
Title: Senior Vice President
|
UNION BANK, N.A.,
|
|
as a Lender
|
|
By:
DENNIS BLANK
|
|
Name: Dennis Blank
|
|
Title: Vice President
|
TD BANK, N.A.,
|
|
as a Lender
|
|
By:
BETTY CHANG
|
|
Name: Betty Chang
|
|
Title: Senior Vice President
|
SUMITOMO MITSUI BANKING CORPORATION,
|
|
as a Lender
|
|
By:
SHUJI YABE
|
|
Name: Shuji Yabe
|
|
Title: Managing Director
|
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY,
|
|
as a Lender
|
|
By:
ROBERT CASEY
|
|
Name: Robert Casey
Title: Authorized Signatory
|
|
By:
GORDON EADON
|
|
Name: Gordon Eadon
|
|
Title: Authorized Signatory
|
The LTIP and Other Agreements
|
This Agreement constitutes the entire understanding between you and PG&E Corporation regarding the Restricted Stock Units, subject to the terms of the LTIP. Any prior agreements, commitments, or negotiations are superseded. In the event of any conflict or inconsistency between the provisions of this Agreement and the LTIP, the LTIP shall govern. Capitalized terms that are not defined in this Agreement are defined in the LTIP. In the event of any conflict between the provisions of this Agreement and the PG&E Corporation Officer Severance Policy or the PG&E Corporation 2012 Officer Severance Policy, this Agreement shall govern. For purposes of this Agreement, employment with PG&E Corporation shall mean employment with any member of the Participating Company Group.
|
|
Grant of Restricted Stock Units
|
PG&E Corporation grants you the number of Restricted Stock Units shown on the cover sheet of this Agreement. The Restricted Stock Units are subject to the terms and conditions of this Agreement and the LTIP.
|
|
Vesting of Restricted Stock Units
|
As long as you remain employed with PG&E Corporation, 20 percent of the total number of Restricted Stock Units originally subject to this Agreement, as shown above on the cover sheet, will vest on the first business day of March of each of the first, second and third years following the Date of Grant, and the additional 40 percent of the total number of shares of Restricted Stock Units will vest on the on the first business day of March of the fourth year following the Date of Grant (collectively, the “Normal Vesting Schedule”). The amounts payable upon each vesting date are hereby designated separate payments for purposes of Code Section 409A. Except as described below, all Restricted Stock Units subject to this Agreement which have not vested upon termination of your employment shall then be automatically cancelled. As set forth below, the Restricted Stock Units may vest earlier upon the occurrence of certain events.
|
|
Dividends
|
Restricted Stock Units will accrue Dividend Equivalents in the event cash dividends are paid with respect to PG&E Corporation common stock having a record date prior to the date on which the Restricted Stock Units are settled. Such Dividend Equivalents will be converted into cash and paid, if at all, upon settlement of the underlying Restricted Stock Units.
|
|
Settlement
|
Vested Restricted Stock Units will be settled in an equal number of shares of PG&E Corporation common stock, subject to the satisfaction of Withholding Taxes, as described below. PG&E Corporation shall issue shares as soon as practicable after the Restricted Stock Units vest in accordance with the Normal Vesting Schedule (but not later than sixty (60) days after the applicable vesting date); provided, however, that such issuance shall, if earlier, be made with respect to all of your outstanding vested Restricted Stock Units (after giving effect to the vesting provisions described below) as soon as practicable after (but not later than sixty (60) days after) the earliest to occur of your (1) Disability (as defined under Code Section 409A), (2) death or (3) “separation from service,” within the meaning of Code Section 409A within 2 years following a Change in Control.
|
|
Voluntary Termination
|
In the event of your voluntary termination (other than Retirement), all unvested Restricted Stock Units will be cancelled on the date of termination.
|
|
Retirement
|
In the event of your Retirement, unvested Restricted Stock Units will continue to vest and be settled pursuant to the Normal Vesting Schedule (without regard to the requirement that you be employed), subject to the earlier settlement provisions of this Agreement; provided, however that in the event of your Retirement within 2 years following a Change in Control, all of your Restricted Stock Units shall vest and be settled as soon as practicable after (but not later than sixty (60) days after) the date of such event. Your voluntary termination of employment will be considered to be a Retirement if you are both age 55 or older on the date of termination and if you were employed by PG&E Corporation for at least five consecutive years ending on the date of termination of your employment.
|
|
Termination for Cause
|
If your employment with PG&E Corporation is terminated at any time by PG&E Corporation for cause, all unvested Restricted Stock Units will be cancelled on the date of termination. In general, termination for “cause” means termination of employment because of dishonesty, a criminal offense or violation of a work rule, and will be determined by and in the sole discretion of PG&E Corporation.
|
|
Termination other than for Cause
|
If your employment with PG&E Corporation is terminated by PG&E Corporation other than for cause and you are an officer in Bands 1-5, any unvested Restricted Stock Units that would have vested during the period of the “Severance Multiple” under the PG&E Corporation Officer Severance Policy or the PG&E Corporation 2012 Officer Severance Policy (as applicable at the time of termination) will continue to vest and be settled pursuant to the Normal Vesting Schedule (without regard to the requirement that you be employed), subject to the earlier settlement provisions of this Agreement. In the event of your involuntary termination other than for cause, if you are not an officer in Bands 1-5, any unvested Restricted Stock Units that would have vested within the 12 months following such termination had your employment continued will continue to vest and be settled pursuant to the Normal Vesting Schedule (without regard to the requirement that you be employed), subject to the earlier settlement provisions of this Agreement. All other unvested Restricted Stock Units will be cancelled unless your termination of employment was in connection with a Change in Control as provided below.
|
|
Death/Disability
|
In the event of your death or Disability while you are employed, all of your Restricted Stock Units shall vest and be settled as soon as practicable after (but not later than sixty (60) days after) the date of such event. If your death or Disability occurs following the termination of your employment and your Restricted Stock Units are then outstanding under the terms hereof, then all of your vested Restricted Stock Units plus any Restricted Stock Units that would have otherwise vested during any continued vesting period hereunder shall be settled as soon as practicable after (but not later than sixty (60) days after) the date of your death or Disability.
|
|
Termination Due to Disposition of Subsidiary
|
(1) If your employment is terminated (other than termination for cause, your voluntary termination, or your Retirement) by reason of a divestiture or change in control of a subsidiary of PG&E Corporation, which divestiture or change in control results in such subsidiary no longer qualifying as a subsidiary corporation under Section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”), or (2) if your employment is terminated (other than termination for cause, your voluntary termination, or your Retirement) coincident with the sale of all or substantially all of the assets of a subsidiary of PG&E Corporation, the Restricted Stock Units shall vest and be settled in the same manner as for a “Termination other than for Cause” described above.
|
|
Change in Control
|
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror
”
), may, without your consent, either assume or continue PG&E Corporation’s rights and obligations under this Agreement or provide a substantially equivalent award in substitution for the Restricted Stock Units subject to this Agreement.
If the Restricted Stock Units are neither assumed nor continued by the Acquiror or if the Acquiror does not provide a substantially equivalent award in substitution for the Restricted Stock Units, all of your unvested Restricted Stock Units shall automatically vest immediately preceding and contingent on, the Change in Control and be settled in accordance with the Normal Vesting Schedule, subject to the earlier settlement provisions of this Agreement.
|
|
Termination In Connection with a Change in Control
|
If you separate from service (other than termination for cause, your voluntary termination, or your Retirement) in connection with a Change in Control within three months before the Change in Control occurs, all of your outstanding Restricted Stock Units (including Restricted Stock Units that you would have otherwise forfeited after the end of the continued vesting period) shall automatically vest on the date of the Change in Control and will be settled in accordance with the Normal Vesting Schedule (without regard to the requirement that you be employed) subject to the earlier settlement provisions of this Agreement. In the event of such a separation in connection with a Change in Control within two years following the Change in Control, your Restricted Stock Units (to the extent they did not previously vest upon, for example, failure of the Acquiror to assume or continue this Award) shall automatically vest on the date of such separation and will be settled as soon as practicable after (but not later than sixty (60) days after) the date of such separation. PG&E Corporation shall have the sole discretion to determine whether termination of your employment was made in connection with a Change in Control
|
|
Delay
|
PG&E Corporation shall delay the issuance of any shares of common stock to the extent it is necessary to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to certain “key employees” of certain publicly-traded companies); in such event, any shares of common stock to which you would otherwise be entitled during the six (6) month period following the date of your “separation from service” under Section 409A (or shorter period ending on the date of your death following such separation) will instead be issued on the first business day following the expiration of the applicable delay period.
|
|
Withholding Taxes
|
The number of shares of PG&E Corporation common stock that you are otherwise entitled to receive upon settlement of Restricted Stock Units will be reduced by a number of shares having an aggregate Fair Market Value, as determined by PG&E Corporation, equal to the amount of any Federal, state, or local taxes of any kind required by law to be withheld by PG&E Corporation
in connection with the Restricted Stock Units determined using the applicable minimum statutory withholding rates
, including
social security and Medicare taxes due under the Federal Insurance Contributions Act and the California State Disability Insurance tax (“
Withholding Taxes”). If the
withheld shares were not sufficient to satisfy your minimum Withholding Taxes, you will be required to pay, as soon as practicable, including through additional payroll withholding, any amount of the Withholding Taxes that is not satisfied by the withholding of shares described above
.
|
|
Leaves of Absence
|
For purposes of this Agreement, if you are on an approved leave of absence from PG&E Corporation, or a recipient of PG&E Corporation sponsored disability benefits, you will continue to be considered as employed. If you do not return to active employment upon the expiration of your leave of absence or the expiration of your PG&E Corporation sponsored disability benefits, you will be considered to have voluntarily terminated your employment. See above under “Voluntary Termination.”
Notwithstanding the foregoing, if the leave of absence exceeds six (6) months, and a return to service upon expiration of such leave is not guaranteed by statute or contract, then you shall be deemed to have had a “separation from service” for purposes of any Restricted Stock Units that are settled hereunder upon such separation. To the extent an authorized leave of absence is due to a medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of at least six (6) months and such impairment causes you to be unable to perform the duties of your position of employment or any substantially similar position of employment, the six (6) month period in the prior sentence shall be twenty-nine (29) months.
PG&E Corporation reserves the right to determine which leaves of absence will be considered as continuing employment and when your employment terminates for all purposes under this Agreement.
|
|
Voting and Other Rights
|
You shall not have voting rights with respect to the Restricted Stock Units until the date the underlying shares are issued (as evidenced by appropriate entry on the books of PG&E Corporation or its duly authorized transfer agent).
|
|
No Retention Rights
|
This Agreement is not an employment agreement and does not give you the right to be retained by PG&E Corporation. Except as otherwise provided in an applicable employment agreement, PG&E Corporation reserves the right to terminate your employment at any time and for any reason.
|
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of California.
|
The LTIP and Other Agreements
|
This Agreement constitutes the entire understanding between you and PG&E Corporation regarding the Performance Shares, subject to the terms of the LTIP. Any prior agreements, commitments or negotiations are superseded. In the event of any conflict or inconsistency between the provisions of this Agreement and the LTIP, the LTIP shall govern. Capitalized terms that are not defined in this Agreement are defined in the LTIP. In the event of any conflict between the provisions of this Agreement and the PG&E Corporation Officer Severance Policy or the PG&E Corporation 2012 Officer Severance Policy, this Agreement shall govern. The LTIP provides the Committee with discretion to adjust the performance award formula.
For purposes of this Agreement, employment with PG&E Corporation shall mean employment with any member of the Participating Company Group.
|
|
Grant of
Performance Shares
|
PG&E Corporation grants you the number of Performance Shares shown on the cover sheet of this Agreement. The Performance Shares are subject to the terms and conditions of this Agreement and the LTIP.
|
|
Vesting of Performance Shares
Settlement in Shares
|
As long as you remain employed with PG&E Corporation, the Performance Shares will vest on the first business day of March (the “Vesting Date”) of the third year following the date of grant specified in the cover sheet. Except as described below, all Performance Shares subject to this Agreement that have not vested shall be forfeited upon termination of your employment.
Vested performance shares will be settled in shares of PG&E Corporation common stock, subject to the satisfaction of Withholding Taxes, as described below. The number of shares you are entitled to receive will be calculated by multiplying the number of vested Performance Shares by the “settlement percentage” determined as follows (except as set forth elsewhere in this Agreement):
|
|
Upon the Vesting Date, PG&E Corporation’s total shareholder return (“TSR”) will be compared to the TSR of the twelve other companies in PG&E Corporation’s comparator group
1
for the prior three calendar years (the “Performance Period”). Subject to rounding considerations, if PG&E Corporation’s TSR falls below the 25
th
percentile of the comparator group the settlement percentage will be 0%; if PG&E Corporation’s TSR is at the 25
th
percentile, the settlement percentage will be 25%; if PG&E Corporation’s TSR is at the 75
th
percentile, the settlement percentage will be 100%; and if PG&E Corporation’s TSR is in the top rank, the settlement percentage will be 200%. The following table sets forth the settlement percentages for the other TSR rankings that could be achieved based on PG&E Corporation’s TSR rank within the comparator group:
Number of Companies in
To
tal (Including PG&E Corporation) - 13
Performance Rounded
Rank Percentile Payout
1 100% 200%
2 92% 170%
3 83% 130%
4 75% 100%
5 67% 90%
6 58% 75%
7 50% 65%
8 42% 50%
9 33% 35%
10 25% 25%
11 17% 0%
12 8% 0%
The final settlement percentage, if any, will be determined as soon as practicable following the date that the Compensation Committee (or a subcommittee of that Committee) of the PG&E Corporation Board of Directors or an equivalent body certifies the TSR percentile rank over the Performance Period pursuant to Section 10.5(a) of the LTIP. PG&E Corporation will issue shares as soon as practicable after such determination, but no earlier than the Vesting Date, and not later than sixty (60) days after the Vesting Date.
|
||
1
The current Performance Comparator Group consists of the following companies: American Electric Power, CMS Energy, Consolidated Edison, Inc., DTE Energy, Duke Energy, NiSource, Inc., Northeast Utilities, Pinnacle West Capital, Southern Company, SCANA Corp., Wisconsin Energy Corporation, and Xcel Energy, Inc.. PG&E Corporation reserves the right to change the companies comprising the comparator group in accordance with the rules established by PG&E Corporation in connection with this award.
|
||
Dividends
|
Each time that PG&E Corporation declares a dividend on its shares of common stock, an amount equal to the dividend multiplied by the number of Performance Shares granted to you by this Agreement shall be accrued on your behalf. If you receive a Performance Share settlement in accordance with the preceding paragraph, at that same time you also shall receive a cash payment equal to the amount of any dividends accrued with respect to your Performance Shares over the Performance Period multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
|
|
Voluntary Termination
|
If you terminate your employment with PG&E Corporation voluntarily before the Vesting Date (other than for Retirement), all of the Performance Shares shall be cancelled as of the date of such termination and any dividends accrued with respect to your Performance Shares shall be forfeited.
|
|
Termination for Cause
|
If your employment with PG&E Corporation is terminated at any time by PG&E Corporation for cause before the Vesting Date, all of the Performance Shares shall be cancelled as of the date of such termination and any dividends accrued with respect to your Performance Shares shall be forfeited. In general, termination for “cause” means termination of employment because of dishonesty, a criminal offense or violation of a work rule, and will be determined by and in the sole discretion of PG&E Corporation.
|
Termination other than for Cause
|
If your employment with PG&E Corporation is terminated by PG&E Corporation other than for cause before the Vesting Date, your unvested Performance Shares will vest proportionally based on the number of months during the Performance Period that you were employed (rounded down) divided by the number of months in the Performance Period (36 months). All other outstanding Performance Shares (and any associated accrued dividends) shall be cancelled unless your termination of employment was in connection with a Change in Control as provided below. Your vested Performance Shares will be settled, if at all, as soon as practicable after the Vesting Date and in any event within sixty (60) days of the Vesting Date, based on the same settlement percentage applied to active employees. At that time you also shall receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your vested Performance Shares multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
|
|
Retirement
|
If you retire before the Vesting Date, your outstanding Performance Shares will continue to vest as though your employment had continued and will be settled, if at all, as soon as practicable following the Vesting Date and in any event within sixty (60) days of the Vesting Date. At the same time you also shall also receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your Performance Shares multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any. You will be considered to have retired if you are age 55 or older on the date of termination and if you were employed by PG&E Corporation for at least five consecutive years ending on the date of termination of your employment.
|
|
Death/Disability
|
If your employment terminates due to your death or disability before the Vesting Date, all of your Performance Shares shall immediately vest and will be settled, if at all, as soon as practicable after the Vesting Date and in any event within sixty (60) days of the Vesting Date based on the same settlement percentage applied to active employees. At that same time you also shall receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your Performance Shares multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
|
|
Termination Due to Disposition of Subsidiary
|
(1) If your employment is terminated (other than for cause or your voluntary termination) by reason of a divestiture or change in control of a subsidiary of PG&E Corporation, which divestiture or change in control results in such subsidiary no longer qualifying as a subsidiary corporation under Section 424(f) of the Internal Revenue Code of 1986, as amended, or (2) if your employment is terminated (other than for cause or your voluntary termination) coincident with the sale of all or substantially all of the assets of a subsidiary of PG&E Corporation, your unvested Performance Shares shall vest and be settled in the same manner as for a “Termination other than for Cause” described above.
|
|
Change in Control
|
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror
”
), may, without your consent, either assume or continue PG&E Corporation’s rights and obligations under this Agreement or provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement. If the Acquiror assumes or continues PG&E Corporation’s rights and obligations under this Agreement or substitutes a substantially equivalent award, TSR shall be calculated by combining (a) the TSR of PG&E Corporation for the period from January 1 of the year of grant to the date of the Change in Control, and (b) the TSR of the Acquiror from the date of the Change in Control to the last calendar day of the year preceding the Vesting Date. The settlement percentage reflected in the table set forth above for the highest percentile TSR performance met or exceeded when calculated on that basis, and considering any adjustments to the comparator group, will be used to determine the number of shares, if any, you are entitled to receive upon settlement of the assumed, continued or substituted award, which settlement shall occur as soon as practicable after the Vesting Date and in any event within sixty (60) days of the Vesting Date. At that time you also shall receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares over the Performance Period multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
If the Change in Control of PG&E Corporation occurs before the original Vesting Date, and if this Award is neither assumed nor continued by the Acquiror or if the Acquiror does not provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement, all of your outstanding Performance Shares shall automatically vest and become nonforfeitable on the date of the Change in Control. Such vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date and in any event within sixty (60) days of the original Vesting Date. The settlement percentage, if any, will be based on TSR for the period from January 1 of the year of grant to the date of the Change in Control compared to the TSR of the other companies in PG&E Corporation’s comparator group for the same period. At the same time you also shall receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares to the date of the Change in Control multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
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Termination In Connection with a Change in Control
|
If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within two years following the Change in Control, all of your outstanding Performance Shares (to the extent they did not previously vest upon failure of the Acquiror to assume or continue this Award) shall automatically vest and become nonforfeitable on the date of termination of your employment. If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within three months before the Change in Control occurs, all of your outstanding performance shares will automatically vest
in full
and become nonforfeitable (including the portion that you would have otherwise forfeited based on the proration of vested performance shares through the date of termination of your employment) as of the date of the Change in Control. Your vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date and in any event within sixty (60) days of the Vesting Date and will be based on the same settlement percentage applied to active employees. You shall also at that time receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your vested Performance Shares multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any. PG&E Corporation shall have the sole discretion to determine whether termination of your employment was made in connection with a Change in Control.
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Withholding Taxes
|
The number of shares of PG&E Corporation common stock that you are otherwise entitled to receive upon settlement of Performance Shares will be reduced by a number of shares having an aggregate Fair Market Value, as determined by PG&E Corporation, equal to the amount of any Federal, state, or local taxes of any kind required by law to be withheld by PG&E Corporation
in connection with the Performance Shares determined using the applicable minimum statutory withholding rates
, including
social security and Medicare taxes due under the Federal Insurance Contributions Act and the California State Disability Insurance tax (“
Withholding Taxes”). If the
withheld shares were not sufficient to satisfy your minimum Withholding Taxes, you will be required to pay, as soon as practicable, including through additional payroll withholding, any amount of the Withholding Taxes that is not satisfied by the withholding of shares described above
.
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Leaves of Absence
|
For purposes of this Agreement, if you are on an approved leave of absence from PG&E Corporation, or a recipient of PG&E Corporation sponsored disability benefits, you will continue to be considered as employed. If you do not return to active employment upon the expiration of your leave of absence or the expiration of your PG&E Corporation sponsored disability benefits, you will be considered to have voluntarily terminated your employment. See above under “Voluntary Termination.”
PG&E Corporation reserves the right to determine which leaves of absence will be considered as continuing employment and when your employment terminates for all purposes under this Agreement.
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No Retention Rights
|
This Agreement is not an employment agreement and does not give you the right to be retained by PG&E Corporation. Except as otherwise provided in an applicable employment agreement, PG&E Corporation reserves the right to terminate your employment at any time and for any reason.
|
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of California.
|
The LTIP and Other Agreements
|
This Agreement constitutes the entire understanding between you and PG&E Corporation regarding the Restricted Stock Units, subject to the terms of the LTIP. Any prior agreements, commitments, or negotiations are superseded. In the event of any conflict or inconsistency between the provisions of this Agreement and the LTIP, the LTIP shall govern. Capitalized terms that are not defined in this Agreement are defined in the LTIP. In the event of any conflict between the provisions of this Agreement and the PG&E Corporation Officer Severance Policy or the PG&E Corporation 2012 Officer Severance Policy, this Agreement shall govern. For purposes of this Agreement, employment with PG&E Corporation shall mean employment with any member of the Participating Company Group.
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Grant of Restricted Stock Units
|
PG&E Corporation grants you the number of Restricted Stock Units shown on the cover sheet of this Agreement. The Restricted Stock Units are subject to the terms and conditions of this Agreement and the LTIP.
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Vesting of Restricted Stock Units
|
As long as you remain employed with PG&E Corporation, 20 percent of the total number of Restricted Stock Units originally subject to this Agreement, as shown above on the cover sheet, will vest on the first business day of March of each of the first, second and third years following the Date of Grant, and the additional 40 percent of the total number of shares of Restricted Stock Units will vest on the on the first business day of March of the fourth year following the Date of Grant (collectively, the “Normal Vesting Schedule”). The amounts payable upon each vesting date are hereby designated separate payments for purposes of Code Section 409A. Except as described below, all Restricted Stock Units subject to this Agreement which have not vested upon termination of your employment shall then be automatically cancelled. As set forth below, the Restricted Stock Units may vest earlier upon the occurrence of certain events.
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Pro-Rata Vesting of Restricted Stock Units
|
Notwithstanding any other vesting provisions noted in this Agreement, after you complete at least three years of employment with PG&E Corporation, upon your termination (other than termination for cause, voluntary termination, Retirement, termination due to death or Disability, or termination in connection with a Change in Control) additional Restricted Stock Units shall continue to vest (as if you continued to be employed by PG&E Corporation) such that the total number of vested Restricted Stock Units (including Restricted Stock Units, if any, that vested prior to the date of termination) shall be equal to the greater of (1) the actual number of vested Restricted Stock Units or (2) the number determined by multiplying the total number of Restricted Stock Units subject to this Agreement by the number of your days of service with PG&E Corporation in the Normal Vesting Schedule (through the date of termination), divided by the potential number of days of service in the Normal Vesting Schedule. All other unvested Restricted Stock Units will be cancelled upon such termination. Vested Restricted Stock Units will continue to be settled and paid on the same time schedule and at the rate that would be normally applicable (absent your termination of employment) until the pro-rated amount (if any) is exhausted.
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Dividends
|
Restricted Stock Units will accrue Dividend Equivalents in the event cash dividends are paid with respect to PG&E Corporation common stock having a record date prior to the date on which the Restricted Stock Units are settled. Such Dividend Equivalents will be converted into cash and paid, if at all, upon settlement of the underlying Restricted Stock Units.
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Settlement
|
Vested Restricted Stock Units will be settled in an equal number of shares of PG&E Corporation common stock, subject to the satisfaction of Withholding Taxes, as described below. PG&E Corporation shall issue shares as soon as practicable after the Restricted Stock Units vest in accordance with the Normal Vesting Schedule (but not later than sixty (60) days after the applicable vesting date); provided, however, that such issuance shall, if earlier, be made with respect to all of your outstanding vested Restricted Stock Units (after giving effect to the vesting provisions described below) as soon as practicable after (but not later than sixty (60) days after) the earliest to occur of your (1) Disability (as defined under Code Section 409A), (2) death or (3) “separation from service,” within the meaning of Code Section 409A within 2 years following a Change in Control.
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Voluntary Termination
|
In the event of your voluntary termination (other than Retirement), all unvested Restricted Stock Units will be cancelled on the date of termination.
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Retirement
|
In the event of your Retirement, unvested Restricted Stock Units will continue to vest and be settled pursuant to the Normal Vesting Schedule (without regard to the requirement that you be employed), subject to the earlier settlement provisions of this Agreement; provided, however that in the event of your Retirement within 2 years following a Change in Control, all of your Restricted Stock Units shall vest and be settled as soon as practicable after (but not later than sixty (60) days after) the date of such event. Your voluntary termination of employment will be considered to be a Retirement if you are both age 55 or older on the date of termination and if you were employed by PG&E Corporation for at least five consecutive years ending on the date of termination of your employment.
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Termination for Cause
|
If your employment with PG&E Corporation is terminated at any time by PG&E Corporation for cause, all unvested Restricted Stock Units will be cancelled on the date of termination.
For these purposes, “cause” means when PG&E Corporation, acting in good faith based upon information then known to it, determines that you have engaged in, committed, or are responsible for, (1) serious misconduct, gross negligence, theft, or fraud against PG&E Corporation and/or its affiliates, (2) refusal or unwillingness to perform your duties; (3) inappropriate conduct in violation of PG&E Corporation’s equal employment opportunity policy; (4) conduct which reflects adversely upon, or making any remarks disparaging of, PG&E Corporation, its Board of Directors, Officers, or employees, or its affiliates or subsidiaries; (5) insubordination; (6) any willful act that is likely to have the effect of injuring the reputation, business, or business relationships of PG&E Corporation or its subsidiaries or affiliates; (7) violation of any fiduciary duty; or (8) breach of any duty of loyalty.
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Termination other than for Cause
|
If your employment with PG&E Corporation is terminated by PG&E Corporation other than for cause, all unvested Restricted Stock Units will be cancelled unless your termination was in connection with a Change in Control as provided below, or if provisions relating to pro-rata vesting of Restricted Stock Units apply. All other unvested Restricted Stock Units will be cancelled unless your termination of employment was in connection with a Change in Control as provided below.
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Death/Disability
|
In the event of your death or Disability while you are employed, all of your Restricted Stock Units shall vest and be settled as soon as practicable after (but not later than sixty (60) days after) the date of such event. If your death or Disability occurs following the termination of your employment and your Restricted Stock Units are then outstanding under the terms hereof, then all of your vested Restricted Stock Units plus any Restricted Stock Units that would have otherwise vested during any continued vesting period hereunder shall be settled as soon as practicable after (but not later than sixty (60) days after) the date of your death or Disability.
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Termination Due to Disposition of Subsidiary
|
(1) If your employment is terminated (other than termination for cause, your voluntary termination, or your Retirement) by reason of a divestiture or change in control of a subsidiary of PG&E Corporation, which divestiture or change in control results in such subsidiary no longer qualifying as a subsidiary corporation under Section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”), or (2) if your employment is terminated (other than termination for cause, your voluntary termination, or your Retirement) coincident with the sale of all or substantially all of the assets of a subsidiary of PG&E Corporation, the Restricted Stock Units shall vest and be settled in the same manner as for a “Termination other than for Cause” described above.
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Change in Control
|
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror
”
), may, without your consent, either assume or continue PG&E Corporation’s rights and obligations under this Agreement or provide a substantially equivalent award in substitution for the Restricted Stock Units subject to this Agreement.
If the Restricted Stock Units are neither assumed nor continued by the Acquiror or if the Acquiror does not provide a substantially equivalent award in substitution for the Restricted Stock Units, all of your unvested Restricted Stock Units shall automatically vest immediately preceding and contingent on, the Change in Control and be settled in accordance with the Normal Vesting Schedule, subject to the earlier settlement provisions of this Agreement.
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Termination In Connection with a Change in Control
|
If you separate from service (other than termination for cause, your voluntary termination, or Retirement) in connection with a Change in Control within three months before the Change in Control occurs, all of your outstanding Restricted Stock Units (including Restricted Stock Units that you would have otherwise forfeited after the end of the continued vesting period) shall automatically vest on the date of the Change in Control and will be settled in accordance with the Normal Vesting Schedule (without regard to the requirement that you be employed) subject to the earlier settlement provisions of this Agreement. In the event of such a separation in connection with a Change in Control within two years following the Change in Control, your Restricted Stock Units (to the extent they did not previously vest upon, for example, failure of the Acquiror to assume or continue this Award) shall automatically vest on the date of such separation and will be settled as soon as practicable after (but not later than sixty (60) days after) the date of such separation. PG&E Corporation shall have the sole discretion to determine whether termination of your employment was made in connection with a Change in Control
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Delay
|
PG&E Corporation shall delay the issuance of any shares of common stock to the extent it is necessary to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to certain “key employees” of certain publicly-traded companies); in such event, any shares of common stock to which you would otherwise be entitled during the six (6) month period following the date of your “separation from service” under Section 409A (or shorter period ending on the date of your death following such separation) will instead be issued on the first business day following the expiration of the applicable delay period.
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Withholding Taxes
|
The number of shares of PG&E Corporation common stock that you are otherwise entitled to receive upon settlement of Restricted Stock Units will be reduced by a number of shares having an aggregate Fair Market Value, as determined by PG&E Corporation, equal to the amount of any Federal, state, or local taxes of any kind required by law to be withheld by PG&E Corporation
in connection with the Restricted Stock Units determined using the applicable minimum statutory withholding rates
, including
social security and Medicare taxes due under the Federal Insurance Contributions Act and the California State Disability Insurance tax (“
Withholding Taxes”). If the
withheld shares were not sufficient to satisfy your minimum Withholding Taxes, you will be required to pay, as soon as practicable, including through additional payroll withholding, any amount of the Withholding Taxes that is not satisfied by the withholding of shares described above
.
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Leaves of Absence
|
For purposes of this Agreement, if you are on an approved leave of absence from PG&E Corporation, or a recipient of PG&E Corporation sponsored disability benefits, you will continue to be considered as employed. If you do not return to active employment upon the expiration of your leave of absence or the expiration of your PG&E Corporation sponsored disability benefits, you will be considered to have voluntarily terminated your employment. See above under “Voluntary Termination.”
Notwithstanding the foregoing, if the leave of absence exceeds six (6) months, and a return to service upon expiration of such leave is not guaranteed by statute or contract, then you shall be deemed to have had a “separation from service” for purposes of any Restricted Stock Units that are settled hereunder upon such separation. To the extent an authorized leave of absence is due to a medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of at least six (6) months and such impairment causes you to be unable to perform the duties of your position of employment or any substantially similar position of employment, the six (6) month period in the prior sentence shall be twenty-nine (29) months.
PG&E Corporation reserves the right to determine which leaves of absence will be considered as continuing employment and when your employment terminates for all purposes under this Agreement.
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Voting and Other Rights
|
You shall not have voting rights with respect to the Restricted Stock Units until the date the underlying shares are issued (as evidenced by appropriate entry on the books of PG&E Corporation or its duly authorized transfer agent).
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No Retention Rights
|
This Agreement is not an employment agreement and does not give you the right to be retained by PG&E Corporation. Except as otherwise provided in an applicable employment agreement, PG&E Corporation reserves the right to terminate your employment at any time and for any reason.
|
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of California.
|
The LTIP and Other Agreements
|
This Agreement constitutes the entire understanding between you and PG&E Corporation regarding the Performance Shares, subject to the terms of the LTIP. Any prior agreements, commitments or negotiations are superseded. In the event of any conflict or inconsistency between the provisions of this Agreement and the LTIP, the LTIP shall govern. Capitalized terms that are not defined in this Agreement are defined in the LTIP. In the event of any conflict between the provisions of this Agreement and the PG&E Corporation Officer Severance Policy or the PG&E Corporation 2012 Officer Severance Policy, this Agreement shall govern. The LTIP provides the Committee with discretion to adjust the performance award formula.
For purposes of this Agreement, employment with PG&E Corporation shall mean employment with any member of the Participating Company Group.
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Grant of
Performance Shares
|
PG&E Corporation grants you the number of Performance Shares shown on the cover sheet of this Agreement. The Performance Shares are subject to the terms and conditions of this Agreement and the LTIP.
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Vesting of Performance Shares
Pro-Rata Vesting of Performance Shares
|
As long as you remain employed with PG&E Corporation, the Performance Shares will vest on the first business day of March (the “Vesting Date”) of the third year following the date of grant specified in the cover sheet. Except as described below, all Performance Shares subject to this Agreement that have not vested shall be forfeited upon termination of your employment.
Notwithstanding any other vesting provisions noted in this Agreement, after you complete at least three years of employment with PG&E Corporation, upon your termination (other than termination for cause, voluntary termination, Retirement, termination due to death or Disability, or termination in connection with a Change in Control) the number of vested Performance Shares shall equal the number of Performance Shares subject to this Agreement, multiplied by the number of your days of service with PG&E Corporation in the vesting period (through the date of termination), divided by the potential number of days of service in the vesting period. Your vested Performance Shares will be settled, if at all, as soon as practicable after the Vesting Date and in any event within sixty (60) days of the Vesting Date, based on the same settlement percentage applied to active employees. All other unvested Performance Shares will be cancelled upon such termination. At that time you also shall receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your vested Performance Shares multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
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Settlement in Shares
|
Vested performance shares will be settled in shares of PG&E Corporation common stock, subject to the satisfaction of Withholding Taxes, as described below. The number of shares you are entitled to receive will be calculated by multiplying the number of vested Performance Shares by the “settlement percentage” determined as follows (except as set forth elsewhere in this Agreement):
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Upon the Vesting Date, PG&E Corporation’s total shareholder return (“TSR”) will be compared to the TSR of the twelve other companies in PG&E Corporation’s comparator group
1
for the prior three calendar years (the “Performance Period”). Subject to rounding considerations, if PG&E Corporation’s TSR falls below the 25
th
percentile of the comparator group the settlement percentage will be 0%; if PG&E Corporation’s TSR is at the 25
th
percentile, the settlement percentage will be 25%; if PG&E Corporation’s TSR is at the 75
th
percentile, the settlement percentage will be 100%; and if PG&E Corporation’s TSR is in the top rank, the settlement percentage will be 200%. The following table sets forth the settlement percentages for the other TSR rankings that could be achieved based on PG&E Corporation’s TSR rank within the comparator group:
Number of Companies in
Total (Including PG&E Corporation) - 13
Performance Rounded
Rank Percentile Payout
1 100% 200%
2 92% 170%
3 83% 130%
4 75% 100%
5 67% 90%
6 58% 75%
7 50% 65%
8 42% 50%
9 33% 35%
10 25% 25%
11 17% 0%
12 8% 0%
The final settlement percentage, if any, will be determined as soon as practicable following the date that the Compensation Committee (or a subcommittee of that Committee) of the PG&E Corporation Board of Directors or an equivalent body certifies the TSR percentile rank over the Performance Period pursuant to Section 10.5(a) of the LTIP. PG&E Corporation will issue shares as soon as practicable after such determination, but no earlier than the Vesting Date, and not later than sixty (60) days after the Vesting Date.
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1
The current Performance Comparator Group consists of the following companies: American Electric Power, CMS Energy, Consolidated Edison, Inc., DTE Energy, Duke Energy, NiSource, Inc., Northeast Utilities, Pinnacle West Capital, Southern Company, SCANA Corp., Wisconsin Energy Corp., and Xcel Energy. PG&E Corporation reserves the right to change the companies comprising the comparator group in accordance with the rules established by PG&E Corporation in connection with this award.
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Dividends
|
Each time that PG&E Corporation declares a dividend on its shares of common stock, an amount equal to the dividend multiplied by the number of Performance Shares granted to you by this Agreement shall be accrued on your behalf. If you receive a Performance Share settlement in accordance with the preceding paragraph, at that same time you also shall receive a cash payment equal to the amount of any dividends accrued with respect to your Performance Shares over the Performance Period multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
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Voluntary Termination
|
If you terminate your employment with PG&E Corporation voluntarily before the Vesting Date (other than for Retirement), all of the Performance Shares shall be cancelled as of the date of such termination and any dividends accrued with respect to your Performance Shares shall be forfeited.
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Termination for Cause
|
If your employment with PG&E Corporation is terminated at any time by PG&E Corporation for cause before the Vesting Date, all of the Performance Shares shall be cancelled as of the date of such termination and any dividends accrued with respect to your Performance Shares shall be forfeited.
For these purposes, “cause” means when PG&E Corporation, acting in good faith based upon information then known to it, determines that you have engaged in, committed, or are responsible for, (1) serious misconduct, gross negligence, theft, or fraud against PG&E Corporation and/or its affiliates, (2) refusal or unwillingness to perform your duties; (3) inappropriate conduct in violation of PG&E Corporation’s equal employment opportunity policy; (4) conduct which reflects adversely upon, or making any remarks disparaging of, PG&E Corporation, its Board of Directors, Officers, or employees, or its affiliates or subsidiaries; (5) insubordination; (6) any willful act that is likely to have the effect of injuring the reputation, business, or business relationships of PG&E Corporation or its subsidiaries or affiliates; (7) violation of any fiduciary duty; or (8) breach of any duty of loyalty.
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Termination other than for Cause
|
If your employment with PG&E Corporation is terminated by PG&E Corporation other than for cause before the Vesting Date, all unvested Performance Shares shall be cancelled unless your termination of employement was in connection with a Change in Control as provided below, or if provisions relating to pro-rata vesting of Restricted Stock Units apply.
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Retirement
|
If you retire before the Vesting Date, your outstanding Performance Shares will continue to vest as though your employment had continued and will be settled, if at all, as soon as practicable following the Vesting Date and in any event within sixty (60) days of the Vesting Date. At the same time you also shall also receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your Performance Shares multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any. You will be considered to have retired if you are age 55 or older on the date of termination and if you were employed by PG&E Corporation for at least five consecutive years ending on the date of termination of your employment.
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Death/Disability
|
If your employment terminates due to your death or disability before the Vesting Date, all of your Performance Shares shall immediately vest and will be settled, if at all, as soon as practicable after the Vesting Date and in any event within sixty (60) days of the Vesting Date based on the same settlement percentage applied to active employees. At that same time you also shall receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your Performance Shares multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
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Termination Due to Disposition of Subsidiary
|
(1) If your employment is terminated (other than for cause, your voluntary termination, or your Retirement) by reason of a divestiture or change in control of a subsidiary of PG&E Corporation, which divestiture or change in control results in such subsidiary no longer qualifying as a subsidiary corporation under Section 424(f) of the Internal Revenue Code of 1986, as amended, or (2) if your employment is terminated (other than for cause or your voluntary termination) coincident with the sale of all or substantially all of the assets of a subsidiary of PG&E Corporation, your unvested Performance Shares shall vest and be settled in the same manner as for a “Termination other than for Cause” described above.
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Change in Control
|
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror
”
), may, without your consent, either assume or continue PG&E Corporation’s rights and obligations under this Agreement or provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement. If the Acquiror assumes or continues PG&E Corporation’s rights and obligations under this Agreement or substitutes a substantially equivalent award, TSR shall be calculated by combining (a) the TSR of PG&E Corporation for the period from January 1 of the year of grant to the date of the Change in Control, and (b) the TSR of the Acquiror from the date of the Change in Control to the last calendar day of the year preceding the Vesting Date. The settlement percentage reflected in the table set forth above for the highest percentile TSR performance met or exceeded when calculated on that basis, and considering any adjustments to the comparator group, will be used to determine the number of shares, if any, you are entitled to receive upon settlement of the assumed, continued or substituted award, which settlement shall occur as soon as practicable after the Vesting Date and in any event within sixty (60) days of the Vesting Date. At that time you also shall receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares over the Performance Period multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
If the Change in Control of PG&E Corporation occurs before the original Vesting Date, and if this Award is neither assumed nor continued by the Acquiror or if the Acquiror does not provide a substantially equivalent award in substitution for the Performance Shares subject to this Agreement, all of your outstanding Performance Shares shall automatically vest and become nonforfeitable on the date of the Change in Control. Such vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date and in any event within sixty (60) days of the original Vesting Date. The settlement percentage, if any, will be based on TSR for the period from January 1 of the year of grant to the date of the Change in Control compared to the TSR of the other companies in PG&E Corporation’s comparator group for the same period. At the same time you also shall receive a cash payment, if any, equal to the amount of dividends accrued with respect to your Performance Shares to the date of the Change in Control multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any.
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Termination In Connection with a Change in Control
|
If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within within two years following the Change in Control, all of your outstanding Performance Shares (to the extent they did not previously vest upon failure of the Acquiror to assume or continue this Award) shall automatically vest and become nonforfeitable on the date of termination of your employment. If your employment is terminated by PG&E Corporation other than for cause in connection with a Change in Control within three months before the Change in Control occurs, all of your outstanding performance shares will automatically vest
in full
and become nonforfeitable (including the portion that you would have otherwise forfeited based on the proration of vested performance shares through the date of termination of your employment) as of the date of the Change in Control. Your vested Performance Shares will be settled, if at all, as soon as practicable following the original Vesting Date and in any event within sixty (60) days of the Vesting Date and will be based on the same settlement percentage applied to active employees. You shall also at that time receive a cash payment, if any, equal to the amount of dividends accrued over the Performance Period with respect to your vested Performance Shares multiplied by the same settlement percentage used to determine the number of shares you are entitled to receive, if any. PG&E Corporation shall have the sole discretion to determine whether termination of your employment was made in connection with a Change in Control.
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Withholding Taxes
|
The number of shares of PG&E Corporation common stock that you are otherwise entitled to receive upon settlement of Performance Shares will be reduced by a number of shares having an aggregate Fair Market Value, as determined by PG&E Corporation, equal to the amount of any Federal, state, or local taxes of any kind required by law to be withheld by PG&E Corporation
in connection with the Performance Shares determined using the applicable minimum statutory withholding rates
, including
social security and Medicare taxes due under the Federal Insurance Contributions Act and the California State Disability Insurance tax (“
Withholding Taxes”). If the
withheld shares were not sufficient to satisfy your minimum Withholding Taxes, you will be required to pay, as soon as practicable, including through additional payroll withholding, any amount of the Withholding Taxes that is not satisfied by the withholding of shares described above
.
|
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Leaves of Absence
|
For purposes of this Agreement, if you are on an approved leave of absence from PG&E Corporation, or a recipient of PG&E Corporation sponsored disability benefits, you will continue to be considered as employed. If you do not return to active employment upon the expiration of your leave of absence or the expiration of your PG&E Corporation sponsored disability benefits, you will be considered to have voluntarily terminated your employment. See above under “Voluntary Termination.”
PG&E Corporation reserves the right to determine which leaves of absence will be considered as continuing employment and when your employment terminates for all purposes under this Agreement.
|
No Retention Rights
|
This Agreement is not an employment agreement and does not give you the right to be retained by PG&E Corporation. Except as otherwise provided in an applicable employment agreement, PG&E Corporation reserves the right to terminate your employment at any time and for any reason.
|
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of California.
|
Three Months
|
||||||||||||||||||||||||
Ended
|
||||||||||||||||||||||||
March 31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||
Earnings:
|
||||||||||||||||||||||||
Net income
|
$ | 237 | $ | 811 | $ | 845 | $ | 1,121 | $ | 1,250 | $ | 1,199 | ||||||||||||
Income taxes provision
|
121 | 298 | 480 | 574 | 482 | 488 | ||||||||||||||||||
Fixed charges
|
227 | 891 | 880 | 799 | 817 | 860 | ||||||||||||||||||
Total earnings
|
$ | 585 | $ | 2,000 | $ | 2,205 | $ | 2,494 | $ | 2,549 | $ | 2,547 | ||||||||||||
Fixed charges:
|
||||||||||||||||||||||||
Interest on short-term borrowings and long-term debt, net
|
$ | 212 | $ | 834 | $ | 824 | $ | 731 | $ | 754 | $ | 794 | ||||||||||||
Interest on capital leases
|
2 | 9 | 16 | 18 | 19 | 22 | ||||||||||||||||||
AFUDC debt
|
13 | 48 | 40 | 50 | 44 | 44 | ||||||||||||||||||
Total fixed charges
|
$ | 227 | $ | 891 | $ | 880 | $ | 799 | $ | 817 | $ | 860 | ||||||||||||
Ratios of earnings to
fixed charges
|
2.58 | 2.24 | 2.51 | 3.12 | 3.12 | 2.96 |
Three Months
|
||||||||||||||||||||||||
Ended
|
||||||||||||||||||||||||
March 31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||
Earnings:
|
||||||||||||||||||||||||
Net income
|
$ | 237 | $ | 811 | $ | 845 | $ | 1,121 | $ | 1,250 | $ | 1,199 | ||||||||||||
Income taxes provision
|
121 | 298 | 480 | 574 | 482 | 488 | ||||||||||||||||||
Fixed charges
|
227 | 891 | 880 | 799 | 817 | 860 | ||||||||||||||||||
Total earnings
|
$ | 585 | $ | 2,000 | $ | 2,205 | $ | 2,494 | $ | 2,549 | $ | 2,547 | ||||||||||||
Fixed charges:
|
||||||||||||||||||||||||
Interest on short-term borrowings
and long-term debt, net
|
$ | 212 | $ | 834 | $ | 824 | $ | 731 | $ | 754 | $ | 794 | ||||||||||||
Interest on capital leases
|
2 | 9 | 16 | 18 | 19 | 22 | ||||||||||||||||||
AFUDC debt
|
13 | 48 | 40 | 50 | 44 | 44 | ||||||||||||||||||
Total fixed charges
|
$ | 227 | $ | 891 | $ | 880 | $ | 799 | $ | 817 | $ | 860 | ||||||||||||
Preferred stock dividends:
|
||||||||||||||||||||||||
Tax deductible dividends
|
$ | 2 | $ | 9 | $ | 9 | $ | 9 | $ | 9 | $ | 9 | ||||||||||||
Pre-tax earnings required to cover
non-tax deductible preferred stock
dividend requirements
|
2 | 7 | 8 | 7 | 7 | 7 | ||||||||||||||||||
Total preferred stock dividends
|
$ | 4 | $ | 16 | $ | 17 | $ | 16 | $ | 16 | $ | 16 | ||||||||||||
Total combined fixed charges
and preferred stock dividends
|
$ | 231 | $ | 907 | $ | 897 | $ | 815 | $ | 833 | $ | 876 | ||||||||||||
Ratios of earnings to combined fixed charges and preferred stock dividends
|
2.53 | 2.21 | 2.46 | 3.06 | 3.06 | 2.91 |
Three Months
|
||||||||||||||||||||||||
Ended
|
||||||||||||||||||||||||
March 31,
|
Year Ended December 31,
|
|||||||||||||||||||||||
2013
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||
Earnings:
|
||||||||||||||||||||||||
Incoming from continuing operations
|
$ | 242 | $ | 830 | $ | 858 | $ | 1,113 | $ | 1,234 | $ | 1,198 | ||||||||||||
Income taxes provision
|
114 | 237 | 440 | 547 | 460 | 425 | ||||||||||||||||||
Fixed charges
|
237 | 931 | 919 | 850 | 877 | 907 | ||||||||||||||||||
Pre-tax earnings required to cover
the preferred stock dividend of consolidated subsidiaries
|
(4 | ) | (15 | ) | (17 | ) | (16 | ) | (16 | ) | (16 | ) | ||||||||||||
Total earnings
|
$ | 589 | $ | 1,983 | $ | 2,200 | $ | 2,494 | $ | 2,555 | $ | 2,514 | ||||||||||||
Fixed charges:
|
||||||||||||||||||||||||
Interest on short-term borrowings and long-term debt, net
|
$ | 218 | $ | 859 | $ | 846 | $ | 766 | $ | 798 | $ | 825 | ||||||||||||
Interest on capital leases
|
2 | 9 | 16 | 18 | 19 | 22 | ||||||||||||||||||
AFUDC debt
|
13 | 48 | 40 | 50 | 44 | 44 | ||||||||||||||||||
Pre-tax earnings required to cover the preferred stock dividend of consolidated subsidiaries
|
4 | 15 | 17 | 16 | 16 | 16 | ||||||||||||||||||
Total fixed charges
|
$ | 237 | $ | 931 | $ | 919 | $ | 850 | $ | 877 | $ | 907 | ||||||||||||
Ratios of earnings to
fixed charges
|
2.49 | 2.13 | 2.39 | 2.93 | 2.91 | 2.77 | ||||||||||||||||||
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 of PG&E Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 2, 2013
|
ANTHONY F. EARLEY, JR.
|
Anthony F. Earley, Jr.
|
|
Chairman, Chief Executive Officer, and President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 of PG&E Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 2, 2013
|
KENT M. HARVEY
|
Kent M. Harvey
|
|
Senior Vice President and Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 of Pacific Gas and Electric Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 2, 2013
|
CHRISTOPHER P. JOHNS
|
Christopher P. Johns
|
|
President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 of Pacific Gas and Electric Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 2, 2013
|
DINYAR B. MISTRY
|
Dinyar B. Mistry
|
|
Vice President, Chief Financial Officer and Controller
|
(1)
|
the Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
|
(2)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PG&E Corporation.
|
|
|
|
ANTHONY F. EARLEY, JR.
|
|
ANTHONY F. EARLEY, JR.
|
|
Chairman, Chief Executive Officer and President
|
|
(1)
|
the Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
|
(2)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PG&E Corporation.
|
|
KENT M. HARVEY
|
|
KENT M. HARVEY
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
|
|
(1)
|
the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
|
(2)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Pacific Gas and Electric Company.
|
CHRISTOPHER P. JOHNS
|
|
CHRISTOPHER P. JOHNS
|
|
|
President
|
(1)
|
the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
|
(2)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Pacific Gas and Electric Company.
|
DINYAR B. MISTRY
|
|
DINYAR B. MISTRY
|
|
Vice President, Chief Financial Officer and Controller
|
|