PG&E 2007 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2007 PG&E annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 148

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148

3
And lastly, as we have probed deeper into
the needs surrounding system reliability,
we recognized last year that even more new
capital will be necessary to achieve the levels
of performance we and our customers expect.
Our operating plan for 2008 confronts
these factors head-on.
We have reprioritized the change initia-
tives planned for 2008, giving the green
light only to those with the potential for the
greatest returns in e ciencies and savings.
We are focusing meticulously on execution
and productivity.  is includes assessing our
sta ng and instituting new and increasingly
rigorous measures and structure around
managing our resources. And we boosted our
four-year capital plan by $2.2 billion.
Fulfi lling Our
Commitment to Investors
Ensuring that PG&E Corporation continues
to be an attractive long-term investment is
fundamental to everything we seek to achieve.
On a non-GAAP earnings from opera-
tions basis, which excludes items that are
considered to be non-operating, earnings
per share for 2007 rose by 8 percent over
2006, to $2.78 per share.  is met the upper
part of our target range and was in line with
commitments to Wall Street. Total net
income was $1 billion, as reported under
GAAP. ( e table on page 31 explains the
comparison of GAAP total net income and
non-GAAP earnings from operations.) We
also increased our common stock dividend
by 9 percent last year, and announced another
8 percent increase in February this year.
Judged in terms of total shareholder
return, however — stock price appreciation
plus dividends — last year’s results were
less than satisfying. A er total returns of
15 percent in 2005 and 31 percent in 2006,
shareholders saw some of these gains o set
by a decline in the share price in 2007.
In December, we rea rmed our existing
commitment to grow earnings per share from
operations at a compound average annual
rate of 8 percent for 2007 through 2011.
However, we also acknowledged that in part
due to the challenges mentioned earlier, some
earnings opportunities that previously repre-
sented potential upside to our targets could
no longer be seen as such. Instead, these
opportunities are included in the 8 percent
growth we have tar-
geted to deliver.
PG&E’s target earn-
ings growth rate still
places the company
among the top 25 per-
cent of comparable
utilities. Within this
group, we believe that
PG&E Corporation
continues to o er in-
vestors a highly attrac-
tive balance of solid
earnings growth and
risk. Among other
factors, this re ects a robust slate of already-
approved capital investments and a high
degree of alignment between our strategy
and the priorities of California policy makers.
Improving Customer Satisfaction
We improved PG&E’s customer satisfaction
signi cantly in 2007, extending a positive
trend from the past two years.
J.D. Power and Associates ranked
PG&E’s business customer satisfaction in
the top 10 percent of utilities nationwide for
both gas and electric service.  e same was
true of residential gas customer satisfaction,
where we  nished h in the nation, up