PG&E 2008 Annual Report Download - page 51

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Credit Ratings
As of January 31, 2009, PG&E Corporation’s and the
Utility’s credit ratings from Moody’s and Standard & Poor’s
(“S&P”) were as follows:
Moody’s S&P
Utility
Corporate credit rating A3 BBB+
Senior unsecured debt A3 BBB+
Credit facility A3 BBB+
Pollution control bonds
backed by letters of credit Not rated to AA-/A-1+ to
Aa1/VMIG1 AAA/A-1+
Pollution control bonds
backed by bond insurance A3 A to AA
Pollution control bonds —
nonbacked A3 BBB+
Preferred stock Baa2 BBB-
Commercial paper program P-2 A-2
PG&E Energy Recovery
Funding
LLC
Energy recovery bonds Aaa AAA
PG&E Corporation
Corporate credit rating Baa1 Not rated
Credit facility Baa1 Not rated
Moody’s and S&P are nationally recognized credit rating
organizations. These ratings may be subject to revision or
withdrawal at any time by the assigning rating organization
and each rating should be evaluated independently of any
other rating. A credit rating is not a recommendation to buy,
sell, or hold securities.
During 2008, PG&E Corporation issued 6,905,462 shares
of common stock upon exercise of employee stock options,
for the account of 401(k) participants, and under its Dividend
Reinvestment and Stock Purchase Plan, generating approxi-
mately $225 million of cash. In 2008, PG&E Corporation
contributed $270 million of cash to the Utility to ensure
that the Utility had adequate capital to fund its capital
expenditures and to maintain the 52% common equity
ratio authorized by the CPUC.
Future Financing Needs
The amount and timing of the Utility’s future fi nancing
needs will depend on various factors, including the condi-
tions in the capital markets and the Utility’s ability to access
the capital markets, the timing and amount of forecasted
capital expenditures, and the amount of cash internally
generated through normal business operations, among other
factors. The Utility’s future fi nancing needs will also depend
on the timing of the resolution of the disputed claims
and the amount of interest on these claims that the Utility
will be required to pay. (See Note 15 of the Notes to the
Consolidated Financial Statements.)
Assuming continued access to the capital markets, the
Utility currently plans to issue additional long-term debt of
$3.5 billion to $4.5 billion through 2011. PG&E Corporation
expects to issue additional common stock, debt, or other
securities, depending on market conditions, to fund a
portion of its equity contributions to the Utility and to
fund PG&E Corporation’s capital expenditures. PG&E
Corporation currently plans to contribute equity of $1.2 bil-
lion to $1.8 billion to the Utility through 2011. Assuming
that PG&E Corporation and the Utility can access the capital
markets on reasonable terms, PG&E Corporation and the
Utility believe that the Utility’s cash fl ow from operations,
existing sources of liquidity, and future fi nancings will provide
adequate resources to fund operating activities, meet antici-
pated obligations, and fi nance future capital expenditures.