PG&E 2009 Annual Report Download - page 28

Investing Activities
The Utility’s investing activities consist of construction of
new and replacement facilities necessary to deliver safe and
reliable electricity and natural gas services to its customers.
Cash used in investing activities depends primarily upon
the amount and timing of the Utility’s capital expenditures,
which can be affected by many factors, including the
timing of regulatory approvals, the occurrence of storms
and other events causing outages or damages to the
Utility’s infrastructure, and the completion of electricity
and natural gas reliability improvement projects.
Net cash used in investing activities also includes the
proceeds from sales of nuclear decommissioning trust
investments largely offset by the amount of cash used to
purchase new nuclear decommissioning trust investments.
The Utility’s nuclear power facilities consist of two units at
Diablo Canyon and the retired facility at Humboldt Bay.
Nuclear decommissioning requires the safe removal of the
nuclear facilities from service and the reduction of residual
radioactivity to a level that permits termination of the NRC
license and release of the property for unrestricted use. The
Utility makes contributions to trust funds to provide for the
eventual decommissioning of each nuclear unit.
The Utility’s cash flows from investing activities for
2009, 2008, and 2007 were as follows:
(in millions) 2009 2008 2007
Capital expenditures $(3,958) $(3,628) $(2,768)
Decrease in restricted cash 666 36 185
Proceeds from sales of nuclear
decommissioning trust
investments 1,351 1,635 830
Purchases of nuclear
decommissioning trust
investments (1,414) (1,684) (933)
Other 11 121
Net cash used in
investing activities $(3,344) $(3,640) $(2,665)
Net cash used in investing decreased by $296 million in
2009 compared to 2008, primarily due to a $700 million
decrease in the restricted cash balance that resulted from a
payment to the California Power Exchange to reduce the
Utility’s liability for the remaining net disputed claims (see
Note 14 of the Notes to the Consolidated Financial
Statements), partially offset by an increase of $330 million in
capital expenditures. Net cash used in investing activities
increased $975 million in 2008 compared to 2007, primarily
due to an increase of $860 million in 2008 of capital
expenditures. The increase in capital expenditures for both
2009 and 2008 as compared to the prior year was for installing
the SmartMeter™ advanced metering infrastructure, generation
facility spending, replacing and expanding gas and electric
distribution systems, and improving the electric transmission
infrastructure. (See “Capital Expenditures” below.)
Future cash flows used in investing activities are largely
dependent on expected capital expenditures. (See “Capital
Expenditures” below for further discussion of expected
spending and significant capital projects.)
Financing Activities
The Utility’s cash flows from financing activities for 2009,
2008, and 2007 were as follows:
(in millions) 2009 2008 2007
Borrowings under accounts receivable
facility and revolving credit facility $ 300 $ 533 $ 850
Repayments under accounts
receivable facility and revolving
credit facility (300) (783) (900)
Net issuance (repayments) of
commercial paper, net of discount
of $3 million in 2009, $11 million
in 2008, and $1 million in 2007 43 6 (209)
Proceeds from issuance of short-term
debt, net of issuance costs of $1
million in 2009 499 ––
Proceeds from issuance of long-term
debt, net of premium, discount,
and issuance costs of $25 million
in 2009, $19 million in 2008, and
$16 million in 2007 1,384 2,185 1,184
Long-term debt matured or
repurchased (909) (454) –
Rate reduction bonds matured –– (290)
Energy recovery bonds matured (370) (354) (340)
Preferred stock dividends paid (14) (14) (14)
Common stock dividends paid (624) (568) (509)
Equity contribution 718 270 400
Other (5) (36) 23
Net cash provided by
financing activities $ 722 $ 785 $ 195
In 2009, net cash provided by financing activities
decreased by $63 million compared to 2008. In 2008, net
cash provided by financing activities increased by $590
million compared to 2007. Cash provided by or used in
financing activities is driven by the Utility’s financing
needs, which depend on the level of cash provided by or
used in operating activities and the level of cash provided
by or used in investing activities. The Utility generally
utilizes long-term senior unsecured debt issuances and
equity contributions from PG&E Corporation to fund debt
maturities and capital expenditures and to maintain its
CPUC-authorized capital structure, and relies on short-
term debt to fund temporary financing needs.
PG&E CORPORATION
With the exception of dividend payments, interest,
common stock issuance, the senior note issuance of $350
million in March 2009, net tax refunds of $189 million,
and transactions between PG&E Corporation and the
Utility, PG&E Corporation had no material cash flows on a
stand-alone basis for the years ended December 31, 2009,
2008, and 2007.
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