PG&E 2013 Annual Report Download - page 19

Dividends
The Board of Directors of PG&E Corporation and the Utility have each adopted a common stock dividend
policy that is designed to meet the following three objectives:
•Comparability: Pay a dividend competitive with the securities of comparable companies based on payout ratio
(the proportion of earnings paid out as dividends) and, with respect to PG&E Corporation, yield
(i.e., dividend per share divided by share price);
•Flexibility: Allow sufficient cash to pay a dividend and to fund investments while avoiding having to issue new
equity unless PG&E Corporation’s or the Utility’s capital expenditure requirements are growing rapidly and
PG&E Corporation or the Utility can issue equity at reasonable cost and terms; and
•Sustainability: Avoid reduction or suspension of the dividend despite fluctuations in financial performance
except in extreme and unforeseen circumstances.
Each Board of Directors retains authority to change the common stock dividend rate at any time, especially if
unexpected events occur that would change its view as to the prudent level of cash conservation. No dividend is
payable unless and until declared by the applicable Board of Directors. In addition, before declaring a dividend, the
CPUC requires that the PG&E Corporation Board of Directors give first priority to the Utility’s capital
requirements, as determined to be necessary and prudent to meet the Utility’s obligation to serve or to operate the
Utility in a prudent and efficient manner. The Boards of Directors must also consider the CPUC requirement that
the Utility maintain, on average, its CPUC-authorized capital structure including a 52% equity component.
The Board of Directors of PG&E Corporation declared dividends of $0.455 per share for each of the quarters
of 2013, 2012, and 2011, for annual dividends of $1.82 per share.
The following table summarizes PG&E Corporation’s and the Utility’s dividends paid:
2013 2012 2011
(in millions)
PG&E Corporation:
Common stock dividends paid ............... $ 782 $ 746 $ 704
Common stock dividends reinvested in Dividend
Reinvestment and Stock Purchase Plan ....... 22 22 24
Utility:
Common stock dividends paid ............... $ 716 $ 716 $ 716
Preferred stock dividends paid ............... 14 14 14
In December 2013, the Board of Directors of PG&E Corporation declared quarterly dividends of $0.455 per
share, totaling $208 million, of which $202 million was paid in January 2014 to shareholders of record on
December 31, 2013.
In December 2013, the Board of Directors of the Utility declared dividends on its outstanding series of
preferred stock, payable in February 2014, to shareholders of record on January 31, 2014.
As the Utility focuses on improving the safety and reliability of its natural gas and electric operations, and
subject to the outcome of the matters described under ‘‘Natural Gas Matters’’ below, PG&E Corporation expects
that its Board will continue to maintain the current quarterly common stock dividend.
Utility
Operating Activities
The Utility’s cash flows from operating activities primarily consist of receipts from customers less payments of
operating expenses, other than expenses such as depreciation that do not require the use of cash.
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