PG&E 2014 Annual Report Download - page 11

Download and view the complete annual report

Please find page 11 of the 2014 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 164

  • 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
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

3
Contents
UNITS OF MEASUREMENT .........................................................................................................................................................5
GLOSSARY ......................................................................................................................................................................................6
PART I
ITEM 1. BUSINESS .........................................................................................................................................................................7
Regulatory Environment ..............................................................................................................................................................7
Ratemaking Mechanisms .............................................................................................................................................................9
Electric Utility Operations..........................................................................................................................................................12
Natural Gas Utility Operations ...................................................................................................................................................16
Competition ................................................................................................................................................................................18
Environmental Regulation ..........................................................................................................................................................19
ITEM 1A. RISK FACTORS ...........................................................................................................................................................23
ITEM 1B. UNRESOLVED STAFF COMMENTS .........................................................................................................................32
ITEM 2. PROPERTIES ...................................................................................................................................................................32
ITEM 3. LEGAL PROCEEDINGS ................................................................................................................................................32
ITEM 4. MINE SAFETY DISCLOSURES ....................................................................................................................................34
EXECUTIVE OFFICERS OF THE REGISTRANTS ....................................................................................................................34
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES ....................................................................................................................................37
ITEM 6. SELECTED FINANCIAL DATA ....................................................................................................................................38
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS ................................................................................................................................................................................39
Overview ....................................................................................................................................................................................39
Results of Operations .................................................................................................................................................................42
Liquidity and Financial Resources .............................................................................................................................................47
Contractual Commitments ..........................................................................................................................................................51
Enforcement and Litigation Matters...........................................................................................................................................52
Ratemaking and Other Regulatory Proceedings ........................................................................................................................56
Environmental Matters ...............................................................................................................................................................58
Risk Management Activities ......................................................................................................................................................58
Critical Accounting Policies .......................................................................................................................................................59
New Accounting Pronouncements .............................................................................................................................................62
Cautionary Language Regarding Forward Looking Statements ................................................................................................63
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ...............................................65
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ...................................................................................66
PG&E Corporation ..........................................................................................................................................................................66
Consolidated Statements of Income ...........................................................................................................................................66
Consolidated Statements of Comprehensive Income .................................................................................................................67
Consolidated Balance Sheets......................................................................................................................................................68
Consolidated Statements of Cash Flows ....................................................................................................................................70
Consolidated Statements of Equity ............................................................................................................................................72
Pacific Gas and Electric Company ..................................................................................................................................................73
Consolidated Statements of Income ...........................................................................................................................................73
Consolidated Statements of Comprehensive Income .................................................................................................................74
Consolidated Balance Sheets......................................................................................................................................................75
Consolidated Statements of Cash Flows ....................................................................................................................................77
Consolidated Statements of Shareholders’ Equity .....................................................................................................................79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .............................................................................................80
NOTE 1: Organization and Basis of Presentation ......................................................................................................................80
NOTE 2: Summary of Significant Accounting Policies .............................................................................................................80
NOTE 3: Regulatory Assets, Liabilities, and Balancing Accounts ............................................................................................87
NOTE 4: Debt ............................................................................................................................................................................90
NOTE 5: Common Stock and Share-Based Compensation .......................................................................................................93
NOTE 6: Preferred Stock ...........................................................................................................................................................95
NOTE 7: Earnings Per Share......................................................................................................................................................95
NOTE 8: Income Taxes ..............................................................................................................................................................96
NOTE 9: Derivatives ..................................................................................................................................................................99