-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C01Dlcif3ElJUlqSSnFc60JQkqP16lmCADSwkRBymNu+LvIC3YTHJRqV7UOn5BO8 hxCvVPEzzmJFVwEeis88SA== 0001004980-97-000005.txt : 19970303 0001004980-97-000005.hdr.sgml : 19970303 ACCESSION NUMBER: 0001004980-97-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970116 ITEM INFORMATION: Other events FILED AS OF DATE: 19970116 SROS: AMEX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACIFIC GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000075488 STANDARD INDUSTRIAL CLASSIFICATION: 4931 IRS NUMBER: 940742640 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02348 FILM NUMBER: 97506954 BUSINESS ADDRESS: STREET 1: 77 BEALE ST STREET 2: P O BOX 770000 MAIL CODE B7C CITY: SAN FRANCISCO STATE: CA ZIP: 94177 BUSINESS PHONE: 4159737000 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: January 16, 1997 Exact Name of Commission Registrant State or other IRS Employer File as specified Jurisdiction of Identification Number in its charter Incorporation Number - - ----------- -------------- --------------- -------------- 1-12609 PG&E Corporation California 94-3234914 1-2348 Pacific Gas and California 94-0742640 Electric Company 77 Beale Street, P.O. Box 770000, San Francisco, California 94177 (Address of principal executive offices) (Zip Code) Registrants' telephone number, including area code:(415) 973-7000 Item 5. Other Events A. Performance Incentive Plan - Year-to-Date Financial Results The Performance Incentive Plan (Plan) is an annual incentive compensation plan applicable to all regular, nonbargaining unit employees of Pacific Gas and Electric Company (PG&E). In 1996, the Plan provided for awards based on (1) PG&E's success in meeting overall corporate financial performance objectives, based on combined earnings per common share for PG&E's utility operations (including Pacific Gas Transmission Company (PGT)), Diablo Canyon Nuclear Power Plant (Diablo Canyon) operations and PG&E's diversified operations, conducted principally through PG&E Enterprises (Enterprises); and (2) the performance of the employee's organizational unit in meeting its specific unit, team or individual objectives.1/ The organizational objectives may include such measures as cost control, quality and reliability of service to customers, public and employee safety, financial performance and operational efficiency. In 1996, awards for the Chairman of the Board and Chief Executive Officer, the President and Chief Operating Officer, the Executive Vice President and certain other officers, were based entirely on PG&E's corporate performance financial objectives. Under the Plan, the Nominating and Compensation Committee of the PG&E Board of Directors (Committee) makes the final determination of awards for officers based upon achievement of the Plan objectives. The Committee has the discretion to modify or eliminate awards for officers. The final determination of non- officer awards is made by the chief executive officer, who also has the discretion to modify or eliminate non-officer awards. The performance measurement target for the 1996 Plan year was disclosed in a Current Report on Form 8-K/A dated January 18, 1996, and was based upon the corporate capital and operating budgets prepared for 1996. The 1996 budgeted earnings per common share for the utility were derived from, among other things, (i) budgeted revenues as authorized by the California Public Utilities Commission __________ 1/ On January 1, 1997, PG&E Corporation became the holding company for PG&E, PGT and Enterprises. For 1997 the corporate financial objective used in making awards under the Plan will be based on PG&E Corporation's earnings per common share, taking into account PG&E utility operations (including Diablo Canyon operations), and financial results of PG&E Corporation's other subsidiaries, including PGT and Enterprises. (CPUC) for 1996 which included the results of the 1996 General Rate Case (GRC), (ii) PG&E's capital budget for 1996 of approximately $1.3 billion for utility operations and (iii) budgeted utility operating expenses that were approximately $250 million greater than the amount adopted by the CPUC for recovery in the 1996 GRC. The higher expense level is primarily attributable to several projects related to transmission and distribution system reliability, and improved customer service and public information systems. The 1996 utility budgeted earnings per common share assumed contribution to earnings of $.11 per share from PGT. The 1996 budgeted earnings per common share for Diablo Canyon were derived from, among other things, (i) a reduction in the price of power produced by Diablo Canyon from 11.0 cents per kilowatt-hour (kWh) in 1995 to 10.5 cents per kWh in 1996, consistent with the agreement to modify the Diablo Canyon rate case settlement (Diablo Settlement), which was approved by the CPUC in 1995, (ii) an operating capacity factor (excluding refueling outages) of 94.0%, (iii) an overall annual capacity factor of 88.8% and (iv) one 40-day refueling outage at Unit 2 during 1996. Budgeted operating expenses for 1996 relating to Diablo Canyon were approximately equal to those budgeted for 1995. Budgeted capital expenditures for Diablo Canyon were approximately $35 million for 1996, which is approximately 10% more than actual capital expenditures in 1995. The 1996 budgeted earnings per common share for diversified operations assumed net income of $15 million from U.S. Generating Company, offset by budgeted net losses of $28 million attributable primarily to business activities involving international power generation and distribution, and energy products and services in U.S. utility markets. All of the 1996 budgeted earnings per common share amounts assumed 406 million shares of common stock outstanding. The budgeted earnings per common share amounts assumed no significant gain or loss on the sale of assets. On a quarterly basis, PG&E has disclosed year-to-date financial performance relating to the three types of operations: utility, Diablo Canyon and diversified operations. For the twelve months ended December 31, 1996, selected financial information is shown below: (in thousands of dollars, except per share amounts) Twelve Months Ended December 31, 1996 ================================================================= Actual (1) Budgeted (2) (unaudited) Operating Revenues: $ 9,609,972 $ 9,550,743 Net Income (Loss): Utility $ 291,680 (3) $ 670,186 Diablo Canyon 497,204 (4) 498,381 Diversified Operations (33,675) (5) (10,810) ----------- ---------- Total Consolidated $ 755,209 $1,157,757 =========== ========== Earnings (Loss) Per Common Share: Utility $ 0.65 (3) $ 1.60 Diablo Canyon 1.18 (4) 1.20 Diversified Operations (0.08) (5) (0.03) ----------- ---------- Total Consolidated $ 1.75 $ 2.77 =========== =========== (1) In the opinion of management, the unaudited "actual" financial information presented above reflects all adjustments to date which are necessary to present a fair statement of operating revenues, net income and earnings per common share for the year. All material adjustments are of a normal recurring nature, except as noted below. This information should be read in conjunction with the 1995 Consolidated Financial Statements and Notes to Consolidated Financial Statements incorporated by reference in PG&E's Annual Report on Form 10-K, and the Consolidated Financial Statements and Notes to Consolidated Financial Statements in the Quarterly Reports on Form 10-Q for the quarters ended September 30, 1996, June 30, 1996 and March 31, 1996. (2) The budgeted corporate earnings per common share was a performance target and not a forecast of actual performance that was expected to be realized by PG&E. The budgeted amount does not reflect the resolution of various regulatory uncertainties or other contingencies, including those disclosed in the Notes to PG&E's Consolidated Financial Statements. (3) Utility earnings were adversely impacted by several one-time charges including $182 million ($.26 per share) relating to the proposed Gas Accord Settlement and contingencies related to Transwestern gas transportation commitments, and $133 million ($.19 per share) for the settlement of litigation related to groundwater contamination near the Hinkley Compressor Station. In addition, utility maintenance and other operating expenses in distribution and customer services were higher than budgeted by approximately $90 million ($.12 per share). (4) Diablo Canyon operated at an overall capacity factor of 88.1% compared to a budgeted overall capacity factor of 88.8% for the twelve months ended December 31, 1996. (5) Earnings reflect one-time charges of $59 million ($.09 per share) related to downward adjustments in the market values of a natural gas storage project and certain property. B. 1996 Consolidated Earnings (unaudited) Attached hereto as an appendix is a copy of the unaudited Condensed Statement of Consolidated Income for PG&E Corporation for the three months and year ended December 31, 1996 and 1995. The Condensed Statement of Consolidated Income includes PG&E and its wholly-owned and controlled subsidiaries and, therefore, also represents what became PG&E Corporation on January 1, 1997, and its subsidiaries. PG&E reported earnings per common share of $1.75 for the year ended December 31, 1996. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized. PG&E CORPORATION and PACIFIC GAS AND ELECTRIC COMPANY CHRISTOPHER P. JOHNS By ________________________________ CHRISTOPHER P. JOHNS Controller Dated: January 16, 1997 PG&E CORPORATION* CONDENSED STATEMENT OF CONSOLIDATED INCOME (unaudited)
- - -------------------------------------------------------------------------------------------------- Three months ended December 31, Twelve months ended December 31, (in thousands, ------------------------------ ------------------------------- except per share amounts) 1996 1995 1996 1995 - - -------------------------------------------------------------------------------------------------- OPERATING REVENUES 2,700,686 2,227,224 9,609,972 9,621,765 OPERATING EXPENSES Cost of electric energy and gas 1,001,042 600,768 3,065,325 2,450,120 Maintenance and other operating 596,102 617,986 2,410,671 2,095,161 Depreciation and decommissioning 305,908 334,889 1,221,952 1,360,118 Administrative and general 288,664 221,907 1,016,439 953,381 ---------- ---------- ----------- ----------- Total operating expenses 2,191,716 1,775,550 7,714,387 6,858,780 ---------- ---------- ----------- ----------- OPERATING INCOME 508,970 451,674 1,895,585 2,762,985 ---------- ---------- ----------- ----------- OTHER INCOME AND (INCOME DEDUCTIONS) Interest income 10,784 22,009 72,900 72,524 Allowance for equity funds used during construction 4,630 2,347 13,941 20,039 Other--net (35,741) 32,649 (16,480) 58,564 ---------- ---------- ----------- ----------- Total other income and (income deductions) (20,327) 57,005 70,361 151,127 ---------- ---------- ----------- ----------- INCOME BEFORE INTEREST EXPENSE 488,643 508,679 1,965,946 2,914,112 ---------- ---------- ----------- ----------- INTEREST EXPENSE Interest charges 163,315 171,551 663,523 690,581 Allowance for borrowed funds used during construction (2,510) (1,511) (7,780) (10,643) ---------- ---------- ----------- ----------- Net interest expense 160,805 170,040 655,743 679,938 ---------- ---------- ----------- ----------- PRETAX INCOME 327,838 338,639 1,310,203 2,234,174 ---------- ---------- ----------- ----------- INCOME TAXES 178,808 111,554 554,994 895,289 ---------- ---------- ----------- ----------- NET INCOME 149,030 227,085 755,209 1,338,885 Preferred dividend requirement and redemption premium 8,279 25,399 33,113 70,288 ---------- ---------- ----------- ----------- EARNINGS AVAILABLE FOR COMMON STOCK $ 140,751 $ 201,686 $ 722,096 $ 1,268,597 ========== ========== =========== =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 408,982 416,655 412,542 423,692 EARNINGS PER COMMON SHARE $.34 $.48 $1.75 $2.99 DIVIDENDS DECLARED PER COMMON SHARE $.30 $.49 $1.77 $1.96 Earnings per share information for each type of the Company's operations is as follows: - - -------------------------------------------------------------------------------------------------- Three months ended December 31, Twelve months ended December 31, (in millions, ------------------------------ ------------------------------- except per share amounts) 1996 1995 1996 1995 - - -------------------------------------------------------------------------------------------------- Earnings per share: Utility (a) $ .07 $ .44 $ .65 $ 1.80 Diablo Canyon (b) .37 .03 1.18 1.16 Diversified operations (c) (.10) .01 (.08) .03 ---------- ---------- ----------- ---------- Total $ .34 $ .48 $ 1.75 $ 2.99 ========== ========== =========== ========== * The Condensed Statement Of Consolidated Income includes PG&E and its wholly-owned and controlled subsidiaries and, therefore, also represents what became PG&E Corporation on January 1, 1997, and its subsidiaries. (a) Earnings per share decreased for the twelve-month period ending December 31, 1996, due, in part, to charges of $182 million ($.26 per share) for contingencies related to gas transportation commitments and an increase in litigation costs of $67 million ($.10 per share). (b) Diablo Canyon earnings per share increased for the three-month period ended December 31, 1996, principally due to a scheduled refueling in the fourth quarter of 1995. (c) Earnings per share decreased for the three- and twelve-month periods ending December 31, 1996, due primarily to $59 million ($.09 per share) of write downs of PG&E's nonregulated investments.
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