Progress Energy Announces 2008 Fourth-Quarter and Full-Year Results; Affirms 2009 Earnings Guidance
February 12, 2009
RALEIGH, NC – February 12, 2009 – Highlights:
Fourth Quarter 2008
— Reports fourth-quarter GAAP earnings of $0.41 per share, compared to
$0.40 per share for the same period last year
— Reports fourth-quarter ongoing earnings of $123 million, or $0.47 per
share, compared to $104 million, or $0.40 per share, for the same
period last year
Full Year 2008
— Reports 2008 GAAP earnings of $3.19 per share, compared to $1.97 per
share in 2007, primarily driven by the divestiture of non-utility
businesses
— Reports 2008 ongoing earnings of $776 million, or $2.98 per share,
compared to $695 million, or $2.72 per share, for the same period last
year
— Affirms 2009 ongoing earnings guidance range of $2.95 to $3.15 per
share
Progress Energy (NYSE:PGN) announced fourth-quarter reported GAAP earnings of $107 million, or $0.41 per share, compared with reported GAAP earnings of $103 million, or $0.40 per share, for the same period last year. Fourth-quarter ongoing earnings were $123 million, or $0.47 per share, compared to $104 million, or $0.40 per share, last year. The significant drivers in ongoing earnings were favorable AFUDC equity, lower depreciation and amortization and higher other retail margin, which were partially offset by lower excess generation revenues and increased interest expense. (See the discussion later in this release for a reconciliation of ongoing earnings per share to reported GAAP earnings per share.)
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Full-year reported GAAP earnings were $830 million, or $3.19 per share, compared with reported GAAP earnings of $504 million, or $1.97 per share, for the same period last year. Reported GAAP earnings for 2007 reflected a loss on the divestiture of non-utility businesses. Full-year ongoing earnings were $776 million, or $2.98 per share, compared to $695 million, or $2.72 per share, last year. The company benefited from favorable AFUDC equity, an increase in net retail base rates related to the Hines Energy Complex and higher other retail margin, which were partially offset by increased interest expense and income taxes. (See the discussion later in this release for a reconciliation of ongoing earnings per share to reported GAAP earnings per share.)
Progress Energy affirmed its 2009 ongoing earnings guidance range of $2.95 to $3.15 per share. The ongoing earnings guidance excludes the impact, if any, from CVO mark-to-market adjustment, potential impairments and discontinued operations. Progress Energy is not able to provide a corresponding GAAP equivalent for the 2009 earnings guidance due to the uncertain nature and amount of these adjustments.
Despite the global financial crisis and economic slowdown, we successfully delivered on our 2008 financial goals with full-year ongoing earnings of $2.98, said Bill Johnson, chairman, president and CEO. We know that 2009 will be a challenging year for our company and our customers. We are aggressively controlling costs to effectively manage our business, maintain high levels of reliability and minimize the impact of rising costs of fuels and new energy policies on our customers.
See pages 4-6 for detailed fourth-quarter and full-year earnings variance analyses for the Progress Energy Carolinas (PEC), Progress Energy Florida (PEF) and Corporate and Other Businesses segments.
RECENT DEVELOPMENTS
— Increased quarterly dividend to 62.0 cents per share from 61.5 cents
per share, representing the 21st consecutive year of dividend growth
for the company’s common stock.
— Issued 14.375 million shares of common stock for net proceeds of
approximately $523 million in January 2009, which were used to reduce
borrowings under Progress Energy’s revolving credit facility and for
general corporate purposes.
— Filed proposal with Florida Public Service Commission (FPSC) to
decrease customer bills in 2009 by approximately 11 percent through
reduced fuel cost projections and deferred nuclear pre-construction
cost recovery.
— Filed with the FPSC a test year letter requesting a permanent base
rate increase in 2010 of approximately $475 million to $550 million
annually. This letter formally indicates PEF’s intent to initiate a
base rate proceeding and is required because the current base rate
settlement agreement will expire at the end of this year. Also, PEF
indicated that it may seek limited and/or interim base rate relief for
2009.
— Met a new peak-demand record set by PEF’s customers in early February
2009, as well as an unprecedented one-day usage record, reflecting
increasing energy needs.
— Signed a contract with Westinghouse Electric Company LLC and Stone &
Webster, Inc., a subsidiary of The Shaw Group, Inc., for the
engineering, procurement and construction of two 1,105-net megawatt
nuclear reactors for a proposed advanced-design nuclear power plant in
Levy County, Fla. (Levy).
— Received final orders from the FPSC for all of PEF’s proposed 2009
recovery for fuel, environmental and energy-efficiency costs.
— Announced agreement with the Florida Department of Environmental
Protection (FDEP) to retire the two oldest coal-fired units at the
Crystal River Energy Complex in Citrus County (approximately 866
megawatts) if the Levy County nuclear plant is built. The coal units
would be retired after the second new nuclear unit at Levy completes
its first fuel cycle, which the company estimates to be around 2020.
— Received recommendation from the FDEP staff to receive a site
certification for Levy.
— Received notice that the U.S. Court of Appeals for the D.C. Circuit
remanded the 2005 Clean Air Interstate Rule (CAIR) without vacatur to
the Environmental Protection Agency (EPA), which leaves the existing
rule in effect while the EPA remedies CAIR’s existing flaws, as
identified by the court.
— Submitted Crystal River Nuclear Plant’s (CR 3) license-renewal
application to the U.S. Nuclear Regulatory Commission (NRC),
requesting 20 additional years of operation through 2036, with a
decision expected in 2011.
— Received approval from the NRC for the renewal of the Harris Nuclear
&nbs
p; Plant’s operating license for 20 additional years through 2046.
— Signed a contract for PEC to continue to supply power to the N.C.
Electric Membership Corporation (NCEMC) for a 20-year period beginning
in 2013, increasing supply up to a total of approximately 2,750
megawatts by the end of the contract term. Current contracts from PEC
supply NCEMC with approximately 1,245 megawatts.
— Received from the North Carolina Utilities Commission (NCUC) a
certificate of environmental compatibility and public convenience and
necessity to construct approximately 64 miles of 230-kilovolt
transmission line in eastern North Carolina.
— Met a new peak-demand record set by PEC’s customers in Western N.C. in
January 2009.
— Received final order from the NCUC to spread the recovery of PEC’s
deferred fuel and fuel-related cost balance over three years with
interest.
— Made a number of announcements relating to energy conservation,
demand-side management (DSM) / energy efficiency (EE), and renewable
energy:
— Received approval from the NCUC for recovery of costs associated
with compliance with renewable energy portfolio standards in North
Carolina.
— Entered into a settlement agreement with several interveners,
which was filed with the NCUC, to recover all DSM/EE program and
measure costs with a potential return, net lost revenues for three
years and performance incentives.
— Filed with South Carolina Public Service Commission a settlement
agreement with interveners to recover all DSM/EE program and
measure costs, net lost revenues for three years and performance
incentives.
— Filed three new energy-efficiency programs with the NCUC,
including a residential solar water heating program.
— Partnered with Ford Motor Company and Electric Power Research
Institute to test a Ford Escape plug-in hybrid vehicle (PHEV) as
part of a national PHEV demonstration program.
— Successfully completed negotiations on a new three-year contract with
the International Brotherhood of Electrical Workers, which represents
approximately 2,000 craft and technical employees at PEF.
— Progress Energy’s two utilities achieved top-quartile ranking in the
latest business customer satisfaction survey from J.D. Power &
Associates. PEC was ranked highest in the competitive South region.
Press releases regarding various announcements are available on the company’s Web site at www.progress-energy.com/aboutus/news.
2008 BUSINESS HIGHLIGHTS
Below are the fourth-quarter and full-year 2008 earnings variance analyses for the company’s business units. See the reconciliation table on pages 7-8 and pages S-1 and S-2 of the supplemental data for a reconciliation of ongoing earnings per share to reported GAAP earnings per share. Also see the attached supplemental data schedules for additional information on PEC and PEF electric revenues, energy sales, energy supply, weather impacts and other information.
QUARTER-OVER-QUARTER ONGOING EPS VARIANCE ANALYSIS
Progress Energy Carolinas
— Reported fourth-quarter ongoing earnings per share of $0.40, compared
with $0.34 for the same period last year; reported GAAP earnings per
share of $0.40, compared with $0.33 for the same period last year
— Reported primary quarter-over-quarter ongoing earnings per share
favorability of:
— $0.06 depreciation and amortization primarily due to lower
depreciation expense associated with PEC’s accelerated cost
recovery program for nuclear generating assets, lower GridSouth
amortization and lower Clean Smokestacks Act amortization
— $0.03 other retail margin primarily due to the impact of the
comprehensive energy bill implementation and the expiration of a
power buyback agreement, partially offset by higher purchased
power expense resulting from increased economical purchases in
2008
— $0.02 weather
— $0.02 AFUDC equity related to increased eligible construction
project costs
— $0.02 income taxes primarily due to changes in tax estimates,
partially offset by lower deduction for domestic production
activities
— Reported primary quarter-over-quarter ongoing earnings per share
unfavorability of:
— $(0.06) wholesale revenues primarily due to lower excess
generation revenues driven by unfavorable market dynamics due to
higher relative fuel costs and lower revenues related to capacity
contracts with two major customers
— $(0.03) other
— 21,000 net increase in the average number of customers for the three
months ended Dec. 31, 2008, compared to the same period in 2007
Progress Energy Florida
— Reported fourth-quarter ongoing earnings per share of $0.22, compared
with $0.20 for the same period last year; reported GAAP earnings per
share of $0.19, compared with $0.19 for the same period last year
— Reported primary quarter-over-quarter ongoing earnings per share
favorability of:
— $0.06 AFUDC equity related to increased eligible construction
project costs
&nbs
p; — $0.03 net retail base rate increase related to the Hines Energy
Complex
— $0.03 other retail margin primarily due to returns on increased
environmental expenditures and the impact of nuclear cost recovery
approved in 2008
— $0.03 O&M primarily due to lower employee benefit costs and lower
sales and use tax audit adjustment
— $0.02 wholesale revenues primarily due to several new and amended
contracts
— Reported primary quarter-over-quarter ongoing earnings per share
unfavorability of:
— $(0.04) other primarily due to investment losses of certain
employee benefit trusts resulting from the decline in market
conditions
— $(0.04) income taxes primarily due to the closure of certain
federal tax years and positions in the prior year and the
accelerated amortization of tax-related regulatory assets
— $(0.03) retail growth and usage
— $(0.03) interest expense primarily due to higher average debt
outstanding, partially offset by favorable AFUDC debt related to
increased eligible construction project costs
— $(0.01) weather
— 5,000 net decrease in the average number of customers for the three
months ended Dec. 31, 2008, compared to the same period in 2007
Corporate and Other Businesses (includes primarily Holding Company Debt)
— Reported fourth-quarter ongoing expenses of $0.15 per share, compared
with expenses of $0.14 per share for the same period last year;
reported GAAP expenses of $0.18 per share, compared with expenses of
$0.12 per share for the same period last year
YEAR-OVER-YEAR ONGOING EPS VARIANCE ANALYSIS
Progress Energy Carolinas
— Reported full-year ongoing earnings and reported GAAP earnings per
share of $2.04, compared with $1.95 for the same period last year
— Reported primary year-over-year ongoing earnings per share
favorability of:
— $0.11 other retail margin primarily due to the impact of the
comprehensive energy bill implementation and the expiration of a
power buyback agreement, partially offset by higher purchased
power expense resulting from increased economical purchases in
2008
— $0.08 retail growth and usage
— $0.07 AFUDC equity primarily related to eligibility of certain
Clean Smokestacks Act compliance and other increased eligible
construction project costs
— $0.02 O&M primarily due to the impact of the comprehensive energy
bill implementation
— Reported primary year-over-year ongoing earnings per share
unfavorability of:
— $(0.09) wholesale revenues primarily due to lower excess
generation revenues driven by unfavorable market dynamics due to
higher relative fuel costs and lower revenues related to capacity
contracts with two major customers
— $(0.07) weather
— $(0.03) other primarily due to lower interest income resulting
from lower eligible deferred fuel and temporary investment
balances
— 24,000 net increase in the average number of customers for 2008,
compared to 2007
Progress Energy Florida
— Reported full-year ongoing earnings and reported GAAP earnings per
share of $1.47, compared with $1.23 for the same period last year
— Reported primary year-over-year ongoing earnings per share
favorability of:
— $0.21 AFUDC equity related to increased eligible construction
project costs
— $0.13 net retail base rate increase related to the Hines Energy
Complex
— $0.11 wholesale revenues primarily due to several new and amended
contracts
— $0.04 other retail margin primarily due to returns on increased
environmental expenditures and increased rental revenue on
electric property
— $0.04 O&M primarily due to lower employee benefit costs and lower
sales and use tax audit adjustment, partially offset by higher
outage and maintenance costs
— $0.01 other
— Reported primary year-over-year ongoing earnings per share
unfavorability of:
— $(0.09) interest expense primarily due to higher average debt
outstanding, partially offset by favorable AFUDC debt related to
increased eligible construction project costs and an interest
benefit resulting from the current year resolution of tax matters
— $(0.07) retail growth and usage
— $(0.06) income taxes primarily due to the closure of certain
federal tax years and positions in the prior year, the accelerated
amortization of tax-related regulatory assets and lower deduction
for domestic production activities
— $(0.04) other primaril
y due to investment losses of certain
employee benefit trusts resulting from the decline in market
conditions
— $(0.03) depreciation primarily due to the impact of higher
depreciable base, partially offset by a write-off in 2007 of
leasehold improvements primarily related to vacated office space
— $(0.01) weather
— No net change in the average number of customers for 2008,
compared to 2007
Corporate and Other Businesses (includes primarily Holding Company Debt)
— Reported full-year ongoing expenses of $0.53 per share, compared with
expenses of $0.46 per share for the same period last year; reported
GAAP expenses of $0.32 per share, compared with expenses of $1.21 per
share for the same period last year
— Reported primary year-over-year ongoing expenses per share
unfavorability of:
— $(0.08) income taxes primarily due to a prior-year benefit from
the closure of certain federal tax years and positions related to
divested subsidiaries and changes in tax estimates
— $(0.04) interest expense primarily due to a decrease in interest
allocated to discontinued operations and a prior-year benefit from
the closure of certain federal tax years and positions primarily
related to divested subsidiaries
— Reported primary year-over-year ongoing expenses per share
favorability of:
— $0.05 other primarily due to decreased corporate overhead
resulting from divestitures and decreased legal expenses,
partially offset by investment losses of certain employee benefit
trusts resulting from the decline in market conditions
ONGOING EARNINGS ADJUSTMENTS
Progress Energy’s management uses ongoing earnings per share to evaluate the operations of the company and to establish goals for management and employees. Management believes this presentation is appropriate and enables investors to more accurately compare the company’s ongoing financial performance over the periods presented. Ongoing earnings as presented here may not be comparable to similarly titled measures used by other companies. The following table provides a reconciliation of ongoing earnings per share to reported GAAP earnings per share.
Progress Energy, Inc.
Reconciliation of Ongoing Earnings per Share to Reported GAAP
Earnings per Share
Three months ended Years ended
—————— ———–
December 31 December 31
———– ———–
2008 2007* 2008 2007
—- —– —- —-
Ongoing earnings per share $0.47 $0.40 $2.98 $2.72
Tax levelization (0.03) (0.03) – –
Discontinued operations (0.03) 0.03 0.22 (0.74)
CVO mark-to-market 0.01 – – (0.01)
Valuation allowance (0.01) – (0.01) –
Reported GAAP earnings per
share $0.41 $0.40 $3.19 $1.97
Shares outstanding (millions) 262 257 260 256
* Previously reported fourth quarter 2007 earnings components have been
restated to reflect impact of intraperiod tax allocation on discontinued
operations. See page S-1 of the supplemental data for information
regarding 2007’s earnings.
Reconciling adjustments from ongoing earnings to GAAP earnings are as follows:
Tax Levelization
Generally accepted accounting principles require companies to apply an effective t
ax rate to interim periods that is consistent with a company’s estimated annual tax rate. The company projects the effective tax rate for the year and then, based upon projected operating income for each quarter, raises or lowers the tax expense recorded in that quarter to reflect the projected tax rate. The resulting tax adjustment decreased earnings per share by $0.03 for the quarter and for the same period last year, and has no impact on the company’s annual earnings. Because this adjustment varies by quarter but has no impact on annual earnings, management believes this adjustment is not representative of the company’s ongoing quarterly earnings.
Discontinued Operations
The company has reduced its business risk by exiting nonregulated businesses to focus on the core operations of the utilities. The discontinued operations of these nonregulated businesses decreased earnings per share by $0.03 for the quarter and increased earnings per share $0.03 for the same period last year. See page S-4 of the supplemental data for further information on the impact of discontinued operations. Due to disposition of these assets, management does not view this activity as representative of the ongoing operations of the company.
Contingent Value Obligation (CVO) Mark-to-Market
In connection with the acquisition of Florida Progress Corporation, Progress Energy issued 98.6 million CVOs. Each CVO represents the right of the holder to receive contingent payments based on after-tax cash flows above certain levels of four synthetic fuels facilities purchased by subsidiaries of Florida Progress Corporation in October 1999. The CVO liability is valued at fair value, and unrealized gains and losses from changes in fair value are recognized in earnings each quarter. The CVO mark-to-market increased earnings per share by $0.01 for the quarter and had no impact on earnings per share for the same period last year. Progress Energy is unable to predict the changes in the fair value of the CVOs, and management does not consider the adjustment to be a component of ongoing earnings.
Valuation Allowance Related to Net Operating Loss Carry Forward
Progress Energy previously recorded a deferred tax asset for a state net operating loss carry forward upon the sale of Progress Energy Ventures Inc.’s nonregulated generation facilities and energy marketing and trading operations. In the fourth quarter of 2008, the company recorded an additional deferred tax asset related to the state net operating loss carry forward due to a change in estimate based on 2007 tax return filings. The company also evaluated the total state net operating loss carry forward for potential impairment and partially impaired it by recording a valuation allowance, which more than offset the change in estimate. The net impact resulted in decreased earnings per share for the quarter by $0.01. Management does not believe this net valuation allowance is representative of the ongoing operations of the company.
* * * *
Progress Energy’s conference call with the investment community will be held February 12, 2009, at 10 a.m. ET (7 a.m. PT). Investors, media and the public may listen to the conference call by dialing 913-312-1447, confirmation code 2870464. If you encounter problems, please contact Investor Relations at 919-546-6057. A playback of the call will be available from 1 p.m. ET February 12 through midnight February 26. To listen to the recorded call, dial 719-457-0820 and enter confirmation code 2870464.
A webcast of the live conference call will be available at www.progress-energy.com/webcast. The webcast will be available in Windows Media format. The webcast will be archived on the site for at least 30 days following the call for those unable to listen in real time. The webcast will include audio of the conference call and a slide presentation referred to by management during the call. The slide presentation will be available for download at beginning at 9:30 a.m. ET today at www.progress-energy.com/webcast.
Progress Energy, headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 21,000 megawatts of generation capacity and $9 billion in annual revenues. Progress Energy includes two major electric utilities that serve approximately 3.1 million customers in the Carolinas and Florida. The company has earned the Edison Electric Institute’s Edison Award, the industry’s highest honor, in recognition of its operational excellence, and was the first utility to receive the prestigious J.D. Power and Associates Founder’s Award for customer service. The company is pursuing a balanced strategy for a secure energy future, which includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. Progress Energy celebrated a century of service in 2008. For more information about Progress Energy, visit the company’s Web site at www.progress-energy.com.
Caution Regarding Forward-Looking Information:
This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The matters discussed in this document involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.
Examples of factors that you should consider with respect to any forward-looking statements made throughout this document include, but are not limited to, the following: the impact of fluid and complex laws and regulations, including those relating to the environment and the Energy Policy Act of 2005; the ability to meet the anticipated future need for additional baseload generation and associated transmission facilities in our regulated service territories and the accompanying regulatory and financial risks; the financial resources and capital needed to comply with environmental laws and renewable energy portfolio standards and our ability to recover related eligible costs under cost-recovery clauses or base rates; our ability to meet current and future renewable energy requirements; the inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, regulatory and financial risks; the impact on our facilities and businesses from a terrorist attack; weather and drought conditions that directly influence the production, delivery and demand for electricity; recurring seasonal fluctuations in demand for electricity; the ability to recover in a timely manner, if at all, costs associated with future significant weather events through the regulatory process; economic fluctuations and the corresponding impact on our customers, including downturns in the housing and consumer credit markets; fluctuations in the price of energy commodities and purchased power and our ability to recover such costs through the regulatory process; our ability to control costs, including O&M and large construction projects; the ability of our subsidiaries to pay upstream dividends or distributions to Progress Energy; the length and severity of the current financial market distress that began in September 2008; the ability to successfully access capital markets on favorable terms; the stability of commercial credit markets and our access to short-term and long-term credit; the impact that increases in leverage may have on us; our ability to maintain our current credit ratings and the impact on our financial condition and ability to meet our cash and other financial obligations in the event our credit ratings are downgraded; our ability to fully utilize tax credits generated from the previous production and sale of qualifying synthetic fuels under Internal Revenue Code Section 29/45K; the investment perfo
rmance of our nuclear decommissioning trust funds; the investment performance of the assets of our pension and benefit plans and its impact on future funding requirements; the outcome of any ongoing or future litigation or similar disputes and the impact of any such outcome or related settlements; and unanticipated changes in operating expenses and capital expenditures. Many of these risks similarly impact our nonreporting subsidiaries. These and other risk factors are detailed from time to time in our filings with the United States Securities and Exchange Commission. All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor can management assess the effect of each such factor on us.
Any forward-looking statement is based on information current as of the date of this document and speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made.
PROGRESS ENERGY, INC.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2008
UNAUDITED CONSOLIDATED STATEMENTS of INCOME
Three months Years
ended ended
December 31, December 31,
(in millions except per share
data) 2008 2007 2008 2007
Operating revenues $2,161 $2,202 $9,167 $9,153
Operating expenses
Fuel used in electric generation 759 764 3,021 3,145
Purchased power 287 290 1,299 1,184
Operation and maintenance 450 505 1,820 1,842
Depreciation, amortization and
accretion 220 240 839 905
Taxes other than on income 121 117 508 501
Other 3 2 (3) 30
Total operating expenses 1,840 1,918 7,484 7,607
Operating income 321 284 1,683 1,546
Other income (expense)
Interest income 4 14 24 34
Allowance for equity funds used
during construction 38 17 122 51
Other, net (8) (1) (17) (7)
Total other income, net 34 30 129 78
Interest charges
Interest charges 186 162 679 605
Allowance for borrowed funds
used during construction (13) (5) (40) (17)
Total interest charges, net 173 157 639 588
Income from continuing
operations before income tax
and minority interest 182 157 1,173 1,036
Income tax expense 66 61 395 334
Minority interest in
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sp; subsidiaries’ income, net of
tax – (1) (5) (9)
Income from continuing
operations 116 95 773 693
Discontinued operations, net of
tax (9) 8 57 (189)
Net income $107 $103 $830 $504
Average common shares
outstanding – basic 262 257 260 256
Basic earnings per common share
Income from continuing
operations $0.44 $0.37 $2.97 $2.71
Discontinued operations, net of
tax (0.03) 0.03 0.22 (0.74)
Net income $0.41 $0.40 $3.19 $1.97
Diluted earnings per common
share
Income from continuing
operations $0.44 $0.37 $2.96 $2.70
Discontinued operations, net of
tax (0.03) 0.03 0.22 (0.74)
Net income $0.41 $0.40 $3.18 $1.96
Dividends declared per common
share $0.620 $0.615 $2.465 $2.445
The Unaudited Consolidated Financial Statements should be read in
conjunction with the Company’s Annual Report to shareholders. These
statements have been prepared for the purpose of providing information
concerning the Company and not in connection with any sale, offer for
sale, or solicitation of an offer to buy any securities.
PROGRESS ENERGY, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in millions) December 31, December 31,
2008 2007
ASSETS
Utility plant
Utility plant in service $26,326 $25,327
Accumulated depreciation (11,298) (10,895)
Utility plant in service, net 15,028 14,432
Held for future use 38 37
Construction work in progress 2,745 1,765
Nuclear fuel, net of amortization 482 371
Total utility plant, net 18,293 16,605
Current assets
Cash and cash equivalents 180 255
Receivables, net 912 1,167
Inventory 1,239 994
Regulatory assets 533 154
Derivative collateral posted &nb
sp; 353 –
Income taxes receivable 194 24
Assets to be divested – 52
Prepayments and other current assets 139 183
Total current assets 3,550 2,829
Deferred debits and other assets
Regulatory assets 2,567 946
Nuclear decommissioning trust funds 1,089 1,384
Miscellaneous other property and
investments 446 448
Goodwill 3,655 3,655
Derivative assets 1 119
Other assets and deferred debits 302 379
Total deferred debits and other assets 8,060 6,931
Total assets $29,903 $26,365
Capitalization and Liabilities
Common stock equity
Common stock without par value, 500
million shares authorized, 264 million
and 260 million shares issued and
outstanding, respectively $6,206 $6,028
Unearned ESOP shares (1 million and 2
million shares, respectively) (25) (37)
Accumulated other comprehensive loss (116) (34)
Retained earnings 2,649 2,465
Total common stock equity 8,714 8,422
Preferred stock of subsidiaries – not
subject to mandatory redemption 93 93
Minority interest 6 84
Long-term debt, affiliate 272 271
Long-term debt, net 10,387 8,466
Total capitalization 19,472 17,336
Current liabilities
Current portion of long-term debt – 877
Short-term debt 1,050 201
Accounts payable 912 &
