Balance sheet

At the end of 3Q10, cash and cash equivalents were $347.0 million versus $700.0 million in 3Q09. Accounts receivable were $3,645.0 million versus $3,298.0 million in 3Q09. Net property, plant and equipment were $30,675.0 million versus $28,184.0 million in 3Q09. Accounts payable were $2,424.0 million versus $2,679.0 million in 3Q09. Long-term debt was $10,727.0 million versus $9,839.0 million in 3Q09. Shareholders’ equity was $11,023.0 million versus $10,162.0 million in 3Q09.

The company expects to issue up to $400.0 million of equity in 2011. It also expects to issue an additional $200.0 million in 2011 via the Dividend Reinvestment Plan (DRIP) program. The company would pre-fund a portion of their 2011 equity needs by the end of 2010 in order to maintain the equity ratio at the allowed level. The actual issuance depends on whether the Manzana wind projects get approved by the Commission.

Dividend Update

On January 15, 2011, the company is expected to pay a quarterly dividend of $0.455 to shareholders of record as of December 31, 2010, as announced by the Board of Directors on December 15, 2010.

Acquisition of Wind Project

The company announced that it plans to acquire the Manzana Wind Project from Iberdrola Renewables subject to CPUC approval. The company intends to request for CPUC approval before the end of 2010, and on a positive decision, it expects to make payments to the developer, incurring capital cost of approximately $280.0 million by 2010 end.
 

• Outcome of Regulatory Proceedings: The company’s revenue and cost that it is authorized to recover from customers are primarily determined through regulatory proceedings.
• Commodity Price Fluctuations: The fluctuations in gas and electricity prices may hurt the profitability of the company.
• Capital Intensive: The capital-intensive nature of the utilities industry creates liquidity risk.
• Gas Explosion: Key risks include potential liability costs associated with the pipeline explosion that may not be covered by insurance and ensuing less favorable than expected rate case outcomes.