Membership Interests

3 Months Ended

Mar. 31, 2022

7. MEMBERSHIP INTERESTS

Contributions

We received cash capital contributions from our members on February 17, 2022 and April 26, 2022 each totaling $106 million.

Distributions

The Sempra Order and our Limited Liability Company Agreement set forth various restrictions on distributions to our members. Among those restrictions is the commitment that we will make no distributions (other than contractual tax payments) to our members that would cause us to exceed the PUCT’s authorized debt-to-equity ratio. Our current authorized regulatory capital structure is 57.5% debt to 42.5% equity. The distribution restrictions also include the ability of a majority of our Disinterested Directors, or either of the two member directors designated by Texas Transmission, to limit distributions to the extent each determines it is necessary to meet expected future requirements of Oncor (including continuing compliance with the PUCT debt-to-equity ratio commitment). At March 31, 2022, our regulatory capitalization was 54.4% debt to 45.6% equity and as a result we had $1.074 billion available to distribute to our members.

The PUCT has the authority to determine what types of debt and equity are included in a utility’s debt-to-equity ratio. For purposes of this ratio, debt is calculated as long-term debt including any finance leases plus unamortized gains on reacquired debt less unamortized issuance expenses, premiums and losses on reacquired debt. Equity is calculated as membership interests determined in accordance with GAAP, excluding accumulated other comprehensive loss and the effects of acquisition accounting from a 2007 transaction.

On February 18, 2022, our board of directors declared a cash distribution of $106 million, which was paid to our members on February 18, 2022. On April 27, 2022, our board of directors declared a cash distribution of $106 million, which was paid to our members on April 28, 2022.

Membership Interests

The following tables present the changes to membership interests during the three months ended March 31, 2022 and 2021, net of tax:


	Capital Accounts		Accumulated Other Comprehensive Income (Loss)		Total Membership Interests
Balance at December 31, 2021	$	12,719	$	(131)	$	12,588
Net income		194		-		194
Capital contributions		106		-		106
Distributions		(106)		-		(106)
Net effects of cash flow hedges		-		1		1
Defined benefit pension plans		-		1		1
Balance at March 31, 2022	$	12,913	$	(129)	$	12,784


Balance at December 31, 2020	$	12,083	$	(151)	$	11,932
Net income		168		-		168
Capital contributions		63		-		63
Distributions		(96)		-		(96)
Net effects of cash flow hedges		-		1		1
Defined benefit pension plans		-		1		1
Balance at March 31, 2021	$	12,218	$	(149)	$	12,069

Accumulated Other Comprehensive Income (Loss) (AOCI)

The following table presents the changes to AOCI for the three months ended March 31, 2022 and 2021, net of tax:


	Cash Flow Hedges – Interest Rate Swaps		Defined Benefit Pension and OPEB Plans		Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2021	$	(36)	$	(95)	$	(131)
Defined benefit pension plans		-		1		1
Cash flow hedge amounts reclassified from AOCI and reported in interest expense and related charges (net of tax expense of $0)		1		-		1
Balance at March 31, 2022	$	(35)	$	(94)	$	(129)

Balance at December 31, 2020	$	(39)	$	(112)	$	(151)
Defined benefit pension plans		-		1		1
Cash flow hedge amounts reclassified from AOCI and reported in interest expense and related charges (net of tax expense of $0)		1		-		1
Balance at March 31, 2021	$	(38)	$	(111)	$	(149)