Membership Interests

9 Months Ended

Sep. 30, 2022

7. MEMBERSHIP INTERESTS

Contributions

We received $106 million in cash capital contributions from our members on October 24, 2022. In the nine months ended September 30, 2022, we received the following cash capital contributions from our members:


Receipt Date	Amount
February 17, 2022	$	106
April 26, 2022	$	106
July 26, 2022	$	106

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 September 30, 2022, our regulatory capitalization was 53.9% debt to 46.1% equity and as a result we had $1.318 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 October 25, 2022, our board of directors declared a cash distribution of $106 million, which was paid to our members on October 26, 2022. In the nine months ended September 30, 2022, our board of directors declared, and we paid, the following cash distributions to our members:


Declaration Date	Payment Date		Amount
February 18, 2022	February 18, 2022	$	106
April 27, 2022	April 28, 2022	$	106
July 27, 2022	July 28, 2022	$	106

Membership Interests

The following tables present the changes to membership interests during the three and nine months ended September 30, 2022 and 2021, net of tax:


	Capital Accounts		Accumulated Other Comprehensive Income (Loss)		Total Membership Interests
Balance at June 30, 2022	$	13,142	$	(128)	$	13,014
Net income		318		-		318
Capital contributions		106		-		106
Distributions		(106)		-		(106)
Net effects of cash flow hedges		-		1		1
Defined benefit pension plans		-		1		1
Balance at September 30, 2022	$	13,460	$	(126)	$	13,334


Balance at June 30, 2021	$	12,353	$	(146)	$	12,207
Net income		258		-		258
Capital contributions		62		-		62
Distributions		(546)		-		(546)
Net effects of cash flow hedges		-		1		1
Defined benefit pension plans		-		1		1
Balance at September 30, 2021	$	12,127	$	(144)	$	11,983


	Capital Accounts		Accumulated Other Comprehensive Income (Loss)		Total Membership Interests
Balance at December 31, 2021	$	12,719	$	(131)	$	12,588
Net income		741		-		741
Capital contributions		318		-		318
Distributions		(318)		-		(318)
Net effects of cash flow hedges		-		2		2
Defined benefit pension plans		-		3		3
Balance at September 30, 2022	$	13,460	$	(126)	$	13,334


Balance at December 31, 2020	$	12,083	$	(151)	$	11,932
Net income		595		-		595
Capital contributions		188		-		188
Distributions		(739)		-		(739)
Net effects of cash flow hedges		-		2		2
Defined benefit pension plans		-		5		5
Balance at September 30, 2021	$	12,127	$	(144)	$	11,983

Accumulated Other Comprehensive Income (Loss) (AOCI)

The following table presents the changes to AOCI for the nine months ended September 30, 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		-		3		3
Cash flow hedge amounts reclassified from AOCI and reported in interest expense and related charges (net of tax expense of $0)		2		-		2
Balance at September 30, 2022	$	(34)	$	(92)	$	(126)

Balance at December 31, 2020	$	(39)	$	(112)	$	(151)
Defined benefit pension plans		-		5		5
Cash flow hedge amounts reclassified from AOCI and reported in interest expense and related charges (net of tax expense of $0)		2		-		2
Balance at September 30, 2021	$	(37)	$	(107)	$	(144)