PG&E Corporation’s (NYSE:PCG) third-quarter 2016 net income after dividends on preferred stock (also called “income available for common shareholders”) was $388 million, or $0.77 per share, as reported in accordance with generally accepted accounting principles (GAAP). GAAP earnings for the same period in 2015 were $307 million, or $0.63 per share.
GAAP results include items that management does not consider part of normal, ongoing operations (items impacting comparability), totaling $137 million pre-tax, or $0.17 per share, in the third quarter of 2016. This includes $59 million pre-tax for safety-related expenditures disallowed as part of the San Bruno penalty, $31 million pre-tax for work to clear pipeline rights-of-way, $23 million pre-tax for legal and regulatory costs related to natural gas matters and regulatory communications, $16 million pre-tax for expenses related to the Butte fire, $4 million pre-tax for fines associated with the federal criminal trial and the California Public Utilities Commission’s (CPUC) gas distribution record-keeping investigation, and $4 million pre-tax for disallowances imposed by the CPUC in connection with prohibited ex-parte communications.
“Results for the third quarter reflect PG&E’s solid operating performance and strong capital investment program. Looking ahead, we continue to see significant growth and investment opportunities in support of our commitment to deliver safe, reliable, affordable and clean energy for customers,” said PG&E Corporation Chairman and CEO Tony Earley.
Among the company’s operational highlights from the third quarter, PG&E:
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Became the nation’s first energy provider to earn the American Chemistry Council’s RC14001® management system standard for process safety.
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Replaced more than 100 poles and over 10 miles of conductor to restore power to customers impacted by the Clayton wildfire, which destroyed hundreds of structures in Lake County.
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Completed PG&E’s largest liquefied natural gas/compressed natural gas project to date in support of pipeline safety upgrades and strength testing in California’s North Valley.
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Announced the launch of new technology demonstration projects with General Electric, Solar City and others to advance integration of distributed energy resources, such as solar and battery storage.
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Inspected its one millionth gas line using the highly advanced Picarro methane detection technology.
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Earnings from Operations
On a non-GAAP basis, excluding items impacting comparability, PG&E Corporation’s earnings from operations for the third quarter of 2016 were $471 million, or $0.94 per share, compared with $412 million, or $0.84 per share, during the same period in 2015. The difference in quarter-over-quarter earnings from operations reflected additional authorized revenue collected through rates as a result of the final phase one decision in Pacific Gas and Electric Company’s 2015 Gas Transmission and Storage (GT&S) rate case and higher rate base earnings. These increases were partially offset by certain timing-related tax expenses.
Earnings Guidance
PG&E Corporation is adjusting its previously issued guidance for projected 2016 GAAP earnings to the range of $2.79 to $3.05 per share and is maintaining previously issued guidance for projected non-GAAP earnings from operations in the range of $3.65 to $3.85 per share.
PG&E Corporation is providing 2017 guidance for projected GAAP earnings in the range of $3.51 to $3.80 per share, which includes forecasts for the revenue true-up authorized in the 2015 GT&S rate case, pipeline-related costs, legal and regulatory expenses, penalties imposed by the CPUC, as well as other items. On a non-GAAP basis, the guidance range for projected 2017 earnings from operations is $3.55 to $3.75 per share.
Guidance is based on various assumptions and forecasts, including those relating to authorized revenues, future expenses, capital expenditures, rate base, equity issuances, and certain other factors. PG&E Corporation discloses historical financial results and provides guidance based on “earnings from operations” in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive of items impacting comparability. See the accompanying tables for a reconciliation of earnings from operations to consolidated income available for common shareholders for the third quarter of 2016 and for 2016 and 2017 earnings guidance.
Supplemental Financial Information
In addition to the financial information accompanying this release, presentation slides for today’s conference call with the financial community have been furnished to the Securities and Exchange Commission and are available on PG&E Corporation’s website at: http://investor.pgecorp.com/financials/quarterly-earnings-reports/default.aspx.
Conference Call with the Financial Community to Discuss Financial Results
Today’s call at 11:00 a.m., Eastern Time, is open to the public on a listen-only basis via webcast. Please visit http://investor.pgecorp.com/news-events/events-and-presentations/default.aspx for more information and instructions for accessing the webcast. The webcast call and the related materials will be available for replay through the website for at least one year. Alternatively, a toll-free replay of the conference call may be accessed shortly after the live call through November 18, 2016, by dialing (866) 415-9493. International callers may dial (205) 289-3247. For both domestic and international callers, the confirmation code 1659# will be required to access the replay.
About PG&E Corporation
PG&E Corporation (NYSE:PCG) is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000 square-mile service area in Northern and Central California. For more information, visit http://www.pgecorp.com.