PG&E Corporation’s (NYSE: PCG) first-quarter 2017 net income after dividends on preferred stock (also called “income available for common shareholders”) was $576 million or $1.13 per share, as reported in accordance with generally accepted accounting principles (GAAP). This compares with $107 million, or $0.22 per share, for the first quarter of 2016, during which PG&E Corporation recorded expenses of $381 million pre-tax related to the Butte fire, and disallowed capital charges of $87 million pre-tax as imposed by the California Public Utilities Commission (CPUC) in connection with the San Bruno gas pipeline accident.
GAAP results include items that management does not consider part of normal, ongoing operations (items impacting comparability), which totaled $55 million of pre-tax earnings, or $0.07 per share, for the quarter. This was driven by revenue recorded in the first quarter in excess of the 2017 authorized revenue requirement in Pacific Gas and Electric Company’s 2015 Gas Transmission and Storage (GT&S) rate case, including the final component of under-collected revenues retroactive to January 1, 2015. This item was partially offset by disallowances ordered by the CPUC in the GT&S rate case, fines associated with the settlement submitted to the CPUC in connection with its investigation into compliance with ex parte rules, costs for work to clear pipeline rights-of-way, and legal and regulatory costs related to the Butte fire, gas matters and regulatory communications.
“Our results for the quarter reflect PG&E’s strong focus on making the investments in our system that will drive further progress on safety, reliability and achieving California’s clean energy goals, while running the business cost effectively and affordably for customers,” said PG&E Corporation CEO and President Geisha Williams.
First-quarter highlights included:
- Pacific Gas and Electric Company won the Edison Electric Institute’s 2017 award for Outstanding National Key Accounts Customer Service and received the second-highest ever customer satisfaction rating in its annual survey of gas transmission customers.
- Despite record-setting heavy wind and rain, investments in advanced grid automation and self-healing grid technology, which are ongoing, helped avoid more than 50 million customer outage minutes during the first quarter alone.
- In support of keeping customer bills affordable, Pacific Gas and Electric Company implemented a series of measures designed to achieve $300 million in cost efficiencies in 2017. These projected efficiencies are reflected in earnings guidance for 2017.
Earnings from operations
On a non-GAAP basis, excluding items impacting comparability, PG&E Corporation’s earnings from operations in the first quarter of 2017 were $544 million, or $1.06 per share, compared with $407 million, or $0.82 per share, in the first quarter of 2016.
The increase in quarter-over-quarter earnings from operations reflected additional authorized revenue as a result of the phase-two decision in the 2015 GT&S rate case issued December 1, 2016, the incremental tax benefit associated with share-based compensation awards, and growth in rate base earnings.
PG&E Corporation is adjusting 2017 guidance for projected GAAP earnings in the range of $3.57 to $3.82 per share. On a non-GAAP basis, the guidance range for projected 2017 earnings from operations remains unchanged at $3.55 to $3.75 per share.
Guidance is based on various assumptions and forecasts, including those relating to future authorized revenues, 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.
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 (SEC) and are available on PG&E Corporation’s website at: http://investor.pgecorp.com/financials/quarterly-earnings-reports/default.aspx.
Email Currents at Currents@pge.com.