- Recorded GAAP losses were $3.06 per share for the third quarter
of 2019, compared to earnings of $1.09 per share for the same
period in 2018.
- Non-GAAP earnings from operations were $1.11 per share for the
third quarter of 2019, compared to $1.13 per share for the same
period in 2018.
PG&E Corporation (NYSE: PCG) recorded third-quarter 2019 net
losses attributable to common shareholders of $1.6 billion, or
$3.06 per share, as reported in accordance with generally accepted
accounting principles (GAAP). This compares with net income
available for common shareholders of $564 million, or $1.09 per
share, for the third quarter of 2018.
GAAP results include items that management does not consider
part of normal, ongoing operations (items impacting comparability,
or "IIC"), which totaled $2.2 billion after-tax, or $4.17 per
share, for the quarter. This was primarily driven by an additional
$2.5 billion pre-tax charge for estimated third-party claims
related to the 2017 Northern California wildfires and the 2018 Camp
fire. This additional charge reflects the previously announced
agreement with insurance subrogation claimants.
IIC for the quarter also include a charge for capital
disallowances in the 2019 Gas Transmission and Storage (GT&S)
rate case; enhanced and accelerated electric asset inspection
costs; clean-up and repair costs related to the 2018 Camp fire;
legal and other costs related to the 2017 Northern California
wildfires and the 2018 Camp fire; and legal and other costs,
partially offset by interest income, related to PG&E
Corporation’s and Pacific Gas and Electric Company’s (Utility)
reorganization cases under Chapter 11 of the U.S. Bankruptcy Code
(Chapter 11).
“We continue to make progress in our efforts to move
expeditiously through the Chapter 11 process, and remain focused on
a fair and prompt resolution of wildfire victims’ claims, while
continuing to support California’s clean energy future. We also
remain dedicated to the safe operation of our gas and electric
systems, and in particular, to reducing the risk of wildfire in our
communities. This work has involved in recent weeks shutting off
power for safety in anticipation of dangerous weather conditions—a
decision that we know causes hardship but is done solely in the
interest of public safety,” said PG&E Corporation Chief
Executive Officer and President Bill Johnson.
Progress Report
PG&E welcomes the engagement of the Governor’s Office
through discussions that began this week toward resolving the
Chapter 11 process and defining the future structure of the
company.
Over the past several months, the company has made significant
headway on operational improvements, wildfire victim compensation,
and the Chapter 11 process:
- The Utility Board of Directors named Andrew M. Vesey as Chief
Executive Officer and President of Pacific Gas and Electric
Company, with responsibility for all aspects of Utility
operations.
- The Utility received its safety certificate from the California
Public Utilities Commission (CPUC), and the Bankruptcy Court
approved PG&E’s participation in the statewide wildfire fund
established by California Assembly Bill (AB) 1054. The Utility
expects that its initial contribution to the wildfire fund would be
approximately $4.8 billion, and that its annual contributions
thereafter would be approximately $193 million. The initial
contribution would be payable upon the company’s emergence from
Chapter 11 reorganization.
- PG&E announced an $11 billion settlement to resolve all
insurance subrogation claims arising from the 2017 Northern
California wildfires and 2018 Camp fire.
- PG&E filed a Plan of Reorganization that will meet the
requirements of AB 1054 by satisfying wildfire claims, in full, in
the amount reached through settlement or as estimated by the
court—consistent with the terms of AB 1054 that it be neutral, on
average, for the Utility’s customers—along with the assumption of
all power-purchase agreements and community-choice aggregation
servicing agreements; the assumption of all collective bargaining
agreements; and certain other terms. PG&E remains committed to
working with the individual wildfire claimants to fairly and
reasonably resolve their claims and will continue to work to do
so.
Non-GAAP Earnings from Operations
PG&E Corporation’s non-GAAP earnings from operations, which
exclude IIC, were $590 million, or $1.11 per share, in the third
quarter of 2019, compared with $582 million, or $1.13 per share,
during the same period in 2018.
The decrease in quarter-over-quarter non-GAAP earnings from
operations per share was primarily driven by 2019 vegetation
management costs, the resolution of 2018 regulatory items, and the
increase in shares outstanding, partially offset by growth in rate
base earnings.
PG&E Corporation discloses “non-GAAP earnings from
operations,” which is a non-GAAP financial measure, 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 non-GAAP earnings from operations to
consolidated loss attributable to common shareholders.
IIC Guidance
At this time, PG&E Corporation is not providing guidance for
2019 GAAP earnings and non-GAAP earnings from operations due to the
continuing uncertainty related to the 2017 Northern California
wildfires, the 2018 Camp fire, the 2019 Kincade fire, the Chapter
11 proceedings, and legislative and regulatory reforms. PG&E
Corporation is providing 2019 IIC guidance of $6.2 billion to $6.3
billion after-tax for costs related to the 2017 Northern California
wildfires, the 2018 Camp fire, enhanced and accelerated electric
asset inspections, Chapter 11-related matters, 2019 GT&S
capital disallowance, and the Public Safety Power Shutoff customer
bill credit. See the accompanying tables for additional
information.
IIC guidance is based on various assumptions and forecasts
related to future expenses and certain other factors.
Supplemental Financial Information
In addition to the financial information accompanying this
release, presentation slides 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.
Public Dissemination of Certain Information
PG&E Corporation and the Utility routinely provide links to
the Utility’s principal regulatory proceedings with the CPUC and
the Federal Energy Regulatory Commission (FERC) at
http://investor.pgecorp.com, under the “Regulatory Filings” tab, so
that such filings are available to investors upon filing with the
relevant agency. PG&E Corporation and the Utility also
routinely post, or provide direct links to, presentations,
documents, and other information that may be of interest to
investors at http://investor.pgecorp.com, under the “Chapter 11,”
“Wildfire Updates” and “News & Events: Events &
Presentations” tabs, respectively, in order to publicly disseminate
such information. It is possible that any of these filings or
information included therein could be deemed to be material
information.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) is a 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. Each of PG&E Corporation and the
Utility is a separate entity, with distinct creditors and
claimants, and is subject to separate laws, rules and regulations.
For more information, visit http://www.pgecorp.com. In this press
release, they are together referred to as “PG&E.”
Forward-Looking Statements
This press release contains forward-looking statements that are
not historical facts, including statements about the beliefs,
expectations, estimates, future plans and strategies of PG&E
Corporation and the Utility, as well as forecasts and estimates
regarding potential liability in connection with the 2018 Camp fire
and 2017 Northern California wildfires, the Utility’s wildfire
mitigation initiatives, 2019 Wildfire Mitigation Plan, the
Utility’s participation in the statewide wildfire fund created by
AB 1054, and PG&E Corporation’s 2019 IIC guidance. These
statements are based on current expectations and assumptions, which
management believes are reasonable, and on information currently
available to management, but are necessarily subject to various
risks and uncertainties. In addition to the risk that these
assumptions prove to be inaccurate, factors that could cause actual
results to differ materially from those contemplated by the
forward-looking statements include factors disclosed in PG&E
Corporation’s and the Utility’s annual report on Form 10-K for the
year ended December 31, 2018, their joint quarterly reports on Form
10-Q for the quarters ended March 31, 2019, June 30, 2019 and
September 30, 2019, and other reports filed with the SEC, which are
available on PG&E Corporation’s website at www.pgecorp.com and
on the SEC website at www.sec.gov. Additional factors include, but
are not limited to, those associated with the Chapter 11 cases of
PG&E Corporation and the Utility that commenced on January 29,
2019. PG&E Corporation and the Utility undertake no obligation
to publicly update or revise any forward-looking statements,
whether due to new information, future events or otherwise, except
to the extent required by law.
PG&E CORPORATION
(DEBTOR-IN-POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(in millions, except per share
amounts)
2019
2018
2019
2018
Operating Revenues
Electric
$
3,554
$
3,466
$
9,292
$
9,729
Natural gas
878
915
3,094
2,942
Total operating revenues
4,432
4,381
12,386
12,671
Operating Expenses
Cost of electricity
1,070
1,256
2,506
3,038
Cost of natural gas
68
69
515
437
Operating and maintenance
2,206
1,611
6,235
5,001
Wildfire-related claims, net of insurance
recoveries
2,548
(10
)
6,448
2,108
Depreciation, amortization, and
decommissioning
840
759
2,433
2,257
Total operating expenses
6,732
3,685
18,137
12,841
Operating Income (Loss)
(2,300
)
696
(5,751
)
(170
)
Interest income
18
14
62
35
Interest expense
(52
)
(232
)
(215
)
(678
)
Other income, net
62
104
199
318
Reorganization items, net
(73
)
—
(256
)
—
Income (Loss) Before Income
Taxes
(2,345
)
582
(5,961
)
(495
)
Income tax provision (benefit)
(729
)
15
(1,932
)
(527
)
Net Income (Loss)
(1,616
)
567
(4,029
)
32
Preferred stock dividend requirement of
subsidiary
3
3
10
10
Income (Loss) Attributable to Common
Shareholders
$
(1,619
)
$
564
$
(4,039
)
$
22
Weighted Average Common Shares
Outstanding, Basic
529
517
528
516
Weighted Average Common Shares
Outstanding, Diluted
529
517
528
517
Net Income (Loss) Per Common Share,
Basic
$
(3.06
)
$
1.09
$
(7.65
)
$
0.04
Net Income (Loss) Per Common Share,
Diluted
$
(3.06
)
$
1.09
$
(7.65
)
$
0.04
Reconciliation of PG&E Corporation’s
Consolidated Earnings (Loss) Attributable to Common Shareholders in
Accordance with Generally Accepted Accounting Principles (“GAAP”)
to Non-GAAP Earnings from Operations
Third Quarter, 2019 vs. 2018
(in millions, except per share
amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
Earnings
Earnings per Common Share
(Diluted)
Earnings
Earnings per Common Share
(Diluted)
(in millions, except per share
amounts)
2019
2018
2019
2018
2019
2018
2019
2018
PG&E Corporation’s Earnings (Loss)
on a GAAP basis
$
(1,619
)
$
564
$
(3.06
)
$
1.09
$
(4,039
)
$
22
$
(7.65
)
$
0.04
Items Impacting Comparability: (1)
2017 Northern California wildfire-related
costs (2)
1,465
31
2.77
0.06
2,935
1,639
5.56
3.17
2018 Camp fire-related costs (3)
408
—
0.77
—
1,979
—
3.75
—
2019 GT&S capital disallowance (4)
193
—
0.37
—
193
—
0.37
—
Electric asset inspection costs (5)
88
—
0.17
—
437
—
0.83
—
Chapter 11-related costs (6)
55
—
0.10
—
210
—
0.40
—
Pipeline-related expenses (7)
—
9
—
0.02
—
25
—
0.05
2015 Butte fire-related costs, net of
insurance (8)
—
6
—
0.01
—
17
—
0.03
Reduction in gas-related capital
disallowances (9)
—
(27
)
—
(0.05
)
—
(27
)
—
(0.05
)
2017 insurance premium cost recoveries
(10)
—
—
—
—
—
(23
)
—
(0.05
)
PG&E Corporation’s Non-GAAP
Earnings from Operations (11)
$
590
$
582
$
1.11
$
1.13
$
1,715
$
1,652
$
3.25
$
3.19
All amounts presented in the table above
are tax adjusted at PG&E Corporation’s statutory tax rate of
27.98% for 2018 and 2019, except for certain costs related to the
Chapter 11 Cases and capital disallowances associated with the 2019
Gas Transmission and Storage ("GT&S") rate case, which are not
tax deductible. Amounts may not sum due to rounding.
(1)
“Items impacting comparability” represent
items that management does not consider part of the normal course
of operations and affect comparability of financial results between
periods, consisting of the items listed in the table above. See
"Use of Non-GAAP Financial Measures."
(2)
The Utility incurred costs of $2.0 billion
(before the tax impact of $569 million) and $4.1 billion (before
the tax impact of $1.1 billion) during the three and nine months
ended September 30, 2019, respectively, associated with the 2017
Northern California wildfires. This includes accrued charges of
$2.0 billion (before the tax impact of $566 million) and $4.0
billion (before the tax impact of $1.1 billion) during the three
and nine months ended September 30, 2019, respectively, related to
increases in the recorded liability for third-party claims. The
Utility also incurred costs of $13 million (before the tax impact
of $4 million) and $54 million (before the tax impact of $15
million) during the three and nine months ended September 30, 2019,
respectively, for legal and other costs.
(in millions, pre-tax)
Three Months Ended September
30, 2019
Nine Months Ended September
30, 2019
Third-party claims
$
2,021
$
4,021
Legal and other costs
13
54
2017 Northern California
wildfire-related costs
$
2,034
$
4,075
(3)
The Utility incurred costs of $567 million
(before the tax impact of $159 million) and $2.7 billion (before
the tax impact of $769 million) during the three and nine months
ended September 30, 2019, respectively, associated with the 2018
Camp fire. This includes accrued charges of $526 million (before
the tax impact of $147 million) and $2.4 billion (before the tax
impact of $679 million) during the three and nine months ended
September 30, 2019, respectively, related to increases in the
recorded liability for third-party claims. The Utility also
incurred costs of $15 million (before the tax impact of $4 million)
and $265 million (before the tax impact of $74 million) during the
three and nine months ended September 30, 2019, respectively, for
clean-up and repair. In addition, the Utility incurred costs of $25
million (before the tax impact of $7 million) and $57 million
(before the tax impact of $16 million) during the three and nine
months ended September 30, 2019, respectively, for legal and other
costs.
(in millions, pre-tax)
Three Months Ended September
30, 2019
Nine Months Ended September
30, 2019
Third-party claims
$
526
$
2,426
Utility clean-up and repair costs
15
265
Legal and other costs
25
57
2018 Camp fire-related costs
$
567
$
2,748
(4)
The Utility recorded costs of $237 million
(before the tax impact of $44 million) during the three and nine
months ended September 30, 2019, for pipeline-replacement costs
disallowed in the 2019 GT&S rate case as a result of spending
above amounts authorized in the 2015-2018 rate case period. Due to
flow-through treatment related to deductible repairs, $80 million
of the loss does not generate a net tax benefit.
(5)
The Utility incurred costs of $121 million
(before the tax impact of $33 million) and $606 million (before the
tax impact of $170 million) during the three and nine months ended
September 30, 2019, respectively, for incremental operating
expenses related to enhanced and accelerated inspections of
electric transmission and distribution assets, and certain
resulting repairs that are not probable of recovery.
(6)
The Utility incurred costs of $73 million
(before tax impact of $18 million) and $256 million (before the tax
impact of $46 million) during the three and nine months ended
September 30, 2019, respectively, directly associated with PG&E
Corporation’s and the Utility’s Chapter 11 Cases. This includes
legal and other costs of $90 million (before the tax impact of $22
million) and $191 million (before the tax impact of $28 million)
during the three and nine months ended September 30, 2019,
respectively ($10 million and $92 million of legal and other costs
during the three and nine months ended September 30, 2019,
respectively, are not tax deductible.) The Utility also incurred
$114 million (before the tax impact of $32 million) during the nine
months ended September 30, 2019 for debtor-in-possession (“DIP”)
financing costs. These costs were partially offset by interest
income of $17 million (before the tax impact of $5 million) and $49
million (before the tax impact of $14 million) recorded during the
three and nine months ended September 30, 2019, respectively.
(in millions, pre-tax)
Three Months Ended September
30, 2019
Nine Months Ended September
30, 2019
Legal and other costs
$
90
$
191
DIP financing costs
—
114
Interest income
(17
)
(49
)
Chapter 11-related costs
$
73
$
256
(7)
The Utility incurred costs of $13 million
(before the tax impact of $4 million) and $35 million (before the
tax impact of $10 million) during the three and nine months ended
September 30, 2018, respectively, for pipeline-related expenses
incurred in connection with the multi-year effort to identify and
remove encroachments from transmission pipeline rights-of-way.
(8)
The Utility incurred costs, net of
insurance, of $9 million (before the tax impact of $3 million) and
$24 million (before the tax impact of $7 million) during the three
and nine months ended September 30, 2018, respectively, associated
with the 2015 Butte fire. This included $9 million (before the tax
impact of $3 million) and $31 million (before the tax impact of $9
million) during the three and nine months ended September 30, 2018,
respectively, for legal costs. These costs were partially offset by
$7 million (before the tax impact of $2 million) recorded during
the nine months ended September 30, 2018 for contractor insurance
recoveries.
(in millions, pre-tax)
Three Months Ended September
30, 2018
Nine Months Ended September
30, 2018
Legal costs
$
9
$
31
Insurance recoveries
—
(7
)
2015 Butte fire-related costs, net of
insurance
$
9
$
24
(9)
The Utility reduced the estimated
disallowance for gas-related capital costs that were expected to
exceed authorized amounts by $38 million (before the tax impact of
$11 million) during the three and nine months ended September 30,
2018. The Utility had previously recorded $85 million (before the
tax impact of $35 million) in 2016 for probable capital
disallowances in the 2015 GT&S rate case. From 2012 through
2014, the Utility had recorded cumulative charges of $665 million
(before the tax impact of $271 million) for disallowed Pipeline
Safety Enhancement Plan-related capital expenditures.
(10)
As a result of the California Public
Utilities Commission’s (“CPUC”) June 2018 decision authorizing a
Wildfire Expense Memorandum Account, the Utility recorded $32
million (before the tax impact of $9 million) during the nine
months ended September 30, 2018 for probable cost recoveries of
insurance premiums incurred in 2017 above amounts included in
authorized revenue requirements.
(11)
“Non-GAAP earnings from operations” is a
non-GAAP financial measure. See "Use of Non-GAAP Financial
Measures."
Key Drivers of PG&E Corporation’s
Non-GAAP Earnings per Common Share (“EPS”) from Operations Third
Quarter, 2019 vs. 2018 (in millions, except per share amounts)
Third Quarter 2019 vs.
2018
YTD 2019 vs. 2018
Earnings
Earnings per Common Share
(Diluted)
Earnings
Earnings per Common Share
(Diluted)
2018 Non-GAAP Earnings from Operations
(1)
$
582
$
1.13
$
1,652
$
3.19
Vegetation management costs (2)
(46
)
(0.09
)
(78
)
(0.15
)
Resolution of 2018 regulatory items
(3)
(15
)
(0.03
)
(44
)
(0.08
)
Increase in shares outstanding
—
(0.03
)
—
(0.07
)
Timing of taxes (4)
(8
)
(0.01
)
7
0.01
Miscellaneous
(19
)
(0.04
)
(5
)
0.01
Growth in rate base earnings
68
0.13
138
0.26
Liability insurance premiums (5)
28
0.05
45
0.08
2019 Non-GAAP Earnings from Operations
(1)
$
590
$
1.11
$
1,715
$
3.25
All amounts presented in the table above
are tax adjusted at PG&E Corporation’s statutory tax rate of
27.98% for 2018 and 2019. Amounts may not sum due to rounding.
(1)
See "Reconciliation of PG&E
Corporation’s Consolidated Earnings (Loss) Attributable to Common
Shareholders in Accordance with Generally Accepted Accounting
Principles (“GAAP”) to Non-GAAP Earnings from Operations" for
reconciliations of (i) earnings on a GAAP basis to non-GAAP
earnings from operations and (ii) EPS on a GAAP basis to non-GAAP
EPS from operations.
(2)
Represents the increase in routine
vegetation management costs incurred during the three and nine
months ended September 30, 2019, which are not recoverable through
authorized revenue requirements.
(3)
Represents the impact of various
regulatory matters resolved during the three and nine months ended
September 30, 2018, with no similar impact in 2019.
(4)
Represents the timing of taxes reportable
in quarterly statements in accordance with Accounting Standards
Codification 740, Income Taxes, and results from variances in the
percentage of quarterly earnings to annual earnings.
(5)
Represents the lower insurance premium
costs during the three and nine months ended September 30, 2019,
due to lower coverage renewed for excess liability and the
accelerated amortization of a portion of the Utility’s liability
insurance premiums during the fourth quarter of 2018 as a result of
the 2018 Camp fire.
PG&E Corporation’s 2019 Items
Impacting Comparability (“IIC”) Guidance
2019 IIC Guidance (in millions,
after-tax)
Low
High
Estimated Items Impacting
Comparability: (1)
2017 Northern California wildfire-related
costs (2)
$
~2,960
$
~2,960
2018 Camp fire-related costs (3)
~2,002
~2,002
Electric asset inspection costs (4)
648
504
Chapter 11-related costs (5)
~474
~438
2019 GT&S capital disallowance (6)
~195
~195
PSPS customer bill credit
$
~65
$
~65
Estimated IIC Guidance
$
~6,344
$
~6,164
All amounts presented in the table above
are tax adjusted at PG&E Corporation’s statutory tax rate of
27.98% for 2019, except for certain Chapter 11-related and 2019
GT&S capital disallowance costs, which are not tax
deductible.
(1)
“Items impacting comparability” represent
items that management does not consider part of the normal course
of operations and affect comparability of financial results between
periods. See "Use of Non-GAAP Financial Measures."
(2)
“2017 Northern California wildfire-related
costs” refers to estimated third-party claims and legal and other
costs associated with the 2017 Northern California wildfires. The
total offsetting tax impact for both the low and high IIC guidance
range is $1.1 billion.
2019
(in millions, pre-tax)
Low IIC guidance range
High IIC guidance
range
Third-party claims
$
~4,020
$
~4,020
Legal and other costs
~90
~90
2017 Northern California wildfire-related
costs
$
~4,110
$
~4,110
(3)
“2018 Camp fire-related costs” refers to
estimated third-party claims, Utility clean-up and repair costs,
and legal and other costs associated with the 2018 Camp fire. The
total offsetting tax impact for both the low and high IIC guidance
range is $778 million.
2019
(in millions, pre-tax)
Low IIC guidance range
High IIC guidance
range
Third-party claims
$
~2,430
$
~2,430
Utility clean-up and repair costs
~270
~270
Legal and other costs
~80
~80
2018 Camp fire-related costs
$
~2,780
$
~2,780
(4)
“Electric asset inspection costs”
represents incremental operating expense related to enhanced and
accelerated inspections of electric transmission and distribution
assets, and certain resulting repairs that are not probable of
recovery. The total offsetting tax impact for the low and high IIC
guidance range is $252 million and $196 million, respectively.
2019
(in millions, pre-tax)
Low IIC guidance range
High IIC guidance
range
Electric asset inspection costs
$
900
$
700
(5)
“Chapter 11-related costs” consists of
external legal, financing, and other fees, net of interest income,
directly associated with PG&E Corporation’s and the Utility’s
Chapter 11 Cases, of which ~$150 million of legal and other costs
are not tax deductible. The total offsetting tax impact for the low
and high IIC guidance range is $126 million and $112 million,
respectively. Exit financing is subject to bankruptcy court
approval.
2019
(in millions, pre-tax)
Low IIC guidance range
High IIC guidance
range
Legal and other costs
$
340
$
290
Exit financing costs
~200
~200
DIP financing costs
~120
~120
Interest income
~(60)
~(60)
Chapter 11-related costs
$
~600
$
~550
(6)
“2019 GT&S capital disallowance"
reflects pipeline-replacement costs disallowed in the 2019 GT&S
rate case as a result of spending above amounts authorized in the
2015-2018 rate case period. Due to flow-through treatment related
to deductible repairs, $80 million of the loss does not generate a
net tax benefit. The total offsetting tax impact for the low and
high IIC guidance range is $45 million.
2019
(in millions, pre-tax)
Low IIC guidance range
High IIC guidance
range
2019 GT&S capital disallowance
$
~240
$
~240
(7)
“PSPS customer bill credit" represents a
one-time bill credit for customers impacted by the October 9, 2019
Public Safety Power Shutoff (PSPS) event. The total offsetting tax
impact for the low and high IIC guidance range is $25 million.
2019
(in millions, pre-tax)
Low IIC guidance range
High IIC guidance
range
PSPS customer bill credit
$
~90
$
~90
Actual financial results for 2019 may differ materially from the
guidance provided. For a discussion of the factors that may affect
future results, see the Forward-Looking Statements.
Use of Non-GAAP Financial Measures
PG&E Corporation and Pacific Gas and
Electric Company
PG&E Corporation discloses historical financial results and
provides guidance based on “non-GAAP earnings from operations” and
“non-GAAP EPS 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.
“Non-GAAP earnings from operations” is a non-GAAP financial
measure and is calculated as income available for common
shareholders less items impacting comparability. “Items impacting
comparability” represent items that management does not consider
part of the normal course of operations and affect comparability of
financial results between periods, consisting of the items listed
in "Reconciliation of PG&E Corporation’s Consolidated Earnings
(Loss) Attributable to Common Shareholders in Accordance with
Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP
Earnings from Operations." “Non-GAAP EPS from operations” also
referred to as “non-GAAP earnings per share from operations” is a
non-GAAP financial measure and is calculated as non-GAAP earnings
from operations divided by common shares outstanding (diluted).
PG&E Corporation uses non-GAAP earnings from operations and
non-GAAP EPS from operations to understand and compare operating
results across reporting periods for various purposes including
internal budgeting and forecasting, short- and long-term operating
planning, and employee incentive compensation. PG&E Corporation
believes that non-GAAP earnings from operations and non-GAAP EPS
from operations provide additional insight into the underlying
trends of the business, allowing for a better comparison against
historical results and expectations for future performance.
Non-GAAP earnings from operations and non-GAAP EPS from
operations are not substitutes or alternatives for GAAP measures
such as consolidated income available for common shareholders and
may not be comparable to similarly titled measures used by other
companies.
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