- Recorded GAAP earnings were $0.04 per share for the third
quarter of 2020, compared to losses of $3.06 per share for the same
period in 2019.
- Non-GAAP core earnings were $0.22 per share for the third
quarter of 2020, compared to $1.11 per share for the same period in
2019.
- 2020 EPS guidance adjusted for GAAP losses in the range of
$1.00 to $1.06 and reaffirmed for non-GAAP core earnings of $1.60
to $1.63 per share.
- 2021 EPS guidance adjusted for GAAP earnings in the range of
$0.14 to $0.26 and reaffirmed non-GAAP core earnings of $0.95 to
$1.05 per share.
PG&E Corporation (NYSE: PCG) recorded third-quarter 2020
income available for common shareholders of $83 million, or $0.04
per share, as reported in accordance with generally accepted
accounting principles (GAAP). This compares with losses
attributable to common shareholders of $1.6 billion, or $3.06 per
share, for the third quarter of 2019.
GAAP results include non-core items that management does not
consider representative of ongoing earnings, which totaled $378
million after-tax, or $0.18 per share, for the quarter. These
results were primarily driven by costs 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). Other non-core items include the amortization of
wildfire insurance fund contributions under Assembly Bill (AB)
1054, investigation remedies and delayed cost recovery,
Kincade-fire related costs, and prior period net regulatory
recoveries.
PG&E Corporation and Pacific Gas and Electric Company
emerged from Chapter 11 on July 1, 2020 after successfully
completing the restructuring process and achieving approval for its
Plan of Reorganization confirmed by the United States Bankruptcy
Court.
“We are focused on building a new PG&E that will deliver on
our commitments to operate safely, reduce risk, and put our
customers at the center of everything we do,” said Bill Smith,
Interim Chief Executive Officer, PG&E Corporation. “Given the
many challenges facing California, from wildfires to COVID-19, we
know that being a trustworthy partner is more important than ever.
We will do that by continuing our important wildfire mitigation
work, leveraging innovative technologies to help California meet
its clean energy goals, and achieving our performance targets in
all areas of our business.”
Wildfire Mitigation Update
To further reduce the potential for wildfires associated with
its electrical equipment in high fire-threat areas, PG&E is
executing its 2020 Wildfire Mitigation Plan as submitted to the
CPUC on February 7, 2020. The company is on track to meet its goals
for each of the four categories of the 2020 Plan, which builds on
the significant work completed in 2019. Wildfire Mitigation work
during 2020 includes:
- System hardening, where we have
exceeded our 2020 target, with 257 circuit miles either relocated
underground or replaced with stronger poles and covered conductor,
making PG&E’s system more resilient.
- Enhanced vegetation
management work, which is at
90% of our 2020 target. PG&E has reviewed more than 1,624 miles
of distribution and lower-voltage transmission lines and taken
necessary action to trim or remove hazards and expand
rights-of-way.
- Situational awareness work, which
is at 65% of our 2020 target, with 309 weather stations and 132
high definition cameras installed, despite some initial supply
chain issues due to COVID-19 disruptions.
- Enhanced inspections are at more
than 96% of our 2020 target. PG&E continues to inspect all
assets in Tier Three miles and a third of the Tier Two miles
annually, which gives greater insight into the health of the
company’s assets and information to act on for equipment requiring
maintenance.
- Improved PSPS implementation. For
two of the three events for which an analysis is available,
PG&E’s data shows that the number of customers affected was
reduced by 56% when compared to the same set of conditions in 2019.
For all three, service was restored for 94% of customers within 12
hours.
Asset Sale
In addition, PG&E filed an application with the CPUC for
approval to sell its San Francisco office complex. This fulfills
the first step of its commitment set out in the Plan of
Reorganization to sell its San Francisco office complex and to
distribute the gain on sale to customers.
Non-GAAP Core Earnings
PG&E Corporation’s non-GAAP core earnings, which exclude
non-core items, were $461 million, or $0.22 per share, in the third
quarter of 2020, compared with $590 million, or $1.11 per share,
during the same period in 2019.
The decrease in quarter-over-quarter non-GAAP core earnings per
share was primarily driven by the increase in shares outstanding,
unrecoverable interest expense, the timing of 2020 General Rate
Case cost recovery, and wildfire mitigation costs above
authorized.
PG&E Corporation uses “non-GAAP core earnings,” 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 non-core
items. See the accompanying tables for a reconciliation of non-GAAP
core earnings to consolidated earnings (loss) attributable to
common shareholders.
2020 Guidance
PG&E Corporation is adjusting 2020 guidance for consolidated
GAAP losses in the range of $1.00 to $1.06 per share, which
includes non-core items. PG&E is updating 2020 non-core items
guidance of approximately $3.3 billion after-tax for bankruptcy and
legal costs, the amortization of wildfire insurance fund
contributions, Kincade fire-related costs, investigation remedies
and delayed cost recovery, partially offset by prior period net
regulatory recoveries.
On a non-GAAP basis, the guidance range for projected 2020 core
earnings is $1.60 to $1.63 per share. Factors driving non-GAAP core
earnings include net below the line and spend above authorized
items of $200 million to $225 million after tax and unrecoverable
interest expense of $125 million after tax.
Guidance is based on various assumptions and forecasts,
including those relating to future authorized revenues, expenses,
capital expenditures, rate base, and certain other factors.
2021 Guidance
PG&E Corporation is adjusting 2021 GAAP earnings guidance in
the range of $0.14 to $0.26 per share, which includes non-core
items. PG&E is adjusting 2021 non-core items guidance to
approximately $1.8 billion after-tax for a net securitization
inception charge, amortization of wildfire insurance fund
contributions, bankruptcy and legal costs, and investigation
remedies and delayed cost recovery, partially offset by prior
period net regulatory recoveries.
On a non-GAAP basis, the guidance range for projected 2021 core
earnings is $0.95 to $1.05 per share, which is unchanged from the
range provided in Q2 2020. Factors driving non-GAAP core earnings
include net below the line and spend above authorized of up to $100
million after tax and unrecoverable interest expense of $275
million to $325 million after tax.
Guidance is based on various assumptions and forecasts,
including those relating to authorized revenues, future expenses,
capital expenditures, rate base, equity issuances, the potential
Net Operating Loss (NOL) securitization, 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.
Earnings Conference Call
PG&E Corporation will also hold a conference call on October
29, 2020, at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) to
discuss its third quarter 2020 results. The public can access the
conference call through a simultaneous webcast. The link is
provided below and will also be available from the PG&E
Corporation website.
What: Third Quarter 2020 Earnings
Call
When: Thursday, October 29, 2020 at
11:00 a.m. Eastern Time
Where:
http://investor.pgecorp.com/news-events/events-and-presentations/default.aspx
A replay of the conference call will be archived through
November 5, 2020 at
http://investor.pgecorp.com/news-events/events-and-presentations/default.aspx.
Alternatively, a toll-free replay of the conference call may be
accessed shortly after the live call through November 5, 2020, by
dialing (800) 585-8367. International callers may dial (416) 621-
4642. For both domestic and international callers, the confirmation
code 2646735 will be required to access the replay.
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. 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 PG&E Corporation’s earnings guidance for 2020 and
2021 and the 2020 Wildfire Mitigation Plan. 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 joint annual report on Form 10-K for the year ended
December 31, 2019, their joint quarterly reports on Form 10-Q for
the quarters ended March 31, 2020, June 30, 2020, September 30,
2020, 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 Plan of Reorganization of
PG&E Corporation and the Utility that became effective on July
1, 2020. 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
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(in millions, except per share
amounts)
2020
2019
2020
2019
Operating Revenues
Electric
$
3,810
$
3,554
$
10,285
$
9,292
Natural gas
1,072
878
3,436
3,094
Total operating revenues
4,882
4,432
13,721
12,386
Operating Expenses
Cost of electricity
1,114
1,070
2,418
2,506
Cost of natural gas
90
68
508
515
Operating and maintenance
2,290
2,206
6,398
6,235
Wildfire-related claims, net of insurance
recoveries
25
2,548
195
6,448
Wildfire fund expense
120
—
293
—
Depreciation, amortization, and
decommissioning
845
840
2,574
2,433
Total operating expenses
4,484
6,732
12,386
18,137
Operating Income (Loss)
398
(2,300)
1,335
(5,751)
Interest income
5
18
33
62
Interest expense
(391)
(52)
(844)
(215)
Other income, net
102
62
299
199
Reorganization items, net
(137)
(73)
(1,937)
(256)
Loss Before Income Taxes
(23)
(2,345)
(1,114)
(5,961)
Income tax provision (benefit)
(109)
(729)
394
(1,932)
Net Income (Loss)
86
(1,616)
(1,508)
(4,029)
Preferred stock dividend requirement of
subsidiary
3
3
10
10
Income (Loss) Attributable to Common
Shareholders
$
83
$
(1,619)
$
(1,518)
$
(4,039)
Weighted Average Common Shares
Outstanding, Basic
1,967
529
1,012
528
Weighted Average Common Shares
Outstanding, Diluted
2,140
529
1,012
528
Net Earnings (Loss) Per Common Share,
Basic
$
0.04
$
(3.06)
$
(1.50)
$
(7.65)
Net Earnings (Loss) Per Common Share,
Diluted
$
0.04
$
(3.06)
$
(1.50)
$
(7.65)
Reconciliation of PG&E Corporation’s
Consolidated Earnings (Loss) Attributable to Common Shareholders in
Accordance with Generally Accepted Accounting Principles (“GAAP”)
to Non-GAAP Core Earnings
Third Quarter, 2020 vs. 2019
(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)
2020
2019
2020
2019
2020
2019
2020
2019
PG&E Corporation's Earnings (Loss)
on a GAAP basis
$
83
$
(1,619)
$
0.04
$
(3.06)
$
(1,518)
$
(4,039)
$
(1.50)
$
(7.65)
Non-core items: (1)
Bankruptcy and legal costs (2)
139
55
0.07
0.10
2,592
210
2.56
0.40
Amortization of wildfire fund contribution
(3)
86
—
0.04
—
211
—
0.21
—
Investigation remedies and delayed cost
recovery (4)
80
—
0.04
—
151
—
0.15
—
2019 Kincade fire-related costs, net of
insurance (5)
20
—
0.01
—
168
—
0.17
—
Prior period net regulatory recoveries
(6)
53
—
0.02
—
(25)
—
(0.02)
—
2017-2018 Wildfire-related costs (7)
—
1,873
—
3.54
—
4,914
—
9.31
Electric asset inspections (8)
—
88
—
0.17
—
437
—
0.83
2019 GT&S capital disallowance (9)
—
193
—
0.37
—
193
—
0.37
PG&E Corporation’s Non-GAAP Core
Earnings (10)
$
461
$
590
$
0.22
$
1.11
$
1,579
$
1,715
$
1.56
$
3.25
(1)
“Non-core items” include items that
management does not consider representative of ongoing earnings and
affect comparability of financial results between periods,
consisting of the items listed in the table above. See Exhibit G:
Use of Non-GAAP Financial Measures.
All amounts presented in the table above
are tax adjusted at PG&E Corporation’s statutory tax rate of
27.98% for 2019 and 2020, except for certain costs that are not tax
deductible, as identified in the following footnotes. Amounts may
not sum due to rounding.
(2)
PG&E Corporation and the Utility
recorded costs of $174 million (before the tax impact of $35
million) and $2.7 billion (before the tax impact of $118 million)
during the three and nine months ended September 30, 2020,
respectively, associated with bankruptcy and legal costs. This
includes $64 million (before the tax impact of $10 million) and
$1.6 billion (before the tax impact of $30 million) during the
three and nine months ended September 30, 2020, respectively,
related to exit financing costs ($26 million and $1.5 billion of
exit financing costs during the three and nine months ended
September 30, 2020, respectively, are not tax deductible). Also
during the nine months ended September 30, 2020, the Utility
recorded a $619 million reduction to the deferred tax asset related
to the value of PG&E Corporation's common stock transferred to
the Fire Victim Trust. PG&E Corporation and the Utility also
incurred legal and other costs of $111 million (before the tax
impact of $24 million) and $457 million (before the tax impact of
$88 million) during the three and nine months ended September 30,
2020, respectively ($23 million and $143 million of legal and other
costs during the three and nine months ended September 30, 2020,
respectively, are not tax deductible).
(in millions, pre-tax)
Three Months Ended September
30, 2020
Nine Months Ended September
30, 2020
Exit financing
$
64
$
1,634
Fire Victim Trust tax valuation
—
619
Legal and other costs
111
457
Bankruptcy and legal costs
$
174
$
2,710
(3)
The Utility recorded costs of $120 million
(before the tax impact of $34 million) and $293 million (before the
tax impact of $82 million) during the three and nine months ended
September 30, 2020, respectively, associated with the amortization
of wildfire fund contributions related to Assembly Bill ("AB")
1054.
(4)
The Utility recorded costs of $104 million
(before the tax impact of $24 million) and $200 million (before the
tax impact of $49 million) during the three and nine months ended
September 30, 2020, respectively, associated with investigation
remedies and delayed cost recovery. This includes $88 million
(before the tax impact of $23 million) and $149 million (before the
tax impact of $39 million) during the three and nine months ended
September 30, 2020, respectively, related to the Wildfire Order
Instituting Investigation ("OII") settlement, as modified by the
Decision Different dated April 20, 2020 ($6 million and $9 million
of Wildfire OII system enhancement costs during the three and nine
months ended September 30, 2020, respectively, are not tax
deductible). The Utility also incurred restoration and rebuild
costs of $8 million (before the tax impact of $2 million) and $28
million (before the tax impact of $8 million) during the three and
nine months ended September 30, 2020, respectively, associated with
the town of Paradise (2018 Camp fire). The Utility also recorded
costs of $7 million (before the tax impact of $1 million) and $23
million (before the tax impact of $1 million) during the three and
nine months ended September 30, 2020, respectively, for system
enhancements related to the Locate and Mark OII ($10 million and
$18 million of Locate and Mark OII system enhancement costs during
the three and nine months ended September 30, 2020, respectively,
are not tax deductible).
(in millions, pre-tax)
Three Months Ended September
30, 2020
Nine Months Ended September
30, 2020
Wildfire OII disallowance and system
enhancements
$
88
$
149
Paradise restoration and rebuild
8
28
Locate and Mark OII system
enhancements
7
23
Investigation remedies and delayed cost
recovery
$
104
$
200
(5)
The Utility incurred costs, net of
probable insurance recoveries, of $27 million (before the tax
impact of $8 million) and $234 million (before the tax impact of
$66 million) during the three and nine months ended September 30,
2020, respectively, associated with the 2019 Kincade fire. This
includes accrued charges of $25 million (before the tax impact of
$7 million) and $625 million (before the tax impact of $175
million) during the three and nine months ended September 30, 2020,
respectively, for third-party claims. The Utility also incurred
costs of $35 million (before the tax impact of $10 million) during
the nine months ended September 30, 2020 for clean-up and repair
costs. In addition, the Utility incurred legal and other costs of
$2 million (before the tax impact of $1 million) and $4 million
(before the tax impact of $1 million) during the three and nine
months ended September 30, 2020, respectively. These costs were
partially offset by $430 million (before the tax impact of $120
million) recorded during the nine months ended September 30, 2020
for probable insurance recoveries.
(in millions, pre-tax)
Three Months Ended September
30, 2020
Nine Months Ended September
30, 2020
Third-party claims
$
25
$
625
Utility clean-up and repairs
—
35
Legal and other costs
2
4
Insurance recoveries
—
(430)
2019 Kincade fire-related costs, net of
insurance
$
27
$
234
(6)
The Utility incurred $73 million (before
the tax impact of $20 million) and recorded net revenues of $35
million (before the tax impact of $10 million) during the three and
nine months ended September 30, 2020, respectively, associated with
prior period net regulatory recoveries. This includes $67 million
(before the tax impact of $19 million) during the three and nine
months ended September 30, 2020 for the impact of the TO20
settlement on 2019 revenues and the TO18 FERC order on 2017, 2018,
and 2019 revenues. Also as a result of the 2011 Gas
Transmission and Storage ("GT&S") capital audit, the Utility
recorded a revenue reduction of $5 million and total revenues of
$103 million (before the tax impact of $29 million) during the
three and nine months ended September 30, 2020, respectively,
related to the recovery of capital expenditures from 2011 through
2014 above amounts adopted in the 2011 GT&S rate case.
(in millions, pre-tax)
Three Months Ended September
30, 2020
Nine Months Ended September
30, 2020
TO proceedings impact
$
67
$
67
2011 GT&S capital audit
5
(103)
Prior period net regulatory
recoveries
$
73
$
(35)
(7)
The Utility incurred $2.6 billion (before
the tax impact of $728 million) and $6.8 billion (before the tax
impact of $1.9 billion) during the three and nine months ended
September 30, 2019, respectively, associated with costs related to
2017 and 2018 wildfires. This includes accrued charges of $2.5
billion (before the tax impact of $713 million) and $6.4 billion
(before the tax impact of $1.8 billion) during the three and nine
months ended September 30, 2019, respectively related to an
increase in the recorded liability related to 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 costs related to the
2018 Camp fire. In addition, the Utility incurred legal and other
costs of $38 million (before the tax impact of $11 million) and
$111 million (before the tax impact of $31 million) related to the
2018 Camp fire and 2017 Northern California wildfires.
(in millions, pre-tax)
Three Months Ended September
30, 2019
Nine Months Ended September
30, 2019
Third-party claims
$
2,547
$
6,447
Utility clean-up and repair
15
265
Legal and other costs
38
111
2017-2018 Wildfire-related
costs
$
2,601
$
6,823
(8)
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.
(9)
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.
(10)
"Non-GAAP core earnings" is a non-GAAP
financial measure. See Exhibit G: Use of Non-GAAP Financial
Measures.
PG&E Corporation's 2020 and 2021
Earnings Guidance
2020
2021
EPS Guidance
Low
High
Low
High
Estimated Earnings (Loss) on a GAAP
basis
$
(1.06)
$
(1.00)
$
0.14
$
0.26
Estimated Non-Core Items: (1)
Bankruptcy and legal costs (2)
~
2.15
~
2.11
~
0.04
~
0.03
Investigation remedies and delayed cost
recovery (3)
~
0.18
~
0.18
~
0.06
~
0.06
Amortization of wildfire fund contribution
(4)
~
0.23
~
0.23
0.15
0.15
2019 Kincade fire-related costs, net of
insurance (5)
~
0.14
~
0.14
—
—
Net securitization inception charge
(6)
—
—
~
0.62
~
0.62
Prior period net regulatory recoveries
(7)
~
(0.04)
~
(0.04)
~
(0.07)
~
(0.07)
Estimated EPS on a non-GAAP Core
Earnings basis
$
1.60
$
1.63
$
0.95
$
1.05
All amounts presented in the table above
are tax adjusted at PG&E Corporation’s statutory tax rate of
27.98% for 2020 and 2021, except for certain costs that are not tax
deductible, as identified in the following footnotes. Amounts may
not sum due to rounding.
(1)
"Non-core items" include items that
management does not consider representative of ongoing earnings and
affect comparability of financial results between periods. See
Exhibit G: Use of Non-GAAP Financial Measures.
(2)
"Bankruptcy and legal costs" consists of
exit financing costs including backstop fees and interest on
temporary Utility debt, a reduction of the deferred tax asset
related to the value of PG&E Corporation's common stock
transferred to the Fire Victim Trust, and legal and other costs
associated with PG&E Corporation and the Utility's Chapter 11
filing. The Fire Victim Trust is subject to future revaluations.
The total offsetting tax impact for the low and high non-core
guidance range is $139 million and $130 million, respectively, for
2020 and $38 million and $24 million, respectively, for 2021.
2020
2021
(in millions, pre-tax)
Low guidance range
High guidance range
Low guidance range
High guidance range
Exit financing
~
$
1,670
~
$
1,670
~
$
60
~
$
60
Fire Victim Trust tax valuation
~
620
~
620
—
—
Legal and other costs
550
500
~
75
~
25
Bankruptcy and legal costs
~
$
2,840
~
$
2,790
~
$
135
~
$
85
(3)
"Investigation remedies and delayed cost
recovery" includes costs related to the Wildfire OII Decision
Different, Paradise restoration and rebuild, and Locate and Mark
OII system enhancements. The total offsetting tax impact for the
low and high non-core guidance range is $69 million for 2020 and
$24 million for 2021.
2020
2021
(in millions, pre-tax)
Low guidance range
High guidance range
Low guidance range
High guidance range
Wildfire OII disallowance and system
enhancements
~
$
230
~
$
230
~
$
110
~
$
110
Paradise restoration and rebuild
~
40
~
40
~
25
~
25
Locate and Mark OII system
enhancements
~
30
~
30
~
25
~
25
Investigation remedies and delayed cost
recovery
~
$
300
~
$
300
~
$
160
~
$
160
(4)
"Amortization of wildfire fund
contribution" represents the amortization of wildfire fund
contributions related to AB 1054. The total offsetting tax impact
for the low and high non-core guidance range is $115 million for
2020 and $130 million for 2021.
2020
2021
(in millions, pre-tax)
Low guidance range
High guidance range
Low guidance range
High guidance range
Amortization of wildfire fund
contribution
~
$
410
~
$
410
~
$
465
~
$
465
(5)
"2019 Kincade fire-related costs, net of
insurance" includes estimated third-party claims, Utility clean-up
and repair costs, and legal and other costs associated with the
2019 Kincade fire, net of probable insurance recoveries. The total
offsetting tax impact for the low and high non-core guidance range
is $67 million for 2020.
2020
2021
(in millions, pre-tax)
Low guidance range
High guidance range
Low guidance range
High guidance range
Third-party claims
~
$
630
~
$
630
$
—
$
—
Utility clean-up and repairs
~
35
~
35
—
—
Legal and other costs
~
5
~
5
—
—
Insurance recoveries
~
(430)
~
(430)
—
—
2019 Kincade fire-related costs, net of
insurance
~
$
240
~
$
240
$
—
$
—
(6)
"Net securitization inception charge"
represents a charge upon inception of securitization and is the
result of an undiscounted regulatory liability associated with the
revenue credits funded by the Net Operating Loss (NOL)
monetization. This reflects the assumption that the CPUC will
authorize the securitization of $7.5 billion of wildfire-related
claims by March 31, 2021 that is contemplated to be neutral on
average to customers. The total offsetting tax impact for the low
and high non-core guidance range is $529 million for 2021.
2020
2021
(in millions, pre-tax)
Low guidance range
High guidance range
Low guidance range
High guidance range
Net securitization inception charge
$
—
$
—
~
$
1,890
~
$
1,890
(7)
"Prior period net regulatory recoveries"
represents the TO20 settlement impact on 2019 revenues, the TO18
FERC order impact on 2017, 2018, and 2019 revenues, allowance for
funds used during construction ("AFUDC") capital structure impact
on 2019 revenues, and the recovery of capital expenditures from
2011 through 2014 above amounts adopted in the 2011 GT&S rate
case. 2020 guidance reflects the completion of the CPUC
GT&S audit, and 2021 guidance is pending CPUC decision. The
total offsetting tax impact for the low and high non-core guidance
range is $18 million for 2020 and $56 million for 2021.
2020
2021
(in millions, pre-tax)
Low guidance range
High guidance range
Low guidance range
High guidance range
TO proceedings impact
~
$
70
~
$
70
$
—
$
—
2019 AFUDC capital structure impact
~
(35)
~
(35)
—
—
2011 GT&S capital audit
~
(100)
~
(100)
~
(200)
~
(200)
Prior period net regulatory
recoveries
~
$
(65)
~
$
(65)
~
$
(200)
~
$
(200)
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 core earnings” and “non-GAAP
core EPS” 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 non-core items.
Beginning with the quarter and full year periods ended December
31, 2019, PG&E Corporation and the Utility changed the name of
their principal non-GAAP earnings metric from “non-GAAP earnings
from operations” to “non-GAAP core earnings” in order to align more
closely with the terminology used by their industry peers.
Likewise, PG&E Corporation and the Utility will now refer to
adjustments as “non-core items” rather than “items impacting
comparability.”
“Non-GAAP core earnings” is a non-GAAP financial measure and is
calculated as income available for common shareholders less
non-core items. “Non-core items” include items that management does
not consider representative of ongoing earnings 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 core EPS” also
referred to as “non-GAAP core earnings per share” is a non-GAAP
financial measure and is calculated as non-GAAP core earnings
divided by common shares outstanding (diluted). PG&E
Corporation uses non-GAAP core earnings and non-GAAP core EPS 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 core
earnings and non-GAAP core EPS 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 core earnings and non-GAAP core EPS 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201029005679/en/
Investor Relations Contact: 415.972.7080 Media Inquiries
Contact: 415.973.5930 www.pgecorp.com
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