PRESS RELEASES 2000 RELEASE
FOR IMMEDIATE RELEASE
March 02, 2000
Contact: PG&E Corporation 1-800-743-6397
EDITORS: Please do not use "Pacific Gas and Electric" or "PG&E" when referring to PG&E Corporation or its National Energy Group. The PG&E National Energy Group is not the same company as Pacific Gas and Electric Company, the utility, and is not regulated by the California Public Utilities Commission. Customers of Pacific Gas and Electric Company do not have to buy products or services from the National Energy Group in order to continue to receive quality regulated services from Pacific Gas and Electric Company.

15 PERCENT INCREASE IN OPERATING EARNINGS PER SHARE HIGHLIGHTS PG&E CORPORATION 1999 FINANCIAL RESULTS

  • PG&E Corporation posts 1999 operating earnings of $2.24 per share, or a 15 percent increase over 1998.

  • PG&E Corporation posts record operating revenue of $20.8 billion, an increase of 6 percent over 1998 operating revenue.

  • PG&E Corporation operating earnings rise to $826 million, an 11 percent increase over 1998 results.

  • PG&E National Energy Group records operating earnings of $0.17 per share, an increase of 42 percent over 1998.

  • Utility unit Pacific Gas and Electric Company posts operating earnings of $2.07, an increase of 14 percent over 1998.

San Francisco, CA – PG&E Corporation (NYSE: PCG) today reported that 1999 operating earnings per share increased by 15 percent to $2.24 per share from 1998 levels of $1.94 per share. The Corporation attributed these results to strong performance in both its National Energy Group, which contributed $0.17 per share, an increase of 42 percent over 1998, and its Pacific Gas and Electric Company utility unit, which contributed $2.07 per share, an increase of 14 percent over 1998. Fourth quarter 1999 operating earnings per share were $0.81, a 59 percent increase over 1998 fourth quarter earnings per share results of $0.51.

The Corporation reported overall earnings for 1999 of ($0.20) per share, or a loss of $71 million due to the pending sale of its Texas-based natural gas business and its retail energy services unit. (See footnote for one-time gains and charges recorded during the fourth quarter of 1999.)

PG&E Corp.’s National Energy Group reported record revenues of $11.592 billion. This represents an increase of nine percent over 1998 revenues of $10.653 billion.

"1999 marked a year both of growth and positioning for the future for our National Energy Group. It achieved 42 percent growth in operating earnings, continued to build its strong national portfolio of generating projects, and took action to eliminate future earnings drag from under-performing businesses," said Robert D. Glynn, Jr., Chairman, CEO, and President of PG&E Corporation. "This strong performance makes clear the future growth potential of this unit.

"The transaction to sell our Texas natural gas business is immediately accretive to earnings. It enables our management team to focus increased financial and human resources on further expanding our competitive generation business and on maximizing the value from our energy commodity trading and natural gas units."

The Corporation noted that other factors driving the unit’s performance included ongoing competitive generation portfolio management activities and continued superior operational and financial performance of its Northwest natural gas transmission assets.

The Corporation’s utility unit, Pacific Gas and Electric Company, posted 1999 operating revenue of $9.228 billion, compared to 1998 operating revenue of $8.924 billion, a 3.4 percent increase. Utility earnings in the fourth quarter reflect the full revenues from the unit’s 1999 General Rate Case, approved on February 17, 2000.

"While the decision in Pacific Gas and Electric Company’s General Rate Case resolves a significant uncertainty regarding its future revenues," said Glynn, "the unit continued to earn below its authorized rate of return on its distribution and transmission business in 1999. But its strong focus on operational excellence, highlighted by a record seventh consecutive Institute of Nuclear Power Operations Number 1 rating for the Diablo Canyon Nuclear Plant, and continued focus on cost management, give it the ability to earn its authorized return on equity going forward."

Customers of PG&E Corporation’s utility unit also saw improved levels of service with an average 12 percent reduction in power outages during 1999. And the unit’s service received ratings of "good," "very good," or "excellent" from 91 percent of customers who responded when asked to rate their satisfaction with the level and quality of service provided by Pacific Gas and Electric Company.

"We are very pleased with our operating performance for 1999," said Glynn. "We look forward to the year ahead as we continue to deliver strong operating performance and build shareholder value in 2000 and beyond."

PG&E Corporation, with revenues of more than $20 billion and operations in 27 states, markets energy services and products throughout North America through its National Energy Group. PG&E Corporation's businesses also include Pacific Gas and Electric Company, the Northern and Central California utility that deliver natural gas and electricity to one in every 20 Americans.

Footnote On One-Time Gains And Charges

The Corporation’s 1999 annual earnings include net charges of ($2.44).

One-time gains and charges for the year include: a write-down of ($2.42) related to the sale of the Corporation’s Texas natural gas liquids and natural gas pipeline business; a revised assessment of legal contingencies related to its Texas natural gas operations reduced the recorded liability for these matters and resulted in a one-time gain of $0.10; charges of ($0.16) per share related to the sale of its retail energy services unit, PG&E Energy Services; a one-time gain of $0.03 associated with a change in accounting method; and a $0.01 net gain relating to other items.

PG&E CORPORATION
CONDENSED STATEMENT OF CONSOLIDATED INCOME
(unaudited)

 

 
Three months ended December 31,
Twelve months ended December 31,
(in millions, except per share amounts)
1999
1998
1999
1998
Operating Revenues
Pacific Gas and Electric Company
$
2,323
$
2,218
$
9,228
$
8,924
National Energy Group
 
PG&E Generating
304
295
1,122
649
PG&E Gas Transmission
– Texas
178
451
1,148
1,941
– Northwest
58
60
224
237
PG&E Energy Trading
2,376
2,516
10,521
8,509
Eliminations and Other
(444)
(176)
(1,423)
(683)
Total operating revenues
4,795
5,364
20,820
19,577
Operating Expenses
Cost of energy for Pacific Gas and Electric                      
Company
966
960
3,149
2,942
Cost of energy–National Energy Group
2,172
2,911
10,587
9,852
Operating expenses, including depreciation
2,236
1,008
6,206
4,685
Total operating expenses
5,374
4,879
19,942
17,479
Operating Income
(579)
485
878
2,098
Interest expense and other
(115)
(157)
(617)
(716)
Income Before Income Taxes
(694)
328
261
1,382
Income taxes
(147)
120
248
611
                       
Income before discontinued operations and                      
cumulative effect of a change in accounting                      
principle   (547)     208     13     771
                     
Discontinued operations                      
Loss from operations of PG&E Energy                      
Services (net of applicable income taxes                      
of $9 million, $14 million, $35 million, and                      
$41 million, respectively)   (6)     (12)     (40)     (52)
Loss on disposal of PG&E Energy Services                      
(net of applicable income taxes of                      
$36 million)   (58)         (58)    
 
 
 
 
                     
Net income (loss) before cumulative effect of a                      
change in accounting principle   (611)     196     (85)     719
 
 
 
                     
Cumulative effect of a change in an accounting                      
principle (net of applicable income taxes of                      
$8 million)           12    
       
Net Income (Loss)
$
(611)
$
196
$
(73)
$
719
 
Weighted Average Common Shares Outstanding
366
383
368
382
Earnings (Loss) Per Common Share, Basic and Diluted
Income from continuing operations
$
(1.49)
$
0.54
$
0.04
$
2.02
Discontinued operations
(0.18)
(0.03)
(0.27)
(0.14)
Cumulative effect of a change in an                      
accounting principle
 0.03
Net income (loss)
$
(1.67)
$
0.51
$
(0.20)
$
1.88
Dividends Declared Per Common Share
$
0.30
$
0.30
$
1.20
$
1.20
                     
                     
Earnings per share from continuing operations for PG&E Corporation's lines of business are as follows:
Three months ended December 31,
Twelve months ended December 31,

1999

1998

1999

1998
Utility
Pacific Gas and Electric Company
$
0.72
$
0.45
$
2.07
$
1.82
National Energy Group
PG&E Generating
0.06
0.09
0.26
0.28
PG&E Gas Transmission
– Texas
(2.34)
(0.05)
(2.43)
(0.18)
– Northwest
0.06
0.05
0.18
0.17
PG&E Energy Trading
(0.04)
(0.02)
(0.09)
(0.02)
Eliminations and Other
0.05
0.02
0.05
(0.05)
Subtotal - National Energy Group
(2.21)
0.09
(2.03)
0.20
Total
$
(1.49)
$
0.54
$
0.04
$
2.02
                     

 

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