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  PRESS RELEASES 2019
 
 
August 09, 2019
ISSUED BY:   PG&E Corporation, 1-415-973-5930

PG&E Corporation Reports Second-Quarter 2019 Financial Results

Related Documents
Press Release and Selected Exhibits
Presentation and Complete Earnings Exhibits

SAN FRANCISCO — PG&E Corporation's (NYSE: PCG) recorded second-quarter 2019 net losses attributable to common shareholders were $2.6 billion, or $4.83 per share, as reported in accordance with generally accepted accounting principles (GAAP). This compares with net losses attributable to common shareholders of $984 million, or $1.91 per share, for the second quarter of 2018.

GAAP results include items that management does not consider part of normal, ongoing operations (items impacting comparability), which totaled $3.1 billion after-tax, or $5.92 per share, for the quarter. This was primarily driven by an additional $3.9 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, among other things, the previously announced agreement with local public entities to resolve their wildfire-related claims, the status of PG&E's efforts to reach a resolution with other holders of wildfire-related claims and additional information from Cal Fire.

Items impacting comparability for the quarter also include 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 financing, legal, and other 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).

"Our primary focus areas are to further reduce the risk of wildfires in the communities we serve, to improve our safety and operational performance across the board, and to move expeditiously through the Chapter 11 process, which includes paying wildfire victims fairly and as soon as possible. We recognize we are operating from a deficit when it comes to public trust, and to regain that trust, we must sustain excellent operational performance day after day, month after month, year after year. That's what my 23,000 colleagues at PG&E are striving to achieve," said PG&E Corporation Chief Executive Officer and President Bill Johnson.

Progress Report

Over the past several months, the company has made significant headway on operational improvements, wildfire victim compensation, and the Chapter 11 process:

  • PG&E has nearly completed enhanced and accelerated inspections of its electric infrastructure in high fire-threat areas. This work has included visual and aerial inspections of approximately 50,000 electric transmission structures, 700,000 distribution poles and 222 substations, covering more than 5,500 miles of transmission line and 25,200 miles of distribution line. The company is addressing immediate safety risks as they are identified during these inspections.
  • PG&E announced $1 billion in settlements with more than a dozen cities, counties and other jurisdictions regarding the 2018 Camp fire, 2017 Northern California wildfires and 2015 Butte fire.
  • The Utility notified the California Public Utilities Commission (CPUC) of its decision to participate in the statewide fund, as established by California Assembly Bill (AB) 1054, which would be available for eligible electric utility companies to pay certain liabilities arising from future wildfires. The Bankruptcy Court must approve PG&E's participation in the fund and the required financing. The Utility expects that its initial contribution to the wildfire fund would be approximately $4.8 billion, and that its annual contributions would be approximately $193 million. The initial contribution would be payable upon the company's emergence from Chapter 11 reorganization.
  • PG&E is preparing a Plan of Reorganization that will include: payment in full or reinstatement of all prepetition funded debt obligations; payment in full of all prepetition trade and employee-related unsecured claims; satisfaction of prepetition wildfire claims in amounts agreed upon or as otherwise approved by the Bankruptcy Court and consistent with the terms of AB 1054; rate neutrality for the Utility's customers; the assumption of all power-purchase agreements and community-choice aggregation servicing agreements; the assumption of all collective bargaining agreements; and certain other terms.

In addition, a refreshed Board of Directors is in place, with 12 new directors and two continuing directors, for PG&E Corporation and the Utility. Shareholders voted all directors to one-year terms at the companies' Annual Meetings of Shareholders on June 21, 2019.

Non-GAAP Earnings from Operations

PG&E Corporation's non-GAAP earnings from operations, which exclude items impacting comparability (IIC), were $581 million, or $1.10 per share, in the second quarter of 2019, compared with $601 million, or $1.16 per share, during the same period in 2018.

The decrease in quarter-over-quarter non-GAAP earnings from operations was primarily driven by various regulatory matters resolved in 2018 and having no similar 2019 impact, and 2019 vegetation management costs, 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 2018 Camp fire, the 2017 Northern California wildfires, the Chapter 11 proceedings, and legislative and regulatory reforms. PG&E Corporation is providing 2019 IIC guidance of $3.8 billion to $4.1 billion after-tax for costs related to the 2017 Northern California wildfires, the 2018 Camp fire, enhanced and accelerated electric asset inspections, and Chapter 11-related matters. 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 "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 Community Wildfire Safety Program, 2019 Wildfire Safety 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 and June 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.

 

 

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