PCG Q1 2019 Earnings Release Final

Transcript

1 | . 972 . 7080 | Media Inquiries Contact: 415 . 973 . 5930 Contact: 415 www.pgecorp.com Investor Relations May 2 , 2019 Corporation Reports First - Quarter 2019 PG&E Results Financial 2019 earning s were $ 0.2 5 per share for the first quarter ▪ GAAP , compared to $ 0.86 per share of for the same period in 2018 . ▪ Non - GAAP earnings from operations were $ 1.0 4 per share for the first quarter of 2019 , compared to $ 0.91 per share for the same period in 2018 . 2019 SAN FRANCISCO PG&E Corporation’ s (NYSE: PCG) first - quarter net income available for — common shareholders was $ 13 6 million , or $ 0.2 5 per share, as reported in accordance with generally accepted accounting principles (GAAP). This compares with net income available common for quarter of $ million, or $ 0.86 shareholders of per share, for the first 442 2018 . GAAP results include items that management does not consider part of normal, ongoing operations (items impacting comparability), which totaled $ 1 0 million after - tax, or $ 0. 79 4 per share, for the quarter. This was primarily driven by enhanced and accelerated electric asset inspection costs, clean - up and repair legal and other costs related to the 2017 Northern California costs related to the 2018 Camp Fire , wildfires 2018 Camp Fire , and financing, legal, and other costs related to PG&E Corporation’s and the Pacific Gas and Electric under Company’s ( Utility ) reorganization cases and C hapter 11 of the U.S. Bankruptcy Code (Chapter 11) . “ The people of California look to to provide safe electric and natural gas service, and this remains PG&E our most important responsibility . Over the last several months, the company has heard the calls for change, and has executed a number of actions that position PG&E to be able to address the evolving needs of California. As we position PG&E for the long - term, we are continuing to implement programs that will make the communities we serve safer in the face of extreme weather and wildfire risk, while also recognizing that significant work remains to be done as our state collectively confront s the coming wildfire season and the challenges of climate cha nge , ” said PG&E Corporation Chief Executive Officer (CEO) and President Bill Johnson . , who recently concluded a more Mr. Johnson year tenure as President and CEO of the than six - Tennessee Valley Authority, . began his role at PG&E today named refreshed Board s of Directors the Utility that include 13 highly In April, PG&E Corporation and to understanding and accomplished individuals committed to further enhancing PG&E’s safety culture, , and properly responding to customer concerns fairly treating wildfire victims, employees, retirees and to other interested parties. F ormer state and federal regulator Nora Mead Brownell was named as Chair of the Board of PG&E Corp , and former U.S. Ambassador Jeffrey Bleich was named as Chair of the oration Board of the Utility . PG&E Corporation also engaged former National Transportation Safety Board Chairman Chris Hart to be a special independent Corporation ’s CEO and safety advisor to PG&E P Mr. Johnson was separately named to the Board of the Utility, effect ive today. resident. PG&E Corporation will also propose to increase the maximum size of its Board to 15 directors, to be voted on at the Annual Shareholders Meeting . In connection with that proposal, Mr. Johnson will stand for election to the PG&E Corporation Board for one of the two new seats, and the Nominating and the fifteenth director position, focusing on Governance Committee will begin the search process for 1

2 can strong clean energy/clean technology experience, a background in network and didates with customer technology, strong ties to California, and expertise in California’s clean energy goals. , PG&E Corporation and the Utility remain commi tted to delivering safe and reliable In the months ahead electric and natural gas service to customers, and to continuing to make critical investments in system safety and maintenance. This includes work to further reduce the risk of wildfire in the the Utility’s communities it serves, and to rebuild infrastructure in areas impacted by wildfires. is taking action by: PG&E Further enhancing vegetation management efforts across high and extreme fire - threat areas t o • ncluding address vegetation that poses higher potential for wildfire risk, removing or trimming i particular tree species that have exhibited a higher pattern of failing; t areas, fire • threa Conducting enhanced safety inspections of electric infrastructure in high - including approximately 735,000 electric towers and poles across approximately 5,700 transmission line miles and 25,200 distribution line miles; and Expanding procedures for turning off power for safety during wildfire season to include all • high and extreme fire - threat areas . transmission and distribution lines in These PG&E’s 2019 Wildfire Safety Plan that the Utility wildfire safety actions and programs are part of ublic Utilities Commission (CPUC) in February . The plan address es the Utility’s filed with the California P unique and diverse service area and is subject to public review oval by the CPUC. and annual appr Operations GAAP Earnings Non - from PG&E Corporation’s non - GAAP earnings from operations, which exclude items impacting comparability (IIC), were $ 5 4 6 million, or $ 1. 0 4 per share, in the first quarter of 201 9 , compared with $ 468 million, or $ 0.91 per share, during the same period in 2018 . earnings increase in quarter - over - quarter The - GAAP from operations was primarily driven by growth non in rate base earnings , timing of insurance premiums and timing of taxes. Corporation discloses “ non - GAAP earnings from PG&E operations,” which is a non - GAAP financial measure, in order to provide financial a measure that allows investors to compare the underlying another, performance the business from one period to of exclusive of items impacting comparability. See the accompanying tables for a reconciliation of non - GAAP earnings from operations to consolidated income for common shareholders. available Guidance IIC 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 reform s . PG&E Corporation is providing 2019 IIC guidance of $ to $ 1. 4 bill ion 1.0 billion after - tax for costs related to enhanced and accelerated electric asset inspections, the 2018 Camp Fire , 2017 Northern California additional information. wildfires, and Chapter 11 - related matters. See the accompanying tables for IIC guidance is based on v arious assumptions and forecasts related future expenses and certain other to 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 ar e available on PG&E Corporation’ s reports/default.aspx. website at : http://investor.pgecorp.com/financials/quarterly - earnings - 2

3 Public Dissemination of Certain Information and the Utility routinely provide links to the Utility’s principal regulatory proceedings ation PG&E Corpor CPUC and the Federal Energy the Regulatory Commission (FERC) at http://investor.pgecorp.com, with the “Regulatory Filings” tab, so that such filings are under vailable to investors upon filing with the a 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.co m, under the “Wildfire Updates” and “News & Events: Events & Presentations” tabs, in order to publicly disseminate such information. It is possible that any of these filings respectively, included therein or could be deem ed to be material information. information About Corporation PG&E 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 - square - mile service area in Northern and Central California. Each of PG&E Corporation across a 70,000 and the Utility is a separate entity, with distinct creditors and claimants, and is subject to separate laws, orp.com. In this press release, they are rules and regulations. For more information, visit http://www.pgec together referred to as “PG&E.” Forward - Looking Statements This press release contains forward - looking statements that are not historical facts, including statements and about beliefs, expectations, estimates, fut ure plans the strategies of PG&E Corporation and the Utility, as well as forecasts and estimates regarding potential liability in connection with the 2018 Camp and Fire and 2017 Northern California wildfires, the Utility’s 2019 Wildfire Safety Plan , PG&E Corporation’s IIC guidance. These statements are based on current expectations and assumptions, 2019 believes are reasonable, and on information currently which available to management, but management are to various risks and uncertainties. In necessarily addition to the risk that these assumptions subject prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated the forward - looking statements include factors by 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 report on - Form 10 Q for the quarter ended March 31, 2019, and other reports filed with the SEC, which are available PG&E Corporation’s website at www.p gecorp.com and on the SEC website at www.sec.gov. on associated Additional include, but are not limited to, those factors with the Chapter 11 cases of PG&E Corporation and the Utility that commenced on January 29, 2019. PG&E Corporation and the Utility to undert no obligation to publicly update or revise any forward - looking statements, whether due ake new information, future events or otherwise, except to the extent required by law. 3

4 PG&E CORPORATION - (DEBTOR IN - POSSESSION) OF INCOME CONDENSED CONSOLIDATED STATEMENTS (Unaudited) Three Months Ended March 31, 2019 2018 (in millions, except per share amounts) Operating Revenues 2,792 $ 2,951 Electric $ Natural gas 1,105 1,219 4,011 4,056 Total operating revenues Operating Expenses Cost of electricity 819 599 Cost of natural gas 289 339 Operating and maintenance 2,087 1,604 - — Wildfire (7 ) related claims, net of insurance recoveries 797 752 Depreciation, amortization, and decommissioning 3,822 Total operating expenses 3,457 Operating Income 189 599 Interest income 9 22 (103 ) (220 ) Interest expense 71 108 Other income, net (127 ) — Reorganization items, net Income Before Income Taxes 52 496 (benefit) (84 ) 51 Income tax provision Net Income 136 445 Preferred stock dividend requirement of subsidiary — 3 $ 136 Income Available for Common Shareholders 442 $ 526 Weighted Average Common Shares Outstanding, Basic 515 Weighted Average Common Shares Outstanding, Diluted 527 516 0.25 $ $ 0.86 Net Earnings Per Common Share, Basic $ 0.25 Net Earnings Per Common Share, Diluted $ 0.86 4

5 ’ s Consolidated Income Available for Common Reconciliation of PG&E Corporation Shareholders in Accordance with GAAP ”) - GAAP Earnings from Operations Generally Accepted Accounting Principles to Non (“ First Quarter, 2019 vs. 2018 (in millions, except per share amounts) Three Months Ended March 31, Earnings per Share Common Earnings (Diluted) 2019 2018 2019 (in millions, except per share amounts) 2018 ’ $ 442 $ PG&E Corporation s Earnings on a GAAP basis 0.25 136 $ 0.86 $ (1) Items Impacting Comparability: (2) 151 0.29 Electric asset inspection costs — — (3) 0.26 related costs 138 — - 2018 Camp fire — (4) - 97 related costs 0.18 — — Chapter 11 (5) 25 15 - 0.05 related costs 2017 North 0.03 ern California wildfire (6) Pipeline - related expenses 7 — — 0.01 (7) related costs, net of insurance — 4 - 2015 Butte — fire 0.01 (8) 546 - GAAP Earnings from Operations $ 468 PG&E Corporation ’ $ 1.04 s Non $ 0.91 $ All amounts presented in the table above are tax adjusted at PG&E Corporation ’ s statutory tax rate of 27.98% for 2018 and Chapter 11 - 2019, except for certain related costs, which are not tax deductible. Amounts may not sum due to rounding. ” ( Items impacting comparability ) represent items that management does not consider part of the normal course of 1 “ l results between periods, consisting of the items listed in the table above. operations and affect comparability of financia - See: Use of Non GAAP Financial Measures. (2) The Utility incurred costs of $210 million (before the tax impact of $59 million) during the three months ended March 31, 2019 for i ncremental operating expenses related to enhanced and accelerated inspections and repairs of electric transmission and distribution assets. (3) The Utility incurred costs of $192 million (before the tax impact of $54 million) during the three months ended March 31, 2019 associated with the 2018 Camp fire. This includes $179 million (before the tax impact of $50 million) during the three months ended March 31, 2019 for clean up and repair costs. The Utility also incurred costs of $13 million (before the - tax impact of $4 million) for legal and other costs. Three Months Ended tax) (in millions, pre - March 31, 2019 - up and repair costs $ 179 Utility clean Legal and other costs 13 - 2018 Camp fire $ 192 related costs

6 (4) million (before the tax impact of $30 million) during the three months ended March 31, The Utility incurred costs of $127 s and the Utility s Chapter 11 Cases. This includes $114 million (before the ’ ’ 2019 directly associated with the Corporation - tax impact of $32 million) during the three mo - possession (DIP) financing costs. nths ended March 31, 2019 for debtor in 1 The Utility also incurred legal and other costs of $24 million (before the tax impact of $1 million ) during the three months by $11 million (before the tax impact of $3 million) recorded ended March 31, 2019. These costs were partially offset during the three months ended March 31, 2019 for interest income. (1) $18 million of legal and other costs are not tax deductible Three Months Ended tax) (in millions, pre - March 31, 2019 financing costs $ 114 DIP Legal and other costs 24 (11 ) Interest income - related costs $ 127 Chapter 11 (5) The Utility incurred legal and other costs of $34 million (before the tax impact of $9 million) and $21 million (before the tax impact of $6 million) during the three months ended March 31, 2019 and 2018, respectively, associated with the 2017 Northern California wildfires. (6) 31, The Utility incurred costs of $10 million (before the tax impact of $3 million) during the three months ended March - 2018 for pipeline related expenses incurred in connection with the multi - year effort to identify and remove encroachments - of - from transmission pipeline rights way. The Utility incurred costs, net of insurance, of $5 million (before the tax impac t of $1 million) during the three months (7) ended March 31, 2018 associated with the 2015 Butte fire. This includes $12 million (before the tax impact of $3 million) during the three months ended March 31, 2018 for legal costs. These costs were partially offs et by $7 million (before the tax impact of $2 million) recorded during the three months ended March 31, 2018 for contractor insurance recoveries. Three Months Ended tax) - (in millions, pre March 31, 2018 $ 12 Legal costs Insurance recoveries (7 ) Butte fire - related costs, net of insurance $ 5 2015 ( 8 ) “ Non - GAAP earnings from operations ” is a non - GAAP financial measure. See: Use of Non - GAAP Financial Measures.

7 from Operations - GAAP Earnings per Common Share (“ EPS Key Drivers of PG&E Corporation s Non ’ ”) First Quarter, 2019 vs. 2018 (in millions, except per share amounts) First Quarter 2019 vs. 2018 Earnings per Common Share Earnings (Diluted) (1) 2018 Non $ 468 - GAAP Earnings from Operations $ 0.91 Growth in rate 0.06 32 base earnings (2) 21 Liability insurance premiums 0.04 (3) 21 Timing of taxes 0.04 4 Miscellaneous 0.01 Increase in shares outstanding (0.02 ) — (1) $ 2019 Non - $ GAAP Earnings from Operations 1.04 546 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 previous e xhibit for reconciliations of (i) earnings on a GAAP basis to non - GAAP earnings fro m operations and (ii) - GAAP EPS from operations. EPS on a GAAP basis to non (2) Represents the insurance premium costs incurred in the first quarter of 2019, above amounts included in authorized revenue requirements that are probable of recovery, with no s imilar impact in the first quarter of 2018. The California Public Utilities Commission issued its final decision authorizing a Wildfire Expense Memorandum Account in June 2018. amortization of a portion of the Utility ’ s Also represents lower insurance premium costs in 2019 due to the accelerated liability insurance premiums during the fourth quarter of 2018 as a result of the 2018 Camp fire. (3) Represents the timing of taxes reportable in quarterly statements in accordance with Accounting Standards Codi fication 740, Income Taxes , and results from variances in the percentage of quarterly earnings to annual earnings.

8 s 2019 Items Impacting Comparability IIC ”) Guidance ’ (“ PG&E Corporation tax) Low 2019 IIC Guidance (in millions, after High - (1) Estimated Items Impacting Comparability: (2) $ 302 2018 Camp fire - $ 245 related costs (3) - 36 65 2017 Northern California wildfire related costs (4) 432 648 Electric asset inspection costs (5) Chapter 11 ~338 - ~287 related costs Estimated IIC Guidance ~1,353 $ ~1,000 $ ’ s statutory tax rate of 27.98% for 2019, except All amounts presented in the table above are tax adjusted at PG&E Corporation - related costs. for certain Chapter 11 ( 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 ) “2018 Camp fire - related costs ” refers to e stimated Utility clean - up and repair and legal and other costs associated with the 2018 Camp fire. The total offsetting tax impact for the low and high IIC guidance range is $118 million and $95 million, respectively . 2019 Low IIC High IIC (in millions, pre - tax) guidance range guidance range $ 350 - 300 up and repair cost Utility clean $ 40 Legal and other costs 70 - $ 420 related costs $ 340 2018 Camp fire ( ) “2017 Northern California wildfire - 3 ” refers to estimated legal and other costs associated with the 2017 related costs Northern California wildfires. The total offsetting tax impact for the low and high IIC guidance range is $25 million and $14 million, respectively. 2019 Low IIC High IIC (in millions, pre - tax) guidance range guidance range $ 90 2017 Northern California wildfire - $ 50 related costs ( 4 ) “ Electric asset inspection costs ” represents incremental operating expense related to enhanced and accelerated inspections and repairs of electric transmission and distribution assets. The total offsetting tax impact for the low and high IIC guidance range is $252 and $168 million, respectively. 2019 High IIC Low IIC tax) - (in millions, pre guidance range guidance range 900 Electric asset inspection costs $ 600 $

9 ( ) “ Chapter 11 - related costs 5 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 ~$100 million of legal and other costs are not tax deductible. The total offsetting tax impact for the low and high IIC guidance range is $92 million and $73 million, respectively. 2019 High IIC Low IIC tax) - (in millions, pre guidance range guidance range $ 340 $ 280 Legal and other costs DIP ~120 ~120 financing costs Interest income ) (40 ) (30 Chapter 11 - related costs $ ~430 $ ~360 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.

10 - Use of Non GAAP Financial Measures PG&E Corporation and Pacific Gas and Electric Company “ non - GAAP earnings from operations ” PG&E Corporation discloses historical financial results and provides guidance based on 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 earni ngs 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 cour se of operations and affect comparability of financial results between periods, consisting of the “ is a items listed in exh i bit s . ” Non - GAAP EPS from operations ” also referred to as “ non - GAAP earnings per share from operations non - is calculated as non - GAAP earnings from operations divided by common shares outstanding GAAP financial measure and - (diluted). PG&E Corporation uses non - GAAP EPS from operations to understand and GAAP earnings from operations and non compare operating results across reporting period s 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 add itional 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 alte rnatives 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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