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Corporate
Relations
One
Market, Spear Tower
Suite
2400
San
Francisco, CA 94105
1-800-743-6397
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FOR
IMMEDIATE RELEASE
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February
24, 2009
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PG&E CORPORATION REPORTS
2008 RESULTS; REAFFIRMS GUIDANCE FOR 2009
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PG&E
Corporation’s consolidated net income reported under GAAP was $1.34
billion, or $3.63 per share, for the year ended December 31, 2008,
compared with $1 billion, or $2.78 per share, in 2007. All per-share
amounts are presented on a diluted
basis.
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Consolidated
net income reported under GAAP for the 2008 fourth quarter was $517
million, or $1.37 per share, compared with $203 million, or $0.56 per
share, in the same quarter of 2007.
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Net
income for the year and quarter ended December 31, 2008 was increased
substantially by the benefits of a multi-year tax settlement, the proceeds
of which will help fund utility capital investments by subsidiary Pacific
Gas and Electric Company.
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Guidance
for 2009 earnings from operations is reaffirmed at $3.15 to $3.25 per
share.
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(San
Francisco) – PG&E Corporation’s (NYSE:PCG) consolidated net income for the
year ended December 31, 2008 reported in accordance with generally accepted
accounting principles (GAAP), was $1.34 billion, or $3.63 per share, compared
with $1 billion, or $2.78 per share, in 2007. Per-share earnings on a
GAAP basis in 2008 include income from a settlement of 2001-2004 tax audits,
totaling $257 million or $0.68 per share.
On a
non-GAAP earnings from operations basis, which excludes the benefits of the tax
settlement, PG&E Corporation’s results in 2008 were $2.95 per share,
compared with $2.78 per share in 2007.
For the
fourth quarter of 2008, PG&E Corporation’s consolidated net income was $517
million, or $1.37 per share, reflecting the benefits of the tax
settlement. This compares with $203 million, or $0.56 per share, in
the same quarter of 2007. On a non-GAAP earnings from operations basis, PG&E
Corporation’s results in the fourth quarter of 2008 were $0.70 per share,
compared with $0.56 per share in the fourth quarter of 2007.
The
year-over-year increase in earnings from operations primarily reflects earnings
from higher authorized capital investments in utility infrastructure and energy
efficiency incentive revenues, partially offset by higher expenses due to
storm-related outages, natural gas system maintenance activities, and the
extended outage to replace the steam generators at one unit of the Diablo Canyon
nuclear generating facility.
“Our
results for 2008 were in line with our commitments to investors and continue to
support our longer-term earnings growth targets,” said Peter A. Darbee,
Chairman, CEO and President of PG&E Corporation. “Looking ahead, we are
confident that we are well positioned to
continue
making the needed investments to strengthen energy reliability and services for
our customers.”
Earnings
Guidance
PG&E
Corporation reaffirms guidance for 2009 earnings from operations in the
$3.15-$3.25 per share range. Guidance assumes that Pacific Gas and
Electric Company (Utility) maintains a ratemaking capital structure of 52
percent equity, that it maintains its California Public Utilities Commission
(CPUC)-authorized return on equity of 11.35 percent and achieves at least a 12
percent return on equity on its Federal Energy Regulatory Commission
jurisdictional assets, while growing its asset base in line with its forecast,
that it earns sufficient incentive revenues for energy efficiency achievements
with an anticipated CPUC decision before the end of 2009, and that the Utility
realizes planned operational and cost efficiencies.
Guidance excludes
three anticipated items impacting comparability forecast to total between $0.05
and $0.11 per share. The three items are: expected benefits of a settlement of
refund claims for the 1998 and 1999 tax years that are anticipated to be
finalized this year; forecasted recovery of hydroelectric divestiture costs
incurred by the Utility in 2000 and 2001 in connection with the proposed
divestiture of its hydroelectric generation facilities; and forecasted costs to
accelerate the
completion of natural gas system integrity surveys and associated
remedial work. When added to earnings from operations, the net effect
of these items impacting comparability results in 2009 GAAP earnings per share
guidance of $3.20 to $3.36.
PG&E
Corporation discloses historical financial results and bases guidance on
“earnings 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 that do not reflect the normal course of
operations. Earnings from operations are not a substitute or alternative for
consolidated net income presented in accordance with GAAP (see the accompanying
financial tables for a reconciliation of results and guidance based on earnings
from operations to results and guidance based on consolidated net income in
accordance with GAAP).
Supplemental
Financial Information
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In
addition to the financial information accompanying this release, an
expanded package of supplemental financial material will be furnished to
the Securities and Exchange Commission and also will be available shortly
on PG&E Corporation’s website
(www.pgecorp.com).
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February
26 Investor Conference
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PG&E
Corporation senior management will provide an overview of the business and
discuss the company’s strategic focus, capital spending plans and
multi-year financial outlook at its upcoming Investor Conference with
members of the financial community on Thursday, February 26, 2009 in New
York City. The public may view the event via simultaneous web
cast beginning at 2:00 p.m. Eastern Standard Time at (www.pgecorp.com/investors/investor_info/conference/index.shtml).
Because the meeting so closely follows today’s earnings announcement,
PG&E Corporation will not hold its regular quarterly conference
call.
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This
press release contains forward-looking statements regarding management’s
guidance for PG&E Corporation’s 2009 earnings per share from
operations that are based on current expectations and various assumptions
that management believes are reasonable. These statements and assumptions
are necessarily subject to various risks and uncertainties, the
realization or resolution of which may be outside of management's
control. Actual results may differ materially. Factors that
could cause actual results to differ materially
include:
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the
Utility’s ability to manage capital expenditures and its operating and
maintenance expenses within authorized levels;
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the
outcome of pending and future regulatory proceedings and whether the
Utility is able to timely recover its costs through
rates;
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the
adequacy and price of electricity and natural gas supplies, and the
ability of the Utility to manage and respond to the volatility of the
electricity and natural gas markets, including the ability of the Utility
and its counterparties to post or return collateral;
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the
effect of weather, storms, earthquakes, fires, floods, disease, other
natural disasters, explosions, accidents, mechanical breakdowns, acts of
terrorism, and other events or hazards on the Utility’s facilities and
operations, its customers, and third parties on which the Utility
relies;
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the
potential impacts of climate change on the Utility’s electricity and
natural gas businesses;
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changes
in customer demand for electricity and natural gas resulting from
unanticipated population growth or decline, general economic and financial
market conditions, changes in technology, including the development of
alternative energy sources, or other reasons;
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operating
performance of Diablo Canyon, the availability of nuclear fuel, the
occurrence of unplanned outages at Diablo Canyon or the temporary or
permanent cessation of operations at Diablo Canyon;
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whether
the Utility can maintain the cost savings it has recognized from operating
efficiencies it has achieved and identify and successfully implement
additional sustainable cost-saving measures;
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whether
the Utility incurs substantial expense to improve the safety and
reliability of its electric and natural gas systems;
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whether
the Utility achieves the CPUC’s energy efficiency targets and recognizes
any incentives the Utility may earn in a timely manner;
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the
impact of changes in federal or state laws, or their interpretation, on
energy policy and the regulation of utilities and their holding
companies;
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the
impact of changing wholesale electric or gas market rules, including new
rules of the California Independent System Operator to restructure the
California wholesale electricity market;
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how
the CPUC administers the conditions imposed on PG&E Corporation when
it became the Utility’s holding company;
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the
extent to which PG&E Corporation or the Utility incurs costs and
liabilities in connection with litigation that are not recoverable through
rates, from insurance, or from other third parties;
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the
ability of PG&E Corporation, the Utility, and counterparties to access
capital markets and other sources of credit in a timely manner on
acceptable terms, especially given the recent deteriorating conditions in
the economy and financial markets;
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the
impact of environmental laws and regulations and the costs of compliance
and remediation;
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the
effect of municipalization, direct access, community choice aggregation,
or other forms of bypass;
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the
impact of changes in federal or state tax laws, policies, or regulations;
and
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other
factors and risks discussed in PG&E Corporation’s and the Utility’s
2008 Annual Report on Form 10-K and other reports filed with the
Securities and Exchange Commission.
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For
more information about PG&E Corporation and Pacific Gas and Electric
Company, please visit our web sites at www.pgecorp.com and
www.pge.com
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