Complete Earnings Tables
- Net income for PG&E Corporation was $0.65
per share, compared with $0.53 per share in the
same quarter of 2004. (All “per share” amounts
in this release are common shares on a diluted
basis.)
- Earnings from operations for PG&E Corporation
were $0.62 per share, compared with $0.57 per
share in the same quarter of 2004.
- Guidance for 2005 earnings from operations is
reaffirmed toward the upper end of the $2.20-$2.30
per share range. Guidance for 2006 earnings
from operations is reaffirmed at $2.35-$2.45 per
share.
(San Francisco) -- PG&E Corporation’s
(NYSE: PCG) consolidated net income reported in accordance
with generally accepted accounting principles (GAAP)
was $252 million, or $0.65 per share, in the third
quarter of 2005. In the same period last year, consolidated
net income was $228 million, or $0.53 per share.
“PG&E Corporation continues to deliver
solid financial and operational performance,” said
Peter A. Darbee, PG&E Corporation President and
CEO. “We look forward to taking further steps
to invest in our infrastructure and people with the
goal of strengthening service and ensuring a reliable
energy future for California.”
On a non-GAAP basis, PG&E Corporation’s
earnings from operations were $239 million, or $0.62
per share, in the third quarter of 2005, compared
with $242 million, or $0.57 per share, in the same
period last year.
Earnings from operations excludes certain non-operating
items reported in GAAP net income. Included in the
third quarter’s GAAP net income was $0.03 of
earnings associated with tax adjustments related
to National Energy & Gas Transmission’s
(formerly PG&E National Energy Group) discontinued
operations.
As disclosed in the Corporation’s Form 10-Q,
accounting for stock options as an expense in the
quarter would have reduced earnings by $0.01 per
share.
QUARTER-OVER-QUARTER COMPARISON
Earnings from operations for the third quarter of
2005 were $0.05 per share greater than in the same
period in 2004, reflecting the net effect of several
items.
Specifically, third quarter results for 2005 included
gains of $0.06 per share reflecting fewer outstanding
shares; $0.03 per share resulting from increased
equity investment in the utility, bringing its equity
ratio to the authorized level of 52 percent compared
with 49 percent in the same period last year; $0.01
per share reflecting lower interest expense at the
holding company; and $0.02 per share from increased
gas transmission revenues and other items.
These items were partially offset by $0.07 per
share, reflecting the earnings impact associated
with the elimination of the regulatory asset established
under the settlement resolving Pacific Gas and Electric
Company’s Chapter 11 case. The regulatory asset
was refinanced in February 2005 in order to deliver
as much as $1 billion in savings to customers.
EARNINGS GUIDANCE
PG&E Corporation believes its 2005 earnings
from operations will come in toward the upper end
of the $2.20-$2.30 per share range, based on year-to-date
results. PG&E Corporation is also reaffirming
its previous guidance for 2006 earnings from operations
at $2.35-$2.45 per share. Additionally, PG&E
Corporation plans to execute approximately $1.1 billion
of additional stock repurchases by the end of 2005.
PG&E Corporation 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 management believes 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.
Supplemental Financial Information:
- In addition to the financial information accompanying
this release, an expanded package of supplemental
financial material for the quarter will be furnished
to the Securities and Exchange Commission and also
will be available shortly on PG&E Corporation’s
website (www.pgecorp.com).
Conference Call with the Financial Community
to Discuss Third Quarter Results:
- Today’s call at 10:30 a.m. Eastern time
is open to the public on a listen-only basis via
webcast. Please visit www.pgecorp.com for
more information and instructions for accessing
the webcast. The call will be archived on the website.
Also, a toll-free replay will be accessible shortly
after the live call through 9 p.m. Eastern time,
on November 10, 2005, by dialing 877-690-2095.
International callers may dial 402-220-0650.
This press release and the attachment
contain forward-looking statements regarding PG&E
Corporation’s 2005 and 2006 guidance for earnings
from operations per share and planned share repurchases
that are based on current expectations and assumptions
which management believes are reasonable and on information
currently available to management. These statements
are necessarily subject to various risks and uncertainties.
In addition to the risk that the assumptions on which
the statements are based (including that Pacific
Gas and Electric Company (Utility) earns its authorized
rate of return on equity on a projected rate base
of approximately $16.2 billion for 2006 which assumes
the Utility makes certain capital expenditures, the
second series of energy recovery bonds is issued
in November 2005 in the approximate amount of $850
million, and that PG&E Corporation repurchases
additional shares of its common stock) prove to be
inaccurate, factors that could cause actual results
to differ materially from those contemplated by the
forward-looking statements include:
- Unanticipated changes in operating expenses
or capital expenditures, which may affect the Utility’s
ability to earn its authorized rate of return;
- The adequacy of natural gas supplies and
the effect of increasing prices for natural gas on
the Utility’s electric generation portfolio
and its natural gas distribution operations, the
ability of the Utility to manage and respond to increasing
natural gas costs successfully and to timely recover
its natural gas costs and increased electricity procurement
costs;
- The operation of the Utility’s
Diablo Canyon nuclear power plant, which exposes
the Utility to potentially significant environmental
costs and capital expenditure outlays, and the
extent to which the Utility is able to timely increase
its spent nuclear fuel storage capacity at Diablo
Canyon by 2007;
- The outcome of proceedings
pending at the California Public Utilities Commission
(CPUC) and the Federal Energy Regulatory Commission
(FERC);
- Whether the assumptions and forecasts underlying
the Utility’s CPUC-approved long-term electricity
procurement plan prove to be accurate, the terms
and conditions of the generation or procurement commitments
the Utility enters into in connection with its plan,
the extent to which the Utility is able to recover
the costs it incurs in connection with these commitments,
and the extent to which a failure to perform by any
of the counterparties to the Utility’s electricity
purchase contracts or the California Department of
Water Resources’ contracts allocated to the
Utility’s customers affects the Utility’s
ability to meet its obligations or to recover its
costs;
- The extent to which the CPUC or the FERC
delays or denies recovery of the Utility’s
costs, including electricity purchase costs, from
customers due to a regulatory determination that
such costs were not reasonable or prudent or for
other reasons, resulting in write-offs of regulatory
balancing accounts;
- How the CPUC administers the capital structure,
stand-alone dividend, and first priority conditions
of the CPUC’s decisions permitting the establishment
of holding companies for the California investor-owned
electric utilities, and the outcome of the CPUC's
new rulemaking proceeding concerning the relationship
between the California investor-owned energy utilities
and their holding companies and non-regulated affiliates;
- The impact of the recently adopted Energy
Policy Act of 2005 and future legislative or regulatory
actions or policies affecting the energy industry;
- The timing and resolution of the pending
appeal of the bankruptcy court’s confirmation
of the Utility’s plan of reorganization;
- The outcome of the litigation
pending against the Utility in California state
court involving allegations of injury allegedly
caused by exposure to chromium at certain of the
Utility's gas compressor stations and other pending
litigation;
- Increased competition
and forms of bypass; and
- Other factors discussed in PG&E
Corporation's SEC reports.