Complete Earnings Tables
- Consolidated net income reported under GAAP
was $2.76 per share for 2006, compared with $2.37
per share for the full year in 2005. (All “per
share” amounts are presented on a diluted
basis.)
- Year-end net income was $991 million, compared
with $917 million in 2005.
- Earnings from operations for 2006 were $2.57
per share, compared with $2.34 for 2005.
- The company is increasing guidance for 2007
earnings from operations by $0.05 per share
to a range of $2.70-$2.80 per share.
(San Francisco) -- PG&E Corporation’s
(NYSE: PCG) consolidated net income reported in accordance
with generally accepted accounting principles (GAAP)
was $991 million, or $2.76 per share, for the full
year 2006. This compares with $917 million, or $2.37
per share, for the full year 2005.
On a non-GAAP basis, PG&E Corporation’s
earnings from operations for the year were $922 million,
or $2.57 per share, compared with $906 million, or
$2.34 per share, in 2005. This excludes certain income
and expenses reported in GAAP net income that are
not considered to be reflective of ongoing, core
operations. For 2006, items impacting comparability
primarily reflect the authorization for recovery
of costs associated with electric transmission scheduling
services provided by PG&E Corporation’s
utility subsidiary, Pacific Gas and Electric Company,
dating back to 1998 (see “Reconciliation of
Earnings from Operations to Consolidated Net Income
in Accordance with GAAP” in the accompanying
financial tables).
“We delivered solid financial results in 2006
and will build on this momentum going forward,” said
Peter A. Darbee, PG&E Corporation Chairman, CEO
and President. “We’re entering 2007 with
a sharp focus on advancing our business transformation
strategy, while taking important leadership positions
on issues like climate change and the environment.
We’re at the forefront on these issues, because
it’s consistent with our vision. It’s
consistent with our values. And it also fits with
our overall strategy, which emphasizes operational
excellence and taking care of our customers. I’m
confident that through our efforts, we will continue
to deliver for our customers, employees, shareholders
and our communities.”
The year-over-year increase in earnings per share
predominantly reflects the positive effects of share
repurchases in 2005, which resulted in fewer shares
outstanding in 2006, in addition to the net effects
of other items (see “Earnings per Common Share
from Operations, Year-to-Date 2006 vs. Year-to-Date
2005” in the accompanying financial tables).
Earnings from operations for the year were not impacted
by changes in the cost of electricity and natural
gas provided to customers, or the cost of fuel to
generate electricity. Increases or decreases in these
expense categories are generally offset by revenue
adjustments authorized by the California Public Utilities
Commission (CPUC).
On a stand-alone basis in 2006, the utility’s
GAAP results were $971 million, compared to $918
million for 2005.
QUARTER-OVER-QUARTER RESULTS
For the fourth quarter of 2006, PG&E Corporation
reported GAAP net income of $152 million, or $0.43
per share, compared with $180 million, or $0.49 per
share, in the same quarter of 2005.
On a non-GAAP basis, PG&E Corporation’s
earnings from operations for the fourth quarter of
2006 were $170 million, or $0.48 per share, compared
with $179 million, or $0.49 per share, during the
fourth quarter of 2005 (see “Earnings per Common
Share from Operations, Fourth Quarter 2006 vs. Fourth
Quarter 2005” in the accompanying financial
tables).
On a stand-alone basis, the utility’s GAAP
results were $155 million for the fourth quarter
of 2006, compared with $183 million in the same quarter
of 2005.
2007 EARNINGS GUIDANCE
PG&E Corporation raised its guidance for 2007
earnings from operations by $0.05 per share, to a
range of $2.70-$2.80. Guidance assumes that the utility’s
rate base averages $17.3 billion in 2007, that the
company earns its authorized return on equity of
11.35 percent, and that the proposed settlement agreement
to resolve the utility’s 2007 general rate
case is approved by the CPUC.
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 (see the accompanying financial tables
for a reconciliation of guidance of earnings from
operations to guidance of consolidated net income
in accordance with GAAP).
Supplemental Financial Information:
- In addition to the financial information
accompanying this release, an expanded package
of supplemental financial and operational information
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 Year-End and Fourth Quarter Results:
- Today’s call at 11:30 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 9:00 p.m. EST, on February
28, 2007, by dialing 877-690-2089. International
callers may dial 402-220-0645.
This press release contains
forward-looking statements regarding management’s guidance
for PG&E Corporation’s 2007 earnings per
share from operations. These statements are based
on current expectations and various assumptions which
management believes are reasonable, including that
Pacific Gas and Electric Company’s (Utility)
rate base averages $17.3 billion in 2007, that the
Utility earns its authorized rate of return on equity
of 11.35 percent, and that the proposed settlement
agreement to resolve the Utility’s 2007 general
rate case is approved by the California Public Utilities
Commission (CPUC). These statements and assumptions
are necessarily subject to various risks and uncertainties,
the realization or resolution of which are outside
of management's control. Actual results may differ
materially. Factors that could cause actual results
to differ materially include:
- the Utility’s
ability to timely recover costs through rates;
- the outcome of regulatory proceedings, including
ratemaking proceedings pending at the CPUC and
the Federal Energy Regulatory Commission;
- 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;
- the effect of weather,
storms, earthquakes, fires, floods, disease,
other natural disasters, explosions, accidents,
mechanical breakdowns, acts of terrorism, and
other events or hazards that could affect the
Utility’s facilities and operations,
its customers and third parties on which
the Utility relies;
- the potential impacts
of climate change on the Utility’s electricity
and natural gas operations;
- 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;
- operating performance
of the Utility’s
Diablo Canyon nuclear generating
facilities (Diablo Canyon), the occurrence of
unplanned outages at Diablo Canyon, or the temporary
or permanent cessation of operations at Diablo
Canyon;
- the ability of the Utility to recognize benefits
from its initiatives to improve its business
processes and customer service;
- the ability of the Utility to timely complete
its planned capital investment projects;
- the impact of changes in federal or state
laws, or their interpretation, on energy policy
and the regulation of utilities and their holding companies;
- the impact of changing
wholesale electric or gas market rules, including
the California Independent System Operator’s
new rules to restructure the California wholesale
electricity market;
- how the CPUC administers
the conditions imposed on PG&E Corporation when it became the Utility’s
holding company;
- the extent to which
PG&E Corporation or
the Utility incurs costs
in connection with pending litigation that are
not recoverable through rates, from third parties,
or through insurance recoveries;
- the ability of PG&E
Corporation and/or the Utility to access capital
markets and other sources of credit;
- the impact of environmental laws and regulations
and the costs of compliance and remediation;
and
- the effect of municipalization, direct access,
community choice aggregation, or other forms of
bypass.