October 28, 2014
ISSUED BY:   PG&E Corporation, 1-415-973-5930


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

SAN FRANCISCO, Calif.—PG&E Corporation's (NYSE: PCG) third-quarter 2014 net income after dividends on preferred stock (also called “income available for common shareholders”) reported in accordance with generally accepted accounting principles (GAAP) was $811 million, or $1.71 per share. This compares with $161 million, or $0.36 per share, for the third quarter of 2013. The increase was primarily driven by recording three quarters of revenues from the 2014 General Rate Case in the third quarter and by lower charges for disallowed costs compared to the third quarter of 2013.

GAAP results include items that management does not consider part of normal, ongoing operations (items impacting comparability), which totaled $15 million pre-tax, or $0.02 per share for the quarter. The items impacting comparability relate mostly to natural gas matters, including costs to validate safe pipeline operating pressures and make other safety improvements, as well as legal and other costs, offset in part by insurance recoveries. The cost to shareholders for natural gas pipeline safety-related work incurred since the San Bruno accident or committed over the next several years is $2.7 billion, based on current forecasts.

PG&E Corporation Chairman, CEO and President Tony Earley said: "Operationally, we continued to make excellent progress during the quarter. This was exemplified by our team's response to make the system safe and restore service during the Napa Valley earthquake in August. Improvements in our emergency planning and the use of data from our SmartMeter™ network supported our ability to respond quickly and effectively.

"Unfortunately, during the quarter, as a result of an internal review, we found that certain improper communications had occurred with our regulators. We promptly reported our findings to the California Public Utilities Commission and took significant actions to address the shortcomings. We are committed to complying with both the letter and the spirit of the law and PG&E's own Code of Conduct at all times.

"We continue to believe that it is vital that state regulators resolve gas pipeline investigations that have been ongoing for more than three years and decide any associated penalties in a timely and balanced manner."

Earnings from Operations

On a non-GAAP basis, excluding items that management does not consider part of normal, ongoing operations, results were $820 million, or $1.73 per share, compared to $395 million, or $0.88 per share for the third quarter of 2013. The most important factor contributing to this quarter-over-quarter increase was the final decision in the 2014 General Rate Case, which provided for incremental revenues retroactive to the beginning of the year. Upon receipt of the final decision, PG&E recorded the cumulative impact of the decision for the first three quarters of 2014 all in the third quarter.

2014 Earnings Guidance

PG&E Corporation is issuing 2014 guidance for non-GAAP earnings from operations of $3.45 to $3.55 per share. On a GAAP basis, the range for projected earnings is $3.06 to $3.23 per share.

Guidance is based on various assumptions and forecasts, including those relating to expenses, capital expenditures, rate base, and equity issuances. Guidance does not include potential fines beyond the $200 million already accrued. These and other assumptions and forecasts are provided in an appendix to the presentation accompanying the earnings release, available on PG&E Corporation's website at:

PG&E Corporation discloses historical financial results based 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 income available for common shareholders presented in accordance with GAAP. See the accompanying tables for a reconciliation of the differences between results based on earnings from operations and results based on consolidated income available for common shareholders.

Supplemental Financial Information

In addition to the financial information accompanying this release, presentation slides for today's conference call with the financial community have been furnished to the Securities and Exchange Commission and are available on PG&E Corporation's website cited above.

Conference Call with the Financial Community to Discuss Financial Results

Today's call at 11:00 a.m., Eastern Time, is open to the public on a listen-only basis via webcast. Please visit for more information and instructions for accessing the webcast. The webcast call and the related materials will be available for replay through the website for at least one year. Alternatively, a toll-free replay of the conference call may be accessed shortly after the live call until 8:00 p.m. Eastern Time, November 11, 2014, by dialing 866-415-9493. International callers may dial (205) 289-3247. For both domestic and international callers, the replay pin 24108# will be required to access the replay.

About PG&E Corporation

PG&E Corporation (NYSE: PCG) is a Fortune 200 energy-based holding company, headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, California's largest investor-owned utility. PG&E serves 16 million Californians across a 70,000 square-mile service area in Northern and Central California. For more information, visit

Management's statements regarding PG&E Corporation's 2014 earnings per share and the estimated amount of the non-recoverable pipeline-related costs Pacific Gas and Electric Company ("Utility") will incur, as well as the assumptions and forecasts on which the statements are based, are forward-looking statements. These statements are necessarily subject to various risks and uncertainties, the realization or resolution of which may be outside of management's control. These statements, and the underlying assumptions and forecasts, reflect management's judgment and opinions. PG&E Corporation and the Utility are not able to predict all the factors that may affect future results. Some of the factors that could cause actual results to differ materially include:

  • the timing and outcomes of the pending CPUC investigations, the criminal prosecution, and other investigations relating to the Utility, including the ultimate amount of fines imposed, whether a monitor is appointed to oversee the Utility's natural gas operations, and the ultimate amount of costs the Utility incurs that are not recoverable or are disallowed including the cost of required remedial actions;
  • the timing and outcome of additional regulatory enforcement actions or investigations that may be or have been commenced relating to the Utility's natural gas operating practices or compliance with the CPUC's rules regarding ex parte communications and whether such additional actions or investigations negatively affect the outcome of ratemaking proceedings, such as the 2015 GT&S rate case, or the pending CPUC investigations;
  • whether PG&E Corporation and the Utility are able to repair the harm to their reputations caused by the continuing negative publicity about the San Bruno accident, the CPUC investigations, the criminal prosecution, the Utility's self-reports of noncompliance with certain natural gas safety regulations and the CPUC rules regarding ex parte communications, and the ongoing work to remove encroachments from transmission pipeline rights-of-way;
  • the outcome of future investigations, citations, or other enforcement proceedings, that may be commenced relating to the Utility's compliance with laws, rules, regulations, or orders applicable to its operations, including the construction, expansion or replacement of its electric and gas facilities; inspection and maintenance practices, customer billing and privacy, and physical and cyber security; and whether the current or potentially worsening state regulatory environment increases the likelihood of unfavorable outcomes;
  • higher electricity procurement costs and whether the Utility is able to recover such higher costs in a timely way;
  • the amount and timing of additional common stock issuances by PG&E Corporation;
  • the ability of PG&E Corporation and the Utility to access capital markets and other sources of debt and equity financing in a timely manner on acceptable terms;
  • changes in credit ratings that could result in increased borrowing costs especially if PG&E Corporation or the Utility were to lose its investment grade credit ratings;
  • whether the ultimate outcome of the pending investigations and proceedings relating to the Utility's natural gas operations affects the Utility's ability to make distributions to PG&E Corporation, and, in turn, PG&E Corporation's ability to pay dividends;
  • the occurrence of events that cause unplanned outages, reduce generating output, disrupt service to customers, damage property owned by the Utility or third parties, subject the Utility to claims by third parties, or result in the imposition of civil, criminal, or regulatory penalties on the Utility;
  • the impact of changes in GAAP, standards, rules, or policies, including those related to regulatory accounting, and the impact of changes in their interpretation or application; and
  • the other factors disclosed in PG&E Corporation’s and the Utility's joint 2013 Annual Report and Quarterly Report on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2014.