01—Abstract
Summary
Summary of the 8-K filed April 25, 2024. Cited figures are marked; the original filing is the authoritative source.
PG&E Corporation and its subsidiary Pacific Gas and Electric Company reported first-quarter 2024 results on April 25, 2024, as described in an 8-K furnishing a press release (Exhibit 99.1) and an earnings slide presentation (Exhibit 99.2).
PG&E Corporation reported GAAP income available for common shareholders of $732 milliona, or $0.34 per share, versus $569 million, or $0.27 per share, in the first quarter of 2023. Non-GAAP core earnings were $800 million, or $0.37 per share, compared with $615 million, or $0.29 per share, a year earlier. Management attributed the GAAP increase mainly to higher customer capital investment approved in the 2023 General Rate Case, along with non-fuel O&M savings net of reinvestment and lower Wildfire Fund amortization expense following an extension of the estimated coverage period from 15 to 20 years.
For 2024, PG&E raised its GAAP EPS guidance to $1.15 to $1.20b per share from $1.10 to $1.14, and reaffirmed non-GAAP core EPS guidance of $1.33 to $1.37 per share. The company stated it forecasts no equity needs in 2024. It also presented a 2024-2028 financing plan that funds $62 billion of safety and reliability capital expenditures, excludes a sale of the Utility's non-nuclear generation assets, and assumes up to $3 billion of potential equity needs over 2025 through 2028.
The filing notes that the 8-K information is furnished rather than filed under Section 18 of the Exchange Act. It also includes a cautionary statement that actual results may differ materially from forward-looking statements, citing risks such as wildfires, regulatory outcomes, and substantial indebtedness.
02—Key points
Key Highlights
- GAAP EPS of $0.34 for Q1 2024, up from $0.27 in Q1 2023; income available for common shareholders was $732 million versus $569 million.
- Non-GAAP core EPS of $0.37 for Q1 2024, up from $0.29 in Q1 2023; non-GAAP core earnings were $800 million versus $615 million.
- 2024 GAAP EPS guidance raised to $1.15 to $1.20 per share, from $1.10 to $1.14 previously.
- 2024 non-GAAP core EPS guidance reaffirmed at $1.33 to $1.37 per share, and no new equity is forecast for 2024.
- 2024-2028 financing plan funds $62 billion of safety and reliability capital expenditures and assumes up to $3 billion of potential equity needs over 2025 through 2028.
- Operating income rose to $1,276 million from $629 million, while interest expense increased to $715 million from $602 million.
- Wildfire Fund amortization expense declined as the estimated coverage period was extended from 15 to 20 years, a driver of the higher GAAP results.
03—Questions
Frequently Asked Questions
Why did GAAP earnings increase in the first quarter of 2024?
The filing attributes the increase primarily to higher customer capital investment, approved in the 2023 General Rate Case final decision and earning an equity return under the Automatic Cost of Capital Adjustment Mechanism. Other drivers were non-fuel O&M savings, net of amounts reinvested in programs such as increased transmission inspections, and lower Wildfire Fund amortization expense due to extending the estimated coverage period from 15 to 20 years.
How did PG&E change its 2024 earnings guidance?
GAAP EPS guidance was updated to $1.15 to $1.20 per share, up from $1.10 to $1.14. Non-GAAP core EPS guidance was reaffirmed at $1.33 to $1.37 per share. The GAAP guidance reflects unrecoverable interest expense of $285 million to $365 million after tax, among other factors.
Does PG&E expect to issue new equity in 2024?
No. The filing states PG&E is forecasting no equity needs in 2024. For 2025 through 2028, the financing plan assumes up to $3 billion of potential equity needs.
What does the 2024-2028 financing plan include?
The five-year plan funds $62 billion of safety and reliability capital expenditures. It excludes any sale of the Utility's non-nuclear generation assets and supports substantial dividend growth over the five-year horizon.
Why does the company present non-GAAP core earnings?
Management uses non-GAAP core earnings to compare underlying performance across periods by excluding non-core items, which management does not consider representative of ongoing earnings. In Q1 2024, non-core items totaled $68 million after tax, or $0.03 per share, compared with $46 million after tax, or $0.02 per share, in Q1 2023.
04—Continue