SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: January 20, 1999
Exact Name of
Commission Registrant State or other IRS Employer
File as specified Jurisdiction of Identification
Number in its charter Incorporation Number
- --------------- ---------------- ----------------- ---------------
1-12609 PG&E Corporation California 94-3234914
1-2348 Pacific Gas and California 94-0742640
Electric Company
Pacific Gas and Electric Company PG&E Corporation
77 Beale Street, P.O. Box 770000 One Market, Spear Tower, Suite 2400
San Francisco, California 94177 San Francisco, California 94105
(Address of principal executive offices) (Zip Code)
Pacific Gas and Electric Company PG&E Corporation
(415) 973-7000 (415) 267-7000
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
A. 1998 Consolidated Earnings (unaudited)
Attached hereto as an appendix is a copy of the unaudited
Condensed Statement of Consolidated Income for PG&E Corporation for
the three months and years ended December 31, 1998 and 1997. PG&E
Corporation reported earnings per common share of $1.88 for the year
ended December 31, 1998, as compared to $1.75 per share for the year
ended December 31, 1997.
B. 1999 Outlook
On January 20, 1999, in commenting upon the 1999 earnings per
share estimates of financial analysts ranging from $2.00 to $2.30 per
share, PG&E Corporation announced that it is currently focused on
achieving earnings per share for 1999 in the middle of the range of
these estimates. The most significant factor influencing the 1999
corporate earnings results will be the outcome of Pacific Gas and
Electric Company's General Rate Case (GRC) proceeding now pending
before the California Public Utilities Commission. The GRC
application requests an increase in base revenues to reflect
increasing levels of gas and electric demand as well as customer
growth in Pacific Gas and Electric Company's service territory, the
cost of continued and enhanced maintenance activities, and increased
capital expenditures. Actual earnings results could be materially
different from the goal stated above depending on the outcome of the
GRC. In addition, several existing factors will have a negative
effect on 1999 earnings per share as compared to 1999, including:
decrease in returns on generation assets as a result of the continuing
divestiture of generation assets and the accelerated depreciation of
the Diablo Canyon Nuclear Power Plant, and the two planned 1999
refueling outages for Diablo Canyon (as compared to a single refueling
outage in 1998) resulting in lost revenues from Diablo Canyon
operations. Countering the negative factors are planned share
repurchases (see item C below), anticipated growth in PG&E
Corporation's non-utility operations, and lower effective tax rates
(as more of PG&E Corporation's revenue is derived from operations
outside of California in states with lower state tax rates).
The foregoing statements regarding PG&E Corporation's 1999
earnings per share goal and the factors expected to affect 1999
earnings are forward looking statements that are necessarily subject
to various risks and uncertainties. These statements are based on the
beliefs and assumptions of management and on information currently
available to management. Factors that could cause future results to
differ materially from those expressed in or implied by the forward-
looking statements include the impact or outcome of:
- -- the pace and extent of the ongoing restructuring of the electric
and gas industries across the United States;
<PAGE>
- -- the regulatory proceedings and operational changes related to that
restructuring;
- -- any changes in the amount Pacific Gas and Electric Company (PG&E)
is allowed to collect (recover) from its customers for certain costs
which prove to be uneconomic under the new competitive market (called
transition costs) in accordance with PG&E's plan for recovering those
costs;
- -- the successful integration and performance of PG&E Corporation's
recently acquired assets;
- -- PG&E Corporation's ability to successfully compete outside PG&E's
traditional regulated markets;
- -- internal and external Year 2000 software and hardware issues;
- -- the outcome of ongoing regulatory proceedings, including: PG&E's
cost of capital proceeding; PG&E's 1999 GRC; and PG&E's transmission
rate case applications;
- -- the development of competition in the California generation market;
and
- -- fluctuations in commodity gas and electric and ancillary service
prices and PG&E Corporation and PG&E's ability to successfully hedge
against such price risk fluctuations.
Although the ultimate impacts of the above factors are uncertain,
these and other factors may cause future earnings to differ materially
from results or outcomes currently sought or expected by PG&E
Corporation.
C. Share Repurchase Program
On January 20, 1999, PG&E Corporation announced that it intends
to repurchase shares through 1999 using all or a major portion of the
approximately $570 million authorization remaining from the stock
repurchase program previously authorized by the Board of Directors on
December 17, 1997. Such repurchases may be effected from time to time
through brokers and dealers on the New York Stock Exchange and/or the
Pacific Exchange or in one or more privately negotiated transactions
which may include accelerated share repurchases.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on their
behalf by the undersigned thereunto duly authorized.
PG&E CORPORATION
and
PACIFIC GAS AND ELECTRIC COMPANY
CHRISTOPHER P. JOHNS
By ________________________________
CHRISTOPHER P. JOHNS
Vice President and Controller
(PG&E Corporation)
Vice President and Controller
(Pacific Gas and Electric Company)
Dated: January 21, 1999
<PAGE>
APPENDIX
PG&E CORPORATION
CONDENSED STATEMENT OF CONSOLIDATED INCOME
(unaudited)
<TABLE>
<CAPTION>
Three months ended Twelve months ended
December 31, December 31,
------------------- ------------------
(in millions, except per
share amounts)
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Operating Revenues
Pacific Gas and Electric Company $ 2,218 $ 2,401 $ 8,924 $ 9,495
Energy commodities and services 3,277 2,487 11,018 5,905
------- ------- ------- ------
Total operating revenues 5,495 4,888 19,942 15,400
------- ------- ------- ------
Operating Expenses
Cost of energy for Pacific Gas
and Electric Company 1,000 811 3,082 2,974
Cost of energy commodities
and services 3,036 2,347 10,194 5,511
Operating expenses including
depreciation 1,003 1,465 4,659 5,187
------- ------- ------- -------
Total operating expenses 5,039 4,623 17,935 13,672
------- ------- ------- -------
Operating Income 456 265 2,007 1,728
Interest expense and other (154) (81) (718) (464)
------- ------- ------- -------
Income Before Income Taxes 302 184 1,289 1,264
------- ------- ------- -------
Income taxes 106 90 570 548
------- ------- ------- -------
Net Income $ 196 $ 94 $ 719 $ 716
======= ======= ======= =======
Weighted Average Common Shares
Outstanding 383 419 382 410
Earnings Per Common Share,
Basic and Diluted $ 0.51 $ 0.22 $ 1.88 $ 1.75
Dividends Declared Per
Common Share $ 0.30 $ 0.30 $ 1.20 $ 1.20
Earnings per share information for PG&E Corporation's
lines of business are as follows:
Three months ended Twelve months ended
December 31, December 31,
------------------- ------------------
1998 (a) 1997 1998 (a) 1997
-------- ------- -------- -------
Utility
Pacific Gas and
Electric Company $ 0.45 $ 0.43 $ 1.82 $ 1.79
Wholesale
U.S. Generating Company 0.09 - 0.28 (0.10)
PG&E Gas Transmission
-Texas (0.05) (0.05) (0.18) (0.06)
-Northwest 0.05 0.02 0.17 0.10
PG&E Energy Trading (0.02) (0.02) (0.02) (0.05)
Retail
PG&E Energy Services (0.03) (0.03) (0.14) (0.07)
Other 0.02 (0.13) (0.05) 0.14
------- ------- ------- -------
Subtotal - Wholesale and Retail 0.06 (0.21) 0.06 (0.04)
------- ------- ------- -------
Total $ 0.51 $ 0.22 $ 1.88 $ 1.75
======= ======= ======= =======
<FN>
(a) Includes an allocation of interest and administrative and general costs
incurred by PG&E Corporation, as parent company.
</TABLE>
<PAGE>
