PG&E (US:PCG)2022-04-28 21:30Financial Data and Key Metrics Changes - The company reported a non-GAAP core EPS of $0.30 for Q1 2022, compared to $0.23 for Q1 2021, reflecting a $0.07 increase year-over-year [6][27] - GAAP income for Q1 2022 was $475 million, with cumulative positive GAAP earnings of $253 million over the last four quarters, meeting eligibility requirements for S&P 500 index inclusion [26] - The company reaffirmed its 2022 non-GAAP core EPS guidance of $1.07 to $1.13, with a targeted EPS growth of at least 10% for 2022 to 2024 and at least 9% for 2025 and 2026 [24][29] Business Line Data and Key Metrics Changes - The company is focused on a simple and affordable model to mitigate financial risks while investing in necessary improvements to its electric and gas energy systems [11][30] - The undergrounding program is a key initiative, with an additional $7 billion capital included in the 2023 general rate case update, aimed at reducing physical risks [12][29] Market Data and Key Metrics Changes - The company is experiencing favorable responses from customers and communities regarding its undergrounding proposals, indicating strong support for legislative initiatives [48] - The company is actively engaging with policymakers to ensure favorable outcomes for its undergrounding plans, which are seen as beneficial for both customers and investors [49] Company Strategy and Development Direction - The company is committed to a culture shift focused on service and performance, aiming to rebuild confidence among employees and stakeholders [8] - The strategy includes a significant investment in undergrounding to permanently reduce physical risks associated with wildfires, alongside enhanced power line safety settings [43][72] - The company is also focused on maintaining affordability for customers while investing in system improvements [11][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its plans without relying on legislative changes, emphasizing the self-sufficiency of its undergrounding strategy [49] - The company is prepared for the upcoming wildfire season, having implemented enhanced safety measures that have shown a significant reduction in ignition incidents [72][75] - Management highlighted the importance of maintaining a strong balance sheet and financial health while addressing operational risks [92] Other Important Information - The company is on track to meet its 2022 targets, having already exceeded its undergrounding miles target for the year [23] - The company has resolved legal steps related to its rate-neutral securitization request, which is expected to improve credit metrics [36] Q&A Session Summary Question: Undergrounding legislative initiatives - Management acknowledged the importance of legislative support but emphasized that their plans can progress independently of legislation [48][49] Question: Wildfire victims fund and market alignment - Management confirmed that the company has completed cash payments to the trust and is open to co-marketing opportunities alongside the trust's public offerings [51] Question: Supply chain issues affecting solar and storage projects - Management expressed confidence in their supply situation for the summer of 2022, despite potential supply chain challenges [82] Question: Cost of capital proceedings and potential settlements - Management indicated that it is premature to speculate on settlement outcomes but noted a good track record with the commission [87] Question: Discussions with rating agencies regarding investment grade status - Management outlined three key factors that agencies are focusing on: operational risk reduction, alignment with state and customers, and core financial performance [92]