PG&E 2015 Annual Report Download - page 48

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PART II
ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
below). However, for certain operating costs, such as costs
associated with pension and other employee benefits,
the Utility is authorized to track the dierence between
actual amounts and forecast amounts and recover or
refund the dierence through rates (referred to as “Utility
Revenues and Costs that did not Impact Earnings” in
Results of Operations below). The Utility also collects
revenue requirements to recover certain costs that the
CPUC has authorized the Utility to pass on to customers,
such as the costs to procure electricity or natural gas
for its customers. Therefore, although these costs can
fluctuate, they generally do not impact net income (referred
to as “Utility Revenues and Costs that did not Impact
Earnings” in Results of Operations below). See “Ratemaking
Mechanisms” in Item 1 for further discussion.
This is a combined report of PG&E Corporation and the
Utility, and includes separate Consolidated Financial
Statements for each of these two entities. This
combinedMD&A should be read in conjunction with the
Consolidated Financial Statements and the Notes to the
Consolidated Financial Statements included in Item 8.
Summary of Changes in Net Income and Earnings per Share
The following table is a summary reconciliation of the
key changes, after-tax, in PG&E Corporation’s income
available for common shareholders and EPS (as well as
earnings from operations and EPS based on earnings from
operations) for the year ended December 31, 2015 compared
to the year ended December 31, 2014 (see “Results of
Operations” below). “Earnings from operations” is a
non-GAAP financial measure and is calculated as income
available for common shareholders less items impacting
comparability. “Items impacting comparability” represent
items that management does not consider part of the
normal course of operations and aect comparability of
financial results between periods. PG&E Corporation uses
earnings from operations to understand and compare
operating results across reporting periods for various
purposes including internal budgeting and forecasting,
short- and long-term operating plans, and employee
incentive compensation. PG&E Corporation believes that
earnings from operations provide additional insight into
the underlying trends of the business allowing for a better
comparison against historical results and expectations
for future performance. Earnings from operations are
not a substitute or alternative for GAAP measures such
as income available for common shareholders and may
not be comparable to similarly titled measures used by
other companies.
(inmillionsexceptpershareamounts) Earnings  EPS(diluted)
IncomeAvailableforCommonShareholders-   
Naturalgasmatters()    
Environmental-relatedcosts()  ()  ()
EarningsfromOperations-()   
Growthinratebaseearnings    
TimingofGT&Scostrecovery()  ()  ()
Regulatoryandlegalmatters()  ()  ()
GainondispositionofSolarCitystock()  ()  ()
Increaseinsharesoutstanding  -  ()
Miscellaneous   
EarningsfromOperations-()   
Insurancerecoveries()    
Finesandpenalties()  ()  ()
Pipeline-relatedexpenses()  ()  ()
Legalandregulatoryrelatedexpenses()  ()  ()
IncomeAvailableforCommonShareholders-   
()Innaturalgasmattersincludedpipeline-relatedcoststoperformworkunderthePSEPandotheractivitiesassociated
withsafetyimprovementstotheUtility’snaturalgassystemaswellaslegalandothercostsrelatedtonaturalgasmatters
Naturalgasmattersalsoincludedchargesrelatedtofinesthirdpartyliabilityclaimsandinsurancerecoveriesin
()IntheUtilityreduceditsaccrualrelatedtotheHinkleywholehousewaterreplacementprogram
()“Earningsfromoperations”isnotcalculatedinaccordancewithGAAPandexcludestheitemsimpactingcomparability
showninnotes()and()aboveandNotes()()and()below
()RepresentsexpensesduringtheyearendedDecemberascomparedtowithnocorrespondingincreasein
revenueTheUtilityhasrequestedthattheCPUCauthorizeanincreasetotheUtility’srevenuerequirementsfor
andinitsGT&SratecaseandexpectsafinaldecisioninAnyrevenuerequirementincreasethattheCPUC
mayauthorizewouldberetroactivetoJanuarybutwouldberecordedintheperiodafinaldecisionisissued