Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Q4 2017 Earnings Presentation
28 slides from Pacific Gas & Electric's earnings presentation, Feb 9, 2018
Slide 1: Fourth Quarter Earnings Call
FOURTH QUARTER EARNINGS CALL February 9, 2018
Slide 2: Forward Looking Statements
Forward Looking Statements This slide presentation contains statements regarding management’s expectations and objectives for future periods as well as forecasts and estimates regarding the impact of the Tax Cuts and Jobs Act of 2017, 2018 IIC guidance, 2017-2019 capital expenditures, 2017-2019 weig
Slide 3: Inverse Condemnation Strategies
Inverse Condemnation Strategies Requested rehearing of CPUC’s decision in San Diego Gas Regulatory & Electric’s wildfire cost recovery proceeding Asked trial court in Butte fire case to reconsider Legal interpretation of the application of inverse condemnation Informing lawmakers on impacts of clima
Slide 4: Tax Cuts and Jobs Act Expected Impact
Tax Cuts and Jobs Act Expected Impact Lower Customer Bills Annual reduction in customer revenue driven ~$500M by lower corporate tax rate annual revenue reduction Cash Tax Payments Faster net operating loss amortization and 2020 ~1 year acceleration of federal tax payments estimated year federal tax
Slide 5: Q4 2017 Earnings Results
Q4 2017 Earnings Results Q4 2017 Earnings Earnings EPS EPS (millions) (millions) Earnings on a GAAP basis $ 114 $ 0.22 $ 1,646 $ 3.21 Items Impacting Comparability (1) Tax Cuts and Jobs Act transition impact 147 0.29 147 0.29 Northern California wildfire-related costs 49 0.09 49 0.09 Butte fire-rela
Slide 6: Q4 2017: Quarter over Quarter Comparison
Q4 2017: Quarter over Quarter Comparison Earnings per Share from Operations $1.40 ($0.33) $1.20 ($0.18) $1.00 ($0.09) $0.80 ($0.06) ($0.02) ($0.02) $1.33 ($0.05) $0.05 $0.60 $0.40 $0.63 $0.20 $0.00 Q4 2016 EPS Timing of 2015 Timing of Impact of 2017 Timing of CEE Incentive Increase in Miscellaneous
Slide 7: 2018 Assumptions
2018 Assumptions Capital Expenditures Authorized Ratebase (weighted average) ($ millions) ($ billions) 2018 2018 General Rate Case 3,900 General Rate Case 26.1 Gas Transmission and Storage 1,000 Gas Transmission and Storage 3.8 Transmission Owner 19 1,400 Transmission Owner 7.1 Total Cap Ex $6.3 bil
Slide 8: 2018 Items Impacting Comparability Guidance
2018 Items Impacting Comparability Guidance ($ millions, pre-tax) 2018 Pipeline-related expenses (1) 35 - 60 Butte fire-related costs (2) 30 - 60 Northern California wildfire-related costs, net of insurance (3) 35 - 50 Estimated 2018 Items Impacting Comparability Guidance Total $100 - 170 (1) Total
Slide 9: Robust Cap Ex Supports Strong Returns
Robust Cap Ex Supports Strong Returns Capital Expenditures ($ in B) 2017-2019 $6.3B ~$6B $5.8B 2017 Recorded 2018 2019 General Rate Case Gas Transmission & Storage Electric Transmission Owner Range See the Forward Looking Statements for factors that could cause actual results to differ materially fr
Slide 10: Ratebase Supports Strong Returns
Ratebase Supports Strong Returns 2017-2019 Weighted Average Ratebase ($ in B) (1) ~7.5 - 8% CAGR $37.0B ~$40B $34.4B 2017 2018 2019 General Rate Case Gas Transmission & Storage Electric Transmission Owner Range Base Case Assumptions Potential Future Updates 2018 2019 • 2019 Gas Transmission & Storag
Slide 11: Equity Needs and Sources
Equity Needs and Sources Needs Sources Previous Guidance (Internal Programs) Internal Programs (Excluding DRP (1)) + Tax Reform + Cash from Dividend Suspension + Items Impacting Comparability December 31, 2017 shares outstanding: ~515 million (1) Dividend Reinvestment Plan. See the Forward Looking S
Slide 12: Appendix
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Slide 13: Appendix – Incremental Equity Factors
Appendix 1 – Incremental Equity Factors Incremental Equity Factors for Unrecovered Costs Equity Impacting Event Multiplier Non-deductible cash charges 100% Cash expenses 72% Non-cash charges (1) 36% (1) Multiplier applies at time of accrual; additional 36% applies at time of cash charge. 13
Slide 14: Appendix – Supplemental Earnings Materials
Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available Slides 15-16 for Common Shareholders in Accordance with Generally Accepted Accounting Principles to Earnings from Operations Exhibit B: Key Drivers of PG&E Corporation’s Earning
Slide 15: A: Reconciliation of Consolidated Income to Earnings from Operations (1 of 2)
Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Earnings from Operations Page 1 of 2 Fourth Quarter and Year to Date, 2017 vs. 2016 Three Months Ended December 31, Twelve Mon
Slide 16: A: Reconciliation of Consolidated Income to Earnings from Operations (2 of 2)
Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Earnings from Operations Page 2 of 2 Three Months Ended Twelve Months Ended (in millions, pre-tax) December 31, 2017 December
Slide 17: B: Key Drivers of Earnings per Common Share from Operations
Exhibit B: Key Drivers of PG&E Corporation’s Earnings per Common Share (“EPS”) from Operations Fourth Quarter and Year to Date, 2017 vs. 2016 (in millions, except per share amounts) Three Months Ended Twelve Months Ended December 31, 2017 December 31, 2017 Earnings per Earnings Common Common Share S
Slide 18: C: Operational Performance Metrics
Exhibit C: Operational Performance Metrics 2017 Performance Results 2017 Actual 2017 Target Meets Target (1) Safety (includes both public and employee safety metrics) Nuclear Operations Safety Unit 1 Performance Indicator 97.0 90.5 Unit 2 Performance Indicator 90.0 87.6 Electric Operations Safet
Slide 19: Definitions of 2017 Operational Performance Metrics from Exhibit C
Definitions of 2017 Operational Performance Metrics from Exhibit C Safety Public and employee safety are measured in four areas: (1) Nuclear Operations Safety, (2) Electric Operations Safety, (3) Gas Operations Safety, and (4) Employee Safety. 1. The safety of the Utility’s nuclear power operations,
Slide 20: D: Sales and Sources Summary
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary Fourth Quarter and Year to Date, 2017 vs. 2016 Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 2017 2016 Sales from Energy Deliveries (in millions kWh) 19,311 19,531 82,226 83,017 Total Electric Customer
Slide 21: E: 2018 Items Impacting Comparability Guidance
Exhibit E: PG&E Corporation’s 2018 Items Impacting Comparability (“IIC”) Guidance 2018 IIC Guidance (in millions, after-tax) Low High Estimated Items Impacting Comparability: (1) Pipeline-related expenses (2) $ 43 $ 25 Butte fire-related costs (3) $ 43 22 Northern California wildfire-related costs,
Slide 22: F: 2018 General Earnings Sensitivities
Exhibit F: 2018 General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company Variable Description of Change Estimated 2018 Earnings Impact Rate base +/- $100 million change in allowed rate base +/- $5 million Return on equity (ROE) +/- 0.1% change in allowed ROE +/- $19 milli
Slide 23: G: Use of Non-GAAP Financial Measures
Exhibit G: Use of Non-GAAP Financial Measures PG&E Corporation and Pacific Gas and Electric Company: Use of Non-GAAP Financial Measures PG&E Corporation discloses historical financial results and provides guidance based on “earnings from operations” in order to provide a measure that allows investor
Slide 24: H: Expected Timelines of Selected Regulatory Cases
Exhibit H: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2017 General Rate Case (Phase I) A. 15-09-001 Sep 1, 2015 – Application Filed Oct 29, 2015 – Prehearing conference Jan 22, 2016 – PG&E Supplemental Testimony on gas distribu
Slide 25: H: Expected Timelines of Selected Regulatory Cases
Exhibit H: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2015 Electric Distribution Resources Plan A.15-07-006, Aug 13, 2014 – Commission issues OIR directing utilities to file Electric Distribution Resources Plans (DRP) R.14-08-0
Slide 26: H: Expected Timelines of Selected Regulatory Cases
Exhibit H: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2015 Electric Distribution Resources Plan A.15-07-006, Jun 15, 2017 – Decision on PG&E's revised Field Demo D (DRP) R.14-08-013 Jun 19, 2017 – PG&E filed comments on CPUC St
Slide 27: H: Expected Timelines of Selected Regulatory Cases
Exhibit H: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Integration of Distributed Energy R.14-10-003 Sep 22, 2015 – Decision to expand scope to include distributed energy resources (DERs) on system side of customer's meter Resou
Slide 28: H: Expected Timelines of Selected Regulatory Cases
Exhibit H: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Ex Parte Order Instituting Investigation and I.15-11-015 Apr 18, 2016 – Joint meet and confer report filed by parties Order to Show Cause Apr 20, 2016 – Prehearing conferenc