Slide 1: PG&E Corporation Third Quarter Earnings Call
PG&E Corporation Third Quarter Earnings Call October 29, 2012 This presentation is not complete without the accompanying statements made by management during the webcast conference call held on October 29, 2012. This presentation, including Exhibits, and the accompanying press release, were attached
Slide 2: Key Focus Areas
Key Focus Areas Position company Rebuild relationships with Resolve gas issues for success key stakeholders • Move forward with • Conduct rigorous • Provide excellent gas work planned in benchmarking service 2012 • Build culture of • Meet commitments • Work to resolve continuous to customers and reg
Slide 3: Regulatory and Operational Updates
Regulatory and Operational Updates • PSEP Proposed Decision Regulatory Approves scope of work, but disallows significant portion Regulatory of requested funding, including all contingency and Developments Developments advice letter mechanism Reduces return on equity on 2012 – 2014 capex for five
Slide 4: 3Q 2012: Earnings Results
3Q 2012: Earnings Results Earnings (millions) EPS Earnings from Operations $ 399 $ 0.93 Items Impacting Comparability Natural Gas Matters (24) (0.06) Environmental-Related Costs (14) (0.03) Earnings on a GAAP Basis $ 361 $ 0.84 Natural Gas Matters (millions, pre-tax) Pipeline-related costs $ (139) P
Slide 5: 3Q 2012: Q over Q Comparison
3Q 2012: Q over Q Comparison EPS from Operations (1) (2) (2) (1) EPS from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit 4 of the Appendix for a reconciliation of EPS from Operations to EPS on a GAAP basis. (2) Other items reflect litigat
Slide 6: 2012 EPS Guidance
2012 EPS Guidance Low High EPS from Operations $ 3.10 $ 3.30 Estimated Items Impacting Comparability Natural Gas Matters (0.99) (0.65) Environmental-Related Costs (0.14) (0.13) Estimated EPS on a GAAP Basis $ 1.97 $ 2.52 (1) Natural Gas Matters (1) (millions, pre-tax) Low guidance High guidance rang
Slide 7: Factors Affecting EPS from Operations
Factors Affecting EPS from Operations* 2012 2013 2014 Capital Expenditures(1) ~$4.6-$4.8 billion Continues Higher Authorized Rate Base(1) ~$24.5 billion ~$26 billion Reset in GRC Authorized ROE(2) 11.35% Set in CoC Set in CoC Authorized Equity Ratio(2) 52% Set in CoC Set in CoC Incremental Spend ~$2
Slide 8: Factors Affecting Natural Gas Matters
Factors Affecting Natural Gas Matters 2012 2013 2014 Pipeline Related Costs $450-$550 million Pipeline Safety Enhancement Plan (PSEP) (1) TBD TBD PSEP - Not Requested Lower Continues Other Work Higher Continues Legal and other costs Lower Lower (1) While guidance assumes no recovery in 2012,
Slide 9: Pipeline Safety Enhancement Plan - PD
Pipeline Safety Enhancement Plan - PD 2011 2012 2013 2014 Total Expense (in millions) Requested $ 221 $ 231 $ 155 $ 144 $ 751 Proposed Decision - (1) - (1) 74 93 167 Difference(2) $ 221(2) $ 231(2) $ 81(2) $ 51(2) $ 584(2) (1) The Utility’s August 2011 application did not request recovery of forecas
Slide 10: Appendix
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Slide 11: Table of Contents
Table of Contents Exhibit 1: Safe Harbor Statement Page 12 Exhibit 2: Regulatory Calendar Page 13 Exhibit 3: Assumptions for 2012 Guidance Page 14 Exhibit 4: Reconciliation of PG&E Corporation Earnings from Operations Page 15 to Consolidated Income Available for Common Shareholders in Accordance wit
Slide 12: Safe Harbor Statement
Exhibit 1: Safe Harbor Statement Management's statements regarding guidance for PG&E Corporation’s future financial results and earnings from operations per common share, the underlying assumptions, and general earnings sensitivities, constitute forward-looking statements that are necessarily subjec
Slide 13: Regulatory Calendar
Exhibit 2: Regulatory Calendar 10/12: Proposed 11/26: Reply Comments on Proposed Decision 12/20: Final Decision Gas Pipeline Decision Safety OIR R. 11-02-019 11/13: Comments on Proposed Decision 8/20: CPSD 11/19: PG&E reply briefs on 11/26/12 – 1/8/13: 10/11-11/1: Suspension financial analysis Rebut
Slide 14: Assumptions for 2012 Guidance
Exhibit 3: Assumptions for 2012 Guidance Additional Expenses Capital Expenditures Forecast ($ millions) ($ millions) ~$250 planned incremental spend* ~$4,600 - $4,800 Authorized Rate Base Cost of Capital (weighted average) ($ billions) 28.0 Authorized ROE: 11.35% 26.0 ~$1.6 24.0 22.0 Forecast CWIP E
Slide 15: Reconciliation of PG&E Corporation Earnings from Operations to GAAP
Exhibit 4: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Account Principles (“GAAP”) Third Quarter, 2012 vs. 2011 (in millions, except per share amounts) Three months ended September 30, Nine
Slide 16: Reconciliation of Pacific Gas and Electric Company Earnings from Operations to GAAP
Exhibit 5: Reconciliation of Pacific Gas and Electric Company Earnings from Operations to Consolidated Income Available for Common Stock in Accordance with GAAP Third Quarter and Year-to-Date, 2012 vs. 2011 (in millions) Three months ended September 30, Nine months ended September 30, Earnings Earni
Slide 17: Key Drivers of PG&E Corporation EPS from Operations
Exhibit 6: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations Third Quarter and Year-to-Date, 2012 vs. 2011 ($/Share, Diluted) Third Quarter 2011 EPS from Operations (1) $ 1.08 Increase in rate base earnings 0.05 Litigation and regulatory matters 0.02 Planned increment
Slide 18: Operational Performance Metrics
Exhibit 7: Operational Performance Metrics Third Quarter 2012 Performance 2012 Improvement/Results Q3 YTD EOY Meets YTD Actual Target Target(1) Safety (includes both public and employee safety metrics) Nuclear Operations 1st Quartile 1st Quartile Leak Repair Performance 61.9% 42.1% Gas Emergency
Slide 19: Definitions of 2012 Operational Performance Metrics
Definitions of 2012 Operational Performance Metrics from Exhibit 7 The Operational Performance Metrics focus on three areas: safety (public and employee), customer service, and financial performance. The EOY goals for each metric except for nuclear performance are stated relative to percentage impro
Slide 20: Pacific Gas and Electric Company Sales and Sources Summary
Exhibit 8: Pacific Gas and Electric Company Sales and Sources Summary Third Quarter, 2012 vs. 2011 Three Months Ended September 30, Nine Months Ended September 30, 2012 2011 2012 2011 Sales from Energy Deliveries (in millions kWh) 24,224 23,648 65,218 62,982 Total Electric Customers at September 30
Slide 21: PG&E Corporation EPS Guidance
Exhibit 9: PG&E Corporation EPS Guidance 2012 EPS Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 3.10 $ 3.30 Estimated Items Impacting Comparability (1) Natural gas matters (2) (0.99) (0.65) Environmental-related costs (3) (0.14) (0.13) Estimated EPS on a GAAP Basis $ 1.97 $
Slide 22: General Earnings Sensitivities
Exhibit 10: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company Estimated 2012 Variable Description of Change Earnings Impact Rate base +/- $100 million change in allowed rate base +/- $6 million Return on equity (ROE) +/- 0.1% change in allowed ROE +/- $12 million S
Slide 23: Summary of Selected Regulatory Cases
Exhibit 11: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Exhibit 11: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2014 General Rate Case TBD July 02, 2012 – Notice of Intent filed Before year-end 2012 – Application
Slide 24: Summary of Selected Regulatory Cases (continued)
Exhibit 11: Pacific Gas and Electric Company Summary of Selected Regulatory Cases (continued) Regulatory Case Docket # Key Dates Smart Grid Order Instituting Rulemaking R.08-12-009 March 5, 2012 – PG&E filed Customer Data Access application D.09-12-046 April 24, 2012 – CPUC issued decision to adopt