Slide 1: Second Quarter Earnings Call
SECOND QUARTER EARNINGS CALL July 26, 2018
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains statements regarding management’s expectations and objectives for future periods as well as forecasts and estimates regarding 2018 IIC guidance, 2017 Tax Cuts and Jobs Act expected impact, 2018-2019 capital expenditures, 2018-2019 weighted averag
Slide 3: Northern California Wildfires Response
Northern California Wildfires Response Advocating to address impacts of climate change and Legislative the need for comprehensive solutions Challenging the application of inverse condemnation in Legal multiple forums Executing numerous programs as precautionary Operations measures intended to reduce
Slide 4: Legal Update
Legal Update Status Update Next Steps • 6/7/2018: Appellate court denied • California Supreme Court response PG&E’s writ to review inverse expected by fall of 2018 condemnation challenge • If granted, appellate process could Butte Fire • 6/18/2018: PG&E filed petition to take ~1 – 2 years Case revie
Slide 5: Q2 2018 Earnings Results
Q2 2018 Earnings Results Q2 2018 Earnings Earnings EPS EPS (millions) (millions) Earnings (Loss) on a GAAP basis $ (984) $ (1.91) $ (542) $ (1.05) Items Impacting Comparability Northern California wildfire-related costs, net of insurance 1,592 3.08 1,608 3.11 Pipeline-related expenses 9 0.02 16 0.03
Slide 6: Q2 2018: Quarter over Quarter Comparison
Q2 2018: Quarter over Quarter Comparison Non-GAAP Earnings per Share from Operations $1.40 $0.07 ($0.03) ($0.01) $1.20 ($0.01) $0.04 $0.05 $0.05 $0.06 $1.00 $0.08 $0.80 $0.60 $1.16 $0.86 $0.40 $0.20 $0.00 Q2 2017 Timing and Resolution of Insurance Timing of Taxes Growth in Miscellaneous Timing of De
Slide 7: 2018 Assumptions
2018 Assumptions Capital Expenditures Authorized Ratebase (weighted average) ($ millions) ($ billions) 2018 2018 General Rate Case 3,900 General Rate Case 25.9 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) Pipeline-related expenses (1) 35 - 60 Butte fire-related costs, net of insurance (2) 30 - 260 Northern California wildfire-related costs, net of insurance (3) 2,225 - 2,240 2017 insurance premium cost recoveries (4) (32) Estimated 201
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 $36.8B ~$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 DRSPP (1)) + Tax Reform + Cash from Dividend Suspension + Non-Cash Northern California Wildfire-related third-party claims, net of insurance + Other Items Impacting Comparability June 30, 2018 s
Slide 12: Appendix
[it PG&E Corporation Appendix
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 – Tax Cuts and Jobs Act Expected Impact
Appendix 1 – Tax Cuts and Jobs Act Expected Impact Lower Customer Bills Annual reduction in customer revenue driven ~$450M by lower corporate tax rate annual revenue reduction 2021 Faster net operating loss amortization and Cash Tax Payments ~1 year acceleration of federal tax payments or later (1)
Slide 15: Appendix – Supplemental Earnings Materials
Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available Slides 16-17 for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP Earnings from Operations Exhibit B: Key Drivers of PG&E Cor
Slide 16: A: Reconciliation of GAAP to Non-GAAP Earnings from Operations
Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP Earnings from Operations Second Quarter, 2018 vs. 2017 Three Months Ended June 30, S ix Months Ended June 30, (in mil
Slide 17: A: Reconciliation of GAAP to Non-GAAP Earnings from Operations (continued)
Exhibit A: Reconciliation of PG&E Corporation’s Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) to Non-GAAP Earnings from Operations (4) T he Utility incurred costs, net of insurance, of $10 million (before the tax impact of
Slide 18: B: Key Drivers of Non-GAAP EPS from Operations
Exhibit B: Key Drivers of PG&E Corporation’s Non-GAAP Earnings per Common Share (“EPS”) from Operations Second Quarter, 2018 vs. 2017 Second Quarter 2018 vs. 2017 Year to Date 2018 vs. 2017 (in millions, except per share amounts) Earnings per Earnings per Common Common Share Share Earnings (Diluted)
Slide 19: C: Operational Performance Metrics
Exhibit C: Operational Performance Metrics Meets YTD 2018 Performance Results YTD Actual 2018 Target Target (1) Safety Nuclear Operations Diablo Canyon Power Plant (DCPP) Reliability and Safety DCPP Unit 1 Score 96.8 96.4 DCPP Unit 2 Score 89.9 87.6 Electric Operations Public Safety Index 1.9 1.
Slide 20: Definitions of 2018 Operational Performance Metrics
Definitions of 2018 Operational Performance Metrics from Exhibit C S afety Public and employee safety are measured in four areas: Nuclear Operations Safety, Electric Operations Safety, Gas Operations Safety, and Employee Safety. The safety of the Utility’s nuclear power operations, DCPP Unit 1 and U
Slide 21: D: Sales and Sources Summary
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary Second Quarter, 2018 vs. 2017 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Sales from Energy Deliveries (in millions kWh) 18,705 19,216 37,525 38,754 Total Electric Customers at June 30 5,420,082 5,376
Slide 22: 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, net of insurance (3) 187 22 Northern California wildfir
Slide 23: E: 2018 Items Impacting Comparability Guidance (continued)
Exhibit E: PG&E Corporation’s 2018 Items Impacting Comparability (“IIC”) Guidance (5) “ 2017 insurance premium cost recoveries” includes insurance premium costs incurred in 2017, above amounts included in authorized revenue requirements, that are probable of recovery as a result of the CPUC’s June 2
Slide 24: F: General Earnings Sensitivities for 2018
Exhibit F: General Earnings Sensitivities for 2018 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 m
Slide 25: 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 “non-GAAP earnings from operations” in order to provide a measure that allows
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 2017 General Rate Case (Phase I) A. 15-09-001 Sep 1, 2015 – Application/Testimony Filed Aug 3, 2016 – Settlement with all parties that filed testimony submitted May, 2017 –
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 2015 Electric Distribution Resources Plan (DRP) A.15-07-006, Aug 13, 2014 – Commission issues OIR directing utilities to file Electric Distribution Resources Plans R.14-08-0
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 2017 Integrated Resource Plan / Long Term Procurement R.16-02-007 Feb 11, 2016 – CPUC opens Order Instituting Rulemaking Plan May 26, 2016 – Scoping Memo Issued Aug 11, 2016