Slide 1: PG&E Corporation Third Quarter Earnings Call
PG&E Corporation Third Quarter Earnings Call October 30, 2013 This presentation is not complete without the accompanying statements made by management during the webcast conference call held on October 30, 2013. This presentation, including Appendices, and the accompanying press release were attache
Slide 2: Safe Harbor Statements
Safe Harbor Statements Management’s statements regarding guidance for PG&E Corporation’s future financial results and earnings from operations per common share, general earnings sensitivities, and the underlying assumptions about the future levels of capital expenditures, rate base, costs, and equit
Slide 3: Key Focus Areas
Key Focus Areas Position company Resolve gas issues Partner effectively for success • Execute critical gas • Rigorous multi-year • Strengthen local work planning presence • Complete regulatory • Drive continuous • Engage in public and legal proceedings improvement policy as soon as possible developm
Slide 4: Operational Update
Operational Update Gas Progress (YTD) Executing • Tested, or validated through records, 159 miles of pipe • Replaced 37 miles of pipe on Operations • Installed 39 automatic or remote shutoff valves • Completed ~5,800 miles of Centerline survey • MAOP validation completed; work reprioritized • PSEP u
Slide 5: Regulatory Update
Regulatory Update • General Rate Case – Awaiting proposed decision (scheduled November 19) Regulatory • TO 14 – Reached settlement in principle Update • TO 15 – Rates in effect October 1, subject to refund • Gas investigations – Record closed October 15, awaiting decision • Gas Transmission rate cas
Slide 6: Q3 2013: Earnings Results
Q3 2013: Earnings Results Earnings (millions) EPS Earnings from Operations $ 395 $ 0.88 Items Impacting Comparability Natural Gas Matters (233) (0.52) Environmental-Related Costs (1) 0.00 Earnings on a GAAP Basis $ 161 $ 0.36 Natural Gas Matters (millions, pre-tax) Q3 Pipeline-related expenses $ (11
Slide 7: Q3 2013: Q over Q Comparison
Q3 2013: Q over Q Comparison EPS from Operations (1) (1) Other reflects financing and depreciation costs for capital spending in excess of authorized levels, higher below-the-line costs, and miscellaneous other items. See Exhibit B for additional detail. EPS from Operations is not calculated in acco
Slide 8: 2013 EPS Guidance
2013 EPS Guidance Low High EPS from Operations $ 2.55 $ 2.75 Estimated Items Impacting Comparability Natural Gas Matters (0.91) (0.78) Environmental-Related Costs (0.04) (0.01) Estimated EPS on a GAAP Basis $ 1.60 $ 1.96 (1) Natural Gas Matters (millions, pre-tax) Low guidance range High guidance ra
Slide 9: Appendix
Appendix Appendices
Slide 10: Table of Contents
Table of Contents Appendix 1 – Regulatory and Guidance Matters Updates to Appendix 1 Since the Previous Quarter slide 12 Gas Regulatory Proceedings Schedule slide 13 Gas Pipeline Safety Costs slide 14 CPSD Recommended Penalty – Total Shareholder Impact slide 15 Assumptions for 2013 Guidance slide 16
Slide 11: Appendix 1
Appendix Appendix 1
Slide 12: Updates to Appendix Since the Previous Quarter
Updates to Appendix 1 Since the Previous Quarter Slide 13 Gas Regulatory Proceedings Schedule Slide 14 Gas Pipeline Safety Costs Slide 15 CPSD Recommended Penalty – Total Shareholder Impact Slide 18 2013 Natural Gas Matters Remaining slides in Appendix 1 are excerpted from Q4 2012 Earnings Package,
Slide 13: Gas Regulatory Proceedings Schedule
Gas Regulatory Proceedings Schedule 7/30: PSEP quarterly compliance filing 10/29: PSEP Update Gas Pipeline application Safety OIR R. 11-02-019 10/29: PSEP quarterly compliance filing 8/19: Commission launches 10/1: Parties’ responses to Orders to Show Cause recommendations Orders to 9/6: Hearings on
Slide 14: Gas Pipeline Safety Costs
Gas Pipeline Safety Costs Changes from prior quarter are noted in blue. Shareholder Funded Gas Transmission Safety-Related Costs (Update) ($ millions) 2013 and Beyond 2010-2012 Total Estimated Forecast Pipeline Safety Enhancement Plan (PSEP) PSEP Expense 599.5 ~300 PSEP Capital 41.1 ~510 Total PSEP
Slide 15: CPSD Recommended Penalty – Total Shareholder Impact
CPSD Recommended Penalty – Total Shareholder Impact Changes from prior quarter are noted in blue. ($ millions) Gas Pipeline Safety Costs Incurred or Committed (1) 2,415 Safety Division Recommendation - Fine 300 Safety Division Recommendation - Additional Shareholder Costs(2) 1,515 Total Shareholder
Slide 16: Assumptions for 2013 Guidance
Assumptions for 2013 Guidance Capital Expenditures Forecast Authorized Rate Base (weighted average) ($ millions) ($ billions) 2013 2013 Electric Distribution 1,850 Electric Distribution 11.9 Electric Transmission 850 Electric Transmission* 4.5 Gas Transmission 350 Gas Transmission 1.8 Gas Distributi
Slide 17: Earnings from Operations Comparison
Earnings from Ops Comparison 2012 EPS from Operations 2013 EPS from Operations $3.22 - ROE reductions - Higher shares - CWIP earnings 100% offset by below-the-line costs $2.55 - 2.75 - Capital expenditures exceeding authorized + Rate base growth Earnings from Operations is not calculated in accordan
Slide 18: 2013 Natural Gas Matters
2013 Natural Gas Matters Changes from prior quarter are noted in blue. ($ millions) 2013 Unrecovered PSEP Expenses 125 - 175 Emerging Work 150 - 200 Rights of Way Encroachment Integrity Management and Other Work Legal and Other 50 - 75 Pipeline Related Expenses 350* - 450 Disallowed Capital 196 * To
Slide 19: 2013 Equity Issuance
2013 Equity Issuance 2012 2013(1) $1B - 1.2B + Lower earnings from operations + Higher capital expenditures + Q4 2012 PSEP capital charge ~$775M (1) The guidance range for 2013 does not include potential penalties (other than those already accrued). See the Safe Harbor Statements for factors that co
Slide 20: Looking Ahead: Capital Expenditures
Looking Ahead: Capital Expenditures Capital Expenditures 2014 - 2016 $4.5B - 6B $4.5B - 6B $4.5B - 5.5B 2014 2015 2016* The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, and current views of other future gas and electric proceedings. The l
Slide 21: Looking Ahead: Rate Base Growth
Looking Ahead: Rate Base Growth Rate Base Growth 2014 - 2016 $32B - 35B $28.5B - 29B CAGR*: 6 – 10% 2014 2016* The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, and current views of other future gas and electric proceedings. The low end re
Slide 22: Looking Ahead: Natural Gas Matters
Looking Ahead: Natural Gas Matters Pipeline Related Costs 2014 Unrecovered costs continue PSEP Costs 2015 Future pipeline safety work incorporated in next Gas Transmission rate case request Emerging Work Right of Way Encroachment 2013-2017 Roughly $500 million of unrecovered costs 2014 Unrecovered c
Slide 23: Appendix 2
Appendix 2
Slide 24: Exhibit A: Reconciliation of Earnings from Operations to GAAP
Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) Third Quarter, 2013 vs. 2012 (in millions, except per share amounts) Three Months Ended September 30, N
Slide 25: Exhibit B: Key Drivers of EPS from Operations
Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations Third Quarter, 2013 vs. 2012 ($/Share, Diluted) Third Quarter 2012 EPS from Operations (1) $ 0.93 Growth in rate base earnings 0.05 Timing of incremental work 0.01 Miscellaneous 0.04 Reduction in authorized
Slide 26: Exhibit C: Operational Performance Metrics
Exhibit C: Operational Performance Metrics Third Quarter 2013 Performance 2013 Performance Results Q3 YTD EOY Meets YTD Actual Target Target (1) Safety (includes both public and employee safety metrics) Nuclear Operations Safety Institute of Nuclear Power Operations (INPO) Performance 3rd Quartile 1
Slide 27: Definitions of 2013 Operational Performance Metrics
Definitions of 2013 Operational Performance Metrics from Exhibit C The Operational Performance Metrics focus on three areas: safety (public and employee), customer service, and financial performance. The column titled “Meets YTD Target” shows illustratively whether or not the metric has met the year
Slide 28: Exhibit D: Sales and Sources Summary
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary Third Quarter, 2013 vs. 2012 Three Months Ended September 30, Nine Months Ended September 30, 2013 2012 2013 2012 Sales from Energy Deliveries (in millions kWh) 24,682 24,224 65,684 65,218 Total Electric Customers at September 30
Slide 29: Exhibit E: PG&E Corporation EPS Guidance
Exhibit E: PG&E Corporation EPS Guidance 2013 EPS Guidance Low High Estimated EPS on an Earnings from Operations Basis $ 2.55 $ 2.75 Estimated Items Impacting Comparability: (1) Natural Gas Matters (2) (0.91) (0.78) Environmental-Related Costs (3) (0.04) (0.01) Estimated EPS on a GAAP Basis $ 1.60 $
Slide 30: Exhibit F: General Earnings Sensitivities
Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company Estimated 2013 Variable Description of Change Earnings Impact Rate base +/- $100 million change in allowed rate base +/- $5 million Return on equity (ROE) +/- 0.1% change in allowed ROE +/- $14 million Sh
Slide 31: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2014 General Rate Case A.12-11-009 Nov 15, 2012 – Application filed (Phase I) Apr 18, 2013 – Phase II filed May 3, 2013 – DRA testimony May 17, 2013 – Intervenor testimony and Safety a
Slide 32: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Gas Matters Fines & Remedies I.11-02-016 Jan 11, 2013 – PG&E financial analysis testimony I.11-11-009 Feb 8, 2013 – CPSD rebuttal testimony I.12-01-007 Mar 4-5, 2013 – Evidentiary hear
Slide 33: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Nuclear Decommissioning Cost Triennial Proceeding A.12-12-012 Dec 21, 2012 – Application filed Mar 17, 2013 – Prehearing conference Jun 17, 2013 – Scoping memo to bifurcate proceeding
Slide 34: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Rulemaking to Reform Energy Efficiency Risk/Reward R.12-01-005 Apr 4, 2013 – Commission Ruling proposing new incentive for 2013- 2014 Incentive Mechanism Apr 26, 2013 – Comments on rul