Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E Corp (PCG, PCG-PA, PCG-PB, PCG-PC, PCG-PD, PCG-PE, PCG-PG, PCG-PH, PCG-PI) — Q4 2015 Earnings Presentation
36 slides from Pacific Gas & Electric's earnings presentation, Feb 18, 2016
Slide 1: Fourth Quarter Earnings Call
FOURTH QUARTER EARNINGS CALL February 18, 2016
Slide 2: Safe Harbor Statements
Safe Harbor Statements This slide presentation contains forecasts and estimates of PG&E Corporation’s 2016 financial results, capital expenditures to be made by PG&E Corporation’s subsidiary, Pacific Gas and Electric Company (Utility), through 2019, the Utility’s rate base through 2019 and general e
Slide 3: Key Focus Areas
Key Focus Areas Grid of Things™Greenhouse gas reduction policyUpdated rate structures Unwavering safety focusCommunity and stakeholder engagementAffordable and reliable service Resolve outstanding regulatory and legal proceedingsBuild strong compliance programs Continue to execute gas safety work Po
Slide 4: Policy and Operational Update
Policy and Operational Update Energy Policy: Invited to represent California at the Paris Climate SummitRenewable Energy: Delivered ~30% qualifying renewables in 2015NEM 2.0: Adopted mandatory time of use rates and non-bypassable charges; committed to review again in 2019Gas Safety: Received three e
Slide 5: Q4 2015 Earnings Results
Q4 2015 Earnings Results Earnings from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of Earnings per Share (“EPS”) from Operations to EPS on a GAAP basis.
Slide 6: Q4 2015: Quarter over Quarter Comparison
Q4 2015: Quarter over Quarter Comparison Earnings per Share from Operations Earnings per Share from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of EPS from Operations to EPS on a GAAP basis.
Slide 7: 2016 Earnings Per Share Guidance
2016 Earnings Per Share Guidance See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. See Exhibit E in Appendix 2 for detailed 2016 earnings guidance. (1) Guidance is consistent with the April 9, 2015
Slide 8: Assumptions for 2016
Assumptions for 2016 Return on Equity: 10.4% Equity Ratio: 52% Authorized Cost of Capital* Authorized Rate Base (weighted average) ($ billions) Other Factors Affecting Earnings from Operations - Gas Transmission & Storage rate caseReasonable outcome expected in 2016Amounts not requested+ Tax benefit
Slide 9: 2016 Items Impacting Comparability
2016 Items Impacting Comparability Items Impacting Comparability range excludes any additional potential futurefines or penalties as well as the impact of the 2015 GT&S revenue adjustment (1) “Pipeline related expenses” includes costs to identify and remove encroachments from transmission pipeline r
Slide 10: 2016 Equity Issuance
2016 Equity Issuance $600M - 800M 2015 EOY shares outstanding: 492 million 2015 See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. ~$800M 2016 - San Bruno Penalty- GT&S Revenue Increase+ Capital Expe
Slide 11: Capital Expenditures 2015-2019
Capital Expenditures 2015-2019 ~$5.6B* See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. 2019 2016 2017 2018 $5.4B $5.4B – 6.5B annually* * Ranges reflect authorized amounts, amounts requested but n
Slide 12: Rate Base Growth 2016-2019
Rate Base Growth 2016-2019 2016-2019 Weighted Average Rate Base Estimates reflect authorized amounts, amounts requested but not yet authorized, amounts that are currently planned to be subject to future authorization requests, and historic spending patterns See the Safe Harbor Statements for factors
Slide 13: Appendix – Regulatory and Guidance Matters
Appendix 1 – Regulatory and Guidance Matters Updates to Appendix 1 Since the Previous Quarter slide 14Regulatory CPUC Penalty Decision in Gas Transmission Pipeline Investigations slide 152015 CPUC Gas Transmission and Storage Rate Case slide 162017 CPUC General Rate Case slide 17FERC Transmission Ow
Slide 14: Updates to Appendix Since the Previous Quarter
Updates to Appendix 1 Since the Previous Quarter Slide 15 CPUC Penalty Decision in Gas Transmission Pipeline InvestigationsSlide 16 2015 CPUC Gas Transmission and Storage Rate CaseSlide 17 2017 CPUC General Rate CaseSlide 18 FERC Transmission Owner Rate CaseSlide 19 CPUC Investigative Proceedings Sc
Slide 15: CPUC Penalty Decision in Gas Transmission Pipeline Investigations
CPUC Penalty Decision in Gas Transmission Pipeline Investigations See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. (1) In March 2015, the Utility increased its accrual from $200 million at December
Slide 16: 2015 CPUC Gas Transmission and Storage Rate Case
2015 CPUC Gas Transmission and StorageRate Case Application filed with the CPUC December 19, 2013Request for authorized revenue requirement for 2015-2017Includes operating costs and capital for CPUC jurisdictional gas transmission and storage2015 requested revenue requirement of $1.3 billion include
Slide 17: 2017 CPUC General Rate Case
2017 CPUC General Rate Case Application filed with the CPUC September 1, 2015Request for authorized revenue requirement for 2017-20192015 requested revenue requirement of $8.37 billion includes increase of $457 millionRequest includes new investments in:Smart grid technologies that better integrate
Slide 18: FERC Transmission Owner Rate Case
FERC Transmission Owner Rate Case July 29, 2015 – TO17 filed with FERC; requested revenue requirement of $1.5 billion, a $314 million increase over TO16September 30, 2015 – FERC accepted TO17 and rate changes suspended until March 1, 2016February 4-5, 2016 – FERC settlement conferenceMarch 18, 2016
Slide 19: CPUC Investigative Proceedings Schedule
CPUC Investigative Proceedings Schedule Recordkeeping OIII. 11-02-016Class Location OIII. 11-11-009Gas Pipeline OIII. 12-01-007 February January March 2015 Ex Parte OIII. 15.11.015 Gas DistributionOII and Order toShow Cause I. 14-11-008 December November 1/19 – 1/21: Hearings 1/25: Closing statement
Slide 20: Incremental Equity Factors
Incremental Equity Factors Equity Impacting Event MultiplierFine payable to State (1) 100%Customer bill credit (2) (4) 60%Charge for disallowed capital (3) (4) 30%Disallowed revenue for pipeline safety expenses (2) (4) 60%CPUC estimated costs of other remedies (4) 60% Applies to newly issued fines.
Slide 21: Appendix – Supplemental Earnings Materials
Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation’s Earnings from Operations to Consolidated slide 22 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation’s Earnings per Common Share from Operations slide
Slide 22: Exhibit A: Reconciliation of Earnings from Operations to GAAP
Exhibit A: Reconciliation of PG&E Corporation’s Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) Fourth Quarter and full year, 2015 vs. 2014 (in millions, except per share amounts) Represents insura
Slide 23: Exhibit B: Key Drivers of EPS from Operations
Exhibit B: Key Drivers of PG&E Corporation’s Earnings per Common Share (“EPS”) from Operations Fourth Quarter and full year, 2015 vs. 2014($/Share, Diluted) See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis.Represents the timing of taxes reportable in quarterly financi
Slide 24: Exhibit C: Operational Performance Metrics
Exhibit C: Operational Performance Metrics The 2015 target for earnings from operations is not publicly reported but is consistent with the guidance range provided for 2015 EPS from operations of $3.00 to $3.10. See following page for definitions of the operational performance metrics. The operation
Slide 25: Definitions of 2015 Operational Performance Metrics
Definitions of 2015 Operational Performance Metrics from Exhibit C SafetyPublic and employee safety are measured in four areas: (1) Nuclear Operations Safety, (2) Gas Operations Safety, (3) Electric Operations Safety, and (4) Employee Safety.1. The safety of the Utility’s nuclear power operations, U
Slide 26: Exhibit D: Sales and Sources Summary
(1) Includes other sources of electric energy totaling 1,512 kWh and 2,004 kWh for the three months ended December 31, 2015 and 2014, respectively, and 7,313 kWh and 5,501 kWh for the twelve months ended December 31, 2015 and 2014, respectively. Exhibit D: Pacific Gas and Electric Company Sales and
Slide 27: Exhibit E: Earnings Per Share Guidance
Exhibit E: PG&E Corporation’s Earnings Per Share Guidance Items impacting comparability represent items that management does not consider part of the normal course of operations and affect comparability of financial results between periods. These items are included in calculating Consolidated Income
Slide 28: Exhibit F: General Earnings Sensitivities
Exhibit F: General Earnings SensitivitiesPG&E Corporation and Pacific Gas and Electric Company These general earnings sensitivities on factors that may affect 2016 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materially. For a discussion of
Slide 29: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric CompanySummary of Selected Regulatory Cases
Slide 30: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric CompanySummary of Selected Regulatory Cases
Slide 31: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric CompanySummary of Selected Regulatory Cases
Slide 32: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric CompanySummary of Selected Regulatory Cases
Slide 33: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric CompanySummary of Selected Regulatory Cases
Slide 34: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric CompanySummary of Selected Regulatory Cases
Slide 35: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric CompanySummary of Selected Regulatory Cases
Slide 36: Exhibit G: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric CompanySummary of Selected Regulatory Cases