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 2014 Earnings Presentation
35 slides from Pacific Gas & Electric's earnings presentation, Feb 10, 2015
Slide 1: Fourth Quarter Earnings Call
FOURTH QUARTER EARNINGS CALL February 10, 2015
Slide 2: Safe Harbor Statements
* Safe Harbor Statements Management's statements and assumptions about PG&E Corporation’s 2015 earnings from operations (including estimates and forecasts of costs, capital expenditures, rate base, and equity issuances) are forward-looking statements that reflect management’s judgment and opinions.
Slide 3: Key Focus Areas
* Key Focus Areas Execute critical gas work Complete regulatory and legal proceedings as soon as possible Rigorous multi-year planning Drive continuous improvement Strengthen local presence Engage in public policy development Resolve gas issues Position company for success Partner effectively
Slide 4: Operational and Regulatory Update
* Gas Investigations – Awaiting decision Gas Transmission and Storage rate case – Schedule resumed. Hearings Feb 2-27, final decision anticipated August 2015 Cost of Capital – Mechanism extended through end of 2016 Regulatory Update Operational and Regulatory Update Executing on Operations 2014 Oper
Slide 5: 2014 Earnings Results
* 2014 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. (1) These amounts included pipeline-related co
Slide 6: Q4 2014: Quarter over Quarter Comparison
* Q4 2014: Quarter over Quarter Comparison EPS 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: Assumptions for 2015
* Assumptions for 2015 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 case Outcome of rate case Amounts not requested + Tax benefits + Incent
Slide 8: 2015 Items Impacting Comparability
* 2015 Items Impacting Comparability Guidance ranges exclude potential fines or penalties and any future insurance recoveries. “Pipeline related expenses” includes costs for rights of way encroachment and unrecovered PSEP expenses. “Legal and regulatory related expenses” includes legal and other cos
Slide 9: 2015 Equity Issuance
* 2015 Equity Issuance 2014 Recorded $827M $400M - 600M 2014 EOY shares outstanding: 476M Does not reflect resolution of pending investigations or other enforcement matters Timing of financing and GRC decision Higher earnings (rate base growth) Lower unrecovered costs + Higher capital expenditures 2
Slide 10: Capital Expenditures 2014-2016
* Capital Expenditures 2014-2016 $4.9B ~$5.5B $5.3B - 5.8B* 2014 Recorded (1) (1) 2014 recorded capex includes ~$400 million that has already been reserved for PSEP capital that exceeds authorized amounts. * Range reflects recent regulatory decisions, current or planned regulatory filings, and histo
Slide 11: Rate Base Growth 2014-2016
* Rate Base Growth 2014-2016 $33.4B - 33.8B* ~$28.2B 2014 2016 2015 ~$31B 2014-2016 Weighted Average Authorized Rate Base CAGR: ~9% * Range reflects recent regulatory decisions, current or planned regulatory filings, and historic spending patterns. See the Safe Harbor Statements for factors that cou
Slide 12: Appendix – Regulatory and Guidance Matters
* Appendix 1 – Regulatory and Guidance Matters Updates to Appendix 1 Since the Previous Quarter slide 13 Rate Cases 2015 CPUC Gas Transmission and Storage Rate Case slide 14 CPUC General Rate Cases slide 15 FERC Transmission Owner Rate Case slide 16 Natural Gas Matters Gas Regulatory Proceedings Sch
Slide 13: Updates to Appendix Since the Previous Quarter
* Updates to Appendix 1 Since the Previous Quarter Slide 14 2015 CPUC Gas Transmission and Storage Rate Case Slide 15 CPUC General Rate Cases Slide 16 FERC Transmission Owner Rate Case Slide 17 Gas Regulatory Proceedings Schedule Slide 18 Gas Pipeline Safety Costs Slide 19 Presiding Officers’ Joint
Slide 14: 2015 CPUC Gas Transmission and Storage Rate Case
* 2015 CPUC Gas Transmission and Storage Rate Case Application filed with the CPUC on December 19, 2013 Request for authorized revenue requirement for 2015-2017 Includes operating costs and capital for CPUC jurisdictional gas transmission and storage 2015 requested revenue requirement of $1.3 billio
Slide 15: CPUC General Rate Cases
* CPUC General Rate Cases General Rate Case set base revenue requirement for 2014-2016 Includes operating costs and capital for generation and electric and gas distribution Excludes cost of capital determination, electric transmission, gas transmission, and cost of fuel and purchased power Final dec
Slide 16: FERC Transmission Owner Rate Case
* FERC Transmission Owner Rate Case July 30, 2014 – TO16 filed with FERC Requested revenue requirement of $1.366 billion and ROE of 11.26% September 30, 2014 – TO16 was accepted and rate changes suspended until March 1, 2015 February 25 and 26, 2015 – Next settlement conference TO16
Slide 17: Gas Regulatory Proceedings Schedule
* Gas Regulatory Proceedings Schedule Recordkeeping OII I. 11-02-016 Class Location OII I. 11-11-009 Gas Pipeline OII I. 12-01-007 February December January March Gas Pipeline Safety OIR R. 11-02-019 2014 Order to Show Cause - Ex Parte A. 13-12-012 2015 Gas Distribution OII and Order to Show Cause I
Slide 18: Gas Pipeline Safety Costs
* Gas Pipeline Safety Costs See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. PSEP Costs: Customer Recovery ($ millions) Changes from prior quarter are noted in blue.
Slide 19: Presiding Officers' Joint Penalty Decision: Estimated Total Shareholder Impact
* Presiding Officers’ Joint Penalty Decision: Estimated Total Shareholder Impact (1) Refer to PG&E Corporation’s and the Utility’s 2014 joint Annual Report on Form 10-K for the year ended December 31, 2014 for additional information regarding costs incurred under the Utility’s pipeline safety enhanc
Slide 20: Incremental Equity Factors
* Incremental Equity Factors Equity Impacting Event Multiplier Fine paid to state General Fund (1) 100% Unrecovered expenses (2) (3) 60% Capital write-off (3) 30% Incremental Equity Factors Associated with Gas Matters (1) Applies to newly issued fines. Fines already accrued: 50% multiplier at time o
Slide 21: Appendix – Supplemental Earnings Materials
* Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated slide 22 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share from Operations slide 2
Slide 22: 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”) Fourth Quarter and full year, 2014 vs. 2013 (in millions, except per share amounts) “Earnings from op
Slide 23: Exhibit B: Key Drivers of EPS from Operations
* Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations Fourth Quarter and full year, 2014 vs. 2013 ($/Share, Diluted) See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis. In 2013, the Utility incurred approximately $200 million of
Slide 24: Exhibit C: Operational Performance Metrics
* Exhibit C: Operational Performance Metrics The 2014 target for earnings from operations is not publicly reported. See following page for definitions of the operational performance metrics.
Slide 25: Definitions of 2014 Operational Performance Metrics
* Definitions of 2014 Operational Performance Metrics from Exhibit C Safety Public and employee safety are measured in four areas: (1) Nuclear Operations Safety, (2) Gas Operations Safety, (3) Electric Operations Safety, and (4) Employee Safety. The safety of the Utility’s nuclear power operations,
Slide 26: Exhibit D: Sales and Sources Summary
* (1) Includes other sources of electric energy totaling 2,004 kWh and 1,958 kWh for the three months ended December 31, 2014 and 2013, respectively, and 5,501 kWh and 5,132 kWh for the twelve months ended December 31, 2014 and 2013, respectively. Exhibit D: Pacific Gas and Electric Company Sales an
Slide 27: Exhibit E: Guidance for Items Impacting Comparability
* Exhibit E: PG&E Corporation Guidance for Items Impacting Comparability (“IIC”) Items impacting comparability are those items that management believes do not reflect the normal course of operations. These items are excluded when calculating “earnings from operations” which is a non-GAAP measure tha
Slide 28: Exhibit F: General Earnings Sensitivities
* Exhibit F: General Earnings Sensitivities PG&E Corporation and Pacific Gas and Electric Company These general earnings sensitivities with respect to factors that may affect 2015 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materially. For
Slide 29: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 30: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 31: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 32: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 33: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 34: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 35: Exhibit G: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases