Pacific Gas & Electric Co. · NYSE:PCG
Pacific Gas & Electric — PG&E — Merrill Lynch 2003 Power & Gas Leaders Conference
14 slides from Pacific Gas & Electric's conference presentation, Sep 17, 2003
Slide 1: PCG: A Path to Stability
PCG: A Path to Stability Robert D. Glynn, Jr. Chairman of the Board, CEO & President Merrill Lynch 2003 Power & Gas Leaders Conference New York, NY September 17, 2003 This presentation is not complete without the accompanying statements made by management on September 17, 2003. A replay is available
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information This presentation includes forward-looking statements that are necessarily subject to various risks and uncertainties. These statements are based on current expectations and assumptions which management believes are reasonable and on informa
Slide 3: PCG: A Path to Stability
PCG: A Path to Stability Clear path to stability at Pacific Gas and Electric Company under proposed Settlement Agreement Solid underlying utility business Separation from NEG Emerging investment grade profile and path to resume dividends Trading at a discount relative to peers 3
Slide 4: Proposed Settlement Agreement Accomplishes Three Main Goals
Proposed Settlement Agreement Accomplishes Three Main Goals Pays or otherwise satisfies all valid claims in full Results in investment grade credit ratings Does not require raising customers’ rates 4
Slide 5: Key Elements of the Proposed Settlement Agreement
Key Elements of the Proposed Settlement Agreement Investment grade ratings Earnings defined by transparent ROE and equity ratio parameters Establishment of $2.21 billion regulatory asset 5
Slide 6: Transition to a More Stable Regulatory Environment
Transition to a More Stable Regulatory Environment Proposed Settlement Agreement Existing generation rate base deemed just and reasonable DWR contracts only assignable if certain conditions are met 2003 General Rate Case Settlement agreement reached with key parties Procurement Rules Balancing accou
Slide 7: Stable, Solid Performance – Earnings
Stable, Solid Performance – Earnings Earnings Earnings Per Per Share Share from from Operations Operations ($/share) $3 ~$2.20 ~$2.30 ~$2.35 ~$2.35 $1.90-$2.00 $2.00-$2.10 $2 $1 $0 2003 2004 2005 2006 2007 2008 Notes: 1) Utility and holding company only. Earnings from operations exclude “headroom” a
Slide 8: Strong Utility Cash Flows
Strong Utility Cash Flows Cash Cash from from Operations Operations Less Less Capital Capital Expenditures Expenditures and and Other Other Net Net Investing Investing Activities Activities ($ in millions) 1,500 $1,180 ~$1,180 $1,150 ~$1,150 $1,000 ~$1,005 1,000 ~$860 $860 ~$840 $840 500 0 2004 2004
Slide 9: Dividends
Dividends Aspire to pay dividends in latter part of 2005 Proposed Settlement Agreement allows dividends after July 1, 2004 Achieving target 52% equity ratio is a key factor 9
Slide 10: Improving Utility Credit Statistics
Improving Utility Credit Statistics [1] 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 Pre-Tax Interest Coverage [2] 3.20x 3.44x 3.58x 3.58x 3.60x FFO Interest Coverage [2] 4.21x 4.43x 4.64x 4.77x 5.09x Total Debt to Total Capital 53.2% 50.7% 50.5% 50.3% 50.2% FFO to Total Debt 21.5% 23.1% 24.5%
Slide 11: Relative Valuation Parameters
Relative Valuation Parameters P/E P/E Multiples Multiples [1] [1] 2003 2003 2004 2004 PG&E Corporation 12.7x 11.5x Solid Regulated Distribution Companies 13.6x 12.9x Integrated Generation / 13.0x 12.4x Regulated Companies [1] Price/Earnings multiples based on stock prices and First Call consensus ea
Slide 12: Management Objectives
Management Objectives Continue to operate utility well Maintain strong operations Continue to strengthen working relationship with CPUC Deliver excellent customer service Deliver expected EPS Earn the authorized return Keep proposed Settlement Agreement on schedule 12
Slide 13: Summary
Summary Clear path to stability Solid underlying business Emerging investment grade profile and path to resume dividends Trading at a discount relative to peers 13
Slide 14: PG&E Corporation
Wl PG&E Corporation
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