Slide 1: PG&E Corporation Fourth Quarter Earnings Call
1 PG&E Corporation Fourth Quarter Earnings Call February 21, 2013 This presentation is not complete without the accompanying statements made by management during the webcast conference call held on February 21, 2013. This presentation, including Exhibits, and the accompanying press release, were att
Slide 2: Key Focus Areas
Key Focus Areas Resolve gas issues Position company Rebuild relationships and for success partner effectively • Execute critical gas • Rigorous multi-year • Strengthen local work planning presence • Complete regulatory • Drive continuous • Engage in public proceedings as soon improvement policy as p
Slide 3: Regulatory and Operational Updates
Regulatory and Operational Updates • Cost of capital – 10.4% ROE, 52% equity ratio • Oakley plant approved – rate base no earlier than 2016 • Pipeline Safety Enhancement Plan – through 2014 Regulatory Update • Filed 2014 GRC request – schedule issued by ALJ • Transmission Owner case – 9.1% ROE compl
Slide 4: Q4 and Full Year 2012: Earnings Results
Q4 and Full Year 2012: Earnings Results Q4 2012 Earnings Earnings (millions) EPS (millions) EPS Earnings from Operations $ 253 $ 0.59 $ 1,367 $ 3.22 Items Impacting Comparability Natural Gas Matters (259) (0.60) (488) (1.15) Environmental-Related Costs (7) (0.02) (63) (0.15) Earnings on a GAAP Basis
Slide 5: Q4 2012: Q over Q Comparison
Q4 2012: Q over Q Comparison EPS from Operations EPS from Operations (1) (1) (1) Other items reflect energy efficiency incentive revenues and miscellaneous items. See Exhibit 5 in the Appendix for additional detail. EPS from Operations is not calculated in accordance with GAAP and excludes items imp
Slide 6: 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 7: Earnings from Ops 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 $2.55 - 2.75 - Capital expenditures exceeding authorized + Rate base growth Earnings from Operations is not calculated in accordan
Slide 8: 2013 Natural Gas Matters
2013 Natural Gas Matters ($ millions) 2013 Unrecovered PSEP Expense (1) 150 - 200 Emerging Work (2) 175 - 225 Rights of Way Encroachment Integrity Management and Other Work Legal and other costs 50 - 100 Pipeline Related Costs 400 - 500* * Total does not equal the sum of the components Timing and ma
Slide 9: 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 Exhibit 1 in the Appendix for factors that cou
Slide 10: 2013 EPS Guidance
2013 EPS Guidance Low High EPS from Operations $ 2.55 $ 2.75 Estimated Items Impacting Comparability Natural Gas Matters (0.85) (0.53) Environmental-Related Costs (0.04) 0.00 Estimated EPS on a GAAP Basis $ 1.66 $ 2.22 (1) Natural Gas Matters (millions, pre-tax) Low guidance High guidance range rang
Slide 11: 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 12: 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 13: Looking Ahead: Natural Gas Matters
Looking Ahead: Natural Gas Matters Pipeline Related Costs PSEP Costs 2014 Unrecovered costs continue 2015 Future pipeline safety work incorporated in next Gas Transmission rate case Emerging Work Right of Way Encroachment 2013-2017 Roughly $500 million of unrecovered costs Integrity Management 2014
Slide 14: Appendix
14 Appendix
Slide 15: Table of Contents
Table of Contents Exhibit 1: Safe Harbor Statement Page 16 Exhibit 2: Regulatory Calendar Page 17 Exhibit 3: Reconciliation of PG&E Corporation Earnings from Operations Page 18 to Consolidated Income Available for Common Shareholders in Accordance with GAAP Exhibit 4: Reconciliation of Pacific Gas a
Slide 16: Exhibit 1: Safe Harbor Statement
Exhibit 1: Safe Harbor Statement 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,
Slide 17: Exhibit 2: Regulatory Calendar
Exhibit 2: Regulatory Calendar Gas Pipeline 12/20: Final Decision 2/21: Replies to requests for rehearing Safety OIR R. 11-02-019 1/28: Intervenor requests for rehearing 5/24: Rebuttal briefs on fines & remedies 1/11: PG&E financial 3/4-3/5: 4/26: Briefs on 2/8: CPSD Evidentiary 5/14: PG&E coordinat
Slide 18: Exhibit 3: Reconciliation of PG&E Corporation Earnings from Operations to GAAP
Exhibit 3: 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 Year-to-Date, 2012 vs. 2011 (in millions, except per share amounts) Three months end
Slide 19: Exhibit 4: Reconciliation of Pacific Gas and Electric Company Earnings from Operations to GAAP
Exhibit 4: Reconciliation of Pacific Gas and Electric Company Earnings from Operations to Consolidated Income Available for Common Stock in Accordance with GAAP Fourth Quarter and Year-to-Date, 2012 vs. 2011 (in millions) Three months ended December 31, Twelve months ended December 31, Earnings Earn
Slide 20: Exhibit 5: Key Drivers of PG&E Corporation EPS from Operations
Exhibit 5: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations Fourth Quarter and Year-to-Date, 2012 vs. 2011 ($/Share, Diluted) Fourth Quarter 2011 EPS from Operations (1) $ 0.89 Increase in rate base earnings 0.05 Planned incremental work (0.11) Employee operational p
Slide 21: Exhibit 6: Operational Performance Metrics
Exhibit 6: Operational Performance Metrics Fourth Quarter 2012 Performance 2012 Improvement/Results EOY EOY Meets Actual Target Target Safety (includes both public and employee safety metrics) Nuclear Operations 1st Quartile 1st Quartile Leak Repair Performance 42.1% 42.1% Gas Emergency Response 23.
Slide 22: Definitions of 2012 Operational Performance Metrics from Exhibit 6
Definitions of 2012 Operational Performance Metrics from Exhibit 6 The Operational Performance Metrics focus on three areas: safety (public and employee), customer service, and financial performance. The EOY targets for each metric except for nuclear performance are stated relative to percentage imp
Slide 23: Exhibit 7: Pacific Gas and Electric Company Sales and Sources Summary
Exhibit 7: Pacific Gas and Electric Company Sales and Sources Summary Fourth Quarter and Year-to-Date, 2012 vs. 2011 Three Months Ended December 31, Twelve Months Ended December 31, 2012 2011 2012 2011 Sales from Energy Deliveries (in millions kWh) 20,895 20,706 86,113 83,688 Total Electric Customer
Slide 24: Exhibit 8: PG&E Corporation EPS Guidance
Exhibit 8: 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) (0.85) (0.53) Environmental-Related Costs (3) (0.04) 0.00 Estimated EPS on a GAAP Basis $ 1.66 $ 2.
Slide 25: Exhibit 9: General Earnings Sensitivities
Exhibit 9: 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
Slide 26: Exhibit 10: Summary of Selected Regulatory Cases
Exhibit 10: 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) Q1 2013 – Phase II expected to be filed May 3, 2013 – DRA testimony May 17, 2013 – Intervenor testimony a
Slide 27: Exhibit 10: Summary of Selected Regulatory Cases (continued)
Exhibit 10: Pacific Gas and Electric Company Summary of Selected Regulatory Cases (continued) Regulatory Case Docket # Key Dates Smart Grid Order Instituting Rulemaking R.08-12-009 Mar 5, 2012 – PG&E filed Customer Data Access D.09-12-046 application D.10-06-047 Apr 24, 2012 – CPUC decision adopting