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) — Q2 2013 Earnings Presentation
31 slides from Pacific Gas & Electric's earnings presentation, Jul 31, 2013
Slide 1: PG&E Corporation Second Quarter Earnings Call
PG&E Corporation Second Quarter Earnings Call July 31, 2013 This presentation is not complete without the accompanying statements made by management during the webcast conference call held on July 31, 2013. This presentation, including Exhibits, and the accompanying press release, were attached to P
Slide 2: Key Focus Areas
* Key Focus Areas Position company for success Partner effectively Resolve gas issues Execute critical gas work Complete regulatory proceedings as soon as possible Rigorous multi-year planning Drive continuous improvement Strengthen local presence Engage in public policy development
Slide 3: Regulatory and Operational Updates
* Regulatory and Operational Updates Executing on Operations Gas Progress (YTD) 66 miles of pipe strength tested or validated through records Replaced 19 miles of pipe, upgraded 27 miles for smart pig Installed 19 automatic or remote shutoff valves Completed ~3,200 miles of Centerline survey Electri
Slide 4: Q2 2013: Earnings Results
* Q2 2013: Earnings Results See Exhibit A for additional detail.
Slide 5: EPS from Operations Q2 2013: Q over Q Comparison
* EPS from Operations Q2 2013: Q over Q Comparison EPS from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis. (1) Other reflects lower gas transmission revenues, financing
Slide 6: 2013 EPS Guidance
* (1) The guidance range for 2013 does not include future insurance recoveries or potential penalties (other than those already accrued) or any potential punitive damages. 2013 EPS Guidance See Exhibit 1 for factors that could cause actual results to differ materially from the guidance presented and
Slide 7: Appendix
Appendix Appendix
Slide 8: Table of Contents
* Table of Contents Appendix 1 – Safe Harbor Statements and Regulatory and Guidance Matters Exhibit 1: Safe Harbor Statements page 10 Exhibit 2: Gas Regulatory Proceedings Calendar page 11 Exhibit 3: Gas Pipeline Safety Costs page 12 Exhibit 4: CPSD Recommended Penalty – Total Shareholder Impact pag
Slide 9: Appendix
Appendix Appendix 1
Slide 10: Safe Harbor Statements
* Exhibit 1: 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, cos
Slide 11: Gas Regulatory Proceedings Calendar
* 7/18: PG&E motion to reopen record Exhibit 2: Gas Regulatory Proceedings Calendar Recordkeeping OII I. 11-02-016 Class Location OII I. 11-11-009 Gas Pipeline OII I. 12-01-007 Gas Pipeline Safety OIR R. 11-02-019 10/29: PSEP update application 5/24: PG&E coordinated reply briefs on fines & remedies
Slide 12: Gas Pipeline Safety Costs
* Exhibit 3: Gas Pipeline Safety Costs * Expenses in excess of amounts authorized in 2011-2014 Gas Transmission & Storage Rate Case ("Gas Accord V")
Slide 13: CPSD Recommended Penalty – Total Shareholder Impact
* Exhibit 4: CPSD Recommended Penalty – Total Shareholder Impact (1) Actual and forecast costs borne by shareholders for gas pipeline safety work, 2010 and beyond. See Exhibit 3 for additional detail. (2) The CPSD penalty recommendation proposes a $300 million fine and recognizes only $435 million o
Slide 14: Assumptions for 2013 Guidance
* Authorized ROE: 10.4% CPUC 9.1% FERC Cost of Capital Authorized Rate Base (weighted average) ($ billions) Exhibit 5: Assumptions for 2013 Guidance EPS Factors - Incremental O&M spending ($250 M) - Financing and depreciation costs for incremental capex (~$1B) - CWIP earnings 100% offset - Lower gas
Slide 15: Earnings from Operations Comparison
* 2012 EPS from Operations Exhibit 6: Earnings from Ops Comparison ROE reductions Higher shares CWIP earnings 100% offset by below-the-line costs Capital expenditures exceeding authorized + Rate base growth $3.22 $2.55 - 2.75 2013 EPS from Operations Earnings from Operations is not calculated in acc
Slide 16: 2013 Natural Gas Matters
* Exhibit 7: 2013 Natural Gas Matters (1) Unrecovered PSEP Expense includes what was previously called “PSEP” and “PSEP - Not Requested.” Assumes no additional disallowed capital. (2) For 2013 and 2014, right-of-way expense is expected to represent more than half of Emerging Work costs. Excerpt from
Slide 17: 2013 Equity Issuance
* 2012 2013(1) ~$775M $1B - 1.2B + Lower earnings from operations + Higher capital expenditures + Q4 2012 PSEP capital charge Exhibit 8: 2013 Equity Issuance (1) The guidance range for 2013 does not include potential penalties (other than those already accrued). See Exhibit 1 for factors that could
Slide 18: Looking Ahead: Capital Expenditures
* Exhibit 9: Looking Ahead: Capital Expenditures Capital Expenditures 2014 - 2016 $4.5B - 5.5B $4.5B - 6B $4.5B - 6B 2014 2015 2016* The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, and current views of other future gas and electric proce
Slide 19: Looking Ahead: Rate Base Growth
* 2014 2016* Exhibit 10: Looking Ahead: Rate Base Growth Rate Base Growth 2014 - 2016 *Excludes Oakley Plant The high end of the range reflects capex at GRC request levels, including attrition amounts for 2015 and 2016, and current views of other future gas and electric proceedings. The low end refl
Slide 20: Looking Ahead: Natural Gas Matters
* Exhibit 11: Looking Ahead: Natural Gas Matters Excerpt from Q4 2012 Earnings Package, Feb 21, 2013
Slide 21: Appendix
Appendix 2 Appendix
Slide 22: Reconciliation of Earnings from Operations to GAAP Income
* Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) “Earnings from operations” is not calculated in accordance with GAAP and excludes items impacting com
Slide 23: Key Drivers of EPS from Operations
* Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations (1) See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis. Second Quarter, 2013 vs. 2012 ($/Share, Diluted)
Slide 24: Operational Performance Metrics
* Exhibit C: Operational Performance Metrics It is possible to meet EOY target while missing YTD target, as most metrics have YTD targets that vary from EOY targets. The 2013 target for earnings from operations is not publicly reported but is consistent with the guidance range provided for 2013 EPS
Slide 25: 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 ye
Slide 26: Sales and Sources Summary
* Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary Second Quarter, 2013 vs. 2012 Please see the 2012 Annual Report on Form 10-K for additional information about operating statistics. Includes sources of electric energy totaling 298 kWh and 1,303 kWh for the three months ended Ju
Slide 27: Guidance Reconciliation Notes
* Items impacting comparability reconcile earnings from operations with Consolidated Income Available for Common Shareholders as reported in accordance with GAAP. This range corresponds to the range of unrecovered costs associated with Natural gas matters, after-tax, of $356 million and $211 million
Slide 28: General Earnings Sensitivities
* These general earnings sensitivities on factors that may affect 2013 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materially. For a discussion of the factors that may affect future results, see Exhibit 1. Exhibit F: General Earnings Sensi
Slide 29: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 30: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases
Slide 31: Summary of Selected Regulatory Cases
* Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases