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 Resolve gas issues Partner effectively for success • Execute critical gas • Rigorous multi-year • Strengthen local work planning presence • Complete regulatory • Drive continuous • Engage in public proceedings as soon as improvement policy possible development 2
Slide 3: Regulatory and Operational Updates
Regulatory and Operational Updates • Gas investigations – Awaiting ALJ ruling on PG&E motion Regulatory • General Rate Case – Hearings underway, concluding August 9 Update • TO 15 – Filed July 24 Gas Progress (YTD) • 66 miles of pipe strength tested or validated through records • Replaced 19 miles o
Slide 4: Q2 2013: Earnings Results
Q2 2013: Earnings Results Earnings (millions) EPS Earnings from Operations $ 348 $ 0.79 Items Impacting Comparability Natural Gas Matters (17) (0.04) Environmental-Related Costs (3) (0.01) Earnings on a GAAP Basis $ 328 $ 0.74 Natural Gas Matters (millions, pre-tax) Q2 Pipeline-related costs $ (74)
Slide 5: Q2 2013: Q over Q Comparison
Q2 2013: Q over Q Comparison EPS from Operations (1) (1) Other reflects lower gas transmission revenues, financing and depreciation costs for capital spending in excess of authorized levels, higher below- the-line costs, and miscellaneous other items. See Exhibit B for additional detail. EPS from Op
Slide 6: 2013 EPS Guidance
2013 EPS Guidance Low High EPS from Operations $ 2.55 $ 2.75 Estimated Items Impacting Comparability Natural Gas Matters (0.80) (0.47) Environmental-Related Costs (0.04) (0.01) Estimated EPS on a GAAP Basis $ 1.71 $ 2.27 (1) Natural Gas Matters (millions, pre-tax) Low guidance High guidance range ra
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 page
Slide 9: Appendix 1
Appendix Appendix 1
Slide 10: Exhibit 1: 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, costs
Slide 11: Gas Regulatory Proceedings Calendar
Exhibit 2: Gas Regulatory Proceedings Calendar 7/30: Quarterly compliance filing Gas Pipeline Safety OIR R. 11-02-019 10/29: PSEP update application Recordkeeping OII 7/10: Responses to I. 11-02-016 5/6: Briefs on fines CPSD request & remedies 6/7: Rebuttal briefs on 7/18: PG&E motion to Class Locat
Slide 12: Gas Pipeline Safety Costs
Exhibit 3: Gas Pipeline Safety Costs Shareholder Funded Gas Transmission Safety-Related Costs ($ millions) 2013 and Beyond 2010-2012 Estimated Total Forecast Pipeline Safety Enhancement Plan (PSEP) PSEP Expense Pipeline Modernization 356.6 Pipeline Records Integration 215.7 Valve Automation 0.4 PSEP
Slide 13: CPSD Recommended Penalty – Total Shareholder Impact
Exhibit 4: CPSD Recommended Penalty – Total Shareholder Impact ($ millions) Gas Pipeline Safety Costs Incurred or Committed(1) 2,215 Safety Division Recommendation - Fine 300 Safety Division Recommendation - Additional Shareholder Costs(2) 1,515 Total Shareholder Impact $ 4,030 (1) Actual and foreca
Slide 14: Assumptions for 2013 Guidance
Exhibit 5: 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
Slide 15: Earnings from Ops Comparison
Exhibit 6: 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 $2.55 - 2.75 - Capital expenditures exceeding authorized + Rate base growth Earnings from Operations is not calculated
Slide 16: 2013 Natural Gas Matters
Exhibit 7: 2013 Natural Gas Matters ($ 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 Ti
Slide 17: 2013 Equity Issuance
Exhibit 8: 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 for factors that could ca
Slide 18: Looking Ahead: Capital Expenditures
Exhibit 9: 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 proceed
Slide 19: Looking Ahead: Rate Base Growth
Exhibit 10: 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. Th
Slide 20: Looking Ahead: Natural Gas Matters
Exhibit 11: 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 $500 million of unrecovered costs Integrity Mana
Slide 21: Appendix 2
Appendix Appendix 2
Slide 22: Reconciliation of Earnings from Operations to GAAP
Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) Second Quarter, 2013 vs. 2012 (in millions, except per share amounts) Three Months Ended June 30, Six M
Slide 23: Key Drivers of EPS from Operations
Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations Second Quarter, 2013 vs. 2012 ($/Share, Diluted) Second Quarter 2012 EPS from Operations (1) $ 0.81 Nuclear refueling outage 0.06 Growth in rate base earnings 0.05 Miscellaneous 0.01 Reduction in authorized
Slide 24: Operational Performance Metrics
Exhibit C: Operational Performance Metrics Second Quarter 2013 Performance 2013 Performance Results Q2 YTD EOY Meets YTD Actual Target Target (1) Safety (includes both public and employee safety metrics) Nuclear Operations Safety Institute of Nuclear Power Operations (INPO) Performance 2nd Quartile
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 year
Slide 26: Sales and Sources Summary
Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary Second Quarter, 2013 vs. 2012 Three Months Ended June 30, Six Months Ended June 30, 2013 2012 2013 2012 Sales from Energy Deliveries (in millions kWh) 20,676 20,664 41,002 40,994 Total Electric Customers at June 30 5,242,000 5,212
Slide 27: PG&E Corporation EPS Guidance
Exhibit E: 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) (0.80) (0.47) Environmental-Related Costs (3) (0.04) (0.01) Estimated EPS on a GAAP Basis $ 1.71 $
Slide 28: General Earnings Sensitivities
Exhibit F: 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 Sh
Slide 29: Summary of Selected Regulatory Cases
Exhibit G: 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) Apr 18, 2013 – Phase II filed May 3, 2013 – DRA testimony May 17, 2013 – Intervenor testimony and Safety a
Slide 30: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Nuclear Decommissioning Cost Triennial Proceeding A.12-12-012 Dec 21, 2012 – Application filed Mar 17, 2013 – Prehearing conference Jun 17, 2013 – Scoping memo to bifurcate proceeding
Slide 31: Summary of Selected Regulatory Cases
Exhibit G: Pacific Gas and Electric Company Summary of Selected Regulatory Cases Regulatory Case Docket # Key Dates Transmission Owner Rate Case (TO14) ER12-2701 Sep 28, 2012 – PG&E filed TO14 rate case seeking an annual revenue requirement for 2013 Nov 29, 2012 – FERC accepted filing making rates e