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) — Q1 2015 Earnings Presentation
34 slides from Pacific Gas & Electric's earnings presentation, Apr 29, 2015
Slide 1: First Quarter Earnings Call
FIRST QUARTER EARNINGS CALL April 29, 2015 Exhibit 99.2
Slide 2: Safe Harbor Statements
* Safe Harbor Statements Management's statements providing guidance for PG&E Corporation’s 2015 financial results and the underlying assumptions and forecasts (including those relating to unrecovered costs, capital expenditures, rate base, equity issuances, authorized revenues, and general earnings
Slide 3: Key Focus Areas
* Key Focus Areas Implement final penalty decision Resolve remaining regulatory and legal proceedings Continue to execute on critical gas work Rigorous multi-year planning Drive continuous improvement Strengthen local presence Engage in public policy development Resolve gas issues Position company f
Slide 4: Operational and Regulatory Update
* Gas Investigations – Final $1.6 billion penalty decision April 9 Gas Transmission and Storage rate case – Hearings completed in March. Briefs April 29, reply briefs May 20 Residential Rate OIR – Proposed decision received April 21 2017 General Rate Case – Plan to file in September 2015 Regulatory
Slide 5: Q1 2015 Earnings Results
* Q1 2015 Earnings Results Earnings from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of Earnings per Share (“EPS”) from Operations to EPS on a GAAP basis.
Slide 6: Q1 2015: Quarter over Quarter Comparison
* Q1 2015: Quarter over Quarter Comparison EPS from Operations Earnings per Share from Operations is not calculated in accordance with GAAP and excludes items impacting comparability. See Exhibit A in Appendix 2 for a reconciliation of EPS from Operations to EPS on a GAAP basis.
Slide 7: Assumptions for 2015
* Assumptions for 2015 Return on Equity: 10.4% Equity Ratio: 52% Authorized Cost of Capital* Authorized Rate Base (weighted average) ($ billions) Other Factors Affecting Earnings from Operations - Gas Transmission & Storage rate case Outcome and timing of rate case Amounts not requested + Tax benefi
Slide 8: 2015 Earnings Per Share Guidance
* 2015 Earnings Per Share Guidance See the Safe Harbor Statements for factors that could cause actual results to differ materially from the guidance presented and underlying assumptions. See Exhibit E in Appendix 2 for detailed 2015 earnings guidance. Guidance ranges exclude potential future fines o
Slide 9: 2015 Items Impacting Comparability Guidance
* 2015 Items Impacting Comparability Guidance ranges exclude potential future fines or penalties and any future insurance recoveries (1) Guidance is consistent with the April 9 final penalty decision, and the estimated safety-related costs that will be trued up with a final GT&S rate case decision.
Slide 10: CPUC Penalty Decision in Gas Transmission Pipeline Investigations
* CPUC Penalty Decision in Gas Transmission Pipeline Investigations (1) A $300 million fine to be paid to the State General Fund by October 2015 (2) A one-time $400 million bill credit to natural gas customers in February 2016 (3) A disallowance of $850 million (including up to $161 million in expen
Slide 11: 2015 Equity Issuance
* 2015 Equity Issuance Previous 2015 $400M - 600M $700M - 800M 2014 EOY shares outstanding: 476M + Fines and penalties Cash flows: balancing accounts, timing of expenditures, and other Current2015 See the Safe Harbor Statements for factors that could cause actual results to differ materially from th
Slide 12: 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 hist
Slide 13: Rate Base Growth 2014-2016
* Rate Base Growth 2014-2016 $32.9 - 33.3B* ~$28.2B 2014 2016 2015 ~$31B* 2014-2016 Weighted Average Authorized Rate Base CAGR: ~8% * Range reflects recent regulatory decisions, current or planned regulatory filings, and historic spending patterns. See the Safe Harbor Statements for factors that cou
Slide 14: Appendix – Regulatory and Guidance Matters
* Appendix 1 – Regulatory and Guidance Matters Updates to Appendix 1 Since the Previous Quarter slide 15 Regulatory 2015 CPUC Gas Transmission and Storage Rate Case slide 16 CPUC General Rate Cases slide 17 FERC Transmission Owner Rate Case slide 18 Gas Regulatory Proceedings Schedule slide 19 Guida
Slide 15: Updates to Appendix Since the Previous Quarter
* Updates to Appendix 1 Since the Previous Quarter Slide 16 2015 CPUC Gas Transmission and Storage Rate Case Slide 18 FERC Transmission Owner Rate Case Slide 19 Gas Regulatory Proceedings Schedule Slide 20 Incremental Equity Factors
Slide 16: 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 17: 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 18: FERC Transmission Owner Rate Case
* FERC Transmission Owner Rate Case July 30, 2014 – TO16 filed with FERC Requested revenue requirement of $1.366 billion and ROE of 11.26% September 30, 2014 – TO16 was accepted and rate changes suspended until March 1, 2015 May 7, 2015 – Next settlement conference TO16
Slide 19: Gas Regulatory Proceedings Schedule
* Gas Regulatory Proceedings Schedule Recordkeeping OII I. 11-02-016 Class Location OII I. 11-11-009 Gas Pipeline OII I. 12-01-007 May March April June Gas Pipeline Safety OIR R. 11-02-019 2015 Order to Show Cause - Ex Parte A. 13-12-012 Gas Distribution OII and Order to Show Cause I. 14-11-008 3/13
Slide 20: Incremental Equity Factors
* Incremental Equity Factors Equity Impacting Event Multiplier Fine payable to State (1) 100% Customer bill credit (2) (4) 60% Charge for disallowed capital (3) (4) 30% Disallowed revenue for pipeline safety expenses (2) (4) 60% CPUC estimated costs of other remedies (4) 60% Applies to newly issued
Slide 21: Appendix – Supplemental Earnings Materials
* Appendix 2 – Supplemental Earnings Materials Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated slide 22 Income Available for Common Shareholders in Accordance with GAAP Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share from Operations slide 2
Slide 22: Exhibit A: Reconciliation of Earnings from Operations to GAAP
* Exhibit A: Reconciliation of PG&E Corporation Earnings from Operations to Consolidated Income Available for Common Shareholders in Accordance with Generally Accepted Accounting Principles (“GAAP”) First Quarter, 2015 vs. 2014 (in millions, except per share amounts) In 2014, natural gas matters inc
Slide 23: Exhibit B: Key Drivers of EPS from Operations
* Exhibit B: Key Drivers of PG&E Corporation Earnings per Common Share (“EPS”) from Operations First Quarter, 2015 vs. 2014 ($/Share, Diluted) See Exhibit A for a reconciliation of EPS from Operations to EPS on a GAAP basis. Represents the increase in base revenues authorized by the CPUC in the 2014
Slide 24: Exhibit C: Operational Performance Metrics
* Exhibit C: Operational Performance Metrics The 2015 target for earnings from operations is not publicly reported but is consistent with the guidance range provided for 2015 EPS from operations of $3.50 to $3.70. See following page for definitions of the operational performance metrics. The operati
Slide 25: Definitions of 2015 Operational Performance Metrics
* Definitions of 2015 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 2,266 kWh and 704 kWh for the three months ended March 31, 2015 and 2014, respectively. Exhibit D: Pacific Gas and Electric Company Sales and Sources Summary First Quarter, 2015 vs. 2014 Please see the 2014 Annual Report on Form 10-K for addit
Slide 27: Exhibit E: Earnings Per Share Guidance
* Exhibit E: PG&E Corporation Earnings Per Share Guidance 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 that allows investors to c
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 on factors that may affect 2015 earnings are forward-looking statements that are based on various assumptions. Actual results may differ materially. For a discussion
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