Slide 1: 2020 First Quarter Earnings
2020 FIRST QUARTER EARNINGS May 1, 2020
Slide 2: Forward-Looking Statements
® Forward-Looking Statements This presentation contains statements regarding management’s expectations and objectives for future periods (including key factors affecting 2020 non-GAAP core earnings) as well as forecasts and estimates regarding PG&E Corporation’s and Pacific Gas and Electric Company’
Slide 3: Resolution of Key Issues
® Resolution of Key Issues Path to timely Chapter 11 exit through the fair settlement of wildfire claims and pending regulatory proceedings, progress with legislative initiatives, and establishment of a multi-year investment and rate roadmap. May 15: Plan Solicitation Ballot Deadline Upcoming May 21
Slide 4: COVID-19 Impacts
® COVID-19 Impacts Overall, PG&E’s key wildfire mitigation and safety work execution has not been impacted by COVID-19. California's constructive regulatory framework minimizes potential earnings impacts from reduced load and higher uncollectibles. Key Areas Potential Business Impact Current Status
Slide 5: Wildfire Mitigation Plan (WMP) Progress
® Wildfire Mitigation Plan (WMP) Progress 2020 Forecast Spend Year-to-Date Spend Expense ~$1.3B ~$0.4B Capital ~$1.4B (1) ~$0.3B 2020 WMP Key Programs and Goals Q1 2020 Progress (2) System 241 circuit miles hardened through System 19% stronger poles and covered conductor, Hardening Hardening (# of L
Slide 6: Wildfire Mitigation Plan Progress (cont.)
® Wildfire Mitigation Plan Progress (cont.) 2020 Public Safety Power Shutoff (PSPS) Improvements Smaller Shorter Smarter 33% fewer impacted customers (1) 50% faster restoration times 2x+ more precise modeling • Secured over 450 MW of temporary • Procuring additional aircraft, including • Increasing
Slide 7: Q1 2020 Earnings Results
® Q1 2020 Earnings Results Q1 (in millions, except per share amounts) Earnings EPS PG&E Corporation’s Earnings on a GAAP basis $ 371 $ 0.57 Non-core items: Bankruptcy and legal costs 177 0.27 Investigation remedies and delayed cost recovery 28 0.04 PG&E Corporation’s Non-GAAP Core Earnings $ 576 $ 0
Slide 8: Q1 2020 Quarter over Quarter Comparison
® Q1 2020 Quarter over Quarter Comparison Non-GAAP Core Earnings per Share $1.25 ($0.19) $1.00 $0.02 $0.01 ($0.06) $0.03 $0.05 ($0.01) $0.75 $0.50 $1.04 $0.89 $0.25 $0.00 Q1 2019 Non- Increase in Interest Timing of Timing of Growth in rate Energy Miscellaneous Q1 2020 Non- GAAP Core shares accrued o
Slide 9: 2020 Factors Impacting Earnings
® 2020 Factors Impacting Earnings 2020 CapEx and Ratebase Assumptions Key Factors Affecting Non-GAAP Core Earnings Drivers of Variance from Authorized ($ billions) Capex Ratebase ($ millions after tax) - Net below the line and spend above authorized (2) $150 - $200 2020 GRC Settlement $4.4 $30.5 - U
Slide 10: Substantial Capital Investments
® Substantial Capital Investments (1) 2019-2024 CapEx Forecast ($B) Subject to Ongoing and Future Recovery Requests $7.3-$8.7 $7.6-$8.2 $7.4-$8.1 Spend driven by: ~$7.5 $7.2-$7.8 • Wildfire Mitigation Plan $7.0 Memorandum Account (WMPMA) • Catastrophic Event Memorandum Account (CEMA) 2019 Actual 202
Slide 11: Ratebase Growth Forecast
® Ratebase Growth Forecast Weighted Average Ratebase forecast by Rate Case ($B) Potential Growth Opportunities ~8% CAGR • Additional wildfire mitigation on equity earning ratebase 2019- 2024 (1, 2) • Transportation electrification (Phase II Light Duty) $57-$60 $53-$55 • Additional distributed genera
Slide 12: Appendix
[t PG&E Corporation Appendix
Slide 13: Table of Contents
® Table of Contents Appendix 1 - Supplemental Earnings Materials Slides 14-31 Appendix 2 - Overview of Regulatory Cases Slides 32-33 13
Slide 14: Appendix 1 – Supplemental Earnings Materials
® Appendix 1 – Supplemental Earnings Materials Reconciliation of PG&E Corporation's Consolidated Earnings Attributable to Common Exhibit A: Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Slides 15-17 Non-GAAP Core Earnings Key Drivers of PG&E Corporation's Non-G
Slide 15: Exhibit A: Reconciliation of GAAP to Non-GAAP Core Earnings
® Exhibit A: Reconciliation of PG&E Corporation's Consolidated Earnings Attributable to Common Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Non-GAAP Core Earnings First Quarter, 2020 vs. 2019 (in millions, except per share amounts) Three Months Ended March 31,
Slide 16: Exhibit A: Reconciliation of GAAP to Non-GAAP Core Earnings (cont.)
® Exhibit A: Reconciliation of PG&E Corporation's Consolidated Earnings Attributable to Common Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Non-GAAP Core Earnings First Quarter, 2020 vs. 2019 (in millions, except per share amounts) (2) PG&E Corporation and the
Slide 17: Exhibit A: Reconciliation of GAAP to Non-GAAP Core Earnings (cont.)
® Exhibit A: Reconciliation of PG&E Corporation's Consolidated Earnings Attributable to Common Shareholders in Accordance with Generally Accepted Accounting Principles ("GAAP") to Non-GAAP Core Earnings First Quarter, 2020 vs. 2019 (in millions, except per share amounts) (4) The Utility incurred $22
Slide 18: Exhibit B: Key Drivers of Non-GAAP Core EPS
® Exhibit B: Key Drivers of PG&E Corporation's Non-GAAP Core Earnings per Common Share ("EPS") First Quarter, 2020 vs. 2019 (in millions, except per share amounts) First Quarter 2020 vs. 2019 Earnings per Earnings Common Share (Diluted) (1) 2019 Non-GAAP Core Earnings $ 546 $ 1.04 (2) Increase in sh
Slide 19: Exhibit C: Operational Performance Metrics
® Exhibit C: Operational Performance Metrics Proposed 2020 Performance Metrics (1) 2020 Target Customer Welfare - prioritizing public and employee safety Electric Operations Reportable Fire Ignitions 101 Electric Asset Failure 2,166 Distribution Circuit Sectionalization 9/1/2020 Gas Operations Large
Slide 20: Definitions of 2020 Operational Performance Metrics from Exhibit C
® Definitions of 2020 Operational Performance Metrics from Exhibit C Customer Welfare – prioritizing public and employee safety Public and employee safety are measured in five areas: Electric Operations, Gas Operations, Generation, Reliability, and Workforce Safety. The safety of the Utility’s elect
Slide 21: Definitions of 2020 Operational Performance Metrics from Exhibit C
® Definitions of 2020 Operational Performance Metrics from Exhibit C Customer Welfare – prioritizing public and employee safety (continued) The safety of the Utility’s Reliability is represented by: • Gas Customer Emergency Response – Measures the average response time for immediate response orders
Slide 22: Exhibit D: Pacific Gas & Electric Company Sales and Sources Summary
® Exhibit D: Pacific Gas & Electric Company Sales and Sources Summary First Quarter, 2020 vs. 2019 Three Months Ended March 31, 2020 2019 Sales from Energy Deliveries (in millions kWh) 18,263 18,435 Total Electric Customers at March 31 5,493,906 5,428,318 Total Gas Sales (in Bcf) 245 259 Total Gas C
Slide 23: Exhibit E: 2020 Non-Core Items Guidance
® Exhibit E: PG&E Corporation's 2020 Non-Core Items Guidance 2020 Non-Core Guidance (in millions, after-tax) Low High (1) Estimated Non-Core Items: Bankruptcy and legal costs (2) ~ $1,694 ~ $1,521 Wildfire insurance fund (3) ~ 483 ~ 483 Investigation remedies and delayed cost recovery (4) ~ 288 ~ 28
Slide 24: Exhibit E: 2020 Non-Core Items Guidance
® Exhibit E: PG&E Corporation's 2020 Non-Core Items Guidance (3) “Wildfire insurance fund” represents the amortization of wildfire insurance fund contributions related to Assembly Bill (AB) 1054. The total offsetting tax impact for the high non- core guidance range is $187 million. 2020 (in millions
Slide 25: Exhibit F: General Earnings Sensitivities for 2020
® Exhibit F: General Earnings Sensitivities for 2020 Pacific Gas & Electric Company Estimated 2020 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 +/-$23 million These general e
Slide 26: Exhibit G: Use of Non-GAAP Financial Measures
® Exhibit G: Use of Non-GAAP Financial Measures PG&E Corporation and Pacific Gas and Electric Company: Use of Non-GAAP Financial Measures PG&E Corporation discloses historical financial results and provides guidance based on “non-GAAP core earnings” and “non-GAAP core EPS” in order to provide a meas
Slide 27: Exhibit H: GAAP Net Income to Non-GAAP Adjusted EBITDA Reconciliation
® Exhibit H: GAAP Net Income to Non-GAAP Adjusted EBITDA Reconciliation PG&E Corporation First Quarter 2020 vs. 2019 Three Months Ended March 31, (in millions) 2020 2019 PG&E Corporation’s Net Income on a GAAP basis $ 374 $ 136 Income tax provision (benefit) (36) (84) Other income, net (97) (71) Int
Slide 28: Exhibit I: AB 1054 Wildfire Fund
® Exhibit I: AB 1054 Wildfire Fund (1) Wildfire Fund Contribution Treatment $21B Wildfire Fund • Contribution amounts expected to be amortized based on an assumed ~10-year life (2) • Tax treatment pending private letter ruling from the IRS $4.8B PG&E Pre-Emergence Wildfire Liabilities • For fires oc
Slide 29: Exhibit J: Expected Timelines of Selected Regulatory Cases
® Exhibit J: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates 2020 General Rate Case (Phase I) A.18-11-009 Dec 13, 2018 – Application filed Mar 8, 2019 – Scoping Memo Mar 25, 2019 – PG&E's Revised Testimony on Real Estate served Jun
Slide 30: Exhibit J: Expected Timelines of Selected Regulatory Cases
® Exhibit J: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Safety Culture and Governance Order I.15-08-019 Dec 21, 2018 – President Picker issued ruling on next phase of the Safety Culture OII Instituting Investigation (Phase 3) J
Slide 31: Exhibit J: Expected Timelines of Selected Regulatory Cases
® Exhibit J: Pacific Gas and Electric Company Expected Timelines of Selected Regulatory Cases Regulatory Case Docket # Key Dates Transmission Owner Rate Case (TO19) ER17-2154 Jul 26, 2017 – PG&E filed TO19 rate case seeking an annual revenue requirement for 2018 Sept 28, 2017 – FERC accepted TO19 ma
Slide 32: 2020 CPUC General Rate Case
® APPENDIX 2 - OVERVIEW OF KEY REGULATORY CASES 2020 CPUC General Rate Case • On December 20, 2019, PG&E filed a 2020 GRC settlement agreement together with the Public Advocates Office of the CPUC, The Utility Reform Network, Coalition of California Utility Employees, the Office of the Safety Advoca
Slide 33: FERC Transmission Owner Rate Cases
® APPENDIX 2 - OVERVIEW OF KEY REGULATORY CASES FERC Transmission Owner Rate Cases TO18 (2017 Revenues) • On July 29, 2016, PG&E filed TO18 with FERC requesting a ~$1.7B revenue requirement with an ROE of 10.90% (inclusive of 50 basis point adder) • PG&E cannot predict when a final decision will be