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Pacific Gas Electric Co (75488) SEC Filing 10-Q Quarterly report for the period ending Tuesday, June 30, 2020

Pacific Gas Electric Co

CIK: 75488

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Investor Relations Contact: 415.972.7080 | Media Inquiries Contact: 415.973.5930 | www.pgecorp.com
July 30, 2020

PG&E Corporation Reports Second-Quarter 2020 Financial Results,
Initiates 2020 and 2021 Earnings and EPS Guidance

Recorded GAAP losses were $3.73 per share for the second quarter of 2020, compared to losses of $4.83 per share for the same period in 2019.
Non-GAAP core earnings were $1.03 per share for the second quarter of 2020, compared to $1.10 per share for the same period in 2019.
2020 EPS guidance initiated for GAAP losses in the range of $0.99 to $1.05 and non-GAAP core earnings of $1.60 to $1.63 per share.
2021 EPS guidance initiated for GAAP earnings in the range of $0.17 to 0.29 and non-GAAP core earnings of $0.95 to $1.05 per share.

SAN FRANCISCO — PG&E Corporation (NYSE: PCG) recorded second-quarter 2020 losses attributable to common shareholders of $1,972 million, or $3.73 per share, as reported in accordance with generally accepted accounting principles (GAAP). This compares with losses attributable to common shareholders of $2,553 million, or $4.83 per share, for the second quarter of 2019.

GAAP results include non-core items that management does not consider representative of ongoing earnings, which totaled $2.5 billion after-tax, or $4.75 per share, for the quarter. These results were primarily driven by costs related to PG&E Corporation’s and Pacific Gas and Electric Company’s (Utility) reorganization cases under Chapter 11 of the U.S. Bankruptcy Code (Chapter 11). PG&E also recorded charges related to the 2019 Kincade fire as a non-core item in the second quarter, which includes estimated third-party claims, net of probable insurance recoveries, Utility clean-up and repair costs, and legal and other costs. Other non-core items include the amortization of wildfire insurance fund contributions under Assembly Bill (AB) 1054 and investigation remedies and delayed cost recovery, partially offset by the recovery of capital expenditures in excess of adopted amounts from the 2011 Gas Transmission & Storage (GT&S) rate case.

PG&E Corporation and Pacific Gas and Electric Company emerged from Chapter 11 on July 1, 2020 after successfully completing the restructuring process and achieving approval for its Plan of Reorganization confirmed by the United States Bankruptcy Court.

PG&E enters the second half of 2020 having:

Implemented the settlement and resolution of all prepetition wildfire claims pursuant to the Plan;
Contributed to the State of California's go-forward wildfire fund, providing for full eligibility of its protections;
Seated its new Board of Directors and Interim CEO; and


The following information was filed by Pacific Gas Electric Co on Thursday, July 30, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedJune 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission
File
Number
Exact Name of
Registrant
as Specified
in its Charter
State or Other
Jurisdiction of
Incorporation
IRS Employer
Identification
Number
1-12609PG&E CorporationCalifornia94-3234914
1-2348Pacific Gas and Electric CompanyCalifornia94-0742640
PG&E CorporationPacific Gas and Electric Company
77 Beale Street77 Beale Street
P.O. Box 770000P.O. Box 770000
San Francisco,California94177San Francisco, California 94177
Address of principal executive offices, including zip code
PG&E CorporationPacific Gas and Electric Company
415973-1000415973-7000
Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, no par valuePCGThe New York Stock Exchange
Equity UnitsPCGUThe New York Stock Exchange
First preferred stock, cumulative, par value $25 per share, 5% series A redeemablePCG-PENYSE American LLC
First preferred stock, cumulative, par value $25 per share, 5% redeemablePCG-PDNYSE American LLC
First preferred stock, cumulative, par value $25 per share, 4.80% redeemablePCG-PGNYSE American LLC
First preferred stock, cumulative, par value $25 per share, 4.50% redeemablePCG-PHNYSE American LLC
First preferred stock, cumulative, par value $25 per share, 4.36% series A redeemablePCG-PINYSE American LLC
First preferred stock, cumulative, par value $25 per share, 6% nonredeemablePCG-PANYSE American LLC
First preferred stock, cumulative, par value $25 per share, 5.50% nonredeemablePCG-PBNYSE American LLC
First preferred stock, cumulative, par value $25 per share, 5% nonredeemablePCG-PCNYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
PG&E Corporation:YesNo
Pacific Gas and Electric Company:YesNo
1


Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
PG&E Corporation:YesNo
Pacific Gas and Electric Company:YesNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
PG&E Corporation:Large accelerated filer
Accelerated filer
 
Non-accelerated filer  
 Smaller reporting companyEmerging growth company
Pacific Gas and Electric Company:Large accelerated filer
Accelerated filer
 
Non-accelerated filer
 Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
PG&E Corporation:
Pacific Gas and Electric Company:
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
PG&E Corporation:Yes
No
Pacific Gas and Electric Company:Yes
No
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
PG&E Corporation:
YesNo
Pacific Gas and Electric Company:
YesNo

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common stock outstanding as of July 27, 2020: 
PG&E Corporation:1,941,473,377  
Pacific Gas and Electric Company:
264,374,809  

2


PG&E CORPORATION AND
PACIFIC GAS AND ELECTRIC COMPANY
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020
TABLE OF CONTENTS
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GLOSSARY

The following terms and abbreviations appearing in the text of this report have the meanings indicated below.
2019 Form 10-KPG&E Corporation and Pacific Gas and Electric Company’s combined Annual Report on Form 10-K for the year ended December 31, 2019
2019 Wildfire Mitigation Planthe wildfire mitigation plan for 2019 submitted by the Utility to the CPUC pursuant to SB 901, previously also referred to as the “2019 Wildfire Safety Plan”
ABAssembly Bill
ABRalternate base rate
ALJadministrative law judge
AROasset retirement obligation
ASUaccounting standard update issued by the FASB (see below)
Backstop Partya third-party investor party to a Backstop Commitment Letter
Bankruptcy Codethe United States Bankruptcy Code
Bankruptcy Courtthe U.S. Bankruptcy Court for the Northern District of California
CAISOCalifornia Independent System Operator
Cal FireCalifornia Department of Forestry and Fire Protection
CARBCalifornia Air Resources Board
CARECalifornia Alternate Rates for Energy
CCACommunity Choice Aggregator
CEMACatastrophic Event Memorandum Account
Chapter 11chapter 11 of title 11 of the U.S. Code
Chapter 11 Casesthe voluntary cases commenced by each of PG&E Corporation and the Utility under Chapter 11 on January 29, 2019
CHTCustomer Harm Threshold
CPUCCalifornia Public Utilities Commission
CPPMA
COVID-19 Pandemic Protections Memorandum Account
CRRscongestion revenue rights
CUECoalition of California Utility Employees
CVAClimate Vulnerability Assessment
DADirect Access
Diablo CanyonDiablo Canyon nuclear power plant
DIP Credit AgreementSenior Secured Superpriority Debtor in Possession Credit, Guaranty and Security Agreement, dated as of February 1, 2019, among the Utility, as borrower, PG&E Corporation, as guarantor, JPMorgan Chase Bank, N.A., as administrative agent, and Citibank, N.A., as collateral agent
DTSCDepartment of Toxic Substances Control
EPSearnings per common share
Effective DateJuly 1, 2020, the effective date of the Plan in the Chapter 11 Cases
FASBFinancial Accounting Standards Board
FEMAFederal Emergency Management Agency
FERCFederal Energy Regulatory Commission
FHPMAFire Hazard Prevention Memorandum Account
FRMMAFire Risk Mitigation Memorandum Account
Fire Victim Trusttrust to be established pursuant to the Plan for the benefit of holders of the Fire Victim Claims into which the Aggregate Fire Victim Consideration (as defined in the Plan) is to be funded
GAAPU.S. Generally Accepted Accounting Principles
GRCgeneral rate case
GT&Sgas transmission and storage
4


HSMHazardous Substance Memorandum Account
IOU(s)investor-owned utility(ies)
LIBORLondon Interbank Offered Rate
LSTCliabilities subject to compromise
MD&AManagement’s Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 2 of this Form 10-Q
MGP(s)manufactured gas plants
the Monitorthird-party monitor retained as part of its compliance with the sentencing terms of the Utility’s January 27, 2017 federal criminal conviction
NAVnet asset value
NDCTPNuclear Decommissioning Cost Triennial Proceedings
NEILNuclear Electric Insurance Limited
NRCNuclear Regulatory Commission
OESState of California Office of Emergency Services
OIIorder instituting investigation
OIRorder instituting rulemaking
PCIAPower Charge Indifference Adjustment
PODPresiding Officer’s Decision
PDproposed decision
Petition DateJanuary 29, 2019
PSAplan support agreement
PSPSPublic Safety Power Shutoff
RAresource adequacy
ROEreturn on equity
RSArestructuring support agreement (as amended)
SBSenate Bill
SECU.S. Securities and Exchange Commission
SEDSafety and Enforcement Division of the CPUC
Tax ActTax Cuts and Jobs Act of 2017
TCCOfficial Committee of Tort Claimants
TOtransmission owner
TURNThe Utility Reform Network
UtilityPacific Gas and Electric Company
VIE(s)variable interest entity(ies)
WEMAWildfire Expense Memorandum Account
Wildfire Assistance Fundprogram designed to assist those displaced by the 2018 Camp fire and 2017 Northern California wildfires with the costs of temporary housing and other urgent needs
Wildfire Fundstatewide fund established by AB 1054 that will be available for eligible electric utility companies to pay eligible claims for liabilities arising from wildfires occurring after July 12, 2019 that are caused by the applicable electric utility company’s equipment
Wildfires OIIOrder Instituting Investigation into the 2017 Northern California Wildfires and the 2018 Camp Fire
WMPWildfire Mitigation Plan
WMPMAWildfire Mitigation Plan Memorandum Account

5


FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are necessarily subject to various risks and uncertainties.  These statements reflect management’s judgment and opinions that are based on current estimates, expectations, and projections about future events and assumptions regarding these events and management’s knowledge of facts as of the date of this report.  These forward-looking statements relate to, among other matters, estimated losses, including penalties and fines, associated with various investigations and proceedings; forecasts of capital expenditures; estimates and assumptions used in critical accounting policies, including those relating to liabilities subject to compromise, insurance receivable, regulatory assets and liabilities, environmental remediation, litigation, third-party claims, the Wildfire Fund, and other liabilities; and the level of future equity or debt issuances.  These statements are also identified by words such as “assume,” “expect,” “intend,” “forecast,” “plan,” “project,” “believe,” “estimate,” “predict,” “anticipate,” “may,” “should,” “would,” “could,” “potential” and similar expressions.  PG&E Corporation and the Utility are not able to predict all the factors that may affect future results.  Some of the factors that could cause future results to differ materially from those expressed or implied by the forward-looking statements, or from historical results, include, but are not limited to:

PG&E Corporation’s and the Utility’s historical financial information not being indicative of future financial performance as a result of the Chapter 11 Cases and the financial and other restructuring recently undergone by PG&E Corporation and the Utility in connection with emergence from Chapter 11;

the ability of PG&E Corporation and the Utility to raise financing for operations and investment;

the risks and uncertainties associated with the 2019 Kincade fire, including the extent of the Utility’s liability in connection with the Kincade fire and whether the Utility will be able to timely recover related costs incurred therewith in excess of insurance; the timing of the insurance recoveries; the timing and outcome of the referral of the Cal Fire report in connection therewith to the Sonoma County District Attorney; and potential liabilities in connection with fines or penalties that could be imposed on the Utility if the CPUC or any other enforcement agency were to bring an enforcement action;

the outcome of the Utility’s Community Wildfire Safety Program that the Utility has developed in coordination with first responders, civic and community leaders, and customers, to help reduce wildfire threats and improve safety as a result of climate-driven wildfires and extreme weather, including the Utility’s ability to comply with the targets and metrics set forth in the 2020-2022 Wildfire Mitigation Plan; and the cost of the program and the timing and outcome of any proceeding to recover such cost through rates;

restrictions on PG&E Corporation’s and the Utility’s ability to pursue strategic and operational initiatives upon emergence from the voluntary cases commenced by each of PG&E Corporation and the Utility under Chapter 11 of title 11 of the U.S. Code (the “Chapter 11 Cases”);

the ability of PG&E Corporation and the Utility to securitize $7.5 billion of costs related to the 2017 Northern California wildfires in a financing transaction that is designed to be rate neutral to customers;

the impact of the Utility’s implementation of its PSPS program, including the timing and outcome of the PSPS OII and order to show cause, and whether any fines or penalties or civil liability for damages will be imposed on the Utility as a result; the costs in connection with PSPS events, and the effects on PG&E Corporation’s and the Utility’s reputations caused by implementation of the PSPS program;

the impact of AB 1054 on potential losses in connection with future wildfires, including the CPUC’s implementation of the procedures for recovering such losses;

the risks and uncertainties associated with the requirement under AB 1054 that the Utility maintain a valid safety certification pursuant to Section 8389(e) of the Public Utilities Code and the potential unavailability of the Wildfire Fund in the event the Utility fails to maintain a valid safety certification;

the timing and outcome of future regulatory and legislative developments in connection with SB 901, including future wildfire reforms, inverse condemnation reform, and other wildfire mitigation measures or other reforms targeted at the Utility or its industry;

6


the severity, extent and duration of the global COVID-19 pandemic and its impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity and cash flows, as well as on energy demand in the Utility’s service territory, the ability of the Utility to collect on customer invoices, the ability of the Utility to offset these effects, including with spending reductions, and the ability of the Utility to recover any losses incurred in connection with the COVID-19 pandemic through cost recovery, and the impact of workforce disruptions, if any;

whether the Utility will be able to obtain full recovery of its significantly increased insurance premiums, and the timing of any such recovery;

whether the Utility can obtain wildfire insurance at a reasonable cost in the future, or at all, and whether insurance coverage is adequate for future losses or claims;

increased employee attrition as a result the Chapter 11 Cases and the challenging political and operating environment facing PG&E Corporation and the Utility;

the timing and outcomes of the 2020 GRC, FERC TO18, TO19, and TO20 rate cases, 2018 and 2019 CEMA applications, WEMA application, future applications for FHPMA, FRMMA, CPPMA, and WMPMA, future cost of capital proceedings, and other ratemaking and regulatory proceedings;

the outcome of the probation and the Monitorship imposed by the federal court after the Utility’s conviction in the federal criminal trial in 2017, the timing and outcomes of the debarment proceeding, potential reliability penalties or sanctions from the North American Electric Reliability Corporation, the SED’s unresolved enforcement matters relating to the Utility’s compliance with natural gas-related laws and regulations, and other investigations that have been or may be commenced relating to the Utility’s compliance with natural gas- and electric- related laws and regulations, and the ultimate amount of fines, penalties, and remedial costs that the Utility may incur in connection with the outcomes including the costs of complying with any additional conditions of probation imposed in connection with the Utility’s federal criminal proceeding, such as expenses associated with any material expansion of the Utility’s vegetation management program, including as a result of the probation proceedings before the U.S. District Court, as well as the impact of additional conditions of probation on PG&E Corporation’s and the Utility’s ability to make distributions to shareholders;

the effects on PG&E Corporation’s and the Utility’s reputations caused by matters such as the CPUC’s investigations and enforcement proceedings and the Utility’s criminal guilty plea as described in Note 10 of the Notes to the Condensed Consolidated Financial Statements under the heading “District Attorneys’ Offices Investigations”;

the outcome of future legislative or regulatory actions as part of “Enhanced Enforcement” or otherwise that may be taken, such as requiring the Utility to transfer ownership of the Utility’s assets to municipalities or other public entities, or implement corporate governance, operational or other changes;

whether the Utility can control its operating costs within the authorized levels of spending, and timely recover its costs through rates; whether the Utility can continue implementing a streamlined organizational structure and achieve project savings, the extent to which the Utility incurs unrecoverable costs that are higher than the forecasts of such costs; and changes in cost forecasts or the scope and timing of planned work resulting from changes in customer demand for electricity and natural gas or other reasons;

whether the Utility and its third-party vendors and contractors are able to protect the Utility’s operational networks and information technology systems from cyber- and physical attacks, or other internal or external hazards;

the timing and outcome in the Court of Appeals of the appeal of FERC’s order denying rehearing on September 19, 2019 of the complaint filed by the CPUC and certain other parties that the Utility provide an open and transparent planning process for its capital transmission projects that do not go through the CAISO’s Transmission Planning Process to allow for greater participation and input from interested parties;

the timing and outcome in the Court of Appeals of the appeal of FERC’s order denying rehearing on March 17, 2020 granting the Utility a 50-basis point ROE incentive adder for continued participation in the CAISO;

7


the outcome of current and future self-reports, investigations, or other enforcement proceedings that could be commenced or notices of violation that could be issued relating to the Utility’s compliance with laws, rules, regulations, or orders applicable to its operations, including the construction, expansion, or replacement of its electric and gas facilities, electric grid reliability, inspection and maintenance practices, customer billing and privacy, physical and cybersecurity, environmental laws and regulations; and the outcome of existing and future SED notices of violations;

the impact of environmental remediation laws, regulations, and orders; the ultimate amount of costs incurred to discharge the Utility’s known and unknown remediation obligations; and the extent to which the Utility is able to recover environmental costs in rates or from other sources;

the impact of SB 100, signed into law on September 10, 2018, which increased the percentage from 50% to 60% of California’s electricity portfolio that must come from renewables by 2030; and establishes state policy that 100% of all retail electricity sales must come from renewable portfolio standard-eligible or carbon-free resources by 2045;

how the CPUC and the CARB implement state environmental laws relating to greenhouse gas, renewable energy targets, energy efficiency standards, distributed energy resources, electric vehicles, and similar matters, including whether the Utility is able to continue recovering associated compliance costs, such as the cost of emission allowances and offsets under cap-and-trade regulations; and whether the Utility is able to timely recover its associated investment costs;

the impact of the California governor’s executive order issued on January 26, 2018, to implement a new target of five million zero-emission vehicles on the road in California by 2030;

the ultimate amount of unrecoverable environmental costs the Utility incurs associated with the Utility’s natural gas compressor station site located near Hinkley, California and the Utility’s fossil fuel-fired generation sites;

the impact of new legislation or NRC regulations, recommendations, policies, decisions, or orders relating to the nuclear industry, including operations, seismic design, security, safety, relicensing, the storage of spent nuclear fuel, decommissioning, cooling water intake, or other issues; the impact of potential actions, such as legislation, taken by state agencies that may affect the Utility’s ability to continue operating Diablo Canyon until its planned retirement;

the impact of wildfires, droughts, floods, or other weather-related conditions or events, climate change, natural disasters, acts of terrorism, war, vandalism (including cyber-attacks), downed power lines, and other events, that can cause unplanned outages, reduce generating output, disrupt the Utility’s service to customers, or damage or disrupt the facilities, operations, or information technology and systems owned by the Utility, its customers, or third parties on which the Utility relies, and the reparation and other costs that the Utility may incur in connection with such conditions or events; the impact of the adequacy of the Utility’s emergency preparedness; whether the Utility incurs liability to third parties for property damage or personal injury caused by such events; whether the Utility is subject to civil, criminal, or regulatory penalties in connection with such events; and whether the Utility’s insurance coverage is available for these types of claims and sufficient to cover the Utility’s liability;

the outcome of future legislative developments in connection with SB 350 (the Golden State Energy Act), a bill which was signed into law on June 30, 2020 and authorizes the creation by the Governor of a new entity “Golden State Energy,” a nonprofit public benefit corporation, for the purpose of acquiring the Utility’s assets and serving electric and gas in the Utility’s service territory in the event that the CPUC revokes the Utility’s Certificate of Public Convenience and Necessity;

whether the Utility’s climate change adaptation strategies are successful;

the breakdown or failure of equipment that can cause damages, including fires, and unplanned outages; and whether the Utility will be subject to investigations, penalties, and other costs in connection with such events;

the impact that reductions in Utility customer demand for electricity and natural gas, driven by customer departures to CCAs and DA providers, have on the Utility’s ability to make and recover its investments through rates and earn its authorized return on equity, and whether the Utility is successful in addressing the impact of growing distributed and renewable generation resources, and changing customer demand for its natural gas and electric services;

8


the supply and price of electricity, natural gas, and nuclear fuel; the extent to which the Utility can manage and respond to the volatility of energy commodity prices; the ability of the Utility and its counterparties to post or return collateral in connection with price risk management activities; and whether the Utility is able to recover timely its electric generation and energy commodity costs through rates, including its renewable energy procurement costs;

the amount and timing of charges reflecting probable liabilities for third-party claims; the extent to which costs incurred in connection with third-party claims or litigation can be recovered through insurance, rates, or from other third parties; and whether the Utility can continue to obtain adequate insurance coverage for future losses or claims, especially following a major event that causes widespread third-party losses;

the impact of the regulation of utilities and their holding companies, including how the CPUC interprets and enforces the financial and other conditions imposed on PG&E Corporation when it became the Utility’s holding company, and whether the uncertainty in connection with the Utility’s probation or enforcement matters will impact the Utility’s ability to make distributions to PG&E Corporation;

the outcome of federal or state tax audits and the impact of any changes in federal or state tax laws, policies, regulations, or their interpretation;

whether PG&E Corporation or the Utility undergoes an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), as a result of the implementation of the Plan (as defined below) and in subsequent years, as a result of which, tax attributes could be limited;

changes in the regulatory and economic environment, including potential changes affecting renewable energy sources and associated tax credits, as a result of the current federal administration; and

the impact of changes in GAAP, standards, rules, or policies, including those related to regulatory accounting, and the impact of changes in their interpretation or application.

For more information about the significant risks that could affect the outcome of the forward-looking statements and PG&E Corporation’s and the Utility’s future financial condition, results of operations, liquidity, and cash flows, see Item 1A. Risk Factors below and a detailed discussion of these matters contained in Item 2. MD&A. PG&E Corporation and the Utility do not undertake any obligation to update forward-looking statements, whether in response to new information, future events, or otherwise.

PG&E Corporation and the Utility routinely provide links to the Utility’s principal regulatory proceedings before the CPUC and the FERC at http://investor.pgecorp.com, under the “Regulatory Filings” tab, so that such filings are available to investors upon filing with the relevant agency. PG&E Corporation and the Utility also routinely post or provide direct links to presentations, documents, and other information that may be of interest to investors at http://investor.pgecorp.com, under the “PG&E Progress,” “Chapter 11,” “Wildfire Updates” and “News & Events: Events & Presentations” tabs, respectively, in order to publicly disseminate such information. It is possible that any of these filings or information included therein could be deemed to be material information. The information contained on such website is not part of this or any other report that PG&E Corporation or the Utility files with, or furnishes to, the SEC. PG&E Corporation and the Utility are providing the address to this website solely for the information of investors and do not intend the address to be an active link.

9


PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

PG&E CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME


 (Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in millions, except per share amounts)2020201920202019
Operating Revenues  
Electric$3,435  $2,946  $6,475  $5,738  
Natural gas1,098  997  2,364  2,216  
Total operating revenues4,533  3,943  8,839  7,954  
Operating Expenses
Cost of electricity759  837  1,304  1,436  
Cost of natural gas134  108  418  447  
Operating and maintenance2,141  1,942  4,108  4,029  
Wildfire-related claims, net of insurance recoveries170  3,900  170  3,900  
Wildfire fund expense173  —  173  —  
Depreciation, amortization, and decommissioning874  796  1,729  1,593  
Total operating expenses4,251  7,583  7,902  11,405  
Operating Income (Loss)282  (3,640) 937  (3,451) 
Interest income12  22  28  44  
Interest expense(199) (60) (453) (163) 
Other income, net100  66  197  137  
Reorganization items, net(1,624) (56) (1,800) (183) 
Loss Before Income Taxes(1,429) (3,668) (1,091) (3,616) 
Income tax provision (benefit)539  (1,119) 503  (1,203) 
Net Loss(1,968) (2,549) (1,594) (2,413) 
Preferred stock dividend requirement of subsidiary    
Loss Attributable to Common Shareholders$(1,972) $(2,553) $(1,601) $(2,420) 
Weighted Average Common Shares Outstanding, Basic529  529  529  528  
Weighted Average Common Shares Outstanding, Diluted529  529  529  528  
Net Loss Per Common Share, Basic$(3.73) $(4.83) $(3.03) $(4.58) 
Net Loss Per Common Share, Diluted$(3.73) $(4.83) $(3.03) $(4.58) 
See accompanying Notes to the Condensed Consolidated Financial Statements.


10


PG&E CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2020201920202019
Net Loss$(1,968) $(2,549) $(1,594) $(2,413) 
Other Comprehensive Income
Pension and other post-retirement benefit plans obligations (net of taxes of $0, $0, $0, and $0, at respective dates)
—  —  —  —  
Total other comprehensive income —  —  —  —  
Comprehensive Loss(1,968) (2,549) (1,594) (2,413) 
Preferred stock dividend requirement of subsidiary    
Comprehensive Loss Attributable to Common Shareholders
$(1,972) $(2,553) $(1,601) $(2,420) 
See accompanying Notes to the Condensed Consolidated Financial Statements.

11


PG&E CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 Balance At
(in millions)June 30, 2020December 31, 2019
ASSETS  
Current Assets  
Cash and cash equivalents$968  $1,570  
Restricted cash14,413   
Accounts receivable:
Customers (net of allowance for doubtful accounts of $81 and $43
at respective dates)
1,419  1,287  
Accrued unbilled revenue1,061  969  
Regulatory balancing accounts2,638  2,114  
Other2,618  2,617  
Regulatory assets377  315  
Inventories:
Gas stored underground and fuel oil89  97  
Materials and supplies564  550  
Wildfire fund asset466  —  
Other400  639  
Total current assets25,013  10,165  
Property, Plant, and Equipment
Electric64,832  62,707  
Gas23,371  22,688  
Construction work in progress2,615  2,675  
Other20  20  
Total property, plant, and equipment90,838  88,090  
Accumulated depreciation(27,437) (26,455) 
Net property, plant, and equipment63,401  61,635  
Other Noncurrent Assets
Regulatory assets7,507  6,066  
Nuclear decommissioning trusts3,196  3,173  
Operating lease right of use asset2,127  2,286  
Wildfire fund asset6,048  —  
Income taxes receivable67  67  
Other1,870  1,804  
Total other noncurrent assets20,815  13,396  
TOTAL ASSETS$109,229  $85,196  
See accompanying Notes to the Condensed Consolidated Financial Statements.

12


PG&E CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
(Unaudited)
 Balance At
(in millions, except share amounts)June 30, 2020December 31, 2019
LIABILITIES AND EQUITY  
Current Liabilities
  
Short-term borrowings$300  $—  
Long-term debt, classified as current450  —  
Debtor-in-possession financing, classified as current2,000  1,500  
Accounts payable:
Trade creditors3,399  1,954  
Regulatory balancing accounts1,915  1,797  
Other631  566  
Operating lease liabilities551  556  
Interest payable1,363   
Disputed claims and customer refunds238  —  
Wildfire-related claims26,143  —  
Wildfire fund liability5,200  —  
Other3,605  1,254  
Total current liabilities45,795  7,631  
Noncurrent Liabilities
Long-term debt34,920  —  
Regulatory liabilities9,641  9,270  
Pension and other post-retirement benefits1,941  1,884  
Asset retirement obligations5,961  5,854  
Deferred income taxes1,171  320  
Operating lease liabilities1,576  1,730  
Other4,423  2,573  
Total noncurrent liabilities59,633  21,631  
Liabilities Subject to Compromise—  50,546  
Equity
Shareholders’ Equity
Common stock, no par value, authorized 3,600,000,000 and 800,000,000 shares
at respective dates; 529,793,355 and 529,236,741 shares outstanding at respective dates
13,045  13,038  
Reinvested earnings(9,486) (7,892) 
Accumulated other comprehensive loss(10) (10) 
Total shareholders’ equity
3,549  5,136  
Noncontrolling Interest - Preferred Stock of Subsidiary252  252  
Total equity3,801  5,388  
TOTAL LIABILITIES AND EQUITY$109,229  $85,196  
See accompanying Notes to the Condensed Consolidated Financial Statements.

13


PG&E CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six Months Ended June 30,
(in millions)20202019
Cash Flows from Operating Activities  
Net loss$(1,594) $(2,413) 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and decommissioning1,729  1,593  
Allowance for equity funds used during construction(21) (45) 
Deferred income taxes and tax credits, net869  (915) 
Reorganization items, net (Note 2) 1,558  90  
Wildfire fund expense173  —  
Other142  53  
Effect of changes in operating assets and liabilities:
Accounts receivable(389) (54) 
Wildfire-related insurance receivable99  35  
Inventories(19) (41) 
Accounts payable 722  159  
Wildfire-related claims619  (14) 
Income taxes receivable/payable—   
Other current assets and liabilities529  (15) 
Regulatory assets, liabilities, and balancing accounts, net(1,570) (34) 
Liabilities subject to compromise 413  4,221  
Other noncurrent assets and liabilities31  132  
Net cash provided by operating activities3,291  2,757  
Cash Flows from Investing Activities  
Capital expenditures(3,399) (2,410) 
Proceeds from sales and maturities of nuclear decommissioning trust investments787  517  
Purchases of nuclear decommissioning trust investments(837) (547) 
Other  
Net cash used in investing activities
(3,441) (2,434) 
Cash Flows from Financing Activities  
Proceeds from debtor-in-possession credit facility
500  1,850  
Repayments of debtor-in-possession credit facility—  (350) 
Debtor-in-possession credit facility debt issuance costs
(3) (111) 
Proceeds from issuance of long-term debt, net of discount and issuance costs of $165
13,510  —  
Bridge facility financing fees(73) —  
Common stock issued—  85  
Other20  (6) 
Net cash provided by financing activities13,954  1,468  
Net change in cash, cash equivalents, and restricted cash13,804  1,791  
Cash, cash equivalents, and restricted cash at January 11,577  1,675  
Cash, cash equivalents, and restricted cash at June 30$15,381  $3,466  
Less: Restricted cash and restricted cash equivalents included in other current assets(14,413) (7) 
Cash and cash equivalents at June 30$968  $3,459  

14


Supplemental disclosures of cash flow information  
Cash paid for:  
Interest, net of amounts capitalized$—  $(21) 
Supplemental disclosures of noncash investing and financing activities
Capital expenditures financed through accounts payable$273  $836  
Operating lease liabilities arising from obtaining right-of-use assets13  2,816  
See accompanying Notes to the Condensed Consolidated Financial Statements.


15


PG&E CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(in millions, except share amounts)Common
Stock
Shares
Common
Stock
Amount
Reinvested
Earnings
Accumulated
Other
Comprehensive
Income
(Loss)
Total
Shareholders’
Equity
Non-
controlling
Interest -
Preferred
Stock of
Subsidiary
Total
Equity
Balance at December 31, 2019529,236,741  $13,038  $(7,892) $(10) $5,136  $252  $5,388  
Net income—  —  374  —  374  —  374  
Other comprehensive loss—  —  —  —  —  —  —  
Common stock issued, net549,155  —  —  —  —  —  —  
Stock-based compensation amortization—  (3) —  —  (3) —  (3) 
Balance at March 31, 2020529,785,896  $13,035  $(7,518) $(10) $5,507  $252  $5,759  
Net loss—  —  (1,968) —  (1,968) —  (1,968) 
Other comprehensive loss—  —  —  —  —  —  —  
Common stock issued, net7,459  —  —  —  —  —  —  
Stock-based compensation amortization—  10  —  —  10  —  10  
Balance at June 30, 2020529,793,355  $13,045  $(9,486) $(10) $3,549  $252  $3,801  

(in millions, except share amounts)Common
Stock
Shares
Common
Stock
Amount
Reinvested
Earnings
Accumulated
Other
Comprehensive
Income
(Loss)
Total
Shareholders’
Equity
Non-
controlling
Interest -
Preferred
Stock of
Subsidiary
Total
Equity
Balance at December 31, 2018520,338,710  $12,910  $(250) $(9) $12,651  $252  $12,903  
Net income—  —  136  —  136  —  136  
Other comprehensive loss—  —  —  —  —  —  —  
Common stock issued, net8,871,568  85  —  —  85  —  85  
Stock-based compensation amortization—   —  —   —   
Balance at March 31, 2019529,210,278  $13,000  $(114) $(9) $12,877  $252  $13,129  
Net loss—  —  (2,549) —  (2,549) —  (2,549) 
Other comprehensive loss—  —  —  —  —  —  —  
Common stock issued, net13,515  —  —  —  —  —  —  
Stock-based compensation amortization—  14  —  —  14—  14
Balance at June 30, 2019529,223,793  $13,014  $(2,663) $(9) $10,342  $252  $10,594  

See accompanying Notes to the Condensed Consolidated Financial Statements.

16


PACIFIC GAS AND ELECTRIC COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME


 (Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2020201920202019
Operating Revenues  
Electric$3,435  $2,946  $6,475  $5,738  
Natural gas1,098  997  2,364  2,216  
Total operating revenues4,533  3,943  8,839  7,954  
Operating Expenses
Cost of electricity759  837  1,304  1,436  
Cost of natural gas134  108  418  447  
Operating and maintenance2,145  1,940  4,110  4,044  
Wildfire-related claims, net of insurance recoveries170  3,900  170  3,900  
Wildfire fund expense173  —  173  —  
Depreciation, amortization, and decommissioning874  796  1,729  1,593  
Total operating expenses4,255  7,581  7,904  11,420  
Operating Income (Loss)278  (3,638) 935  (3,466) 
Interest income12  22  28  43  
Interest expense(189) (60) (441) (161) 
Other income, net93  64  186  130  
Reorganization items, net
(111) (57) (204) (168) 
Income (Loss) Before Income Taxes83  (3,669) 504  (3,622) 
Income tax provision (benefit)556  (1,119) 526  (1,205) 
Net Loss(473) (2,550) (22) (2,417) 
Preferred stock dividend requirement    
Loss Attributable to Common Stock$(477) $(2,554) $(29) $(2,424) 
See accompanying Notes to the Condensed Consolidated Financial Statements.

17


PACIFIC GAS AND ELECTRIC COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2020201920202019
Net Loss$(473) $(2,550) $(22) $(2,417) 
Other Comprehensive Income
Pension and other post-retirement benefit plans obligations (net of taxes of $0, $0, $0, and $0, at respective dates)
—  —  —  —  
Total other comprehensive income—  —  —  —  
Comprehensive Loss$(473) $(2,550) $(22) $(2,417) 
See accompanying Notes to the Condensed Consolidated Financial Statements.


18


PACIFIC GAS AND ELECTRIC COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 Balance At
(in millions)June 30, 2020December 31, 2019
ASSETS  
Current Assets  
Cash and cash equivalents$746  $1,122  
Restricted cash9,076   
Accounts receivable:
Customers (net of allowance for doubtful accounts of $81 and $43
at respective dates)
1,419  1,287  
Accrued unbilled revenue1,061  969  
Regulatory balancing accounts2,638  2,114  
Other2,634  2,647  
Regulatory assets377  315  
Inventories:
Gas stored underground and fuel oil89  97  
Materials and supplies564  550  
Wildfire fund asset466  —  
Other388  628  
Total current assets19,458  9,736  
Property, Plant, and Equipment
Electric64,832  62,707  
Gas23,371  22,688  
Construction work in progress2,615  2,675  
Other 18  18  
Total property, plant, and equipment90,836  88,088  
Accumulated depreciation(27,435) (26,453) 
Net property, plant, and equipment63,401  61,635  
Other Noncurrent Assets
Regulatory assets7,507  6,066  
Nuclear decommissioning trusts3,196  3,173  
Operating lease right of use asset2,121  2,279  
Wildfire fund asset6,048  —  
Income taxes receivable66  66  
Other1,714  1,659  
Total other noncurrent assets20,652  13,243  
TOTAL ASSETS$103,511  $84,614  
See accompanying Notes to the Condensed Consolidated Financial Statements.

19


PACIFIC GAS AND ELECTRIC COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
<
 (Unaudited)
 Balance At
(in millions. except share amounts)June 30, 2020December 31, 2019
LIABILITIES AND EQUITY
Current Liabilities  
Long-term debt, classified as current$100  $—  
Debtor-in-possession financing, classified as current2,000  1,500  
Accounts payable:
Trade creditors3,382  1,949  
Regulatory balancing accounts1,915  1,797  
Other717  675  
Operating lease liabilities548  553