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Pacific Gas Electric Co (75488) SEC Filing 10-Q Quarterly Report for the period ending Thursday, September 30, 2021

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
November 1, 2021

PG&E Corporation Reports Third-Quarter 2021 Financial Results

Recorded GAAP losses were $0.55 per share for the third quarter of 2021, compared to earnings of $0.04 per share for the same period in 2020.
Non-GAAP core earnings were $0.24 per share for the third quarter of 2021, compared to $0.22 per share for the same period in 2020.
2021 EPS guidance adjusted for GAAP earnings to a range of $(0.12) to $0.07 and reaffirmed non-GAAP core earnings of $0.95 to $1.05 per share.

SAN FRANCISCO — PG&E Corporation (NYSE: PCG) recorded third-quarter 2021 losses attributable to common shareholders of $1,091 million, or $0.55 per share, as reported in accordance with generally accepted accounting principles (GAAP). This compares with income available for common shareholders of $83 million, or $0.04 per share, for the third quarter of 2020.

GAAP results include non-core items that management does not consider representative of ongoing earnings, which totaled $1,570 million after tax, or $0.79 per share, for the quarter. These results were primarily driven by costs related to the 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), amortization of wildfire insurance fund contributions under Assembly Bill (AB) 1054, prior period net regulatory recoveries, investigation remedies, and 2019-2020 wildfire-related costs.

“Our leadership team is implementing the necessary systems and processes to run a high-performing utility – over both the short and long term – that will produce triple bottom-line results for people, the planet, and California’s prosperity,” said Patti Poppe, CEO of PG&E Corporation. “As part of this, we continue to deliver on our wildfire mitigation commitments while initiating bold new actions to reduce risk across our electric system, including: undergrounding power lines, calibrating the sensitivity of our automatic shutoff equipment, and executing more vegetation management.”


Non-GAAP Core Earnings

PG&E Corporation’s non-GAAP core earnings, which exclude non-core items, were $479 million, or $0.24 per share, in the third quarter of 2021, compared with $461 million, or $0.22 per share, during the same period in 2020.

The increase in quarter-over-quarter non-GAAP core earnings per share was primarily driven by the growth in rate base earnings, the change in shares, and wildfire mitigation costs above authorized, partially offset by the timing of taxes.



The following information was filed by Pacific Gas Electric Co on Monday, November 1, 2021 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 endedSeptember 30, 2021
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
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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
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 October 27, 2021: 
PG&E Corporation:
2,463,112,791*
Pacific Gas and Electric Company:
264,374,809  
*Includes 477,743,590 shares of common stock held by PG&E ShareCo LLC, a wholly owned subsidiary of PG&E Corporation.

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PG&E CORPORATION AND
PACIFIC GAS AND ELECTRIC COMPANY
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021
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.
2020 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, 2020
ABAssembly bill
ALJAdministrative Law Judge
AROasset retirement obligation
ASUaccounting standard update issued by the FASB
Backstop Commitment Lettersthe Chapter 11 Plan Backstop Commitment Letters entered into by PG&E Corporation and the Backstop Parties dated as of March 6, 2020, as amended
Backstop Party (Parties)a 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
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
Confirmation Orderthe order confirming PG&E Corporation’s and the Utility’s and the Shareholder Proponents’ Joint Chapter 11 Plan of Reorganization, dated as of June 20, 2020 with the Bankruptcy Court
CPECentral Procurement Entity
CPPMA
COVID-19 Pandemic Protections Memorandum Account
CPUCCalifornia Public Utilities Commission
CRRscongestion revenue rights
Diablo CanyonDiablo Canyon nuclear power plant
DTSCDepartment of Toxic Substances Control
Effective DateJuly 1, 2020, the effective date of the Plan in the Chapter 11 Cases
EIRelectric incident report
EMANI
European Mutual Association for Nuclear Insurance
EOexecutive order
EOEPEnhanced Oversight and Enforcement Process
EPSearnings per common share
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
FERCFederal Energy Regulatory Commission
FHPMAFire Hazard Prevention Memorandum Account
Fire Victim Trusttrust 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) has been, and will continue to be funded
FRMMAFire Risk Mitigation Memorandum Account
GAAPU.S. Generally Accepted Accounting Principles
GOGeneral Order
GRCgeneral rate case
GT&Sgas transmission and storage
HSMHazardous Substance Memorandum Account
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IOU(s)investor-owned utility(ies)
IRSInternal Revenue Service
Lakeside Building300 Lakeside Drive, Oakland, California 94612
LSEload serving entity
MW1 Megawatt (MW) = One thousand kilowatts
MWh1 Megawatt-Hour (MWh) = One megawatt continuously for one hour
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
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
NBCnon-bypassable charge
NDCTPNuclear Decommissioning Cost Triennial Proceeding
NEILNuclear Electric Insurance Limited
NEMnet energy metering
NRCNuclear Regulatory Commission
OEISOn July 1, 2021, the Wildfire Safety Division became the Office of Energy Infrastructure Safety. For consistency, this Quarterly Report on Form 10-Q uses “OEIS” to refer to both.
OIIorder instituting investigation
OIRorder instituting rulemaking
PERAPublic Employees Retirement Association of New Mexico
PODPresiding Officer’s Decision
PDproposed decision
Petition DateJanuary 29, 2019
the PlanDebtors’ and Shareholder Proponents’ Joint Chapter 11 Plan of Reorganization, dated June 19, 2020
PSPSPublic Safety Power Shutoff
RAresource adequacy
ROEreturn on equity
RTBARisk Transfer Balancing Account
RUBAResidential Uncollectibles Balancing Account
SBSenate Bill
SECU.S. Securities and Exchange Commission
Securities ActThe Securities Act of 1933, as amended
SEDSafety and Enforcement Division of the CPUC
SFGOoffice space generally located at 25 Beale Street, 45 Beale Street, 77 Beale Street, 50 Main Street, 215 Market Street, and 245 Market Street, San Francisco, California 94105, and associated properties owned by the Utility
ShareCoPG&E ShareCo LLC, a limited liability company whose sole member is PG&E Corporation
SPVPG&E AR Facility, LLC
Subrogation Wildfire Trustthe trust funded by PG&E Corporation and the Utility for the benefit of certain holders of wildfire insurance subrogation claims
Tax ActTax Cuts and Jobs Act of 2017
TCCOfficial Committee of Tort Claimants
TCC RSARestructuring Support Agreement dated December 6, 2019 with the TCC and attorneys and other advisors and agents for certain holders of Fire Victim Claims (as defined therein), as amended
this Form 10-QPG&E Corporation and Pacific Gas and Electric Company’s combined Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021
TOtransmission owner
TURNThe Utility Reform Network
UtilityPacific Gas and Electric Company
VIE(s)variable interest entity(ies)
VMBAVegetation Management Balancing Account
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WEMAWildfire Expense Memorandum Account
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
WMBAWildfire Mitigation Balancing Account
WMCEWildfire Mitigation and Catastrophic Events
WMPWildfire Mitigation Plan
WMPMAWildfire Mitigation Plan Memorandum Account

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 insurance receivables, 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 their emergence from Chapter 11;

the risks and uncertainties associated with wildfires that have occurred, are occurring or may occur in the Utility’s service territory, including the wildfire that began on October 23, 2019 northeast of Geyserville in Sonoma County, California (the “2019 Kincade fire”), the wildfire that began on September 27, 2020 in the area of Zogg Mine Road and Jenny Bird Lane, north of Igo in Shasta County, California (the “2020 Zogg fire”), the wildfire that began on July 13, 2021 near the Feather River Canyon in Plumas County (the “2021 Dixie fire”), and any other wildfires for which the cause has yet to be determined, the damage caused by such wildfires; the extent of the Utility’s liability in connection with such wildfires (including the risk that the Utility may be found liable for damages regardless of fault); investigations into such wildfires, including those being conducted by the CPUC and the District Attorneys’ offices of Sonoma, Shasta, Butte, and Plumas Counties; the outcome of the criminal proceedings initiated against the Utility by the Sonoma County District Attorney in connection with the 2019 Kincade fire; the outcome of the criminal proceedings initiated against the Utility by the Shasta County District Attorney in connection with the 2020 Zogg fire and three other fires; 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 in respect of any such fire; the risk that the Utility is not able to recover costs from insurance, from the Wildfire Fund or through rates; and the effect on PG&E Corporation’s and the Utility’s reputations of such wildfires, investigations and proceedings;

the Utility’s ability to reduce wildfire threats and improve safety, including the Utility’s ability to comply with the targets and metrics set forth in its WMP; to maintain a valid safety certification; to retain or contract for the workforce necessary to execute its WMP; the effectiveness of its system hardening, including undergrounding; and the cost of the program and the timing and outcome of any proceeding to recover such costs through rates;

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the impact of wildfires, droughts, floods, high winds, lightning, extreme heat events (including recent extreme heat events during the 2021 wildfire season) 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 effectiveness of the Utility’s efforts to prevent or respond to such conditions or events; 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 able to procure replacement power; and whether the Utility is subject to civil, criminal, or regulatory penalties in connection with such events;

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 risks and uncertainties associated with the Utility’s ability to access the Wildfire Fund, including whether the Wildfire Fund has sufficient remaining funds;

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

the risks and uncertainties associated with the timing and outcomes of PG&E Corporation’s and the Utility’s ongoing litigation, including appeals of the Confirmation Order; certain indemnity obligations to current and former officers and directors, as well as potential indemnity obligations to underwriters for certain of the Utility’s note offerings; three purported class actions that have been consolidated and denominated In re PG&E Corporation Securities Litigation, U.S. District Court for the Northern District of California, Case No. 18-035509; the appeal of the 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; the debarment proceeding; the purported PSPS class action filed in December 2019; and other third-party claims, including the extent to which related costs can be recovered through insurance, rates, or from other third parties;

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, remedial costs that the Utility may incur in connection with the probation 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;

the timing and outcomes of the Utility’s pending and future ratemaking and regulatory proceedings, including the extent to which PG&E Corporation and the Utility are able to recover their costs through rates as recorded in memorandum accounts or balancing accounts, or as otherwise requested;

the outcome of current and future self-reports, investigations or other enforcement actions, or notices of violation that could be issued related to the Utility’s compliance with laws, rules, regulations, or orders applicable to its gas and electric operations; the construction, expansion, or replacement of its electric and gas facilities; electric grid reliability; audit, inspection and maintenance practices; customer billing and privacy; physical and cybersecurity protections; environmental laws and regulations; or otherwise, such as fines, penalties, remediation obligations, the transfer of ownership of the Utility’s assets to municipalities or other public entities, or the implementation of corporate governance, operational or in connection with the EOEP or other changes;

the ability of the Utility to meet the conditions in its corrective action plan and exit the EOEP;

the ability of PG&E Corporation and the Utility to securitize (i) up to $1.19 billion of fire risk mitigation capital expenditures that were or will be incurred by the Utility in 2020 and 2021 and (ii) $7.5 billion of costs related to the multiple wildfires that began on October 8, 2017 and spread through Northern California, including Napa, Sonoma, Butte, Humboldt, Mendocino, Lake, Nevada and Yuba Counties, as well as in the area surrounding Yuba City (the “2017 Northern California wildfires”) in a financing transaction that is designed to be rate neutral to customers;

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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 receivables, the ability of the Utility to mitigate these effects, including with spending reductions, and the ability of the Utility to recover any losses incurred in connection with the COVID-19 pandemic, and the impact of workforce disruptions caused either by illness of workers and their family members or workforce attrition related to potential new workplace regulations such as vaccine mandates;

the availability, cost, coverage, and terms of the Utility’s insurance, including insurance for wildfire, nuclear, and other liabilities, the timing of any insurance recoveries, and recovery of the costs of such insurance or, in the event liabilities exceed insured amounts, the ability to recover uninsured losses through rates or from other third parties;

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

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;

cyber or physical attacks on the Utility or its third-party vendors, contractors, or customers (or others with whom they have shared data), which could result in operational disruption; the misappropriation or loss of confidential or proprietary assets, information or data, including customer, employee, financial, or operating system information, or intellectual property; corruption of data; or potential costs, lost revenues, or reputational harm;

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 that reductions in Utility customer demand for electricity and natural gas, driven by customer departures to CCAs and direct access providers and legislative mandates to replace gas-fuel technologies, 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;

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 risks and uncertainties associated with any future substantial sales of shares of common stock of PG&E Corporation by existing shareholders, including the Fire Victim Trust;

the ability of PG&E Corporation and the Utility to access capital markets and other sources of debt and equity financing in a timely manner on acceptable terms;

the timing and outcome of future regulation and federal, state or local legislation, their implementation, and their interpretation, the cost to comply with such regulation and legislation, and the extent to which the Utility recovers its associated compliance and investment costs, including those regarding:
wildfires, including inverse condemnation reform, wildfire insurance, and additional wildfire mitigation measures or other reforms targeted at the Utility or its industry;

the environment, including the costs incurred to discharge the Utility’s remediation obligations or the costs to comply with standards for greenhouse gas emissions, renewable energy targets, energy efficiency standards, distributed energy resources, and electric vehicles;

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the nuclear industry, including operations, seismic design, security, safety, relicensing, the storage of spent nuclear fuel, decommissioning, and cooling water intake, and the Utility’s ability to continue operating Diablo Canyon until its planned retirement;

the regulation of utilities and their holding companies, including the conditions imposed on PG&E Corporation when it became the Utility’s holding company and whether the Utility can make distributions to PG&E Corporation; and

taxes and tax audits;

actions by credit rating agencies to downgrade PG&E Corporation’s or the Utility’s credit ratings or to place those ratings on negative outlook;

whether PG&E Corporation’s and the Utility’s counterparties are available and able to meet their financial and performance obligations with respect to contracts, credit agreements, and financial instruments, which could be affected by disruptions in the global supply chain caused by the COVID-19 pandemic or otherwise;

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 which tax attributes could be limited; 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 “Chapter 11,” “Wildfire and Safety Updates” and “News & Events: Events & Presentations” tabs, respectively, in order to publicly disseminate such information. Specifically, within two hours during business hours or four hours outside of business hours of the determination that an incident is attributable or allegedly attributable to the Utility’s electric facilities and has resulted in property damage estimated to exceed $50,000, a fatality or injuries requiring overnight in-patient hospitalization, or significant public or media attention, the Utility is required to submit an EIR including information about such incident. The information included in an EIR is limited and may not include important information about the facts and circumstances about the incident due to the limited scope of the reporting requirements and timing of the report and is necessarily limited to information to which the Utility has access at the time of the report. Ignitions are also reportable under CPUC Decision 14-02-015 when they involve self-propagating fire of material other than electrical or communication facilities; the fire traveled greater than one linear meter from the ignition point; and the Utility has knowledge that the fire occurred. 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.


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

PG&E CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 (Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in millions, except per share amounts)2021202020212020
Operating Revenues  
Electric$4,181 $3,810 $11,527 $10,285 
Natural gas1,284 1,072 3,869 3,436 
Total operating revenues5,465 4,882 15,396 13,721 
Operating Expenses
Cost of electricity1,133 1,114 2,570 2,418 
Cost of natural gas176 90 670 508 
Operating and maintenance2,795 2,290 7,714 6,398 
Wildfire-related claims, net of recoveries94 25 261 195 
Wildfire Fund expense162 120 399 293 
Depreciation, amortization, and decommissioning801 845 2,540 2,574 
Total operating expenses5,161 4,484 14,154 12,386 
Operating Income304 398 1,242 1,335 
Interest income— 17 33 
Interest expense(399)(391)(1,205)(844)
Other income, net132 102 387 299 
Reorganization items, net— (137)(11)(1,937)
Income (Loss) Before Income Taxes37 (23)430 (1,114)
Income tax provision (benefit)1,125 (109)994 394 
Net Income (Loss)(1,088)86 (564)(1,508)
Preferred stock dividend requirement of subsidiary10 10 
Income (Loss) Attributable to Common Shareholders$(1,091)$83 $(574)$(1,518)
Weighted Average Common Shares Outstanding, Basic1,985 1,967 1,985 1,012 
Weighted Average Common Shares Outstanding, Diluted1,985 2,140 1,985 1,012 
Net Income (Loss) Per Common Share, Basic$(0.55)$0.04 $(0.29)$(1.50)
Net Income (Loss) Per Common Share, Diluted$(0.55)$0.04 $(0.29)$(1.50)
See accompanying Notes to the Condensed Consolidated Financial Statements.


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PG&E CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2021202020212020
Net Income (Loss)$(1,088)$86 $(564)$(1,508)
Other Comprehensive Income
Pension and other post-retirement benefit plans obligations (net of taxes of $0, $0, $0, and $0, respectively)
— — 
Total other comprehensive income 1  2  
Comprehensive Income (Loss)(1,087)86 (562)(1,508)
Preferred stock dividend requirement of subsidiary10 10 
Comprehensive Income (Loss) Attributable to Common Shareholders
$(1,090)$83 $(572)$(1,518)
See accompanying Notes to the Condensed Consolidated Financial Statements.

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PG&E CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 Balance At
(in millions)September 30, 2021December 31, 2020
ASSETS  
Current Assets  
Cash and cash equivalents$420 $484 
Restricted cash11 143 
Accounts receivable:
Customers (net of allowance for doubtful accounts of $306 million and $146 million at respective dates) (includes $1.59 billion and $1.63 billion related to VIEs, net of allowance for doubtful accounts of $306 million and $143 million at respective dates)
1,817 1,883 
Accrued unbilled revenue (includes $1.03 billion and $959 million related to VIEs at respective dates)
1,140 1,083 
Regulatory balancing accounts2,905 2,001 
Other2,022 1,172 
Regulatory assets724 410 
Inventories:
Gas stored underground and fuel oil47 95 
Materials and supplies522 533 
Wildfire Fund asset461 464 
Other1,458 1,334 
Total current assets11,527 9,602 
Property, Plant, and Equipment
Electric69,570 66,982 
Gas25,306 24,135 
Construction work in progress3,186 2,757 
Other20 20 
Total property, plant, and equipment98,082 93,894 
Accumulated depreciation(28,691)(27,758)
Net property, plant, and equipment69,391 66,136 
Other Noncurrent Assets
Regulatory assets9,479 8,978 
Nuclear decommissioning trusts3,670 3,538 
Operating lease right of use asset1,316 1,741 
Wildfire Fund asset5,428 5,816 
Income taxes receivable68 67 
Other (includes net noncurrent accounts receivable of $271 million and $0 related to VIEs, net of noncurrent allowance for doubtful accounts of $51 million and $0 at respective dates)
2,682 1,978 
Total other noncurrent assets22,643 22,118 
TOTAL ASSETS$103,561 $97,856 
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)September 30, 2021December 31, 2020
LIABILITIES AND EQUITY  
Current Liabilities
  
Short-term borrowings$2,470 $3,547 
Long-term debt, classified as current4,518 28 
Accounts payable:
Trade creditors2,697 2,402 
Regulatory balancing accounts1,139 1,245 
Other655 580 
Operating lease liabilities461 533 
Interest payable305 498 
Disputed claims and customer refunds— 242 
Wildfire-related claims2,758 2,250 
Other2,781 2,256 
Total current liabilities17,784 13,581 
Noncurrent Liabilities
Long-term debt (includes $1.0 billion related to VIEs at respective dates)
35,959 37,288 
Regulatory liabilities11,661 10,424 
Pension and other post-retirement benefits2,329 2,444 
Asset retirement obligations6,620 6,412 
Deferred income taxes2,997 1,398 
Operating lease liabilities878 1,208 
Other4,606 3,848 
Total noncurrent liabilities65,050 63,022 
Equity
Shareholders’ Equity
Common stock, no par value, authorized 3,600,000,000 shares at respective dates; 1,985,369,201 and 1,984,678,673 shares outstanding at respective dates
35,114 30,224 
Treasury stock, at cost; 477,743,590 and 0 shares at respective dates
(4,854)— 
Reinvested earnings(9,760)(9,196)
Accumulated other comprehensive loss(25)(27)
Total shareholders’ equity
20,475 21,001 
Noncontrolling Interest - Preferred Stock of Subsidiary252 252 
Total equity20,727 21,253 
TOTAL LIABILITIES AND EQUITY$103,561 $97,856 
See accompanying Notes to the Condensed Consolidated Financial Statements.


13


PG&E CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Nine Months Ended September 30,
(in millions)20212020
Cash Flows from Operating Activities  
Net loss$(564)$(1,508)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and decommissioning2,540 2,574 
Bad debt expense280 96 
Allowance for equity funds used during construction(96)(43)
Deferred income taxes and tax credits, net1,607 923 
Reorganization items, net (Note 2) (71)1,597 
Wildfire Fund expense399 293 
Disallowed capital expenditures— 16 
Other232 164 
Effect of changes in operating assets and liabilities:
Accounts receivable(158)(1,012)
Wildfire-related receivables(790)1,657 
Inventories(5)(12)
Accounts payable 242 465 
Wildfire-related claims508 (16,800)
Other current assets and liabilities(254)(1,557)
Regulatory assets, liabilities, and balancing accounts, net(1,174)(1,393)
Liabilities subject to compromise — 413 
Contributions to Wildfire Fund— (5,008)
Other noncurrent assets and liabilities(643)(84)
Net cash provided by (used in) operating activities2,053 (19,219)
Cash Flows from Investing Activities  
Capital expenditures(5,468)(5,475)
Proceeds from sale of SFGO749 — 
Proceeds from sales and maturities of nuclear decommissioning trust investments1,176 1,144 
Purchases of nuclear decommissioning trust investments(1,187)(1,203)
Other52 10 
Net cash used in investing activities
(4,678)(5,524)
Cash Flows from Financing Activities  
Proceeds from debtor-in-possession credit facility
— 500 
Repayments of debtor-in-possession credit facility— (2,000)
Debtor-in-possession credit facility debt issuance costs
— (3)
Bridge facility financing fees— (73)
Pre-petition long-term debt repaid— (750)
Borrowings under credit facilities6,687 2,420 
Repayments under credit facilities(7,772)(1,480)
Borrowings under term loan credit facilities— 3,000 
Credit facilities financing fees— (22)
Proceeds from issuance of long-term debt, net of discount and issuance costs of $47 and $178 at respective dates
3,171 13,497 
14


Repayment of long-term debt(21)(7)
Proceeds from sale of future revenue from transmission tower license sales, net of fees370 — 
Exchanged debt financing fees— (103)
Common stock issued, net of issuance costs— 7,582 
Equity Units issued— 1,304 
Other(6)(20)
Net cash provided by financing activities2,429 23,845 
Net change in cash, cash equivalents, and restricted cash(196)(898)
Cash, cash equivalents, and restricted cash at January 1627 1,577 
Cash, cash equivalents, and restricted cash at September 30$431 $679 
Less: Restricted cash and restricted cash equivalents(11)(215)
Cash and cash equivalents at September 30$420 $464 

Supplemental disclosures of cash flow information  
Cash received (paid) for:  
Interest, net of amounts capitalized$(1,229)$(1,372)
        Income taxes, net12 — 
Supplemental disclosures of noncash investing and financing activities
Capital expenditures financed through accounts payable$963 $404 
Operating lease liabilities arising from obtaining right-of-use assets47 13 
Common stock issued in satisfaction of liabilities— 8,276 
Increase to PG&E Corporation common stock and treasury stock in connection with the PG&E Fire Victim Trust Share Exchange and Tax Matters Agreement4,854 — 
See accompanying Notes to the Condensed Consolidated Financial Statements.

15


PG&E CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Common StockTreasury StockReinvested
Earnings
Accumulated
Other
Comprehensive
Income
(Loss)
Total
Shareholders’
Equity
Non-
controlling
Interest -
Preferred
Stock of
Subsidiary
Total
Equity
(in millions, except share amounts)SharesAmountSharesAmount
Balance at December 31, 20201,984,678,673 $30,224  $ $(9,196)$(27)$21,001 $252 $21,253 
Net income— — — — 123 — 123 — 123 
Other comprehensive income— — — — — — 
Common stock issued, net427,030 — — — — — — — — 
Stock-based compensation amortization— — — — — — 
Balance at March 31, 20211,985,105,703 $30,226  $ $(9,073)$(26)$21,127 $252 $21,379 
Net income— — — — 401 — 401 — 401 
Other comprehensive income— — — — — — — — — 
Common stock issued, net167,345 — — — — — — — — 
Stock-based compensation amortization— 19 — — — — 19 — 19 
Balance at June 30, 20211,985,273,048 $30,245  $ $(8,672)$(26)$21,547 $252 $21,799 
Net loss — — — (1,088)— (1,088)— (1,088)
Other comprehensive income— — — — — — 
Common stock issued, net96,153 4,854 — — — — 4,854 — 4,854 
Treasury stock acquired— — 477,743,590 (4,854)  (4,854) (4,854)
Stock-based compensation amortization— 15 — — — — 15 — 15 
Balance at September 30, 20211,985,369,201 $35,114 477,743,590 $(4,854)$(9,760)$(25)$20,475 $252 $20,727 

(in millions, except share amounts)Common
Stock
Shares
Common
Stock
Amount
Reinvested
Earnings
Accumulated
Other
Comprehensive
(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 
Net income— — 86 — 86 — 86 
Other comprehensive loss— — — — — — — 
Common stock issued, net1,454,768,680 15,855 — — 15,855 — 15,855 
Equity units issued— 1,304 — — 1,304 — 1,304 
Stock-based compensation amortization— 18 — — 18 — 18 
Balance at September 30, 20201,984,562,035 $30,222 $(9,400)$(10)$20,812 $252 $21,064 

See accompanying Notes to the Condensed Consolidated Financial Statements.

16


PACIFIC GAS AND ELECTRIC COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 (Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2021202020212020
Operating Revenues  
Electric$4,181 $3,810 $11,527 $10,285 
Natural gas1,284 1,072 3,869 3,436 
Total operating revenues5,465 4,882 15,396 13,721 
Operating Expenses
Cost of electricity1,133 1,114 2,570 2,418 
Cost of natural gas176 90 670 508 
Operating and maintenance2,793 2,311 7,705 6,421 
Wildfire-related claims, net of recoveries94 25 261 195 
Wildfire Fund expense162 120 399 293 
Depreciation, amortization, and decommissioning801 845 2,540 2,574 
Total operating expenses5,159 4,505 14,145 12,409 
Operating Income306 377 1,251 1,312 
Interest income— 17 33 
Interest expense(342)(323)(1,032)(764)
Other income, net133 101 390 287 
Reorganization items, net
— (82)(12)(286)
Income Before Income Taxes97 78 614 582 
Income tax provision (benefit)1,139 (92)1,039 434 
Net Income (Loss)(1,042)170 (425)148 
Preferred stock dividend requirement10 10 
Income (Loss) Attributable to Common Stock$(1,045)$167 $(435)$138 
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 September 30,Nine Months Ended September 30,
(in millions)2021202020212020
Net Income (Loss)$(1,042)$170 $(425)$148 
Other Comprehensive Income
Pension and other post-retirement benefit plans obligations (net of taxes of $0, $0, $0, and $0, respectively)
— — 
Total other comprehensive income 1  1 
Comprehensive Income (Loss)$(1,042)$171 $(425)$149 
See accompanying Notes to the Condensed Consolidated Financial Statements.

18


PACIFIC GAS AND ELECTRIC COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 Balance At
(in millions)September 30, 2021December 31, 2020
ASSETS  
Current Assets  
Cash and cash equivalents$269 $261 
Restricted cash11 143 
Accounts receivable:
Customers (net of allowance for doubtful accounts of $306 million and $146 million
at respective dates) (includes $1.59 billion and $1.63 billion related to VIEs, net of allowance for doubtful accounts of $306 million and $143 million at respective dates)
1,817 1,883 
Accrued unbilled revenue (includes $1.03 billion and $959 million related to VIEs at respective dates)
1,140 1,083 
Regulatory balancing accounts2,905 2,001 
Other2,171 1,180 
Regulatory assets724 410 
Inventories:
Gas stored underground and fuel oil47 95 
Materials and supplies522 533 
Wildfire Fund asset461 464 
Other1,445 1,321 
Total current assets11,512 9,374 
Property, Plant, and Equipment
Electric69,570 66,982 
Gas25,306 24,135 
Construction work in progress3,186 2,757 
Other 18 18 
Total property, plant, and equipment98,080 93,892 
Accumulated depreciation(28,689)(27,756)
Net property, plant, and equipment69,391 66,136 
Other Noncurrent Assets
Regulatory assets9,479 8,978 
Nuclear decommissioning trusts3,670 3,538 
Operating lease right of use asset1,313 1,736 
Wildfire Fund asset5,428 5,816 
Income taxes receivable67 66 
Other (includes net noncurrent accounts receivable of $271 million and $0 related to VIEs, net of noncurrent allowance for doubtful accounts of $51 million and $0 at respective dates)
2,524 1,818 
Total other noncurrent assets22,481 21,952 
TOTAL ASSETS$103,384 $97,462 
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)September 30, 2021December 31, 2020
LIABILITIES AND EQUITY
Current Liabilities  
Short-term borrowings$2,470 $3,547 
Long-term debt, classified as current4,491 — 
Accounts payable:
Trade creditors2,695 2,366 
Regulatory balancing accounts1,139 1,245 
Other661 624 
Operating lease liabilities459 530 
Interest payable279 444 
Disputed claims and customer refunds— 242 
Wildfire-related claims2,758 2,250 
Other2,778 2,248 
Total current liabilities17,730 13,496 
Noncurrent Liabilities
Long-term debt (includes $1.0 billion related to VIEs at respective dates)
31,366 32,664 
Regulatory liabilities11,661 10,424 
Pension and other post-retirement benefits2,219 2,328 
Asset retirement obligations6,620 6,412 
Deferred income taxes3,214 1,570 
Operating lease liabilities877 1,206 
Other4,646 3,886 
Total noncurrent liabilities60,603 58,490 
Shareholders’ Equity
Preferred stock258 258 
Common stock, $5 par value, authorized 800,000,000 shares; 264,374,809 shares outstanding at respective dates
1,322 1,322 
Additional paid-in capital28,286 28,286 
Reinvested earnings(4,810)(4,385)
Accumulated other comprehensive loss(5)(5)
Total shareholders’ equity25,051 25,476 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$103,384 $97,462 
See accompanying Notes to the Condensed Consolidated Financial Statements.

20


PACIFIC GAS AND ELECTRIC COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Nine Months Ended September 30,
(in millions)20212020
Cash Flows from Operating Activities  
Net income (loss)$(425)$148 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and decommissioning2,540 2,574 
Bad debt expense280 96 
Allowance for equity funds used during construction(96)(43)
Deferred income taxes and tax credits, net1,651 961 
Reorganization items, net (Note 2) (38)
Wildfire Fund expense399 293 
Disallowed capital expenditures— 16 
Other180 141 
Effect of changes in operating assets and liabilities:
Accounts receivable(154)(987)
Wildfire-related receivables(790)1,657 
Inventories(5)(12)
Accounts payable 206 423 
Wildfire-related claims508 (16,800)
Other current assets and liabilities(220)(1,594)
Regulatory assets, liabilities, and balancing accounts, net(1,174)(1,393)
Liabilities subject to compromise — 401 
Contributions to Wildfire Fund— (5,008)
Other noncurrent assets and liabilities(642)(46)
Net cash provided by (used in) operating activities2,220 (19,170)
Cash Flows from Investing Activities
Capital expenditures (5,468)(5,475)
Proceeds from sale of SFGO
749 — 
Proceeds from sales and maturities of nuclear decommissioning trust investments1,176 1,144 
Purchases of nuclear decommissioning trust investments(1,187)(1,203)
Intercompany note to PG&E Corporation(145)— 
Other52 10 
Net cash used in investing activities
(4,823)(5,524)
Cash Flows from Financing Activities
Proceeds from debtor-in-possession credit facility
— 500 
Repayments of debtor-in-possession credit facility— (2,000)
Debtor-in-possession credit facility debt issuance costs
— (3)
Bridge facility financing fees— (33)
Pre-petition long-term debt repaid— (100)
Borrowings under credit facilities6,687 2,420 
Repayments under credit facilities(7,772)(1,480)
21


Borrowings under term loan credit facilities— 3,000 
Credit facilities financing fees— (22)
Proceeds from issuance of long-term debt, net of discount and issuance costs of $47 and $88 at respective dates
3,171 8,837 
Proceeds from sale of future revenue from transmission tower license sales, net of fees370 — 
Exchanged debt financing fees— (103)
Equity contribution from PG&E Corporation— 12,986 
Other23 (20)
Net cash provided by financing activities2,479 23,982 
Net change in cash, cash equivalents, and restricted cash(124)(712)
Cash, cash equivalents, and restricted cash at January 1404 1,129 
Cash, cash equivalents, and restricted cash at September 30$280 $417 
Less: Restricted cash and restricted cash equivalents(11)(215)
Cash and cash equivalents at September 30$269 $202 
Supplemental disclosures of cash flow information
Cash received (paid) for:
Interest, net of amounts capitalized$(1,046)$(1,305)
        Income taxes, net12 — 
Supplemental disclosures of noncash investing and financing activities
Capital expenditures financed through accounts payable$963 $404 
Operating lease liabilities arising from obtaining right-of-use assets 47 13 
Common stock equity infusion from PG&E Corporation used to satisfy liabilities— 6,750 
See accompanying Notes to the Condensed Consolidated Financial Statements.

22


PACIFIC GAS AND ELECTRIC COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in millions)Preferred
Stock
Common
Stock
Amount
Additional
Paid-in
Capital
Reinvested
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shareholders’
Equity
Balance at December 31, 2020$258 $1,322 $28,286 $(4,385)$(5)$25,476 
Net income — — 177 — 177 
Balance at March 31, 2021$258 $1,322 $28,286 $(4,208)$(5)$25,653 
Net income— — — 440 — 440 
Balance at June 30, 2021$258 $1,322 $28,286 $(3,768)$(5)$26,093 
Net loss— — — (1,042)— (1,042)
Balance at September 30, 2021$258 $1,322 $28,286 $(4,810)$(5)$25,051 

(in millions)Preferred
Stock
Common
Stock
Amount
Additional
Paid-in
Capital
Reinvested
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shareholders’
Equity
Balance at December 31, 2019$258 $1,322 $8,550 $(4,796)$1 $5,335 
Net income— — — 451 — 451 
Balance at March 31, 2020$258 $1,322 $8,550 $(4,345)$1 $5,786 
Net loss— — — (473)— (473)
Balance at June 30, 2020$258 $1,322 $8,550 $(4,818)$1 $5,313 
Net income— — — 170 — 170 
Other comprehensive income— — — — 
Equity contribution— — 19,736 — — 19,736 
Balance at September 30, 2020$258 $1,322 $28,286 $(4,648)$2 $25,220 
See accompanying Notes to the Condensed Consolidated Financial Statements.

23


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

Organization and Basis of Presentation

PG&E Corporation is a holding company whose primary operating subsidiary is Pacific Gas and Electric Company, a public utility serving northern and central California.  The Utility generates revenues mainly through the sale and delivery of electricity and natural gas to customers.  The Utility is primarily regulated by the CPUC and the FERC.  In addition, the NRC oversees the licensing, construction, operation, and decommissioning of the Utility’s nuclear generation facilities.

This quarterly report on Form 10-Q is a combined report of PG&E Corporation and the Utility.  PG&E Corporation’s Condensed Consolidated Financial Statements include the accounts of PG&E Corporation, the Utility, and other wholly owned and controlled subsidiaries.  The Utility’s Condensed Consolidated Financial Statements include the accounts of the Utility and its wholly owned and controlled subsidiaries.  All intercompany transactions have been eliminated in consolidation.  The Notes to the Condensed Consolidated Financial Statements apply to both PG&E Corporation and the Utility.  PG&E Corporation and the Utility assess financial performance and allocate resources on a consolidated basis (i.e., the companies operate in one segment).

The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with GAAP and in accordance with the interim period reporting requirements of Form 10-Q and reflect all adjustments that management believes are necessary for the fair presentation of PG&E Corporation’s and the Utility’s financial condition, results of operations, and cash flows for the periods presented.  The information at December 31, 2020 in the Condensed Consolidated Balance Sheets included in this quarterly report was derived from the audited Consolidated Balance Sheets in Item 8 of the 2020 Form 10-K.  This quarterly report should be read in conjunction with the 2020 Form 10-K. 

The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Some of the more significant estimates and assumptions relate to the Utility’s regulatory assets and liabilities, wildfire-related liabilities, legal and regulatory contingencies, the Wildfire Fund, environmental remediation liabilities, AROs, wildfire-related receivables, and pension and other post-retirement benefit plan obligations. Management believes that its estimates and assumptions reflected in the Condensed Consolidated Financial Statements are appropriate and reasonable. A change in management’s estimates or assumptions could result in an adjustment that would have a material impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, liquidity, and cash flows during the period in which such change occurred.

NOTE 2: BANKRUPTCY FILING

Chapter 11 Proceedings

On the Petition Date, PG&E Corporation and the Utility commenced the Chapter 11 Cases with the Bankruptcy Court. Prior to the Effective Date, PG&E Corporation and the Utility continued to operate their business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

On June 20, 2020, the Bankruptcy Court entered the Confirmation Order confirming the Plan filed on June 19, 2020. PG&E Corporation and the Utility emerged from Chapter 11 on the Effective Date of July 1, 2020.

Except as otherwise set forth in the Plan, the Confirmation Order or another order of the Bankruptcy Court, substantially all pre-petition liabilities were discharged under the Plan.

24


Unresolved Chapter 11 Claims

PG&E Corporation and the Utility have received over 100,000 proofs of claim since the Petition Date, of which approximately 80,000 were channeled to the Subrogation Wildfire Trust and Fire Victim Trust. The claims channeled to the Subrogation Wildfire Trust and Fire Victim Trust will be resolved by such trusts, and PG&E Corporation and the Utility have no further liability in connection with such claims. PG&E Corporation and the Utility continue their review and analysis of certain remaining claims, including asserted litigation claims, trade creditor claims, along with other tax and regulatory claims, and therefore the ultimate liability of PG&E Corporation or the Utility for such claims may differ from the amounts asserted in such claims. Allowed claims are paid in accordance with the Plan and the Confirmation Order. Amounts expected to be allowed are reflected as current or noncurrent liabilities in the Condensed Consolidated Balance Sheets.

The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation, other than as provided in the Plan or the Confirmation Order.

However, holders of certain claims may assert that they are entitled under the Plan or the Bankruptcy Code to pursue, or continue to pursue, their claims against PG&E Corporation and the Utility on or after the Effective Date, including claims arising from or relating to indemnification or contribution claims, including with respect to the wildfire that began on November 8, 2018 near the city of Paradise, Butte County, California (the “2018 Camp fire”), the 2017 Northern California wildfires, and the wildfire that began September 9, 2015 in Amador and Calaveras counties in Northern California (the “2015 Butte fire”).

In addition, Subordinated Debt Claims and HoldCo Rescission or Damage Claims continue to be pursued against PG&E Corporation and the Utility in the claims reconciliation process in the Bankruptcy Court, and claims against certain former directors and current and former officers, as well as certain underwriters, are being pursued in the purported securities class action that is further described in Note 10 under the heading “Securities Class Action Litigation.”

In addition to filing objections in the Bankruptcy Court to claims with respect to which PG&E Corporation and the Utility do not believe they have liability, PG&E Corporation and the Utility are working to resolve certain disputed general unsecured claims before a panel of mediators. On April 5, 2021, the Bankruptcy Court entered an order extending the deadline for PG&E Corporation and the Utility to object to claims to December 23, 2021, except for some claims filed by the United States and by Cal Fire, for which the Bankruptcy Court has approved stipulations extending the objection deadline to November or December 2021, depending on the claim. On October 19, 2021, PG&E Corporation and the Utility filed a motion for entry of an order further extending the deadline for PG&E Corporation and the Utility to object to claims through and including June 21, 2022, which motion is pending before the Bankruptcy Court.

Various electricity suppliers filed claims in the Utility’s 2001 prior proceeding filed under Chapter 11 of the Bankruptcy Code seeking payment for energy supplied to the Utility’s customers between May 2000 and June 2001. While the FERC and judicial proceedings were pending, the Utility pursued settlements with electricity suppliers and entered into a number of settlement agreements with various electricity suppliers to resolve some of these disputed claims and to resolve the Utility’s refund claims against these electricity suppliers. On May 20, 2021, the FERC approved an uncontested filing that would result in a final market clearing and funds distribution associated with the issues relating to short-term electric energy sales in California between May 2000 and June 2001 that have been litigated at the FERC and in other forums. In August 2021, both the Utility’s and the California Power Exchange’s bankruptcy courts approved the final market clearing. As a result, the Utility expects to receive $143 million from the California Power Exchange and various escrows that were established as part of the disputed claims settlements, reflected in Accounts receivable – other on the Condensed Consolidated Balance Sheets. As such, as of September 30, 2021, the Condensed Consolidated Balance Sheets reflected $0 in net claims within Disputed claims and customer refunds compared to $242 million as of December 31, 2020. The Utility expects to refund current regulatory liabilities of $419 million, reflected in Current liabilities – other on the Condensed Consolidated Balance Sheets, $143 million of which would be funded from the California Power Exchange and various escrows discussed above.

25


Reorganization Items, Net

Reorganization items, net, represent amounts incurred after the Petition Date as a direct result of the Chapter 11 Cases and are comprised of professional fees and financing costs, net of interest income and other. Cash paid for reorganization items, net was $0 and $9 million for PG&E Corporation and the Utility, respectively, during the three months ended September 30, 2021 as compared to $6 million and $93 million for PG&E Corporation and the Utility, respectively, during same period in 2020. Cash paid for reorganization items, net was $31 million and $50 million for PG&E Corporation and the Utility, respectively, during the nine months ended September 30, 2021 as compared to $96 million and $300 million for PG&E Corporation and the Utility, respectively, during the same period in 2020. There were no amounts recorded to reorganization items during the three months ended September 30, 2021. Reorganization items, net for the nine months ended September 30, 2021 and three and nine months ended September 30, 2020 include the following:

Three Months Ended September 30, 2020
(in millions)
Utility
PG&E Corporation (1)
PG&E Corporation Consolidated
Debtor-in-possession financing costs$— $— $— 
Legal and other 90 55 145 
Interest income(8)— (8)
Total reorganization items, net$82 $55 $137 
(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.

Nine Months Ended September 30, 2021
(in millions)Utility
PG&E Corporation (1)
PG&E Corporation Consolidated
Debtor-in-possession financing costs$— $— $— 
Legal and other21 (1)20 
Other(9)— (9)
Total reorganization items, net$12 $(1)$11 
(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.

Nine Months Ended September 30, 2020
(in millions)
Utility
PG&E Corporation (1)
PG&E Corporation Consolidated
Debtor-in-possession financing costs$$— $
Legal and other (2)
296 1,653 1,949 
Interest income(13)(2)(15)
Total reorganization items, net$286 $1,651 $1,937 
(1) PG&E Corporation amounts reflected under the column “PG&E Corporation” exclude the accounts of the Utility.
(2) Amount includes $1.5 billion in equity backstop premium expense, bridge loan facility fees, and trustee fees.

NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

For a summary of the significant accounting policies used by PG&E Corporation and the Utility, see Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2020 Form 10-K.


Variable Interest Entities

A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, or whose equity investors lack any characteristics of a controlling financial interest. An enterprise that has a controlling financial interest in a VIE is a primary beneficiary and is required to consolidate the VIE.

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Consolidated VIE

The SPV created in connection with the Receivables Securitization Program (as defined below in Note 5) in October 2020 is a bankruptcy remote limited liability company wholly owned by the Utility, and its assets are not available to creditors of PG&E Corporation or the Utility. Pursuant to the Receivables Securitization Program, the Utility sells certain of its receivables and certain related rights to payment and obligations of the Utility with respect to such receivables, and certain other related rights to the SPV, which, in turn, obtains loans secured by the receivables from financial institutions (the “Lenders”). Amounts received from the Lenders, the pledged receivables and the corresponding debt are included in Accounts receivable, Other noncurrent assets and Long-term debt, respectively, on the Condensed Consolidated Balance Sheets. As of September 30, 2021, the aggregate principal amount of the loans made by the Lenders cannot exceed $1.0 billion outstanding at any time. On September 15, 2021, the Receivables Securitization Program was amended and extended to September 15, 2023.

The SPV is considered a VIE because its equity capitalization is insufficient to finance its activities. The most significant activities that impact the economic performance of the SPV are decisions made to manage receivables. The Utility is considered the primary beneficiary and consolidates the SPV as it makes these decisions. No additional financial support was provided to the SPV during the period ended September 30, 2021 or is expected to be provided in the future that was not previously contractually required. As of September 30, 2021 and December 31, 2020, the SPV had net accounts receivable of $2.9 billion and $2.6 billion, respectively, and outstanding borrowings of $1.0 billion and $1.0 billion, respectively, under the Receivables Securitization Program.

Non-Consolidated VIEs

Some of the counterparties to the Utility’s power purchase agreements are considered VIEs. Each of these VIEs was designed to own a power plant that would generate electricity for sale to the Utility. To determine whether the Utility was the primary beneficiary of any of these VIEs at September 30, 2021, it assessed whether it absorbs any of the VIE’s expected losses or receives any portion of the VIE’s expected residual returns under the terms of the power purchase agreement, analyzed the variability in the VIE’s gross margin, and considered whether it had any decision-making rights associated with the activities that are most significant to the VIE’s performance, such as dispatch rights and operating and maintenance activities. The Utility’s financial obligation is limited to the amount the Utility pays for delivered electricity and capacity. The Utility did not have any decision-making rights associated with any of the activities that are most significant to the economic performance of any of these VIEs. Since the Utility was not the primary beneficiary of any of these VIEs at September 30, 2021, it did not consolidate any of them.

Pension and Other Post-Retirement Benefits

PG&E Corporation and the Utility sponsor a non-contributory defined benefit pension plan and cash balance plan. Both plans are included in “Pension Benefits” below. Post-retirement medical and life insurance plans are included in “Other Benefits” below.

The net periodic benefit costs reflected in PG&E Corporation’s Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2021 and 2020 were as follows:
Pension BenefitsOther Benefits
Three Months Ended September 30,
(in millions)2021202020212020
Service cost for benefits earned (1)
$147 $133 $15 $15 
Interest cost161 178 13 16 
Expected return on plan assets(261)(261)(33)(34)
Amortization of prior service cost(1)(1)
Amortization of net actuarial loss(8)(5)
Net periodic benefit cost47 50 (10)(5)
Regulatory account transfer (2)
37 34 — — 
Total$84 $84 $(10)$(5)
(1) A portion of service costs are capitalized pursuant to GAAP.
(2) The Utility recorded these amounts to a regulatory account since they are probable of recovery from, or refund to, customers in future rates.

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Pension BenefitsOther Benefits
Nine Months Ended September 30,
(in millions)2021202020212020
Service cost for benefits earned (1)
$440 $397 $47 $46 
Interest cost484 535 39 47 
Expected return on plan assets(784)(783)(103)(103)
Amortization of prior service cost(4)(4)10 10 
Amortization of net actuarial loss(24)(15)
Net periodic benefit cost140 148 (31)(15)
Regulatory account transfer (2)
111 102 — — 
Total$251 $250 $(31)$(15)
(1) A portion of service costs are capitalized pursuant to GAAP.
(2) The Utility recorded these amounts to a regulatory account since they are probable of recovery from, or refund to, customers in future rates.

Non-service costs are reflected in Other income, net on the Condensed Consolidated Statements of Income. Service costs are reflected in Operating and maintenance on the Condensed Consolidated Statements of Income.

There was no material difference between PG&E Corporation and the Utility for the information disclosed above.

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss)

The changes, net of income tax, in PG&E Corporation’s accumulated other comprehensive income (loss) consisted of the following:
Pension
Benefits
Other
Benefits
Total
(in millions, net of income tax)Three Months Ended September 30, 2021
Beginning balance$(38)$17 $(21)
Amounts reclassified from other comprehensive income: (1)
Amortization of prior service cost (net of taxes of $0 and $1, respectively)
(1)
Amortization of net actuarial loss (net of taxes of $0 and $3, respectively)
(5)(4)
Regulatory account transfer (net of taxes of $1 and $2, respectively)
Net current period other comprehensive gain (loss)1  1 
Ending balance$(37)$17 $(20)
(1) These components are included in the computation of net periodic pension and other post-retirement benefit costs.  (See the “Pension and Other Post-Retirement Benefits” table above for additional details.)

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Pension BenefitsOther BenefitsTotal
(in millions, net of income tax)Three Months Ended September 30, 2020
Beginning balance$(22)$17 $(5)
Amounts reclassified from other comprehensive income: (1)
Amortization of prior service cost (net of taxes of $0 and $1, respectively)
(1)
Amortization of net actuarial loss (net of taxes of $0 and $1, respectively)
(4)(3)
Regulatory account transfer (net of taxes of $1 and $0, respectively)
— 
Net current period other comprehensive gain (loss)