Corporate Responsibility and Sustainability Report 2018

Headquarters Location

San Francisco, California

Service Area

70,000 square miles in Northern and Central California

Service Area Population

Approximately 16 million people

Customer Accounts (as of December 31, 2018)

5.4 million electric distribution accounts:

• 4.8 million residential
• 0.6 million commercial, industrial and other

4.4 million natural gas distribution accounts:

• 4.2 million residential
• 0.2 million commercial and industrial

Employees (as of December 31, 2018)

Approximately 24,000 regular employees

Approximately 14,500 employees are covered by collective bargaining agreements with three labor unions:

• International Brotherhood of Electrical Workers (IBEW), Local 1245, AFL-CIO
• Engineers and Scientists of California/International Federation of Professional and Technical Engineers (ESC/IFPTE), Local 20, AFL-CIO and CLC
• Service Employees International Union (SEIU), Local 24/7

System

• 7,686 MW of PG&E-owned hydroelectric, nuclear, natural gas, solar and fuel cell generation
• Approximately 107,000 circuit miles of electric distribution lines (about 25 percent underground and 75 percent overhead) and approximately 18,000 circuit miles of electric transmission lines
• Approximately 42,800 miles of gas distribution pipelines, 6,600 miles of backbone and local gas transmission pipelines and three gas storage facilities

• 1. Includes interdepartmental natural gas sales for the purpose of electric generation but excludes other interdepartmental natural gas sales.¹

System Investments

Approximately $7.2 billion in capital investments in 2018 to enhance PG&E’s infrastructure and improve safety and reliability.

Contribution to State and Local Revenues

PG&E is a major contributor to the revenue that state and local governments depend on to fund critical public services. In addition to property taxes, PG&E pays franchise fees to cities and counties for the right to use public streets for gas and electric facilities.

Financial Performance

The financial information below is derived from PG&E Corporation’s Consolidated Financial Statements at December 31, 2017 and December 31, 2018, unless otherwise indicated, which include the accounts of PG&E Corporation, the Utility and other wholly owned and controlled subsidiaries.

• 1. This is combined information for PG&E Corporation and Pacific Gas and Electric Company (the “Utility”). PG&E Corporation’s Consolidated Financial Statements include the accounts of PG&E Corporation, the Utility, and subsidiaries, and have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”). All amounts presented in the table above are tax-adjusted at PG&E Corporation’s statutory tax rate of 27.98% for 2018 and 40.75% for 2017, except for certain fines and penalties in 2017.¹
• 2. "Earnings from operations" is a non-GAAP financial measure and is calculated as income available for common shareholders less “Items impacting comparability” as defined in Note (3) below. “Non-GAAP EPS from operations” also referred to as “non-GAAP earnings per share from operations” is a non-GAAP financial measurement and is calculated as non-GAAP earnings from operations divided by common shares outstanding (diluted). PG&E Corporation uses non-GAAP earnings from operations and non-GAAP EPS from operations to understand and compare operating results across reporting periods for various purposes including internal budgeting and forecasting, short- and long-term operating planning, and employee incentive compensation. PG&E Corporation believes that non-GAAP earnings from operations and non-GAAP EPS from operations provide additional insight into the underlying trends of the business, allowing for a better comparison against historical results and expectations for future performance.^{2a, 2b}
• 3. “Items impacting comparability” represent items that management does not consider part of the normal course of operations and that affect comparability of financial results between periods. Items impacting comparability reconcile earnings from operations with consolidated income available for common shareholders as reported in accordance with GAAP. Presented below is a reconciliation of PG&E Corporation’s consolidated income available for common shareholders in accordance with GAAP to non-GAAP earnings from operations for 2017 and 2018:
  

  Year Ended December 31, 2018 (in millions, except per share amounts)

  	Earnings		Earnings per Common Share (Diluted)
  	2018	2017	2018	2017
  PG&E Corporation’s Non-GAAP Earnings from Operations	$2,069	$1,889	$4.00	$3.68
  PG&E Corporation’s Earnings (Loss) on a GAAP basis	$(6,851)	$1,646	$(13.25)	$3.21
  Items Impacting Comparability:
  2018 Camp fire-related costs, net of insurance	6,823	—	13.20	—
  2017 Northern California wildfire-related costs, net of insurance	2,090	49	4.04	0.09
  Pipeline-related expenses	33	52	0.06	0.10
  2015 Butte fire-related costs, net of insurance	24	36	0.05	0.07
  Reduction in gas-related capital disallowances	(27)	—	(0.05)	—
  2017 insurance premium cost recoveries	(23)	—	(0.05)	—
  Tax Cuts and Jobs Act transition impact	—	147	—	0.29
  Fines and penalties	—	47	—	0.09
  Diablo Canyon settlement-related disallowance	—	32	—	0.06
  Legal and regulatory-related expenses	—	6	—	0.01
  GT&S revenue timing impact	—	(88)	—	(0.17)
  Net benefit from derivative litigation settlement	—	(38)	—	(0.07)

  For information about Items impacting comparability in 2017 and 2018, see PG&E Corporation’s and the Utility’s annual reports on Form 10-K for the years ended December 31, 2017 and December 31, 2018, respectively.^{3a, 3b}
• 4. The quarterly cash dividend on PG&E Corporation’s common stock was suspended beginning with the fourth quarter of 2017.⁴

For more information, see PG&E Corporation’s and Pacific Gas and Electric Company’s 2018 Joint Annual Report to Shareholders or Annual Report on Form 10-K for year ended December 31, 2018, which have been filed with the U.S. Securities and Exchange Commission.

Forward-Looking Statements

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