PRESS RELEASES 2021
February 25, 2021
ISSUED BY: PG&E Corporation, 1-415-973-5930

PG&E Corporation Reports Full-Year and Fourth-Quarter 2020 Financial Results

Related Documents
Press Release and Selected Exhibits
Presentation and Complete Earnings Exhibits

SAN FRANCISCO, Calif. — PG&E Corporation (NYSE: PCG) recorded full-year losses of $1.3 billion, or $1.05 per share and fourth-quarter 2020 income available for common shareholders of $200 million, or $0.09 per share, as reported in accordance with generally accepted accounting principles (GAAP). This compares with losses attributable to common shareholders of $7.7 billion, or $14.50 per share, for the full year of 2019 and $3.6 billion, or $6.84 per share, for the fourth quarter of 2019.

GAAP results include non-core items that management does not consider representative of ongoing earnings, which totaled $3.3 billion after-tax, or $2.66 per share, for the year. 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). Other non-core items include the amortization of wildfire insurance fund contributions under Assembly Bill (AB) 1054, investigation remedies, 2019-2020 wildfire-related costs, and prior period net regulatory recoveries.

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

"Our multi-year financial plan is based on strong, organic growth," said Patti Poppe, CEO of PG&E Corporation. "In my many conversations with customers, policymakers, our own frontline teams, and other key stakeholders, the clearest theme is the opportunity PG&E has to help build a better future for everyone who relies on us. I am embracing that challenge with a focus on the power of the Triple Bottom Line – results that create benefits for people, the planet, and our shared prosperity. The key will be earning back trust by keeping our promises and delivering consistent, stable performance of which we can all be proud."

2021 Priorities

In addition to continuing the 100-day listening tour she launched upon her January 4 arrival, Poppe outlined four initial priorities for 2021:

  1. Implementing a lean operating system to better serve customers;
  2. Assembling a team of senior leaders able to drive this organizational agenda;
  3. Implementing an improved action plan to further reduce wildfire risk; and
  4. Delivering on PG&E's financial commitment of 10 percent EPS growth.

Bolstering the Senior Leadership Team

Accordingly, the Utility appointed Adam Wright as Executive Vice President of Operations and Chief Operating Officer, where he is now responsible for all of the Utility's operations, including Gas, Electric and Generation. He will focus on safety, seek to increase connectivity among operational groups, standardize practices, and promote excellent execution across the board.

Further, Julius Cox was appointed Executive Vice President of People, Shared Services, and Supply Chain, and is responsible for ensuring the Utility has the people, skills, resources and tools to meet customers' expectations. Marlene Santos will also join the Utility as Executive Vice President and Chief Customer Officer, responsible for the Utility's customer contact centers; programs supporting energy efficiency, electric vehicles, rooftop solar, demand response and low-income customers; billing, metering and account services; marketing and communications; and regional leadership.

Wildfire Mitigation Update

In its February 5, 2021 Wildfire Mitigation Plan (WMP), the Utility detailed its ongoing strategy to further reduce wildfire risk, increase situational awareness, deploy new technology and models to help keep customers and communities safe, and continue to reduce the effects of Public Safety Power Shutoffs (PSPS). The WMP enhances the company's ongoing, comprehensive Community Wildfire Safety Program designed to address the growing threat of severe weather and wildfires across its service area. Specifically, it focuses on reducing wildfire potential by inspecting and repairing equipment, conducting enhanced vegetation management, and investing in grid technology and system hardening; installing more weather stations and high-definition cameras throughout the Utility service area, investing in the Utility's Wildfire Safety Operations Center that monitors high-fire threat areas in real time; investing in meteorology to monitor weather conditions; and reducing the impacts of PSPS as a tool of last resort by upgrading the electric system and improving support for affected customers and communities.

Non-Core Asset Sale

The Utility granted a wholly owned subsidiary of SBA Communications Corporation (SBA) an exclusive license to sublicense and market wireless communications equipment attachment locations on certain electric transmission towers and other utility structures to wireless telecommunication carriers for attachment of wireless communications equipment. The arrangement also allows the SBA subsidiary to continue to market and sublicense access to the towers and structures to additional wireless providers with the Utility receiving a portion of that future revenue. SBA agreed to pay the Utility a purchase price of $973 million, of which $954 million was paid at closing. The Utility may also assign additional attachment locations upon the satisfaction of certain terms and conditions, for which SBA will make additional purchase price payments to the Utility. Cash proceeds received at closing were $945 million and reflected an adjustment for an estimated amount of payments received by the Utility from Carriers in the pre-closing period that are allocable to licenses in the post closing period. The Utility did not sell any electric transmission towers as part of this transaction.

The Utility also entered into a strategic relationship with SBA, through SBA's wholly owned subsidiary, to sublicense and market equipment at additional attachment locations; as many as 28,000 electric transmission towers across the Utility's extensive network. Through this arrangement, the Utility will receive a portion of future revenues from these sublicensed equipment attachment locations.

Overall, PG&E expects the proceeds from this agreement to help further reduce its financing needs and strengthen its financial position while also benefiting customers, who will receive a significant portion of the sale proceeds in the form of lower monthly bills as well as a portion of any future revenues from additional attachment locations.

Non-GAAP Core Earnings

PG&E Corporation's non-GAAP core earnings, which exclude non-core items, were $2,020 million, or $1.61 per share, for the full year 2020, compared with $2,074 million, or $3.93 per share, during the same period in 2019. For the fourth-quarter, non-GAAP core earnings were $441 million, or $0.21 per share, compared with $360 million, or $0.68 per share, during the same period in 2019.

The decrease in quarter-over-quarter non-GAAP core earnings per share was primarily driven by the increase in shares outstanding, unrecoverable interest expense, timing of nuclear refueling outages, and inspection costs, partially offset by the growth in rate base earnings, interest accrued on pre-petition payables and short-term debt, and the timing of 2020 General Rate Case cost recovery.

PG&E Corporation uses "non-GAAP core earnings," which is a non-GAAP financial measure, in order to provide a measure that allows investors to compare the underlying financial performance of the business from one period to another, exclusive of non-core items. See the accompanying tables for a reconciliation of non-GAAP core earnings to consolidated earnings (loss) attributable to common shareholders.

Guidance

PG&E Corporation is adjusting 2021 GAAP loss guidance in the range of $0.52 to $0.38 per share, which includes non-core items. PG&E is adjusting 2021 non-core items guidance to approximately $3.1 billion after-tax. Non-core items reflect a net securitization inception charge, amortization of wildfire insurance fund contributions, bankruptcy and legal costs, investigation remedies, and 2019 Kincade fire-related costs, partially offset by prior period net regulatory recoveries.

On a non-GAAP basis, the guidance range for projected 2021 non-GAAP core earnings is $0.95 to $1.05 per share. Factors affecting non-GAAP core earnings include net below-the-line and spend above authorized of up to $100 million after-tax and unrecoverable interest expense of $300 million to $325 million after-tax.

PG&E is also rolling forward its five-year plan and introducing non-GAAP core earnings per share growth guidance of 10 percent.

Guidance is based on various assumptions and forecasts, including those relating to authorized revenues, future expenses, capital expenditures, rate base, equity issuances, the potential securitization of certain wildfire-related costs for the 2017 Northern California wildfires, and certain other factors.

Supplemental Financial Information

In addition to the financial information accompanying this release, presentation slides have been furnished to the Securities and Exchange Commission (SEC) and are available on PG&E Corporation's website at: http://investor.pgecorp.com/financials/quarterly-earnings-reports/default.aspx.

Earnings Conference Call

PG&E Corporation will also hold a conference call on February 25, 2021, at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) to discuss its full year and fourth quarter 2020 results. The public can access the conference call through a simultaneous webcast. The link is provided below and will also be available from the PG&E Corporation website.

What: Fourth Quarter 2020 Earnings Call

When: Thursday, February 25, 2021 at 11:00 a.m. Eastern Time

Where: http://investor.pgecorp.com/news-events/events-and-presentations/default.aspx

A replay of the conference call will be archived through April 3, 2021 at http://investor.pgecorp.com/news-events/events-and-presentations/default.aspx.

Alternatively, a toll-free replay of the conference call may be accessed shortly after the live call through April 3, 2021, by dialing (800) 585-8367. International callers may dial (416) 621-4642. For both domestic and international callers, the confirmation code 2695505 will be required to access the replay.

Public Dissemination of Certain Information

PG&E Corporation and the Utility routinely provide links to the Utility's principal regulatory proceedings with the CPUC and the Federal Energy Regulatory Commission (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 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.

About PG&E Corporation

PG&E Corporation (NYSE: PCG) is a holding company headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. For more information, visit http://www.pgecorp.com. In this press release, they are together referred to as "PG&E."

Forward-Looking Statements

This press release contains forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of PG&E Corporation and the Utility, as well as forecasts and estimates regarding PG&E Corporation's earnings guidance for 2021 and the 2021 Wildfire Mitigation Plan. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in PG&E Corporation's and the Utility's joint annual report on Form 10-K for the year ended December 31, 2019, their subsequent quarterly reports on Form 10-Q, their joint annual reports on Form 10-K for the year ended December 31,2020 and other reports filed with the SEC, which are available on PG&E Corporation's website at www.pgecorp.com and on the SEC website at www.sec.gov. PG&E Corporation and the Utility undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.



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