GAAP earnings were $1.09 per share for the third quarter of 2018, compared to $1.07 per share for the same period in 2017.

Non-GAAP earnings from operations were $1.13 per share for the third quarter of 2018, compared to $1.12 per share for the same period in 2017.

Creating even greater safety clearances between trees and power lines in neighborhoods that face the most extreme wildfire threat to reduce the risk of vegetation coming into contact with lines;

Continued installation of additional weather stations and early fire detection cameras to have better situational awareness of where extreme wildfire danger could occur; and

Proactively turning off power for safety in certain communities in the North Bay and Sierra Foothills before forecasted extreme weather in October.

California lawmakers passed important wildfire policy reforms as outlined in Senate Bill 901. A series of upcoming regulatory filings, including PG&E’s 2020 General Rate Case, will lay out the company’s wildfire risk management programs in detail.

The California Public Utilities Commission (CPUC) approved a revised Power Charge Indifference Adjustment for customers who choose Community Choice Aggregation programs, reducing the cost-shift to remaining bundled utility customers.

the impact of the Northern California wildfires, including whether the Utility will be able to timely recover costs incurred in connection thereto in excess of the Utility’s currently authorized revenue requirements; the timing and outcome of the remaining wildfire investigations and the extent to which the Utility will have liability associated with these fires; the timing and amount of insurance recoveries; and potential liabilities in connection with fines or penalties that could be imposed on the Utility if the CPUC or any other law enforcement agency were to bring an enforcement action and determined that the Utility failed to comply with applicable laws and regulations;

the timing and outcome of the Butte fire litigation and of any proceeding to recover costs in excess of insurance through regulatory mechanisms and the timing of such recovery; and whether additional investigations and proceedings in connection with the Butte fire will be opened and any additional fines or penalties imposed on the Utility;

whether PG&E Corporation and the Utility are able to successfully challenge the application of the doctrine of inverse condemnation to investor-owned utilities;

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;

the timing and outcome of any CPUC decision related to the Utility’s March 30, 2018 submissions in connection with the impact of the Tax Cuts and Jobs Act of 2017 on the Utility’s rate cases, and its implementation plan;

the timing and outcomes of the 2019 GT&S rate case, 2020 GRC, FERC TO18, TO19, and TO20 rate cases, 2018 CEMA, WEMA, FHPMA, future cost of capital proceeding, and other ratemaking and regulatory proceedings;

the timing and outcome of future regulatory and legislative developments in connection with SB 901, including the customer harm threshold in connection with the Northern California wildfires, and future wildfire reforms;

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

further credit ratings downgrades that could, among other things, result in higher borrowing costs, fewer financing options, and additional collateral posting, especially if PG&E Corporation’s or the Utility’s credit ratings were to fall below investment grade;

the cost of the Utility’s community wildfire safety program, and the timing and outcome of any proceeding to recover such cost through rates;

the timing and outcomes of phase two of the ex parte order instituting investigation (OII) and of the safety culture OII;

the Utility’s ability to efficiently manage capital expenditures and its operating and maintenance expenses within the authorized levels of spending and timely recover its costs through rates, and the extent to which the Utility incurs unrecoverable costs that are higher than the forecasts of such costs;

the outcome of the probation and the monitorship, the timing and outcomes of the debarment proceeding, the Safety and Enforcement Division’s (SED) 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, and the ultimate amount of fines, penalties, and remedial and other costs that the Utility may incur as a result; and

the other factors disclosed in PG&E Corporation and the Utility’s joint annual report on Form 10-K for the year ended December 31, 2017, their joint quarterly reports on Form 10-Q for the quarters ended March 31, 2018, June 30, 2018 and September 30, 2018, respectively, 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.

Electric

Natural gas

Total operating revenues

Operating Expenses

Cost of electricity

Cost of natural gas

Operating and maintenance

Wildfire-related claims, net of insurance recoveries

Depreciation, amortization, and decommissioning

Total operating expenses

Operating Income (Loss)

Interest income

Interest expense

Other income, net

Income (Loss) Before Income Taxes

Income tax provision (benefit)

Net Income

Preferred stock dividend requirement of subsidiary

Income Available for Common Shareholders

Weighted Average Common Shares Outstanding, Basic

Weighted Average Common Shares Outstanding, Diluted

Net Earnings Per Common Share, Basic

Net Earnings Per Common Share, Diluted

PG&E Corporation’s Earnings on a GAAP basis

PG&E Corporation’s Non- GAAP Earnings from

Operations ⁽¹²⁾

“Items impacting comparability” represent items that management does not consider part of the normal course of operations and affect comparability of financial results between periods. See Use of Non-GAAP Financial Measures.

The Utility incurred costs, net of insurance, of $43 million (before the tax impact of $12 million) and $2.3 billion (before the tax impact of $637 million) during the three and nine months ended September 30, 2018, respectively, associated with the Northern California wildfires. This includes accrued charges of $2.5 billion (before the tax impact of $700 million) during the nine months ended September 30, 2018, related to estimated third-party claims in connection with 14 of the Northern California wildfires. The Utility also recorded $53 million (before the tax impact of $15 million) and $120 million (before the tax impact of $34 million) during the three and nine months ended September 30, 2018, respectively for legal and other costs. In addition, the Utility incurred costs of $40 million (before the tax impact of $11 million) during the nine months ended September 30, 2018 for Utility clean-up and repair costs. These costs were partially offset by $10 million (before the tax impact of $3 million) and $385 million (before the tax impact of $108 million) recorded during the three and nine months ended September 30, 2018, respectively, for probable insurance recoveries.

Third-party claims

Legal and other costs

Utility clean-up and repair costs

Insurance recoveries

Northern California wildfire-related costs, net of insurance

The Utility incurred costs of $13 million (before the tax impact of $4 million) and $35 million (before the tax impact of $10 million) during the three and nine months ended September 30, 2018, respectively, for pipeline-related expenses incurred in connection with the multi-year effort to identify and remove encroachments from transmission pipeline rights-of-way.

The Utility incurred costs, net of insurance, of $9 million (before the tax impact of $3 million) and $24 million (before the tax impact of $7 million) during the three and nine months ended September 30, 2018, respectively, associated with legal costs for the Butte fire. These costs were partially offset by $7 million (before the tax impact of $2 million) recorded during the nine months ended September 30, 2018 for contractor insurance recoveries.

Legal costs

Insurance recoveries

Butte fire-related costs, net of insurance

The Utility reduced the estimated disallowance for gas-related capital costs that were expected to exceed authorized amounts by $38 million (before the tax impact of $11 million) during the three and nine months ended September 30, 2018. The Utility had previously recorded $85 million (before the tax impact of $35 million) in 2016 for probable capital disallowances in the 2015 Gas Transmission and Storage (“GT&S”) rate case. From 2012 through 2014, the Utility had recorded cumulative charges of $665 million (before the tax impact of $271 million) for disallowed Pipeline Safety Enhancement Plan- (“PSEP”) related capital expenditures.

As a result of the California Public Utilities Commission’s (“CPUC”) June 2018 decision authorizing a Wildfire Expense Memorandum Account (“WEMA”), the Utility recorded $32 million (before the tax impact of $9 million) during the nine months ended September 30, 2018 for probable cost recoveries of insurance premiums incurred in 2017 above amounts included in authorized revenue requirements.

The Utility incurred costs of $11 million (not tax deductible) and $71 million (before the tax impact of $24 million) during the nine months ended September 30, 2017, respectively, for fines and penalties. This included disallowed expenses of $32 million (before the tax impact of $13 million) during the nine months ended September 30, 2017, associated with safety-related cost disallowances imposed by the CPUC in its April 9, 2015 decision (“San Bruno Penalty Decision”) in the gas transmission pipeline investigations. The Utility also recorded $15 million (before the tax impact of $6 million) during the nine months ended September 30, 2017, for disallowances imposed by the CPUC in its final phase two decision of the 2015 GT&S rate case for prohibited ex parte communications. In addition, the Utility recorded $11 million (not tax deductible) and $24 million (before the tax impact of $5 million) during the nine months ended September 30, 2017, for financial remedies in connection with the settlement filed with the CPUC on March 28, 2017, related to the order instituting investigation into compliance with ex parte communication rules.

The Utility recorded a disallowance of $47 million (before the tax impact of $15 million) during the nine months ended September 30, 2017, comprised of cancelled projects of $24 million (before the tax impact of $6 million) and disallowed license renewal costs of $23 million (before the tax impact of $9 million), as a result of the settlement agreement submitted to the CPUC in connection with the Utility’s joint proposal to retire the Diablo Canyon Power Plant.

The Utility incurred costs of $2 million (before the tax impact of $1 million) and $9 million (before the tax impact of $4 million) during the three and nine months ended September 30, 2017, respectively, for legal and regulatory related expenses incurred in connection with various enforcement, regulatory, and litigation activities regarding natural gas matters and regulatory communications.

The Utility recorded revenues of $150 million (before the tax impact of $62 million) during the nine months ended September 30, 2017 in excess of the 2017 authorized revenue requirement, which included the final component of under-collected revenues retroactive to January 1, 2015, as a result of the CPUC’s final phase two decision in the 2015 GT&S rate case.

PG&E Corporation recorded proceeds from insurance, net of plaintiff payments, of $65 million (before the tax impact of $27 million) during the three and nine months ended September 30, 2017, associated with the settlement agreement in connection with the San Bruno shareholder derivative litigation that was approved by the Superior Court of California, County of San Mateo, on July 18, 2017. This included $90 million (before the tax impact of $37 million) during the three and nine months ended September 30, 2017, for proceeds from insurance, partially offset by $25 million (before the tax impact of $10 million) during the three and nine months ended September 30, 2017, for plaintiff legal fees paid in connection with the settlement.

“Non-GAAP earnings from operations” is a non-GAAP financial measure. See Use of Non-GAAP Financial Measures.

2017 Non- GAAP Earnings from Operations ⁽¹⁾

Growth in rate base earnings

Timing of taxes ⁽²⁾

Insurance premium cost recoveries ⁽³⁾

Resolution of regulatory items ⁽⁴⁾

Timing and duration of nuclear refueling outages

Timing of 2017 operational spend ⁽⁵⁾

Decrease in authorized return on equity ⁽⁶⁾

Tax impact of stock compensation ⁽⁷⁾

Increase in shares outstanding

Miscellaneous

2018 Non-GAAP Earnings from Operations ⁽¹⁾

See previous exhibit for a reconciliation of EPS on a GAAP basis to non-GAAP EPS from Operations.

Represents the timing of taxes reportable in quarterly statements in accordance with Accounting Standards Codification 740, Income Taxes, and results from variances in the percentage of quarterly earnings to annual earnings.

Represents insurance premium costs incurred during the three and nine months ended September 30, 2018, above amounts included in authorized revenue requirements, that are probable of recovery as a result of the CPUC’s June 2018 decision authorizing a WEMA.

Represents the impact of various regulatory outcomes during the nine months ended September 30, 2018.

Represents the timing of operational expense spending during the three and nine months ended September 30, 2018, as compared to the same period in 2017.

Represents the decrease in return on equity from 10.40 percent in 2017 to 10.25 percent in 2018 as a result of the 2017 CPUC final decision approving an additional extension to the original 2013 Cost of Capital decision.

Represents the impact of income taxes related to share-based compensation awards under the Long-Term Incentive Plan that vested during the nine months ended September 30, 2018, as compared to the same period in 2017.

Estimated Items Impacting Comparability: ⁽¹⁾

Pipeline-related expenses ⁽²⁾

Butte fire-related costs, net of insurance ⁽³⁾

Northern California wildfire-related costs, net of insurance ⁽⁴⁾

Reduction in gas-related capital disallowances ⁽⁵⁾

2017 insurance premium cost recoveries ⁽⁶⁾

Estimated IIC Guidance

“Items impacting comparability” represent items that management does not consider part of the normal course of operations and affect comparability of financial results between periods. See Use of Non-GAAP Financial Measures.

“Pipeline-related expenses” includes costs to identify and remove encroachments from transmission pipeline rights-of-way. The pre-tax range of estimated costs is shown below. The offsetting tax impact for the low and high IIC guidance range is $14 million and $11 million, respectively.

Pipeline-related expenses

“Butte fire-related costs, net of insurance” refers to legal costs and estimated third-party claims associated with the Butte fire, net of contractor insurance recoveries. The pre-tax range of estimated costs shown below includes $7 million of contractor insurance recoveries. Based on the cumulative charges recorded through 2017 of $1.1 billion, the cumulative range for third-party claims is $1.1 billion to $1.3 billion. The total offsetting tax impact for the low and high IIC guidance range is $69 million and $10 million, respectively.

Legal costs, net of insurance

Third-party claims

Butte fire-related costs, net of insurance

“Northern California wildfire-related costs, net of insurance” refers to estimated third-party claims, Utility clean-up and repair costs, and legal and other costs associated with the Northern California wildfires, net of probable insurance recoveries. The pre-tax range of estimated costs shown below includes accrued charges through September 30, 2018 for estimated third-party claims in connection with 14 of the Northern California wildfires. Guidance reflects the low end of the estimated range of costs related to such third-party claims. The Utility is currently unable to estimate the high end of the range of costs related to third-party claims. The insurance recoveries estimate is based on an accounting assessment, but the actual timing and amount of insurance recoveries may vary. The total offsetting tax impact for the low and high IIC guidance range is $644 million and $641 million, respectively.

Third-party claims

Legal and other costs

Utility clean-up and repair costs

Insurance recoveries

Northern California wildfire-related costs, net of insurance

“Reduction in gas-related capital disallowances” reflects the reduction to estimated disallowances for gas-related costs expected to exceed authorized amounts in the 2015 GT&S rate case and the Utility’s PSEP. The total offsetting tax impact for the low and high IIC guidance range is $11 million.

Reduction in gas-related capital disallowances

“2017 insurance premium cost recoveries” includes insurance premium costs incurred in 2017, above amounts included in authorized revenue requirements, that are probable of recovery as a result of the CPUC’s June 2018 decision authorizing a WEMA. The total offsetting tax impact for the low and high IIC guidance range is $9 million.

2017 insurance premium cost recoveries