PG&E : Second Quarter 2019 Form 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., 20549

FORM 10-Q

(Mark One)

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☐

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________

				Exact Name of
Commission				Registrant	State or Other		IRS Employer
File				as Specified	Jurisdiction of		Identification
Number				in its Charter	Incorporation		Number
1-12609				PG&E Corporation	California	94-3234914
1-2348				Pacific Gas and Electric Company	California	94-0742640
PG&E Corporation						Pacific Gas and Electric Company
77 Beale Street						77 Beale Street
P.O. Box 770000						P.O. Box 770000
San Francisco,	California 94177				San Francisco,	California 94177
			Address of principal executive offices, including zip code
PG&E Corporation						Pacific Gas and Electric Company
415 973-1000						415 973-7000
				Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, no par value	PCG	The New York Stock Exchange
First preferred stock, cumulative, par value $25 per		NYSE American LLC
share, 5% series A redeemable	PCG-PE
First preferred stock, cumulative, par value $25 per		NYSE American LLC
share, 5% redeemable	PCG-PD
First preferred stock, cumulative, par value $25 per		NYSE American LLC
share, 4.80% redeemable	PCG-PG
First preferred stock, cumulative, par value $25 per		NYSE American LLC
share, 4.50% redeemable	PCG-PH
First preferred stock, cumulative, par value $25 per		NYSE American LLC
share, 4.36% series A redeemable	PCG-PI
First preferred stock, cumulative, par value $25 per		NYSE American LLC
share, 6% nonredeemable	PCG-PA
First preferred stock, cumulative, par value $25 per		NYSE American LLC
share, 5.50% nonredeemable	PCG-PB
First preferred stock, cumulative, par value $25 per		NYSE American LLC
share, 5% nonredeemable	PCG-PC

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:	☒Yes	☐ No
Pacific Gas and Electric Company:	☒Yes	☐ No

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:	☒Yes	☐ No
Pacific Gas and Electric Company:	☒Yes	☐ No

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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 company	☐Emerging growth company
Pacific Gas and Electric Company:	☐Large accelerated filer	☐Accelerated filer
	☒Non-accelerated filer
	☐Smaller reporting company	☐Emerging 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 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 August 2, 2019:
PG&E Corporation:	529,223,793
Pacific Gas and Electric Company:	264,374,809

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PG&E CORPORATION AND

PACIFIC GAS AND ELECTRIC COMPANY, DEBTORS-IN-POSSESSION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019

TABLE OF CONTENTS

GLOSSARY

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS PG&E CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

PACIFIC GAS AND ELECTRIC COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

NOTE 2: BANKRUPTCY FILING

NOTE 3: SIGNIFICANT ACCOUNTING POLICIES

NOTE 4: REGULATORY ASSETS, LIABILITIES, AND BALANCING ACCOUNTS

NOTE 5: DEBT

NOTE 6: EQUITY

NOTE 7: EARNINGS PER SHARE

NOTE 8: DERIVATIVES

NOTE 9: FAIR VALUE MEASUREMENTS

NOTE 10: WILDFIRE-RELATED CONTINGENCIES

NOTE 11: OTHER CONTINGENCIES AND COMMITMENTS

NOTE 12: SUBSEQUENT EVENTS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW

RESULTS OF OPERATIONS

LIQUIDITY AND FINANCIAL RESOURCES ENFORCEMENT AND LITIGATION MATTERS REGULATORY MATTERS

LEGISLATIVE AND REGULATORY INITIATIVES ENVIRONMENTAL MATTERS CONTRACTUAL COMMITMENTS

RISK MANAGEMENT ACTIVITIES RECENT DEVELOPMENTS CRITICAL ACCOUNTING POLICIES

ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED FORWARD-LOOKING STATEMENTS

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ITEM 4. CONTROLS AND PROCEDURES

PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ITEM 1A. RISK FACTORS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS ITEM 6. EXHIBITS

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SIGNATURES

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GLOSSARY

The following terms and abbreviations appearing in the text of this report have the meanings indicated below.

	PG&E Corporation and Pacific Gas and Electric Company's combined Annual Report on Form 10-K for
2018 Form 10-K	the year ended December 31, 2018
2019 Wildfire
Safety Plan	the wildfire mitigation plan for 2019 submitted by the Utility to the CPUC pursuant to SB 901
AB	Assembly Bill
ALJ	administrative law judge
ARO	asset retirement obligation
ASU	accounting standard update issued by the FASB (see below)
Bankruptcy Code	the United States Bankruptcy Code
Bankruptcy Court	the U.S. Bankruptcy Court for the Northern District of California
CAISO	California Independent System Operator
Cal Fire	California Department of Forestry and Fire Protection
CCA	Community Choice Aggregator
CCPA	California Consumer Privacy Act of 2018
CEC	California Energy Resources Conservation and Development Commission
CEMA	Catastrophic Event Memorandum Account
Chapter 11	chapter 11 of title 11 of the U.S. Code
	the voluntary cases commenced by each of PG&E Corporation and the Utility under Chapter 11 on
Chapter 11 Cases	January 29, 2019
CPUC	California Public Utilities Commission
CRRs	congestion revenue rights
CWSP	Community Wildfire Safety Program
DA	Direct Access
DER	distributed energy resources
Diablo Canyon	Diablo Canyon nuclear power plant
	Senior Secured Superpriority Debtor in Possession Credit, Guaranty and Security Agreement, dated as of
DIP Credit	February 1, 2019, among the Utility, as borrower, PG&E Corporation, as guarantor, JPMorgan Chase
Agreement	Bank, N.A., as administrative agent, and Citibank, N.A., as collateral agent
DOGGR	Division of Oil, Gas, and Geothermal Resources of the California Department of Conservation
DRP	Distribution Resource Plan
DTSC	Department of Toxic Substances Control
EPS	earnings per common share
EV	electric vehicle
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FHPMA	fire hazard prevention memorandum account
FRMMA	fire risk mitigation memorandum account
GAAP	U.S. Generally Accepted Accounting Principles
GHG	greenhouse gas
GRC	general rate case
GT&S	gas transmission and storage
HSM	hazardous substance memorandum account
IOU(s)	investor-owned utility(ies)
LIBOR	London Interbank Offered Rate
LSTC	liabilities subject to compromise
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