PG&E Corporation

Earnings + guidance reaffirmed (core EPS) - Q3 2026 core EPS: $0.41 - 1–9 months 2026 core EPS: $1.24 vs $1.14 prior-year period (~+0.10, modestly ahead) - 2026 core EPS guidance reaffirmed: $1.64–$1.66 (≈ +10% vs 2025 midpoint) - 2027 core EPS guidance reaffirmed: $1.78–$1.82 (≈ +9% at the midpoint) - Key takeaway: Management is confident for 2026–2027 execution despite ongoing wildfire policy uncertainty; no guidance beyond 2027 during the strategic review.

Strategic review: aiming for investment-grade + exploring corporate/financing structure changes - Goal is to become a sustainable investment-grade business and unlock value for customers and shareholders. - PG&E is assessing how PG&E is organized and financed, including possible: - Regulatory reforms - Capital allocation changes - Revisiting corporate structure (e.g., ring-fencing, sales/separations) - Timing: outcome/plan no later than next summer (with updates sooner if material). - Fundamentals: PG&E states it already has sufficient equity planning—no plan to issue equity through 2030 (and says it would be the “wrong cost of capital” at the current valuation). - Risk/catalyst framing: Legislature/policy reform remains the preferred fastest path, but they emphasize “more than one way” to resolve the discount from wildfire risk burden.

Wildfire liability reform remains the central overhang (policy risk; ratings impact) - Management says comprehensive wildfire reform has not yet been enacted; without it, tail risk and an ongoing capital cost penalty persist. - They cite progress in California’s framework since SB 901 (2018) → AB 1054 (2019) → SB 254 (2025) (e.g., liquidity, revised prudency, self-insurance up to $1B, potential securitization precedent). - Ratings negative signals: during the quarter Fitch revised outlook to negative and S&P emphasized heightened risk for CA IOUs. - Surprising but important negative: PG&E quantifies that sub-investment-grade borrowing since 2017 could cost customers ~$4B incremental interest expense over the life of that financing unless policy changes.