On December 4, 2024, PG&E Corporation issued 55,961,070 shares of common stock, no par value, for cash proceeds of approximately $1.13 billion. The proceeds from this issuance are intended to be used for general corporate purposes, which may include, among other things, to fund its five-year capital investment plan.

Under Section 382 of the IRC, if a corporation (or a consolidated group) undergoes an “ownership change,” net operating loss carryforwards and other tax attributes may be subject to certain limitations (which could limit PG&E Corporation or the Utility’s ability to use these deferred tax assets to offset taxable income). In general, an ownership change occurs if the aggregate value of the stock ownership of certain shareholders (generally five percent shareholders, applying certain look-through and aggregation rules) increases by more than 50% over such shareholders’ lowest percentage ownership during the testing period (generally three years). The Amended Articles limit Transfers (as defined in the Amended Articles) that increase a person’s or entity’s (including certain groups of persons) ownership of PG&E Corporation’s equity securities to 4.75% or more prior to the Restriction Release Date (as defined in the Amended Articles) without approval by the Board of Directors of PG&E Corporation.

Shares of PG&E Corporation common stock held directly by the Utility are attributed to PG&E Corporation for income tax purposes and are therefore effectively excluded from the total number of outstanding equity securities when calculating a person’s Percentage Stock Ownership (as defined in the Amended Articles) for purposes of the 4.75% ownership limitation in the Amended Articles. Accordingly, although PG&E Corporation had 2,671,320,389 common shares outstanding as of February 5, 2025, only 2,193,576,799 common shares (the number of outstanding shares of common stock less the number of shares held directly by the Utility) count as outstanding for purposes of the ownership restrictions in the Amended Articles with the result that the ownership limitation based on the unadjusted outstanding stock of PG&E Corporation is lower than 4.75% and can vary based on the relative value of the common stock and mandatory convertible preferred stock on any particular date.

As of the date of this report, it is more likely than not that PG&E Corporation has not undergone an ownership change and consequently, its net operating loss carryforwards and other tax attributes are not limited by Section 382 of the IRC.

CPUC holding company rules require that the Utility’s dividend policy be established by the Utility’s Board of Directors on the same basis as if the Utility were a stand-alone utility company, and that the capital requirements of Utility, as deemed to be necessary to meet the Utility’s electricity service obligations, shall receive first priority from the Boards of Directors of both PG&E Corporation and the Utility. The CPUC requires the Utility to maintain a capital structure composed of at least 52% equity on average. The CPUC has granted the Utility a temporary waiver from compliance with its authorized capital structure until 2025 for the financing in place upon the Utility’s emergence from Chapter 11.

California law also requires that for a dividend to be declared: (a) retained earnings must equal to or exceed the proposed dividend, or (b) immediately after the dividend is made, the value of the corporation’s assets must exceed the value of its liabilities plus amounts required to be paid, if any, in order to liquidate stock senior to the shares receiving the dividend. A California corporation may not declare a dividend if it is, or as a result of the dividend would be, likely to be unable to meet its liabilities as they mature.

Additionally, neither PG&E Corporation nor the Utility may pay common stock dividends unless all cumulative preferred dividends on PG&E Corporation’s Mandatory Convertible Preferred Stock and the Utility’s preferred stock, respectively, have been paid.

Subject to the foregoing restrictions, any decision to declare and pay dividends in the future will be made at the discretion of PG&E Corporation’s and the Utility’s Boards of Directors and will depend on, among other things, results of operations, financial condition, cash requirements, contractual restrictions and other factors that the Boards of Directors may deem relevant.

On each of February 13, May 16, and September 19, and November 29, 2024, the Board of Directors of the Utility declared common stock dividends of $450 million, $500 million, $500 million, and $575 million, which were paid to PG&E Corporation on March 25, June 3, September 20, and December 24, 2024, respectively.

On each of February 13, May 16, and September 19, 2024, the Board of Directors of PG&E Corporation declared a quarterly common stock dividend of $0.01 per share, each declaration totaling $21 million, which were paid on April 15, July 15, and October 15, 2024, to holders of record as of March 28, June 28 and September 30, 2024, respectively. On November 29, 2024, the Board of Directors of PG&E Corporation declared a new quarterly common stock dividend of $0.025 per share, totaling $55 million, which was paid on January 15, 2025, to holders of record as of December 31, 2024.

The LTIP (i.e., the PG&E Corporation 2014 LTIP or the PG&E Corporation 2021 LTIP, as applicable) permits various forms of share-based incentive awards, including stock options, restricted stock units, performance shares, and other share-based awards, to eligible employees of PG&E Corporation and its subsidiaries. Non-employee directors of PG&E Corporation are also eligible to receive certain share-based awards. A maximum of 91 million shares of PG&E Corporation common stock (subject to certain adjustments) has been reserved for issuance under the LTIP, of which 55,900,800 shares were available for future awards at December 31, 2024.

The exercise price of stock options granted under the LTIP and all other outstanding stock options is equal to the market price of PG&E Corporation’s common stock on the date of grant. Stock options generally have a 10-year term and vest over three years of continuous service, subject to accelerated vesting in certain circumstances. As of December 31, 2024, there were no unrecognized compensation costs related to nonvested stock options for PG&E Corporation.

Expected volatilities are based on historical volatility of PG&E Corporation’s common stock. The expected dividend payment is the dividend yield at the date of grant. The risk-free interest rate for periods within the contractual term of the stock option is based on the U.S. Treasury rates in effect at the date of grant. The expected life of stock options is derived from historical data that estimates stock option exercises and employee departure behavior.


	Number of Stock Options	Weighted Average Grant- Date Fair Value		Weighted Average Remaining Contractual Term (Years)
Outstanding at January 1	1,396,261	$	8.2
Granted (1)	—	—
Exercised	—	—
Forfeited or expired	(652,298)	6.89
Outstanding at December 31	743,963	10.23		2.58
Vested or expected to vest at December 31	743,963	10.23		2.58
Exercisable at December 31	743,963	$	10.23	2.58

Restricted stock units generally vest equally over three years. Vested restricted stock units are settled in shares of PG&E Corporation common stock accompanied by cash payments to settle any dividend equivalents associated with the vested restricted stock units. Compensation expense is generally recognized ratably over the vesting period based on grant-date fair value. The weighted average grant-date fair value for restricted stock units granted during 2024, 2023, and 2022 was $16.74, $15.70, and $11.40, respectively. The total fair value of restricted stock units that vested during 2024, 2023, and 2022 was $62 million, $64 million, and $46 million, respectively. The tax benefit from restricted stock units that vested in 2024 was $21 million. In general, forfeitures are recorded ratably over the vesting period, using historical averages and adjusted to actuals when vesting occurs. As of December 31, 2024, $90 million of total unrecognized compensation costs related to nonvested restricted stock units was expected to be recognized over the remaining weighted average period of 1.52 years.


	Number of Restricted Stock Units	Weighted Average Grant- Date Fair Value
Nonvested at January 1	9,268,425	$	13.29
Granted	5,273,850	16.74
Vested	(4,922,000)	12.62
Forfeited	(196,693)	15.27
Nonvested at December 31	9,423,582	$	15.52

Performance shares generally vest three years after the grant date. Following vesting, performance shares are settled in shares of common stock based on either PG&E Corporation’s total shareholder return relative to a specified group of industry peer companies over a three-year performance period (“TSR”) or an internal PG&E Corporation metric (subject in some instances to a multiplier based on TSR). Dividend equivalents, if any, are paid in cash based on the amount of common stock to which the recipients are entitled.

Compensation expense attributable to performance shares is generally recognized ratably over the applicable three-year period based on the grant-date fair value determined using a Monte Carlo simulation valuation model for the TSR-based awards or the grant-date market value of PG&E Corporation common stock for awards based on internal metrics. The weighted average grant-date fair value for performance shares granted during 2024, 2023, and 2022 was $16.94, $13.39, and $13.44 respectively. In general, forfeitures are recorded ratably over the vesting period, using historical averages and adjusted to actuals when vesting occurs. As of December 31, 2024, $48 million of total unrecognized compensation costs related to nonvested performance shares was expected to be recognized over the remaining weighted average period of 1.17 years.


	Number of Performance Shares	Weighted Average Grant- Date Fair Value
Nonvested at January 1	6,602,292	$	14.06
Granted	2,714,196	16.94
Vested	(1,779,695)	10.70
Forfeited	(356,587)	13.07
Nonvested at December 31	7,180,206	$	15.52