This discussion is for informational purposes only and is not intended to provide legal or tax advice. You are highly encouraged to review PG&E Corporation’s Articles of Incorporation carefully and consult with your own legal and tax advisors regarding the restrictions that may apply to your ownership and transfer of PG&E Corporation stock.

Background

• PG&E Corporation (“PG&E”) has, as of December 31, 2024, $34 billion of U.S. federal, $35 billion California state net operating loss carryforwards and certain other tax attributes (collectively, the “NOLs”).
• PG&E’s ability to use the NOLs may be significantly limited if the ownership of PG&E’s stock by certain shareholders increases beyond statutory thresholds. Any such limitation could materially impair PG&E’s financial condition, including earnings and cash flows.
• To reduce the possibility of such a limitation on the NOLs, PG&E’s Articles of Incorporation prohibit any investor from acquiring or accumulating 4.75% or more in value of PG&E’s stock and certain other equity interests in PG&E.
• Although PG&E had 2,671,320,389 shares of common stock outstanding as of February 5, 2025, only 2,193,576,799 shares of common stock (the number of outstanding shares of common stock less the number of shares of common stock held directly by the Utility) count as outstanding for purposes of the ownership restrictions in the Articles of Incorporation – with the result that the ownership limitation based on the unadjusted outstanding stock of PG&E 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.

Ownership Restrictions

• Based on the closing prices of PG&E’s common stock and preferred stock as of February 5, 2025, a person’s effective Percentage Stock Ownership limitation for acquisition of stock on February 5, 2025 was 3.92% of the combined value of PG&E Corporation’s outstanding common and preferred stock. As indicated, such percentage can change day-to-day with changes in the relative value of the common stock and preferred stock.
• As the shares of preferred stock of PG&E make up only a small portion of the aggregate value of all of the outstanding stock of PG&E, an investor that owns and acquires only shares of PG&E common stock may – as a general rule of thumb – calculate the percentage ownership limitation without regard to the preferred stock. Under this simplified approach, a person owning and acquiring only common stock could bring its ownership up to at least 3.90% of PG&E’s outstanding common stock as of December 31, 2024 (or 104.19 million shares of common stock), based on the outstanding common stock reported on the cover of PG&E’s 10-K for the period ended December 31, 2024.
• In applying these restrictions, ownership of PG&E stock may be aggregated with ownership by other investors who are related, under common control or otherwise making a coordinated acquisition of PG&E stock. Whether ownership will be aggregated for these purposes (for example, across multiple funds) is complex and based on all facts and circumstances, including whether the investment decision of one investor depends on that of another.