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, 2021, $21.1 billion of U.S. federal, $18.9 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 of PG&E’s stock and certain other equity interests in PG&E.

Ownership Restrictions

• Ownership for these purposes is determined based on the number of shares outstanding under the applicable tax rules rather than the number of reported outstanding shares for corporate or other purposes. As discussed in PG&E’s annual report on Form 10-K for the period ended December 31, 2022 (the “10-K”), which was filed on February 22, 2023, under the heading “Tax Matters” in Item 2. Management’s Discussion and Analysis, any stock held by the Fire Victim Trust and PG&E (and any subsidiary) is ignored for purposes of calculating an investor’s percentage ownership of PG&E stock.
• As of February 16, 2023, the ownership limitation is 3.46% of PG&E’s outstanding stock as reported on the cover of PG&E’s 10-K for the year ended December 31, 2022 (or 85,534,257 shares). Any attempted acquisition of PG&E stock in violation of the ownership restrictions will be null and void and the nominal acquirer will receive no economic benefit or voting rights of any such stock.
• 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.