Good morning, and welcome to the PG&E Q3 2017 Earnings Conference Call. At this time, I would like to introduced your host, Chris Foster. Thank you and enjoy your conference. You may proceed, Mr. Foster. Chris Foster - PG&E Corp.: Thank you, Jackie. And thanks to those of you on the phone for joining us this morning. Before I turn it over to Geisha Williams, I want to remind you that our discussion today will include forward-looking statements about our outlook for future financial results, which are based on assumption, forecasts, expectations, and information currently available to management. Some of the important factors that could affect the company's actual financial results are described on the second page of today's third quarter earnings call presentation. We also encourage you to review our quarterly report on Form 10-Q that'll be filed later today with the SEC and the discussion of risk factors that appears there and in the 2016 annual report. With that, I'll hand it over to Geisha. Geisha J. Williams - PG&E Corp.: Thank you, Chris, and good morning everyone. Given the recent wildfires impacting our customers and communities, our discussion today will be different from our usual earnings call. This morning, I will update you on what we currently know about the fires and I'll describe our restoration activity. I will address the efforts to identify the causes of the fires and provide an overview of the process from here. I'll also talk about how we're working to protect the safety of our customers and communities as we see this trend towards more extreme weather events continuing to increase. Jason will walk you through the financials of the quarter, and then I'll provide a few closing remarks, and then we'll take your questions. I want to start by sharing…

Certainly. Our first question comes from the line of Jonathan Arnold with Deutsche Bank. Please proceed.

Good morning, guys. Jason P. Wells - PG&E Corp.: Good morning. Geisha J. Williams - PG&E Corp.: Good morning, Jonathan.

Thank you for all the commentary and update on the fire situation. I realize it's difficult to say anything very definitive but I think you added a lot of color. Thank you. Just I want to make sure I understand on the Butte fire. Did you say the statute of limitations has now expired, so this new estimate of a total claims of $1.1 billion is basically – you're not going to see new claims from here. The question is whether that's a good estimate? Jason P. Wells - PG&E Corp.: Jonathan, thanks for the question. We saw a key statute of limitations expire this quarter, and that was for personal injury claims. However, the statute of limitations per property extends for another year.

Okay. And given that you have the finding of inverse condemnation in that fire back in June, it's reasonable to expect you'd have other property claims come in over the next year but you've made an estimate of what those might be in your number, I would guess? Jason P. Wells - PG&E Corp.: Yeah. I can't speculate as to what others may do but we've tried to make an estimate here with our adjustments to the accrual to reflect what we believe would be the cost associated with those fires.

Okay. Thank you. And then there's obviously been a lot of attention on this case relating to one of your peer utilities around inverse. And when we sort of dig in to some of that discussion, it seems that the other side is arguing that because there was never a court finding of inverse, they assumed that it would apply but it wasn't actually applied, that that somehow changes the circumstances. Can you guys comment at all on that, i.e. what's your view on that sort of disagreement, if you like? Geisha J. Williams - PG&E Corp.: Yeah. Jonathan, this is Geisha. We don't believe negligence is applicable as it relates to inverse condemnation, and negligence is something that ultimately is going to be decided by a jury. It's complicated, it's not a bright line. And so when we think about inverse condemnation in the state of California, we believe that strict liability without the commensurate cost recovery would not be consistent with the underlying theory of inverse condemnation.

Okay. Understood. And then I had a related question actually on just the safety OII which is still sitting out there. I mean, obviously you've talked a bit about safety today. How much of that have you already implemented, all the proposals from the consultant, and how are you approaching what to implement or not to implement given the commission hasn't yet decided how much of it, it wants you to adopt? Nickolas Stavropoulos - PG&E Corp.: So this is Nick Stavropoulos. Good morning. Regarding the safety OII, right from the first time we received the report on the CPUC's consultant, we embraced the 68 recommendations that they laid out, and we've been working with the CPUC staff and their consultants to better understand some of those recommendations. We expect to have a significant percentage of those actually complete by the end of this year. We will have almost all of the recommendations either complete or well underway by midpoint of next year. There are five specific recommendations that were provided by the consultants that we really need feedback from the commission on, and so we look forward to that. But those recommendations are built into our safety plan, our company-wide One PG&E Safety Plan, and we are actively implementing those recommendations.

Great. Thank you. And just on one other issue. What would be the trigger for taking a charge on the Northern California wildfires? Are we waiting for the Cal Fire report essentially before that would happen, beyond the $100 million which, if I heard you right, is sort of restoration plus re-upping insurance cost? Jason P. Wells - PG&E Corp.: Jonathan, this is Jason. I think it's way too early to discuss potential liability, if any, stemming from these fires. Obviously, we've got to let Cal Fire conclude its investigation. That will be an important part of sort of our consideration for when and if to record liability, but I wouldn't say that that is the sole determinant.

Okay. Could it be before then in some circumstances? Jason P. Wells - PG&E Corp.: Really, I can't speculate at this time as to any potential timing for liability recognition. Investigations have really just begun, and so we're really just focused on cooperating with Cal Fire as they investigate the sources of these fires.

Okay. Great. Thanks for all the color. Geisha J. Williams - PG&E Corp.: You're welcome.

Thank you, Mr. Arnold. Our next question comes from the line of Stephen Byrd with Morgan Stanley. Please proceed. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Hi. Good morning. Geisha J. Williams - PG&E Corp.: Good morning. Jason P. Wells - PG&E Corp.: Good morning. Stephen Calder Byrd - Morgan Stanley & Co. LLC: I know inverse condemnation is very popular topic. I just wanted to make sure that I understood your perspective. So as I understand, your perspective is that if inverse condemnation did apply to utilities, then utilities should be able to recover those costs. And if I – I may have gotten that position wrong. But regarding your position, what is the path to be taken to attempt to clarify how, if at all, inverse condemnation should apply to utilities? Is that through the CPUC, is that through a court process or is that too early to say? Geisha J. Williams - PG&E Corp.: Well, Stephen, this Geisha. Let me go ahead and get started. So we don't believe that inverse condemnation is an appropriate doctrine, and we certainly don't believe that it is appropriately applied to investor-owned utilities. Whether and how inverse condemnation is decided to be applied is really up to, I believe, a court. We would challenge its application if, in fact, it were to be determined that our facilities were among the causes of these fires. We would challenge it to the extent that – and, again, if we were to not be successful in having inverse condemnation not be applied, then we would expect that the CPUC would take action that's consistent, really, with the underlying purpose of the doctrine, which is, of course, that our costs over and above insurance coverage should be shared by all customers. Stephen Calder…

Thank you, Mr. Byrd. Our next question comes from the line of Steve Fleishman with Wolfe Research. Please proceed.

Yeah. Hi. Good morning. Thanks. Geisha J. Williams - PG&E Corp.: Good morning. Jason P. Wells - PG&E Corp.: Good morning.

Hey, Geisha, Jason. I don't know if you guys got to see the TURN letter from yesterday. But just at a high level, your point on inverse condemnation and spreading the costs seems to make sense. On the other hand, there's the kind of traditional prudency and all those things at the Commission. So how do you kind of tie those two together and argue against customers having to pay for the cost of this? John R. Simon - PG&E Corp.: Steve, hi. It's John Simon. I'm the General Counsel here. Inverse is, as Geisha mentioned, a strict liability concept. Negligence is a completely different construct, and inverse really excludes the consideration of negligence. In other words, the premise of inverse is that the utility pays the property damages and attorney's fees without any showing that it's at fault and, in turn, the utility spreads the cost across all the customers and recovers those costs through rates. So as I understand, the TURN argument is sort of apples and oranges to where we are with inverse. So we see it differently.

Okay. And just tying into that, this seems to be getting back and forth addressed through ex parte or letters in the San Diego wildfire case. Do you get any sense that this could move into kind of a broader venue because it's such a big precedent-setting decision-making here. Is there any sense of maybe this instead of just deciding there gets broadened out into a different type of proceeding? Geisha J. Williams - PG&E Corp.: That's a good question, Steve. I mean, clearly, this issue of liability is such a public policy. It's a significant California issue and there's no question that the decision in the San Diego Gas & Electric case will be very telling, and so not sure what the CPUC is thinking about at this point. We do know that they've delayed the taking action on it. I think that they're trying to be thoughtful and deliberate in understanding the ramifications of whatever decision that they ultimately end up making. But this issue of liability again in California, a state that has a history of extreme weather, extreme wildfires, so that case is one that has to be dealt affirmatively in the future. So we welcome an opportunity to be able to discuss it and, again, talk about constructive solutions that will be in the benefit of both state and as many customers.

Okay. And then one just technical question, Jason, on the GT&S 2019 case. You mentioned $900 million to $1 billion of capital spend. Can you just clarify. Is that incremental to what is – right now, you're using flat in 2019 as your base case. So is the $900 million to $1 billion kind of incremental to that flat? Jason P. Wells - PG&E Corp.: No. Our guidance reflects the $900 million that we're spending this year. So for context purposes, for 2019 we're providing a range of $900 million to $1 billion which is, on one end, flat with our consistent spending and, on the upper end, it could be as much as a $100 million increase from where we are today.

Okay. So it kind of suggests that that kind of level of spending will continue most likely through, assuming it's approved through this next plan? Jason P. Wells - PG&E Corp.: That's correct. Yes.

Yeah. Okay. Okay. Thank you.

Thank you, Mr. Fleishman. Our next question comes from the line of Praful Mehta with Citigroup. Please proceed.

Thanks so much. Hey, guys. Geisha J. Williams - PG&E Corp.: Hey. Jason P. Wells - PG&E Corp.: Good morning.

Hi. Good morning. So sorry to beat a dead horse, but I just want to – on the inverse condemnation point, I just wanted to clarify. If you win your argument, right, so either you are either not found to pay for cause or you're allowed to recover it from customers? Either way, you're not liable from a shareholder perspective at least. There's no cost that the shareholder is bearing for this except in the case of gross negligence. If gross negligence is found, then there are penalties which, obviously, will flow to the shareholder. Is that a fair way of thinking about it? John R. Simon - PG&E Corp.: Cal Fire is doing their investigation. It's early as Geisha mentioned. I don't think it's productive for us to speculate on some of the theories in your questions. So I think it's just too soon to talk about sort of these concepts right now.

So just, I guess, I'll keep it more broad. And then you touched on how you feel comfortable. But what I'm trying to understand is if you win the argument on inverse condemnation, in what scenario do you see the shareholder actually bearing any costs related to the fire? Geisha J. Williams - PG&E Corp.: Well first of all, I mean, I think you've jumped ahead and assumed that we have liability, so that's why we're uncomfortable talking about really, what's in essence, a hypothetical situation here. Inverse condemnation is very clear about its strict liability but also providing the commensurate cost recovery from all the customers that have benefited, if you will, from the services. So it's a question for the juries at the end of the day to determine what the company will be liable for versus shareholders or anyone else for that matter. But it is so very, very early in this whole process to be able to provide you any kind of confidence one way or the other.

Got you. Fair enough. I totally understand. Is there, at this point, any internal studies being done to figure out what the maintenance at the levels that you are expected to do? Any results of that internal review, separate obviously from all the reviews that Cal Fire and others may be doing? Geisha J. Williams - PG&E Corp.: Well as I mentioned in my opening remarks, we are doing extensive fact-finding given the lawsuits that have been presented before us, and so we're gathering data.

Fair enough. Okay. And moving on to the tax reform, and I know that this is clearly different from everything else that's going on. But tax reform obviously is coming or at least attempting to come in. Any color on how you think that impacts you, guys? Any changes in terms of what that would mean for your plan going forward? Geisha J. Williams - PG&E Corp.: I mean, we're generally well-positioned when you look at all the various considerations in the tax reform, so we find that we're in a good place overall. But, I mean, Jason, anything you want to add to that? Jason P. Wells - PG&E Corp.: Yeah. I mean, obviously, we're still very early in this process. But as we disclosed sort of on the fourth quarter earnings call earlier this year, we think we're, as Geisha mentioned, very well-positioned in that the recent discussions have included sort of a phase down of the corporate tax rate. We see that as beneficial to our customers in terms of refunding sort of the excess amount of taxes that we've collected in the past. And so for us, that would allow us to create sort of bill capacity for incremental capital expenditures in our system which we think would continue to improve the safety and reliability of our gas and electric systems.

Yeah. Thanks. And that refund that you mentioned, Jason, that you still expect to go over a long period of time as the credit to customer bills effectively? Jason P. Wells - PG&E Corp.: Absolutely. The details are going to matter on this one, but I think it's a reasonable assumption to assume that that would refund back to customers over essentially the book life of the assets.

Got you. Okay. Thanks so much, guys.

Thank you, Mr. Mehta. Our next question comes from the line of Greg Gordon with Evercore. Please proceed.

Thanks. Can we just go back to what you said about the Butte fire cost? You said the estimate of the total potential liability is now in excess of your insurance policy. My understanding from prior conversations with you however is that you also had access potentially to the insurance coverage of your vendors. You talk about having gotten some of that. So are these costs above even limits of your policy, potentially shareholder exposures, or are you still confident that you have other avenues of recovery through still working with the insurance agencies of your vendors and other venues that you'll be able to fully recover these costs? Jason P. Wells - PG&E Corp.: We've recorded insurance receivables up to the full policy limit of our insurance of $922 million. We've collected a little bit more than $50 million to-date from our contactors' insurers. So the $1.1 billion accrual for third party claims exceeds that amount. Consistent with the conversation that we've been having on the doctrine of inverse condemnation, we would expect to see recovery for those costs from customers and have filed to do so.

Okay. But is there also a potential for a reduction in that amount from further recoveries from other insurance companies or no? Jason P. Wells - PG&E Corp.: We will continue to seek recovery of incremental costs for third party insurance. But I'm not in a position to provide details on either one there. Their insurance levels are too sort of – nature of those negotiations.

Okay. Thank you.

Thank you, Mr. Gordon. Our next question comes from the line of Christopher Turnure with JPMorgan. Please proceed.

Good morning, guys. I just want to follow-up on the last question on contractor insurance and maybe apply it to the current wildfire situation. Do you also not have information there on size? Do you, the – I guess contractors or other utility companies have an allowance to charge their customers for the insurance premiums and how can we get a sense of any kind of coverage there, if at all? Jason P. Wells - PG&E Corp.: I think I understand your question. I'll try to answer it as I interpret it. We have recovery for our liability insurance cost through our General Rate Case process. There isn't a separate, direct recovery for contractor's insurance. Generally, our contractors procure insurance sort of in an ordinary course of business. We do not have, as I mentioned, direct subsidization of those costs. And just as for the Butte fire, we're not in a position to talk about the level of insurance those contractors maintain.

Okay. Fair enough. And then, going back to one of the earlier questions or several of the earlier questions. I wanted to just make sure that we were on the same page with your legal strategy, let's say, that in I guess next week's decision on the SDG&E fire. Let's say that it does not go in the favor of SDG&E and the CPUC kind of makes its position known. Is there any change in specific legal strategy that you can take as you begin the third-party challenges for those claims for the Northern California wildfires? Geisha J. Williams - PG&E Corp.: Hi. This is Geisha. I just don't think it's constructive at this point to be speculating about what we might do if this happened or the other thing happened and kind of talk about legal strategies for things that haven't occurred yet. So, I'd just rather not comment on that.

Okay. Fair enough. Thanks, guys.

Thank you, Mr. Turnure. Our next question comes from the line of Michael Lapides with Goldman Sachs. Please proceed. Michael Lapides - Goldman Sachs & Co. LLC: Hi, Geisha. Thanks for taking my question. Geisha J. Williams - PG&E Corp.: Hi, Michael. Michael Lapides - Goldman Sachs & Co. LLC: A process one, and I know this is hard. But in general or historically, how long does it take for Cal Fire to (a) do its investigation, but (b) put out reports? And is there any precedent for where it's not just one incident, but it's multiple incidents that occur over the same time before you get that? Geisha J. Williams - PG&E Corp.: So, we don't have a tremendous amount of experience at this but our latest experience, I would say, was the Butte fire case. In that particular case, if you recall, the Butte fire actually occurred in September of 2015 and we received the Cal Fire report in April the following year. So, it took seven months. And if you think about that fire, while it was a terrible fire and very expansive, it was one fire. In this particular case, you have a series of fires all erupting over a several-day period. And so I think the complexity of this particular investigation is much higher. So, having said that, how long will it take? I don't know. When you look at the 2007 wildfires that occurred in Southern California, there were multiple fires and my understanding is that they issued multiple findings associated with those particular fires. And, again, that took some time. So, I think we're going to have to be patient. What I've read is the same things that you've read in the press, that they're intent on being thorough, on being accurate, and…

Thank you, Michael. Our next question comes from the line of Julien Dumoulin-Smith with Bank of America Merrill Lynch. Please proceed.

Hey. Good morning. Geisha J. Williams - PG&E Corp.: Good morning. Jason P. Wells - PG&E Corp.: Good morning, Julien.

Hey. So, a quick follow-up on Steve's earlier question on CapEx. Just wanted to follow-up. I know there was some discussion earlier in the year around $700 million related to the NTSB CapEx potentially. Where do we stand in terms of reflecting that into your expectations, both currently and prospectively in the forecast? Geisha J. Williams - PG&E Corp.: I'm not sure I understand your question. What NTSB capital?

Well, I suppose earlier in the year, we talked about some additional safety capital. Maybe I think $300 million and change was potentially the update we were talking about. Is that still a prospect here or is – or maybe I can ask the question a little bit more generically. Have you sort of reflected all of the additional potential spending throughout the course of the year related to safety that we'd kind of talked about? Jason P. Wells - PG&E Corp.: Julien, this is Jason. The $900 million to $1 billion that I referred to in my comments reflects the additional spending associated with the DOGGR regulations to improve – or to mitigate methane leaks for gas storage facilities. So, it takes into consideration our current programs to improve pipeline safety as well as the additional spending associated with reducing the risk of methane leaks on gas storage assets.

Thank you, sir. You knew what I was talking about. Separately and distinctly, I just wanted to come back to just timeline here in terms of process. I don't want to talk about legal strategy per se, but just wanted to understand, in terms of process here, obviously, we're going to wait to see what happens in terms of Cal Fire, first and foremost. But then separately, there's the parallel process with respect to the, I suppose, establishing or not establishing a new policy on inverse condemnation. What happens once that decision comes out from your perspective next? Or is it up to you or would you expect to be making any kind of filing with respect to inverse condemnation at that point in time or really your principal channel of action here is to follow the Cal Fire and then leave it to the separate and distinct process with SDG&E in the South? Geisha J. Williams - PG&E Corp.: Julien, I think, again, it's really premature to be thinking about actions we might take if this happened or that happened. I think we're going to have to give – we have to be patient and I think we're going to have to give Cal Fire its due time to be able to complete a thorough investigation of what happened here, and then we'll go from there. I mean, at this point, I think to speculate on courses of action that we might take under different scenarios is just not constructive.

Got it. But timeline-wise, what's the expectation for each one of these if you were to put something out there? Geisha J. Williams - PG&E Corp.: Well, it's – again, depends on what happens with the Cal Fire reports, when they issue it, what the findings are. And again, way too many things to speculate on it. Again, I don't believe makes a whole lot of sense right now.

Totally understood. Thank you very much, all.

Thank you, Mr. Smith. Our next question comes from the line of Paul Patterson with Glenrock Associates. Please proceed. Mr. Patterson, your line is open.

I'm sorry. Just want to touch base with you on how should we think about how most of these lawsuits may be filed? Do you think that they're going to be done under inverse condemnation or would they go to the negligence route? John R. Simon - PG&E Corp.: Paul, John Simon. It's not clear. There's nine lawsuits filed. There may be others to come. They may allege one or both theories. I haven't studied the existing cases yet, so I can't comment on that. But it wouldn't surprise me if both are alleged. It's just we'll have to wait and see.

Okay. And if they – I guess with respect to the insurance, does that -would the insurance be applied equally under inverse condemnation or under the liability judgment scenario? In other words, could you allocate the insurance to the liability as opposed to the inverse condemnation? Did it work that way? Jason P. Wells - PG&E Corp.: Our insurance covers claims for property under inverse condemnation. It could also cover claims under a negligence standard. So, it would apply to sort of any potential liabilities associating from these events.

But you could allocate the claims from liability to the insure – you could take the liability and apply those claims before inverse condemnation, does that makes sense? Jason P. Wells - PG&E Corp.: I think it's really way too early in a process to kind of begin to speculate with the portion claims. So, honestly, I think we just have to let Cal Fire concludes its investigation and work from there.

Okay. That's it. Thanks so much.

Thank you, Mr. Patterson. Our next question comes from the line of Paul Fremont with Mizuho. Please proceed.

Thank you very much. I guess, my first question, the $1.1 billion, is that an estimate of minimum, maximum, or you're just – or your best guess of likely damages for Butte? Geisha J. Williams - PG&E Corp.: That's the low end of the range, Paul. Jason P. Wells - PG&E Corp.: It does reflect, Paul, the fact that we have settled now roughly a third of the cases. So, we're taking into consideration our experience with these claims. However, as I mentioned, we've received a number of new claims in this third quarter. We saw about a 50% increase in the number of claims, so there still remains some uncertainty as to the detail and nature of those claims. So, right now, I consider it a minimum, but it is reflective of our experience to-date.

Okay. And you've not identified sort of a high end of estimate? Jason P. Wells - PG&E Corp.: We're unable to, at this point, identify a high end particularly given the fact that so many new claims came in the third quarter for which we don't have any detail today.

And then I guess the insurance coverage for Butte was higher than the insurance coverage that you've identified as available for the California wildfires? Can you explain why the insurance amount ended up being less for this event? Jason P. Wells - PG&E Corp.: We've seen a reduction in capacity the insurance markets here in California over the last several years. In California, there's been a number of notable full policy losses in the state of California. In addition, the state of California does have this unusual inverse condemnation doctrine. And as a result, what we've seen is a decrease of available insurance for liability.

Okay. And then, I guess, can you discuss your vegetation practices or the trees that are located near power lines? I guess we've seen sort of – and reports that have come out from some of your peers, that they sort of track vegetation that's within certain distances from the lines and they basically make their decisions on what to do based on sort of updates? Nickolas Stavropoulos - PG&E Corp.: This is Nick again. Thank you for the question. So, as Geisha mentioned, we have a very aggressive vegetation management program across our 70,000 square mile territory. We manage about 123 million trees that are near and adjacent to our facilities. And over the last two years, we've doubled the amount that we have invested in veg management, that includes line clearing to remove parts of trees that are adjacent to our facilities, as well as removal of dead and dying trees. So, the program involves a year-round effort to identify these dead and dying trees through inspection processes where we use foot and aerial patrols; we use LiDAR, which is light detecting and ranging technology to identify the trees that need to be worked. We inspect all of our overhead lines every year, and we do second patrols in high-fire danger areas at least twice a year. In some areas, we do it as often as four times a year. So, it's a very aggressive program. There are specific requirements around line clearing, and it depends upon the voltage of the lines. And it can range up to a feet to as much as sort of 18 inches away from the facility. So, there are all sorts of different requirements depending upon where the facilities are located and the voltage of the facilities.