EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.
DELAYS RELEASE OF EARNINGS
(San Francisco, CA) - PG&E
Corporation (NYSE:PCG) announced that it would delay release of
its 4th Quarter and annual earnings that were originally scheduled
to be issued today.
The Corporation said that
late yesterday, as it was preparing for the simultaneous release
of its earnings and 10-K, it identified a technical issue related
to four synthetic leases it has or had associated with its power
plant projects including Lake Road and La Paloma. The Company stated
that it expects this finding will have no material impact on net
This type of lease, which
has been fully disclosed in previous consolidated financial statements,
requires that independent third party lessors hold a minimum of
three percent ownership. The technical issue concerns the composition
of separate trusts' routine monthly dispersals. These dispersals
inadvertently included amounts to the independent third party lessors
resulting in their "deemed" (for accounting purposes) equity ownership
dropping below the required three percent minimum. Such a decrease
in "deemed" equity ownership would require reclassification of these
financings from off balance sheet to on balance sheet.
Due to this finding, the
Corporation said it would delay release of earnings and 10-K until
its review is complete and subsequent determinations have been made.
On completion of its review,
the Company will take the necessary actions including amending its
financial statements, potentially back to the inception of the earliest
transaction in 1999.
Placing these leases on
the Company's balance sheet would increase the total assets and
liabilities by approximately $1 billion and have no material impact
on the income statement.
PG&E Corporation confirmed
that these leases were previously disclosed in its consolidated
financial statements and have been fully discussed with rating agencies,
lenders, and the financial community. The Company stated that it
expects this change will have no material impact on earnings, equity,
or debt covenants.