01—Abstract
Summary
Summary of the 10-K/A filed March 5, 2002. Cited figures are marked; the original filing is the authoritative source.
PG&E Corporation and Pacific Gas and Electric Company filed Amendment No. 1 to their joint Form 10-K for fiscal 2000 to restate PG&E Corporation's consolidated financial statements for 1999 and 2000.
The restatement consolidates the assets and liabilities of certain leases tied to power plant projects and turbine acquisitions at PG&E National Energy Group, Inc. (NEG), which had been treated as off-balance-sheet synthetic leases. As restated, PG&E Corporation reported total assets of $36.2 billiona at December 31, 2000, of which the Utility had $22 billion, and 2000 operating revenues of $26.2 billion. Operating revenues were $9.6 billion for the Utility.
The bulk of the filing concerns the California energy crisis. The Utility's undercollected wholesale power purchase costs reached $6.6 billionb at December 31, 2000. PG&E Corporation and the Utility recorded a fourth-quarter 2000 charge of $6.9 billion ($4.1 billion after tax) to write off generation-related regulatory assets and undercollected purchased power costs.
The filing reports a 2000 net loss of $3,364 millionc for PG&E Corporation, against a 1999 net loss of $73 million. The filing also discloses that, as of March 29, 2001, the Utility was in default or had not paid amounts totaling over $4 billion, that its credit ratings had fallen below investment grade, and that it filed a voluntary Chapter 11 petition on April 6, 2001. The Utility retains control of its assets as a debtor in possession.
PG&E Corporation refinanced its parent-level obligations on March 2, 2001, with $1 billiond in term loans. The loans restrict dividends and share repurchases, and the filing states that PG&E Corporation believes its holding company and non-CPUC-regulated subsidiaries are protected from the Utility's bankruptcy. The filing also details a Utility lawsuit against the CPUC in federal court and the CPUC's regulatory actions, including a March 27, 2001 decision that adopted accounting changes the Utility considers illegal.
02—Key points
Key Highlights
- Restatement: Revised 1999 and 2000 consolidated financial statements to consolidate assets and liabilities of certain NEG synthetic leases tied to power plant and turbine projects.
- Scale: PG&E Corporation reported $36.2 billion in total assets and $26.2 billion in 2000 operating revenues, of which the Utility accounted for $22 billion in assets and $9.6 billion in revenues.
- Write-off: A fourth-quarter 2000 charge of $6.9 billion ($4.1 billion after tax) wrote off generation-related regulatory assets and undercollected purchased power costs.
- Loss: PG&E Corporation's 2000 net loss was $3,364 million, compared with a net loss of $73 million in 1999.
- Bankruptcy: The Utility filed a voluntary Chapter 11 petition on April 6, 2001, and as of March 29, 2001 was in default or had not paid over $4 billion in obligations.
- Liquidity: PG&E Corporation refinanced its obligations with $1 billion in term loans on March 2, 2001, which prohibit dividends and share repurchases until repaid.
- Dividends: Common and preferred dividends were suspended, and the Utility's cumulative preferred dividends are in arrears.
03—Questions
Frequently Asked Questions
Why was this 10-K amended?
The amendment restates PG&E Corporation's consolidated financial statements for 1999 and 2000. Management determined that the assets and liabilities associated with certain NEG synthetic leases for power plant projects and turbine acquisition commitments should have been consolidated. The amendment does not update other disclosures for developments after the original filing.
How large was the loss from the California energy crisis?
PG&E Corporation and the Utility recognized a fourth-quarter 2000 charge of $6.9 billion ($4.1 billion after tax) to write off generation-related regulatory assets and undercollected purchased power costs. The Utility's undercollected power purchase costs had grown to $6.6 billion at December 31, 2000.
What is the status of the Utility's finances?
As of March 29, 2001, the Utility was in default or had not paid amounts totaling over $4 billion, including $1,448 million to the PX/ISO for real-time deliveries and $643 million to qualifying facilities. Its credit ratings had been downgraded to below investment grade. The Utility filed a voluntary Chapter 11 petition on April 6, 2001, and continues to operate as a debtor in possession.
Is PG&E Corporation itself protected from the Utility's bankruptcy?
The filing states that PG&E Corporation believes its holding company and non-CPUC-regulated subsidiaries are protected from the Utility's bankruptcy. PG&E Corporation had $297 million in cash at March 29, 2001, and its March 2, 2001 refinancing gives lenders a security interest in the NEG. The filing notes that the loan restricts dividends and share repurchases until repaid.
What legal and regulatory actions are pending against the Utility?
The Utility filed a federal lawsuit against the CPUC asserting that its wholesale power costs are recoverable in retail rates. The CPUC opened an investigation into holding company activities. Wilson complaints seek restitution of $2,326 million related to stock repurchases and $663 million related to a tax-sharing arrangement. The chromium litigation involves approximately 1,150 plaintiffs, and the filing states that the litigation is automatically stayed by the bankruptcy filing.
04—Continue