<PAGE>
As filed with the Securities and Exchange Commission on June 30, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-33657
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
PG&E Gas Transmission, Texas Corporation
Savings Fund Plan
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
PG&E Corporation
One Market, Spear Tower
Suite 2400
San Francisco, CA 94105
<PAGE>
REQUIRED INFORMATION
1. The Statement of Net Assets Available for Benefits of the PG&E Gas
Transmission, Texas Corporation Savings Fund Plan as of December 31, 1997, the
Statement of Changes in Net Assets Available for Benefits for the Period from
August 1, 1997 (Inception) through December 31, 1997, the Statement of Net
Assets Available for Benefits with Fund Information as of December 31, 1997, and
the Statement of Changes in Net Assets Available for Benefits with Fund
Information for the period August 1, 1997 (Inception) through December 31, 1997,
together with supplemental schedules and the report of Arthur Andersen LLP,
independent accountants, are contained in Exhibit 1 to this Annual Report.
2. The Consent of Arthur Andersen LLP, independent accountants, is
contained in Exhibit 2 to this Annual Report.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
PG&E GAS TRANSMISSION, TEXAS CORPORATION
SAVINGS FUND PLAN
JAMES RICHTER
Date: June 26, 1998 By: _________________________
James Richter
Chairman, Administrative Committee
2
<PAGE>
EXHIBIT 1
PG&E GAS TRANSMISSION, TEXAS CORPORATION
SAVINGS FUND PLAN
INDEX TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<S> <C>
Report of Independent Public Accountants 4
Statement of Net Assets Available for Benefits at December 31, 1997 5
Statement of Changes in Net Assets Available for Benefits for the
Period from August 1, 1997 (Inception) through December 31, 1997 6
Notes to Financial Statements 7
Fund Information:
Exhibit I: Statement of Net Assets Available for
Benefits with Fund Information as of
December 31, 1997 13
Exhibit II: Statement of Changes in Net Assets
Available for Benefits With Fund
Information for the Period from
August 1, 1997 (Inception) Through
December 31, 1997 16
Supplemental Schedules:
Schedule I: Line 27(a) - Schedule of Assets Held for
Investment Purposes as of December 31,
1997 19
Schedule II: Line 27(d) - Schedule of Reportable
Transactions for the Period From
August 1, 1997 (Inception) through
December 31, 1997 20
</TABLE>
3
<PAGE>
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrative Committee of the
PG&E Gas Transmission, Texas Corporation
Savings Fund Plan:
We have audited the accompanying statements of net assets available for benefits
of PG&E Gas Transmission, Texas Corporation Savings Fund Plan as of December 31,
1997, and the related statement of changes in net assets available for benefits
for the period from August 1, 1997 (inception), through December 31, 1997.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the PG&E Gas
Transmission, Texas Corporation Savings Fund Plan as of December 31, 1997, and
the changes in net assets available for benefits for the period from August 1,
1997 (inception), through December 31, 1997, in conformity with generally
accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
index to financial statements are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
San Antonio, Texas
May 22, 1998
4
<PAGE>
PG&E GAS TRANSMISSION, TEXAS CORPORATION
SAVINGS FUND PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------
AS OF DECEMBER 31, 1997
-----------------------
(in thousands)
<TABLE>
<CAPTION>
ASSETS DECEMBER 31, 1997
- ------ -----------------
<S> <C>
Investments, at fair value
Fidelity Puritan Fund $ 1,648
Fidelity Equity Income Fund 3,276
Fidelity Blue Chip Growth Fund 3,077
Fidelity Low-Priced Stock Fund 2,068
Fidelity Diversified International Fund 738
Fidelity Freedom Income Fund 23
Fidelity Freedom 2000 Fund 29
Fidelity Freedom 2010 Fund 387
Fidelity Freedom 2020 Fund 576
Fidelity Freedom 2030 Fund 52
Fidelity Retirement Money Market Fund 5,350
Spartan US Equity Index Fund 2,176
Fidelity US Bond Index Fund 396
PG&E Corporation Common Stock Fund 10,446
Valero Energy Corporation Common Stock Fund 17,087
Cash 1,086
Participants Notes Receivable 1,586
---------
Total Investments 50,001
Interest and Dividend Receivables 103
---------
TOTAL ASSETS $ 50,104
LIABILITIES
- -----------
Amounts due to Brokers for Securities
received but not yet paid $ 116
---------
NET ASSETS AVAILABLE FOR BENEFITS $ 49,988
=========
</TABLE>
5
<PAGE>
PG&E GAS TRANSMISSION, TEXAS CORPORATION
SAVINGS FUND PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM AUGUST 1, 1997
(INCEPTION) THROUGH
INCREASE IN NET ASSETS ATTRIBUTABLE TO: DECEMBER 31, 1997
- -------------------------------------- -----------------
<S> <C>
Interest and Dividend Income $ 614
Net Appreciation in Fair Value of Investments 19,258
Valero Energy Corporation Thrift Plan Transfer
Pursuant to Acquisition 20,539
Contributions:
Employee Contributions 1,595
Employee Rollovers 7,697
Employer Contributions 1,038
----------
TOTAL ADDITIONS 50,741
DECREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Benefit Distributions to Participants (753)
----------
TOTAL DEDUCTIONS (753)
NET ASSETS AVAILABLE FOR BENEFITS: $ 49,988
BEGINNING OF PERIOD $ -
----------
END OF PERIOD $ 49,988
==========
</TABLE>
6
<PAGE>
PG&E GAS TRANSMISSION, TEXAS CORPORATION
SAVINGS FUND PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF PLAN
-------------------
The following description of the PG&E Gas Transmission, Texas Corporation
Savings Fund Plan ("Savings Plan") provides only general information.
Participants should refer to the Savings Plan document for a complete
description of the Savings Plan provisions.
General
- -------
The Savings Plan is a qualified defined-contribution plan established August 1,
1997, and amended December 30, 1997, and is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA), as amended. The
purpose of the Savings Plan is to provide a program whereby contributions of
participating employees and their employers are systematically invested to
provide the employees an interest in PG&E Corporation and other investment
options to further their financial independence. The Savings Plan is
administered by an administrative committee consisting of persons selected by
the Board of Directors of PG&E Gas Transmission, Texas Corporation ("the
Company") or a duly authorized committee thereof. Fidelity Management Trust
Company ("Fidelity") is the trustee ("Trustee") and recordkeeper under the
Savings Plan and has custody of the securities and investments of the Savings
Plan ("Savings Plan Trust"). In 1997, the Savings Plan was open to virtually all
employees of the Company, as well as former employees of Valero Energy
Corporation, who are now employed by an affiliate of the Company, who have at
least six months of service, as defined by the plan document. Beginning January
1, 1998, the Savings Plan will also include employees of affiliates of the
Company who adopt such plan.
Contributions
- -------------
Participating employees may elect to contribute from 2 to 15 percent of their
annual base salary ("Annual Base Salary") on a pretax or after-tax basis through
payroll deductions. The Annual Base Salary for purposes of the Savings Plan is
limited by the Internal Revenue Code (the "Code") to $160,000 for 1997.
Participants may also contribute amounts representing distributions from other
defined contribution plans. This amount may be deferred compensation, or after-
tax contributions. Deferred compensation contributions are not subject to
federal or state income tax until withdrawn or distributed from the Savings
Plan.
As provided by the Code, deferred employee contributions may not exceed $9,500
for 1997, and total contributions to a participant's account may not exceed the
lesser of 25% of compensation or $30,000 a year. The annual deferral
limitation, as indexed, may be adjusted each year to reflect changes in the cost
of living.
Employee contributions, up to a maximum of 6% of covered compensation, are
matched by employer contributions at a 100% rate for the plan year ended
December 31, 1997. Effective January 1, 1998, the employer will match up to 5%
of employee contributions for new eligible participants. This change will be
effective for all participants beginning August 1, 1999.
Participant Accounts
- --------------------
Each participant's account is credited with the participant's contribution and
allocations of (a) the Company's contributions and (b) earnings on investment
elections in the Savings Plan Trust. The participant's accounts are adjusted to
reflect all contributions, withdrawals, income, expenses, gains and losses
7
<PAGE>
attributable to such accounts. Allocations are based on participant earnings or
account balances, as defined. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account (see
"Vesting" below). Forfeited balances of terminated participants' nonvested
accounts are used to reduce future Company contributions. Forfeitures for the
plan year ending December 31, 1997, totaled approximately $1,200.
Vesting
- -------
Participants are immediately vested in their contributions plus actual earnings
thereon including amounts attributable to elective pre-tax contributions,
employee after-tax contributions and any rollovers and transfers. Vesting in
the Company's matching and contribution portion of their accounts (plus actual
earnings thereon) is based on years of continuous service. If a participant's
employment with the Company ends for any reason other than retirement, permanent
disability, or death, he or she will vest in the balances in his or her account
based on total years of service with the Company and such non-vested portions of
such participant's account will be forfeited. Participants vest 20% per year of
service and are 100% vested after five years of continuous service.
Investment Options
- ------------------
Participants designate the way in which their contributions are invested and may
change their investment designation at any time on a daily basis. Participants
may elect to have their contributions invested in one or more of the following
funds in any whole-number percentage:
Fidelity Puritan Fund - Invests in a broad diversified portfolio of
domestic and foreign common stocks, preferred
stocks and bonds. There were 282 participants in
the Fidelity Puritan Fund as of December 31,
1997.
Fidelity Equity Income Fund - Invests primarily in income-producing equity
securities (common & preferred stocks) and some
bonds. There were 489 participants in the
Fidelity Equity Income Fund as of December 31,
1997.
Fidelity Blue Chip Growth Fund - Invests in diversified portfolio of common
stocks of well-known and established domestic
and foreign companies generally considered
industry leaders. There were 587 participants in
the Fidelity Blue Chip Growth Fund as of
December 31, 1997.
Fidelity Low-Priced Stock Fund - Invests in U.S. and foreign low-priced stocks.
There were 363 participants in the Fidelity Low-
Priced Stock Fund as of December 31, 1997.
Fidelity Diversified International Fund - Invests primarily in equity securities
of companies outside the U.S. that are included
in the Morgan Stanley EAFE index. There were 198
participants in the Fidelity Diversified
International Fund as of December 31, 1997.
Fidelity Freedom Income Fund - Invests in a combination of underlying
Fidelity stock, bond and money market mutual
8
<PAGE>
funds. There were 10 participants in the
Fidelity Freedom Income Fund as of December 31,
1997.
Fidelity Freedom 2000 Fund - Invests in a combination of underlying
Fidelity stock, bond and money market mutual
funds designed for those planning to retire in
approximately 1-10 years. There were 15
participants in the Fidelity Freedom 2000 Fund
as of December 31, 1997.
Fidelity Freedom 2010 Fund - Invests in a combination of underlying
Fidelity stock, bond and money market mutual
funds designed for those planning to retire in
approximately 10-20 years. There were 36
participants in the Fidelity Freedom 2010 Fund
as of December 31, 1997.
Fidelity Freedom 2020 Fund - Invests in a combination of underlying
Fidelity stock, bond and money market mutual
funds designed for those planning to retire in
approximately 20-30 years. There were 62
participants in the Fidelity Freedom 2020 Fund
as of December 31, 1997.
Fidelity Freedom 2030 Fund - Invests in a combination of underlying
Fidelity stock, bond and money market mutual
funds designed for those planning to retire in
approximately 30-40 years. There were 24
participants in the Fidelity Freedom 2030 Fund
as of December 31, 1997.
Fidelity Retirement Money Market Fund - Invests in high quality, short-term
money market securities of U.S. and foreign
issuers. There were 431 participants in the
Fidelity Retirement Money Market Fund as of
December 31, 1997.
Spartan US Equity Index Fund - Invests primarily in the S&P 500 companies.
There were 346 participants in the Spartan US
Equity Index Fund as of December 31, 1997.
Fidelity US Bond Index Fund - Invests in investment grade (medium to high
quality) or above maturities of at least one
year. There were 80 participants in the Fidelity
US Bond Index Fund as of December 31, 1997.
PG&E Corporation
Common Stock Fund - Invests in common stock of PG&E Corporation.
There were 733 participants in the PG&E
Corporation Common Stock Fund as of December 31,
1997.
Valero Energy Corporation
Common Stock Fund - Invests in common stock of Valero Energy
Corporation. There were 753 participants in the
Valero Energy Corporation Common Stock Fund as
of December 31, 1997. No new deposits may be
made in this fund. Any stock in this fund as of
December 31, 1998, will be sold and reinvested
in available investment fund options in
accordance with the current investment
selections of each participant.
9
<PAGE>
Plan Termination
- ----------------
Although the Company has not expressed any intent to do so, its Board of
Directors reserves the right to amend or terminate the Savings Plan at any
time.
Participants' Notes Receivable
- ------------------------------
Participants may borrow from their fund accounts a minimum of $1,000 and a
maximum equal to the lesser of $50,000 or 50 percent of their vested account
balance. Loan transactions are treated as a transfer to/(from) the investment
fund from/(to) the participant notes receivable fund. Loan terms are up to five
years for general purpose loans or up to fifteen years for the purchase of a
primary residence. The loans are secured by the balance in the participant's
account and bear interest at a rate commensurate with local prevailing rates as
determined quarterly by the Plan administrator based upon the reason and
repayment term of each participant loan. Interest rates ranged from 7.0 percent
to 11.5 percent as of December 31, 1997. Principal and interest are paid
ratably through monthly payroll deductions.
Payment of Benefits
- -------------------
Upon a participant's death, total and permanent disability, or retirement, such
participant, or beneficiary of a deceased participant, is entitled to a
distribution of the entire value of the participant's account regardless of
whether or not such accounts are fully vested. Upon a participant's termination
for any reason, such participant is entitled to a distribution of only the value
of their participant's contributions and the vested portion of their employer
contributions. Distributions from these accounts may be received in a single sum
in whole shares of PG&E Corporation common stock and cash, a rollover into a
qualified IRA account or a lump-sum distribution of cash. Alternatively, a
participant or beneficiary may elect to receive such distribution in the form of
equal monthly installments over a period not exceeding the participant's life
expectancy or the joint expectancy of the participant and their designated
beneficiary. When the value of the distribution to the participant is less than
$3,500, and $5,000 for every plan year thereafter, the distribution must be in
the form of a lump-sum distribution. Terminated participants with account
balances in excess of the limits above may elect to have the Trustee hold their
accounts for distribution to them at a date, not later than April 1 of the
calendar year after which they attain age 70 1/2. In such event, terminated
participants continue to share in the earnings and losses of the Savings Plan
until their accounts are distributed.
Voting Rights
- -------------
Each participant is entitled to exercise voting rights attributable to the
shares allocated to his or her account and is notified by the Trustee prior to
the time that such rights are to be exercised. The Trustee is not permitted to
vote any share for which a participant has not given instructions. The Trustee
is required, however, to vote any unallocated shares on behalf of the collective
best interest of Savings Plan participants and beneficiaries.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Accounting and Use of Estimates
- ----------------------------------------
The accompanying financial statements have been prepared using the accrual
method of accounting. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions. These estimates and assumptions affect the
accompanying financial statements and disclosures. Actual results could differ
from those estimates.
10
<PAGE>
Investment Valuation and Income Recognition
- -------------------------------------------
The Savings Plan's investments are stated at fair value. The Fidelity mutual
funds and securities traded on a national securities exchange are valued as of
the last business day of the year based on published prices. Investments that
represent 5% or more of the Savings Plan's net assets as of December 31, 1997
are as follows:
<TABLE>
<CAPTION>
December 31, 1997
------------------
(in thousands)
<S> <C>
Fidelity Equity Income Fund $ 3,276
Fidelity Blue Chip Growth Fund 3,077
Fidelity Retirement Money Market Fund 5,350
PG&E Corporation Common Stock Fund 10,446
Valero Energy Corporation Common Stock Fund 17,087
</TABLE>
Cash and participant notes receivable are stated at cost, which approximate fair
value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded as earned on the accrual basis. Dividend income is
recorded on the ex-dividend date.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
(3) VALERO ENERGY CORPORATION THRIFT PLAN TRANSFER PURSUANT TO ACQUISITION
----------------------------------------------------------------------
On July 31, 1997 ("Acquisition Date"), pursuant to an agreement and plan of
merger among PG&E Corporation, PG&E Acquisition Corporation ("Acquisition
Corp.") and Valero Energy Corporation ("Energy"), and an agreement and plan of
distribution between Energy and Valero Refining and Marketing Company ("VRMC"),
Energy distributed the stock of VRMC, representing its refining and marketing
business, to Energy's stockholders and then, with its remaining natural gas
related services business, merged with Acquisition Corp. In the merger, Energy
became a wholly owned subsidiary of PG&E Corporation. Each Energy employee
participating in the Energy Thrift Plan prior to the distribution who became a
PG&E Corporation employee subsequent to the distribution transferred their
account balance to the Savings Plan.
(4) PARTY-IN-INTEREST TRANSACTIONS
------------------------------
Certain Savings Plan investments are shares of mutual funds managed by Fidelity.
Fidelity is the trustee as defined by the Savings Plan and, therefore, these
transactions qualify as party-in-interest. Fees paid by the Sponsor for the
investment management services amounted to approximately $17,500 for the year
ended December 31, 1997.
(5) AMOUNTS PAYABLE TO WITHDRAWING PARTICIPANTS
-------------------------------------------
The following is a reconciliation of net assets available for benefits from the
financial statements to Form 5500:
As of December 31, 1997, net assets available for benefits included
approximately $107,260 of amounts payable to withdrawing participants for
benefit claims that were processed and approved for payment prior to December
31, 1997 but not yet paid as of that date. For the Form 5500, however, such
amounts are allocated to withdrawing participants:
11
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
------------------
(in thousands)
<S> <C>
Net assets available for benefits per the financial statements $49,988
Amounts allocated to withdrawing participants (107)
-------
Net assets available for benefits per Form 5500 $49,881
=======
</TABLE>
The following is a reconciliation of benefits paid to participants according to
the financial statements to Form 5500:
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM AUGUST 1,
1997 (INCEPTION)
THROUGH
December 31, 1997
------------------
(in thousands)
<S> <C>
Benefits paid to participants per the financial statements $753
Add: Amounts allocated to withdrawing participants at
December 31, 1997 107
----
Benefits paid to participants per Form 5500 $860
====
</TABLE>
Amounts allocated to withdrawing participants are recorded on Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, but not paid as of that date.
(6) FEDERAL INCOME TAXES
--------------------
As of the date of this report, the Company was in the process of obtaining a
determination letter from the Internal Revenue Service ("IRS") covering the
Savings Plan in its present form. The Savings Plan administrator and the
Savings Plan's tax counsel believe that the Savings Plan is currently designed
and being operated in compliance with the applicable requirements of the Code.
Therefore, the Savings Plan administrator and the Savings Plan's tax counsel
believe that the Savings Plan was qualified and the related Trust was tax-exempt
as of December 31, 1997.
(7) EXPENSES OF THE SAVINGS PLAN
----------------------------
Administrative expenses of the Savings Plan, including trustee fees and
expenses, are paid by the Company, or at the Company's option, by the Savings
Plan Trust. During 1997, the Company paid third party fees which totalled
approximately $78,500. Participants bear an amount of expense for certain
management fees and other expenses incurred as administrative costs of mutual
funds and loan processing fees, as defined.
12
<PAGE>
EXHIBIT I
PG&E GAS TRANSMISSION, TEXAS CORPORATION
SAVINGS FUND PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
---------------------------------------------------------------------
AS OF DECEMBER 31, 1997
-----------------------
(in thousands)
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity Fidelity Fidelity
Fidelity Equity Blue Chip Low-Priced Diversified Freedom
Puritan Income Growth Stock International Income
Fund Fund Fund Fund Fund Fund
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- ------
Investments, at fair value
Fidelity Puritan Fund $ 1,648 $ - $ - $ - $ - $ -
Fidelity Equity Income Fund 3,276
Fidelity Blue Chip Growth Fund 3,077
Fidelity Low-Priced Stock Fund 2,068
Fidelity Diversified International Fund 738
Fidelity Freedom Income Fund 23
Fidelity Freedom 2000 Fund
Fidelity Freedom 2010 Fund
Fidelity Freedom 2020 Fund
Fidelity Freedom 2030 Fund
Fidelity Retirement Money Market Fund
Spartan US Equity Ind Fund
Fidelity US Bond Index Fund
PG&E Corporation Common Stock
Valero Energy Corporation Common Stock
Cash - - - - - -
Participants Notes Receivable - - - - - -
-------------------------------------------------------------------------------
Total Investments 1,648 3,276 3,077 2,068 738 23
Interest and Dividend Receivables - - - - - -
-------------------------------------------------------------------------------
TOTAL ASSETS $ 1,648 $ 3,276 $ 3,077 $ 2,068 $ 738 $ 23
LIABILITIES
- -----------
Amounts due to Brokers for Securities
received but not yet paid $ - $ - $ - $ - $ - $ -
-------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,648 $ 3,276 $ 3,077 $ 2,068 $ 738 $ 23
===============================================================================
</TABLE>
ADDITIONAL COLUMNS OF EXHIBIT I CONTINUED ON NEXT PAGE.
13
<PAGE>
<TABLE>
<CAPTION> Fidelity
Fidelity Fidelity Fidelity Fidelity Retirement Spartan
Freedom Freedom Freedom Freedom Money Market US Equity
2000 Fund 2010 Fund 2020 Fund 2030 Fund Fund Index Fund
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- ------
Investments, at fair value
Fidelity Puritan Fund $ - $ - $ - $ - $ - $ -
Fidelity Equity Income Fund
Fidelity Blue Chip Growth Fund
Fidelity Low-Priced Stock Fund
Fidelity Diversified International Fund
Fidelity Freedom Income Fund
Fidelity Freedom 2000 Fund 29
Fidelity Freedom 2010 Fund 387
Fidelity Freedom 2020 Fund 576
Fidelity Freedom 2030 Fund 52
Fidelity Retirement Money Market Fund 5,350
Spartan US Equity Ind Fund 2,176
Fidelity US Bond Index Fund
PG&E Corporation Common Stock
Valero Energy Corporation Common Stock
Cash - - - - - -
Participants Notes Receivable - - - - - -
-------------------------------------------------------------------------------
Total Investments 29 387 576 52 5,350 2,176
Interest and Dividend Receivables - - - - - -
-------------------------------------------------------------------------------
TOTAL ASSETS $ 29 $ 387 $ 576 $ 52 $ 5,350 $ 2,176
LIABILITIES
- -----------
Amounts due to Brokers for Securities
received but not yet paid $ - $ - $ - $ - $ - $ -
-------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 29 $ 387 $ 576 $ 52 $ 5,350 $ 2,176
===============================================================================
</TABLE>
ADDITIONAL COLUMNS OF EXHIBIT I CONTINUED ON NEXT PAGE.
14
<PAGE>
<TABLE>
<CAPTION>
PG&E Valero Energy
Fidelity Corporation Corporation Participants
US Bond Common Common Notes
Index Fund Stock Fund Stock Fund Receivable Total
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
- ------
Investments, at fair value
Fidelity Puritan Fund $ - $ - $ - $ - $ 1,648
Fidelity Equity Income Fund 3,276
Fidelity Blue Chip Growth Fund 3,077
Fidelity Low-Priced Stock Fund 2,068
Fidelity Diversified International Fund 738
Fidelity Freedom Income Fund 23
Fidelity Freedom 2000 Fund 29
Fidelity Freedom 2010 Fund 387
Fidelity Freedom 2020 Fund 576
Fidelity Freedom 2030 Fund 52
Fidelity Retirement Money Market Fund 5,350
Spartan US Equity Ind Fund 2,176
Fidelity US Bond Index Fund 396 396
PG&E Corporation Common Stock 10,446 10,446
Valero Energy Corporation Common Stock 17,087 17,087
Cash 283 803 - 1,086
Participants Notes Receivable - - - 1,586 1,586
-------------------------------------------------------------------------------
Total Investments 396 10,729 17,890 1,586 50,001
Interest and Dividend Receivables - 99 4 - 103
-------------------------------------------------------------------------------
TOTAL ASSETS $ 396 $ 10,828 $ 17,894 $ 1,586 $ 50,104
LIABILITIES
- -----------
Amounts due to Brokers for Securities
received but not yet paid $ - $ 116 $ - $ - $ 116
-------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 396 $ 10,712 $ 17,894 $ 1,586 $ 49,988
===============================================================================
</TABLE>
15
<PAGE>
EXHIBIT II
PG&E GAS TRANSMISSION, TEXAS CORPORATION
SAVINGS FUND PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
- --------------------------------------------------------------------------------
FOR THE PERIOD FROM AUGUST 1, 1997 (INCEPTION) THROUGH DECEMBER 31, 1997
------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity
Fidelity Equity Blue Chip Low-Priced
Puritan Income Growth Stock
Fund Fund Fund Fund
---------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS ATTIBUTABLE TO:
- --------------------------------------
Interest and Dividend Income $ 59 $ 122 $ 76 $ 58
Net Appreciation/(Depreciation) in Fair Value of Investments (13) (22) (19) (23)
Valero Energy Corporation Thrift Plan Transfer - - - -
Pursuant to the Acquisition
Contributions:
Employee Contributions 189 343 441 222
Employee Rollovers 1,023 1,328 1,679 862
Employer Contributions 116 200 256 128
---------------------------------------------------------
Total Additions 1,374 1,971 2,433 1,247
DECREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Benefit Distributions to Participants (10) (25) (70) (11)
---------------------------------------------------------
Total Deductions (10) (25) (70) (11)
TRANSFERS (TO)/FROM OTHER FUNDS 284 1,330 714 832
---------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,648 $ 3,276 $ 3,077 $ 2,068
BEGINNING OF PERIOD $ - $ - $ - $ -
---------------------------------------------------------
END OF PERIOD $ 1,648 $ 3,276 $ 3,077 $ 2,068
=========================================================
</TABLE>
ADDITIONAL COLUMNS OF EXHIBIT II CONTINUED ON NEXT PAGE.
16
<PAGE>
<TABLE>
<CAPTION>
Fidelity Fidelity
Diversified Freedom Fidelity Fidelity
International Income Freedom Freedom
Fund Fund 2000 Fund 2010 Fund
---------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Interest and Dividend Income $ 28 $ 1 $ 2 $ 15
Net Appreciation/(Depreciation) in Fair Value of Investments (23) - (1) (9)
Valero Energy Corporation Thrift Plan Transfer - - - -
Pursuant to the Acquisition
Contributions:
Employee Contributions 105 7 12 39
Employee Rollovers 377 12 10 285
Employer Contributions 58 4 8 21
---------------------------------------------------------
Total Additions 545 24 31 351
DECREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Benefit Distributions to Participants (6) (1) (1) (2)
---------------------------------------------------------
Total Deductions (6) (1) (1) (2)
TRANSFERS (TO)/FROM OTHER FUNDS 199 - (1) 38
---------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 738 $ 23 $ 29 $ 387
BEGINNING OF PERIOD $ - $ - $ - $ -
---------------------------------------------------------
END OF PERIOD $ 738 $ 23 $ 29 $ 387
=========================================================
</TABLE>
ADDITIONAL COLUMNS OF EXHIBIT II CONTINUED ON NEXT PAGE.
17
<PAGE>
<TABLE>
<CAPTION>
Fidelity
Fidelity Fidelity Retirement Spartan
Freedom Freedom Money Market US Equity
2020 Fund 2030 Fund Fund Index Fund
----------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Interest and Dividend Income $ 22 $ 2 $ 86 $ 28
Net Appreciation/(Depreciation) in Fair Value of Investments (16) (1) - 32
Valero Energy Corporation Thrift Plan Transfer - - 6,432 -
Pursuant to the Acquisition
Contributions:
Employee Contributions 65 18 95 234
Employee Rollovers 423 13 398 964
Employer Contributions 35 11 39 129
---------------------------------------------------------
Total Additions 529 43 7,050 1,387
DECREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Benefit Distributions to Participants (5) (1) (272) (39)
---------------------------------------------------------
Total Deductions (5) (1) (272) (39)
TRANSFERS (TO)/FROM OTHER FUNDS 52 10 (1,428) 828
---------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 576 $ 52 $ 5,350 $ 2,176
BEGINNING OF PERIOD $ - $ - $ - $ -
---------------------------------------------------------
END OF PERIOD $ 576 $ 52 $ 5,350 $ 2,176
=========================================================
</TABLE>
ADDITIONAL COLUMNS OF EXHIBIT II CONTINUED ON NEXT PAGE.
18
<PAGE>
<TABLE>
<CAPTION>
PG&E Valero Energy
Fidelity Corporation Corporation Total
US Bond Common Common Fund
Index Fund Stock Fund Stock Fund Acitivity
----------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Interest and Dividend Income $ 7 $ 108 $ - $ 614
Net Appreciation/(Depreciation) in Fair Value of Investments 3 7,001 12,349 19,258
Valero Energy Corporation Thrift Plan Transfer - 4,215 8,118 18,765
Pursuant to the Acquisition
Contributions:
Employee Contributions 52 6 - 1,828
Employee Rollovers 200 123 - 7,697
Employer Contributions 28 5 - 1,038
---------------------------------------------------------
Total Additions 290 11,458 20,467 49,200
DECREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Benefit Distributions to Participants - (123) (232) (798)
---------------------------------------------------------
Total Deductions - (123) (232) (798)
TRANSFERS (TO)/FROM OTHER FUNDS 106 (623) (2,341) -
---------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 396 $ 10,712 $ 17,894 $ 48,402
BEGINNING OF PERIOD $ - $ - $ - $ -
---------------------------------------------------------
END OF PERIOD $ 396 $ 10,712 $ 17,894 $ 48,402
=========================================================
</TABLE>
ADDITIONAL COLUMNS OF EXHIBIT II CONTINUED ON NEXT PAGE.
19
<PAGE>
<TABLE>
<CAPTION>
Participants
Notes
Receivable Total
----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Interest and Dividend Income $ - $ 614
Net Appreciation/(Depreciation) in Fair Value of Investments - 19,258
Valero Energy Corporation Thrift Plan Transfer 1,774 20,539
Pursuant to the Acquisition
Contributions:
Employee Contributions (233) 1,595
Employee Rollovers - 7,697
Employer Contributions - 1,038
--------------------------
Total Additions 1,541 50,741
DECREASE IN NET ASSETS ATTRIBUTABLE TO:
- ---------------------------------------
Benefit Distributions to Participants 45 (753)
--------------------------
Total Deductions 45 (753)
TRANSFERS (TO)/FROM OTHER FUNDS - -
--------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,586 $ 49,988
BEGINNING OF PERIOD $ - $ -
--------------------------
END OF PERIOD $ 1,586 $ 49,988
==========================
</TABLE>
ADDITIONAL COLUMNS OF EXHIBIT II CONTINUED ON NEXT PAGE.
20
<PAGE>
SCHEDULE I
PG&E GAS TRANSMISSION, TEXAS CORPORATION
SAVINGS FUND PLAN
Line 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
------------------------------------------------------------
AS OF DECEMBER 31, 1997
-----------------------
(in thousands)
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUE/DESCRIPTION OF INVESTMENT COST VALUE
------------------------------------------- ----------- -----------
<S> <C> <C>
* Fidelity Puritan Fund $ 1,661 $ 1,648
* Fidelity Equity Income Fund 3,298 3,276
* Fidelity Blue Chip Growth Fund 3,095 3,077
* Fidelity Low-Priced Stock Fund 2,091 2,068
* Fidelity Diversified International Fund 761 738
* Fidelity Freedom Income Fund 23 23
* Fidelity Freedom 2000 Fund 29 29
* Fidelity Freedom 2010 Fund 397 387
* Fidelity Freedom 2020 Fund 592 576
* Fidelity Freedom 2030 Fund 54 52
* Fidelity Retirement Money Market Fund 5,350 5,350
* Fidelity Spartan US Equity Index Fund 2,144 2,176
* Fidelity US Bond Index Fund 394 396
* PG&E Corporation Common Stock 3,993 10,446
Valero Energy Corporation Common Stock 6,837 17,087
Cash held in interest bearing accounts 1,086 1,086
* PG&E Gas Transmission, Texas Corporation Savings Fund Plan
Participants Notes Receivable (interest rates ranging from
7% to 11.5%) 1,586 1,586
----------- ------------
Total $ 33,391 $ 50,001
=========== ============
</TABLE>
*Party in interest to the Savings Plan
21
<PAGE>
SCHEDULE II
PG&E GAS TRANSMISSION, TEXAS CORPORATION
SAVINGS FUND PLAN
Line 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
------------------------------------------------
FOR THE PERIOD FROM AUGUST 1, 1997 (INCEPTION) THROUGH DECEMBER 31, 1997
------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
IDENTITY OF PARTY INVOLVED/ PURCHASE SELLING COST OF NET
DESCRIPTION OF ASSET PRICE PRICE ASSET GAIN/(LOSS)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Series Transactions:
- -------------------
Fidelity Puritan Fund
Purchases 1,776 - 1,776 -
Sales - 115 115 -
Fidelity Equity Income Fund
Purchases 3,327 - 3,327 -
Sales - 29 29 -
Fidelity Blue Chip Growth Fund
Purchases 3,211 - 3,211 -
Sales - 115 117 (2)
Fidelity Low-Priced Stock Fund
Purchases 2,102 - 2,102 -
Sales - 11 11 -
Fidelity Retirement Money Market Fund
Purchases/Transfers 7,753 - 7,753 -
Sales - 2,403 2,403 -
Spartan US Equity Index Fund
Purchases 2,195 - 2,195 -
Sales - 51 50 1
PG&E Corporation Common Stock
Purchases/Transfers 4,338 - 4,338 -
Sales - 893 346 547
Valero Energy Corporation Common Stock
Purchases/Transfers 8,118 - 8,118 -
Sales - 3,531 1,432 2,099
Individual Transactions:
- -----------------------
Fidelity Retirement Money Market Fund
Valero Energy Corporation Thrift Plan Transfer
Pursuant to Acquisition 6,432 - 6,432 -
PG&E Corporation Common Stock
Valero Energy Corporation Thrift Plan Transfer
Pursuant to Acquisition 4,215 - 4,215 -
Valero Energy Corporation Common Stock
Valero Energy Corporation Thrift Plan Transfer
Pursuant to Acquisition 8,118 - 8,118 -
</TABLE>
This schedule is a listing of individual or series of investment transactions in
the same security which exceeded 5% of the market value of the Plan assets as of
August 1, 1997 (the initial funding of the plan) and are deemed to be reportable
transactions for the period ended December 31, 1997. The current value of assets
on transaction date for a purchase and a sale is equal to the purchase and
selling price, respectively. Columns for lease rentals and expense have been
omitted as these columns are not applicable.
22
<PAGE>
EXHIBIT 2
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K into the Company's previously filed
Registration Statement on Form S-8 (File No. 333-33657).
ARTHUR ANDERSEN LLP
San Antonio, Texas
June 26, 1998
23
