Bellevue, WA-based Puget Energy Tuesday reported it was lowering its 2003 earnings by $4 million based on recent information about losses at an energy-focused venture capital fund that its utility had invested in starting in 1997. The revision was reported in a 10-K filing to the Securities and Exchange Commission.

After an impairment charge for the sour investments, Puget income on common stock for 2003 was reduced to $114.7 million, or $1.20/share. The $4 million after-tax charge against earnings was not included in the Feb. 10 report of 2003 unaudited financial results that put overall income at $120.2 million, or $1.26/share, for Puget Energy, and $118.7, or $1.25/share, for the utility subsidiary, Puget Sound Energy (PSE). The utility learned of the impairment after Feb. 10.

Puget said the 2003 utility earnings as reported most recently and in the SEC filing Tuesday have been audited by the company’s independent auditors, PricewaterhouseCoopers LLP.

“The impairment was established when PSE learned from the manager of the venture capital fund that it intends to record unrealized losses of certain portfolio assets in its calendar year 2003 financial statements, reflecting current venture capital conditions and near-term liquidity prospects for the portfolio companies,” Puget indicated in its announcement.

In what might bring solace to many small investors struggling to make consistent gains on their investments, PSE said it has invested $8.2 million since 1997 in the venture capital fund — an 11.11% minority interest — in which the fund manager has sole discretion over management and investment decisions, and as of Dec. 31, 2003, the utility’s investment was worth $2.1 million. In addition, PSE is still obligated to invest another $500,000 before the fund terminates in December 2007.

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