SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[..X..] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 31, 2001
For the quarterly period ended.......................................
Or
[.....] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ________________ to _________________
Name of
Commission Registrant IRS Employer
File as specified State of Identification
Number in its charter Incorporation Number
- ---------- -------------- -------------- --------------
1-40 Pacific Enterprises California 94-0743670
1-1402 Southern California
Gas Company California 95-1240705
555 West Fifth Street, Los Angeles, California 90013
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code (213) 244-1200
-------------------
No Change
- -----------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since
last report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past
90 days. Yes...X... No......
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock outstanding:
Pacific Enterprises Wholly owned by Sempra Energy
Southern California Gas Company Wholly owned by Pacific Enterprises
ITEM 1. FINANCIAL STATEMENTS.
PACIFIC ENTERPRISES AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
Dollars in millions
Three months ended
March 31,
-----------------
2001 2000
------- -------
Operating Revenues $ 1,548 $ 698
------- -------
Operating Expenses
Cost of natural gas distributed 1,151 346
Operation and maintenance 188 150
Depreciation and amortization 65 64
Income taxes 42 44
Other taxes and franchise payments 34 28
------- -------
Total operating expenses 1,480 632
------- -------
Operating Income 68 66
------- -------
Other Income and (Deductions)
Interest income 17 8
Regulatory interest - net (5) -
Allowance for equity funds used
during construction 1 -
Taxes on non-operating income (2) (2)
Other - net (4) -
------- -------
Total 7 6
------- -------
Income Before Interest Charges 75 72
------- -------
Interest Charges
Long-term debt 17 19
Other interest 9 2
Allowance for borrowed funds used
during construction (1) (1)
------- -------
Total 25 20
------- -------
Net Income 50 52
Preferred Dividend Requirements 1 1
------- -------
Earnings Applicable to Common Shares $ 49 $ 51
======= =======
See notes to Consolidated Financial Statements.
PACIFIC ENTERPRISES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in millions
Balance at
---------------------------
March 31, December 31,
2001 2000
----------- --------------
ASSETS
Property, plant and equipment $6,379 $6,337
Accumulated depreciation (3,632) (3,571)
-------- --------
Property, plant and equipment - net 2,747 2,766
-------- --------
Current assets
Cash and cash equivalents 474 205
Accounts receivable - trade 604 589
Accounts receivable - other 27 83
Income taxes receivable 4 --
Due from affiliate 37 214
Deferred income taxes 74 43
Fixed price contracts and other derivatives 2,475 --
Inventories 19 67
Other 40 84
----- -----
Total current assets 3,754 1,285
----- -----
Other assets
Regulatory assets 94 108
Notes receivable - affiliates 403 617
Fixed price contracts and other derivatives 1,226 --
Other 59 52
------ ------
Total other assets 1,782 777
------ ------
Total assets $8,283 $4,828
====== ======
See notes to Consolidated Financial Statements.
PACIFIC ENTERPRISES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in millions
Balance at
---------------------------
March 31, December 31,
2001 2000
----------- --------------
CAPITALIZATION AND LIABILITIES
Capitalization
Common Stock $1,282 $1,282
Retained earnings 74 165
Accumulated other comprehensive income (loss) (1) (1)
-------- --------
Total common equity 1,355 1,446
Preferred stock 80 80
Long-term debt 821 821
-------- --------
Total capitalization 2,256 2,347
-------- --------
Current liabilities
Accounts payable - trade 390 368
Accounts payable - other 134 43
Regulatory balancing accounts - net 395 463
Income taxes payable -- 50
Deferred income taxes 31 --
Dividends and interest payable 31 28
Current portion of long-term debt 120 120
Due to affiliates 157 365
Regulatory liabilities arising from fixed price
contracts and other derivatives 2,444 --
Other 345 300
-------- --------
Total current liabilities 4,047 1,737
-------- --------
Deferred credits and other liabilities
Customer advances for construction 15 16
Post-retirement benefits other than pensions 95 97
Deferred income taxes 233 224
Deferred investment tax credits 52 53
Regulatory liabilities 9 --
Regulatory liabilities arising from fixed price
contracts and other derivatives 1,226 --
Deferred credits and other liabilities 330 334
Preferred stock of subsidiary 20 20
-------- --------
Total deferred credits and other liabilities 1,980 744
-------- --------
Contingencies and commitments (Note 2)
Total liabilities and shareholders' equity $8,283 $4,828
======== ========
See notes to Consolidated Financial Statements.
PACIFIC ENTERPRISES AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
Dollars in millions
Three Months Ended
March 31,
------------------
2001 2000
------ -----
Cash Flows from Operating Activities:
Net income $ 50 $ 52
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 65 64
Deferred income taxes and investment
tax credits 9 13
Other - net 10 (6)
Net changes in other working capital components 132 282
----- -----
Net cash provided by operating activities 266 405
----- -----
Cash Flows From Investing Activities
Capital expenditures (46) (40)
Loans repaid by (paid to) affiliates 190 (219)
----- -----
Net cash provided by (used in) investing
activities 144 (259)
----- -----
Cash Flows from Financing Activities
Common dividends paid (140) --
Preferred dividends paid (1) (1)
----- -----
Net cash used in financing activities (141) (1)
----- -----
Increase in cash and cash equivalents 269 145
Cash and cash equivalents, January 1 205 11
----- -----
Cash and cash equivalents, March 31 $ 474 $ 156
===== =====
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Income tax payments - net $ 102 $ --
===== =====
Interest payments, net of amounts capitalized $ 21 $ 41
===== =====
See notes to Consolidated Financial Statements.
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
Dollars in millions
Three months ended
March 31,
-----------------
2001 2000
------- -------
Operating Revenues $1,548 $ 698
------ ------
Operating Expenses
Cost of natural gas distributed 1,151 346
Operation and maintenance 186 150
Depreciation and amortization 65 64
Income taxes 44 44
Other taxes and franchise payments 34 28
------ ------
Total operating expenses 1,480 632
------ ------
Operating Income 68 66
------ ------
Other Income and (Deductions)
Interest income 9 4
Regulatory interest - net (5) -
Allowance for equity funds used
during construction 1 -
Taxes on non-operating income (2) (2)
Other - net (1) -
------ ------
Total 2 2
------ ------
Income Before Interest Charges 70 68
------ ------
Interest Charges
Long-term debt 17 17
Other 3 2
Allowance for borrowed funds used
during construction (1) (1)
------ ------
Total 19 18
------ ------
Earnings Applicable to Common Shares $ 51 $ 50
====== ======
See notes to Consolidated Financial Statements.
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in millions
Balance at
--------------------------
March 31, December 31,
2001 2000
---------- ------------
ASSETS
Utility plant - at original cost $6,356 $6,314
Accumulated depreciation (3,618) (3,557)
------ ------
Utility plant - net 2,738 2,757
------ ------
Current assets
Cash and cash equivalents 474 205
Accounts receivable - trade 604 589
Accounts receivable - other 26 83
Due from affiliates 37 214
Deferred income taxes 74 74
Fixed price contracts and other derivatives 2,475 --
Inventories 19 67
Other 38 80
------ ------
Total current assets 3,747 1,312
------ ------
Other assets
Regulatory assets -- 12
Fixed price contracts and other derivatives 1,226 --
Other 45 35
------ ------
Total other assets 1,671 47
------ ------
Total assets $7,756 $4,116
====== ======
See notes to Consolidated Financial Statements.
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
Dollars in millions
Balance at
--------------------------
March 31, December 31,
2001 2000
---------- ------------
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock $ 835 $ 835
Retained earnings 364 453
Accumulated other comprehensive income (loss) (1) (1)
------ ------
Total common equity 1,198 1,287
Preferred stock 22 22
Long-term debt 821 821
------ ------
Total capitalization 2,041 2,130
------ ------
Current liabilities
Accounts payable - trade 390 368
Accounts payable - other 135 44
Regulatory balancing accounts - net 395 463
Income taxes payable 38 90
Interest payable 30 26
Current portion of long-term debt 120 120
Regulatory liabilities arising from fixed price
contracts and other derivatives 2,444 --
Other 344 300
------ ------
Total current liabilities 3,896 1,411
------ ------
Deferred credits and other liabilities
Customer advances for construction 15 16
Deferred income taxes 322 314
Deferred investment tax credits 52 53
Regulatory liabilities 9 --
Regulatory liabilities arising from fixed price
contracts and other derivatives 1,226 --
Deferred credits and other liabilities 195 192
------ ------
Total deferred credits and other liabilities 1,819 575
------ ------
Contingencies and commitments (Note 2)
Total liabilities and shareholders' equity $7,756 $4,116
====== ======
See notes to Consolidated Financial Statements.
<PE SEC Coverage Ratios>
EXHIBIT 12.1
PACIFIC ENTERPRISES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
|
1996 |
1997 |
1998 |
1999 |
2000 |
For the three months ended March 31, 2001 |
|
|
Fixed Charges and Preferred Stock Dividends: |
||||||
|
Interest |
$99 |
$91 |
$84 |
$82 |
$72 |
$18 |
|
Interest Portion of Annual Rentals |
12 |
12 |
11 |
3 |
4 |
1 |
|
Preferred dividends of subsidiary (1) |
14 |
13 |
2 |
2 |
2 |
2 |
|
Total Fixed Charges and Preferred Stock For Purpose of Ratio |
$125 |
$116 |
$97 |
$87 |
$78 |
$21 |
|
Earnings: |
||||||
|
Pretax income from continuing operations |
$354 |
$335 |
$274 |
$350 |
$396 |
$94 |
|
Add: |
||||||
|
Fixed charges (from above) |
125 |
116 |
97 |
87 |
78 |
21 |
|
Less: Fixed charges capitalized |
2 |
1 |
1 |
2 |
2 |
1 |
|
Fixed charges net of capitalized charges |
123 |
115 |
96 |
85 |
76 |
20 |
|
Total Earnings for Purpose of Ratio |
$477 |
$450 |
$370 |
$435 |
$472 |
$114 |
|
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends |
3.82 |
3.89 |
3.82 |
5.00 |
6.05 |
5.43 |
(1) In computing this ratio, "Preferred dividends of subsidiaries" represents the before-tax earnings necessary to pay such dividends, computed at the effective tax rates for the applicable periods.
EXHIBIT 12.1
SOUTHERN CALIFORNIA GAS
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
|
1996 |
1997 |
1998 |
1999 |
2000 |
For the three months ended March 31, 2001 |
|
|
Fixed Charges: |
||||||
|
Interest |
$88 |
$88 |
$81 |
$62 |
$72 |
$18 |
|
Interest Portion of Annual Rentals |
5 |
5 |
4 |
3 |
4 |
1 |
|
Total Fixed Charges For Purpose of Ratio |
$93 |
$93 |
$85 |
$65 |
$76 |
$19 |
|
Earnings: |
||||||
|
Pretax income from continuing operations |
$349 |
$416 |
$287 |
$383 |
$390 |
$97 |
|
Add: Fixed charges (from above) |
93 |
93 |
85 |
65 |
76 |
19 |
|
Less: Fixed charges capitalized |
2 |
1 |
1 |
2 |
2 |
1 |
|
Fixed charges net of |
91 |
92 |
84 |
63 |
74 |
18 |
|
Total Earnings for Purpose of |
$440 |
$508 |
$371 |
$446 |
$464 |
$115 |
|
Ratio of Earnings to Fixed Charges |
4.73 |
5.46 |
4.36 |
6.86 |
6.11 |
6.05 |