SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report |
|
(Date of earliest event reported): | November 2, 2006 |
|
| Name of Registrant, State of |
| IRS Employer |
1-40 |
| Pacific Enterprises |
| 94-0743670 |
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|
1-1402 |
| Southern California Gas Company |
| 95-1240705 |
|
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |
|
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[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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2
FORM 8-K
Item 2.02 Results of Operations and Financial Condition
The information furnished in this Item 2.02 and in Exhibits 99.1 and 99.2 shall not be deemed to be "filed" for purposes of the Securities Exchange Act of 1934, nor shall it be deemed to be incorporated by reference in any filing of Pacific Enterprises or Southern California Gas Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
On November 2, 2006, Sempra Energy, of which Pacific Enterprises and Southern California Gas Company are consolidated subsidiaries, issued a press release announcing consolidated net income of $653 million, or $2.49 per diluted share of common stock, for the third quarter of 2006. The press release has been posted on Sempra Energy's website (www.sempra.com) and a copy is attached as Exhibit 99.1.
Concurrently with the website posting of such press release and as noted therein, Sempra Energy also posted its Income Statement Data by Business Unit for the three months and nine months ended September 30, 2006 and 2005. A copy of such information is attached as Exhibit 99.2.
The Sempra Energy financial information contained in the press release includes, on a consolidated basis, information regarding Pacific Enterprises' and Southern California Gas Company's results of operations and financial condition.
Item 9.01 Financial Statements and Exhibits.
Exhibits
99.1
November 2, 2006 Sempra Energy News Release (including tables)
99.2
Sempra Energy's Income Statement Data by Business Unit for the three months and nine months ended September 30, 2006 and 2005.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PACIFIC ENTERPRISES
(Registrant)
Date: November 2, 2006 | By: /s/ Dennis V. Arriola |
| Dennis V. Arriola |
|
SOUTHERN CALIFORNIA GAS COMPANY
(Registrant)
Date: November 2, 2006 | By: /s/ Dennis V. Arriola |
| Dennis V. Arriola |
|
4
Exhibit 99.1
NEWS RELEASE
Media Contacts:
Doug Kline
Sempra Energy
(877) 866-2066
www.sempra.com
Financial Contacts:
Jeff Martin/Karen Sedgwick
Sempra Energy
(877) 736-7727
SEMPRA ENERGY REPORTS HIGHER
THIRD-QUARTER 2006 EARNINGS
SAN DIEGO, Nov. 2, 2006 - Sempra Energy (NYSE: SRE) today reported earnings of $653 million, or $2.49 per diluted share, in the third quarter 2006, up from $221 million, or $0.86 per diluted share, in the same period last year. Third-quarter 2006 earnings included income of $110 million from discontinued operations, compared with $5 million in the prior-year period.
Income from continuing operations in the third quarter 2006 was $543 million, or $2.07 per diluted share. Continuing operations included a $211 million gain from the sale of several Texas power plants. Excluding the impact of these asset sales, third-quarter 2006 income from continuing operations was $332 million, or $1.27 per diluted share.
Third-quarter 2005 net income benefited from several one-time items totaling $141 million, offset by a $189 million after-tax effect from an increase in litigation reserves.
1
For the first nine months of 2006, Sempra Energy's earnings were $1.28 billion, or $4.92 per diluted share, compared with $565 million, or $2.26 per diluted share, during the same period in 2005. Excluding the impact of the sale of the Texas power plants, nine-month income from continuing operations in 2006 was $758 million, or $2.91 per diluted share.
"Our strategy is to grow both our natural gas infrastructure businesses and our California utilities, while divesting non-core assets," said Donald E. Felsinger, chairman and chief executive officer of Sempra Energy. "Execution of this plan has been very successful to date. Given our strong results through the first nine months of the year, we are increasing our earnings guidance for 2006."
Felsinger said the company has raised its 2006 earnings guidance to a range of $3.50 per share to $3.70 per share from continuing operations, excluding gains on asset sales, from the previous range of $3.40 per share to $3.60 per share.
Sempra Energy's revenues in the third quarter 2006 were approximately $2.7 billion, unchanged from the year-ago quarter.
OPERATING HIGHLIGHTS
Sempra Utilities
Third-quarter net income for Southern California Gas Co. (SoCalGas) rose to $61 million in 2006 from $36 million last year. In the prior-year's quarter, SoCalGas recorded a $53 million after-tax increase in litigation reserves, partially offset by an $18 million benefit from the resolution of prior-years' tax issues.
San Diego Gas & Electric (SDG&E) had net income of $70 million in the third quarter 2006, compared with $102 million in the same quarter last year. In the third quarter 2006, SDG&E benefited from a favorable regulatory outcome and contributions from its new Palomar Energy Center. In the year-ago quarter, SDG&E recorded a $39 million benefit from the resolution of prior-years' tax issues and a $27 million benefit from an electric-transmission cost settlement, offset by the effect of a $27 million after-tax increase in litigation reserves.
2
In August 2006, the California Independent System Operator, the agency that manages the state's power grid, endorsed SDG&E's proposal to build Sunrise Powerlink, a major new transmission line. The project, if approved by the California Public Utilities Commission, will be built and placed into service in 2010.
Sempra Commodities
Sempra Commodities' third-quarter net income was $105 million in 2006, compared with $161 million last year. In the third quarter 2005, Sempra Commodities had a $16 million benefit from the resolution of prior-years' tax issues and a $38 million after-tax gain related to asset sales, partially offset by the effect of a $14 million after-tax increase in litigation reserves. During the recent quarter, Sempra Commodities' results in natural gas, power marketing and metals were strong, while margins in its petroleum marketing business were lower.
Sempra Generation
Net income for Sempra Generation in the third quarter 2006 was $265 million, up from $24 million in the third quarter 2005. In the recent quarter, Sempra Generation benefited from a net gain of $211 million from the sale of the company's 50-percent stake in several Texas power plants, as well as lower project-development and operating costs. Third-quarter 2005 earnings were affected by $19 million from temporary mark-to-market losses on forward sales.
Sempra Pipelines & Storage
Third-quarter net income for Sempra Pipelines & Storage was $19 million in 2006, unchanged from the prior-year's quarter.
3
During the recent quarter, Sempra Pipelines & Storage and ProLiance Transportation and Storage, LLC, announced they acquired three existing salt caverns representing 10 billion cubic feet (Bcf) to 12 Bcf of potential natural gas storage capacity and more than 150 acres of property in Cameron Parish, La. Once developed, the newly acquired property and caverns would become an extension of Liberty Gas Storage -- a nearby natural gas storage facility the two companies currently are constructing.
Sempra LNG
Sempra LNG reported a loss of $13 million in the third quarter 2006, compared with a loss of $5 million in the same quarter last year.
Construction on Sempra LNG's Mexico receipt terminal -- planned to be operational in 2008 -- is now more than 50-percent complete. Sempra LNG's Louisiana receipt terminal also is under construction and on schedule for completion in late 2008.
Internet Broadcast
Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. EST with key company executives. Access is available by logging onto the Web site at www.sempra.com. For those unable to log onto the live Webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (706) 645-9291 and entering the passcode, 9434558.
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2005 revenues of $11.7 billion. The Sempra Energy companies' 14,000 employees serve more than 29 million consumers in the United States, Europe, Canada, Mexico, South America and Asia.
Income-statement information by business unit is available on Sempra Energy's Web site at http://www.sempra.com/downloads/3Q2006_Table_All.pdf.
###
This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When the company uses words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "would," "should" or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with
respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, the California State Legislature, the California Department of Water Resources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas and liquefied natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business de velopment efforts; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company. These risks and uncertainties are further discussed in the company's reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov and on the companys Web site, www.sempra.com
Sempra LNG and Sempra Pipelines & Storage are not the same companies as the utilities, SDG&E or SoCalGas, and are not regulated by the California Public Utilities Commission. Sempra Energy Trading, doing business as Sempra Commodities, and Sempra Generation are not the same companies as the utilities, SDG&E or SoCalGas, and the California Public Utilities Commission does not regulate the terms of their products and services.
4
SEMPRA ENERGY | ||||||||
Table A | ||||||||
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STATEMENTS OF CONSOLIDATED INCOME | ||||||||
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| Three months ended |
| Nine months ended | ||||
|
| September 30, |
| September 30, | ||||
(Dollars in millions, except per share amounts) | 2006 |
| 2005 |
| 2006 |
| 2005 | |
|
| (Unaudited) | ||||||
Operating revenues | ||||||||
Sempra Utilities | $1,494 |
| $1,495 |
| $5,190 |
| $4,783 | |
Sempra Global and parent | 1,200 |
| 1,215 |
| 3,326 |
| 2,797 | |
| Total operating revenues | 2,694 |
| 2,710 |
| 8,516 |
| 7,580 |
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|
Operating expenses | ||||||||
Sempra Utilities: | ||||||||
| Cost of natural gas | 412 |
| 547 |
| 2,077 |
| 2,060 |
| Cost of electric fuel and purchased power | 203 |
| 146 |
| 566 |
| 437 |
Other cost of sales | 716 |
| 709 |
| 1,936 |
| 1,796 | |
Other operating expenses | 657 |
| 705 |
| 1,979 |
| 1,758 | |
Litigation expense | 12 |
| 325 |
| 43 |
| 341 | |
Depreciation and amortization | 163 |
| 152 |
| 491 |
| 466 | |
Franchise fees and other taxes | 67 |
| 59 |
| 208 |
| 181 | |
Losses (gains) on sale of assets, net | (2) |
| (99) |
| 1 |
| (104) | |
| Total operating expenses | 2,228 |
| 2,544 |
| 7,301 |
| 6,935 |
Operating income | 466 |
| 166 |
| 1,215 |
| 645 | |
Other income, net | 376 |
| 19 |
| 375 |
| 24 | |
Interest income | 34 |
| 28 |
| 73 |
| 50 | |
Interest expense | (90) |
| (74) |
| (273) |
| (220) | |
Preferred dividends of subsidiaries | (2) |
| (2) |
| (7) |
| (7) | |
Income from continuing operations before income taxes and | ||||||||
| equity in earnings of certain unconsolidated subsidiaries | 784 |
| 137 |
| 1,383 |
| 492 |
Income tax expense (benefit) | 257 |
| (63) |
| 461 |
| (22) | |
Equity in earnings of certain unconsolidated subsidiaries | 16 |
| 16 |
| 40 |
| 42 | |
Income from continuing operations | 543 |
| 216 |
| 962 |
| 556 | |
Discontinued operations, net of income tax | 110 |
| 5 |
| 319 |
| 9 | |
Net income | $653 |
| $221 |
| $1,281 |
| $565 | |
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Basic earnings per share: | ||||||||
| Income from continuing operations | $2.11 |
| $0.85 |
| $3.76 |
| $2.28 |
| Discontinued operations, net of income tax | 0.43 |
| 0.02 |
| 1.25 |
| 0.04 |
| Net income | $2.54 |
| $0.87 |
| $5.01 |
| $2.32 |
Weighted-average number of shares outstanding (thousands) | 257,487 |
| 252,974 |
| 255,834 |
| 243,342 | |
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Diluted earnings per share: | ||||||||
| Income from continuing operations | $2.07 |
| $0.84 |
| $3.69 |
| $2.22 |
| Discontinued operations, net of income tax | 0.42 |
| 0.02 |
| 1.23 |
| 0.04 |
| Net income | $2.49 |
| $0.86 |
| $4.92 |
| $2.26 |
Weighted-average number of shares outstanding (thousands) | 262,102 |
| 257,370 |
| 260,587 |
| 249,874 | |
Dividends declared per share of common stock | $0.30 |
| $0.29 |
| $0.90 |
| $0.87 | |
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The statements above reflect the decisions in 2006 to dispose of the Twin Oaks power plant, Sempra Energy Production Company, and the Energy Services and Facilities Management businesses, all within Sempra Generation, and Bangor Gas and Frontier Energy, both within Sempra Pipelines & Storage. | ||||||||
5
SEMPRA ENERGY | |||||||
Table B | |||||||
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CONSOLIDATED BALANCE SHEETS | |||||||
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| September 30, |
| December 31, |
(Dollars in millions) | 2006 |
| 2005 | ||||
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| (Unaudited) | ||
Assets | |||||||
Current assets: | |||||||
| Cash and cash equivalents | $1,501 |
| $769 | |||
| Restricted cash | 165 |
| 12 | |||
| Accounts receivable | 702 |
| 1,145 | |||
| Deferred income taxes | 336 |
| 134 | |||
| Interest receivable | 43 |
| 29 | |||
| Trading-related receivables and deposits, net | 2,754 |
| 3,370 | |||
| Derivative trading instruments | 4,278 |
| 4,502 | |||
| Commodities owned | 2,025 |
| 2,498 | |||
| Regulatory assets | 217 |
| 255 | |||
| Inventories | 300 |
| 205 | |||
| Other | 269 |
| 297 | |||
|
| Current assets of continuing operations | 12,590 |
| 13,216 | ||
|
| Current assets of discontinued operations | 145 |
| 611 | ||
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| Total current assets | 12,735 |
| 13,827 | |
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Investments and other assets: | |||||||
| Due from unconsolidated affiliates | 21 |
| 21 | |||
| Regulatory assets arising from fixed-price contracts and other derivatives | 364 |
| 398 | |||
| Other regulatory assets | 707 |
| 713 | |||
| Nuclear decommissioning trusts | 669 |
| 638 | |||
| Investments | 1,062 |
| 1,091 | |||
| Sundry | 808 |
| 802 | |||
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| Total investments and other assets | 3,631 |
| 3,663 | |
Property, plant and equipment, net | 12,680 |
| 11,756 | ||||
Total assets | $29,046 |
| $29,246 | ||||
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Liabilities and Shareholders' Equity | |||||||
Current liabilities: | |||||||
| Short-term debt | $411 |
| $1,043 | |||
| Accounts payable | 1,256 |
| 1,394 | |||
| Income taxes payable | 132 |
| 86 | |||
| Trading-related payables | 3,192 |
| 4,127 | |||
| Derivative trading instruments | 2,903 |
| 3,246 | |||
| Commodities sold with agreement to repurchase | 488 |
| 634 | |||
| Dividends and interest payable | 153 |
| 140 | |||
| Regulatory balancing accounts, net | 349 |
| 192 | |||
| Fixed-price contracts and other derivatives | 100 |
| 130 | |||
| Current portion of long-term debt | 842 |
| 98 | |||
| Other | 796 |
| 1,012 | |||
|
| Current liabilities of continuing operations | 10,622 |
| 12,102 | ||
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| Current liabilities of discontinued operations | 174 |
| 151 | ||
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| Total current liabilities | 10,796 |
| 12,253 | |
Long-term debt | 4,416 |
| 4,815 | ||||
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Deferred credits and other liabilities: | |||||||
| Due to unconsolidated affiliate | 162 |
| 162 | |||
| Customer advances for construction | 123 |
| 110 | |||
| Postretirement benefits other than pensions | 122 |
| 121 | |||
| Deferred income taxes | 355 |
| 214 | |||
| Deferred investment tax credits | 68 |
| 73 | |||
| Regulatory liabilities arising from removal obligations | 2,388 |
| 2,313 | |||
| Asset retirement obligations | 996 |
| 958 | |||
| Other regulatory liabilities | 220 |
| 200 | |||
| Fixed-price contracts and other derivatives | 368 |
| 400 | |||
| Deferred credits and other | 1,377 |
| 1,288 | |||
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| Total deferred credits and other liabilities | 6,179 |
| 5,839 | |
Preferred stock of subsidiaries | 179 |
| 179 | ||||
Shareholders' equity | 7,476 |
| 6,160 | ||||
Total liabilities and shareholders' equity | $29,046 |
| $29,246 | ||||
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The statements above reflect the decisions in 2006 to dispose of the Twin Oaks power plant, Sempra Energy Production Company, and the Energy Services and Facilities Management businesses, all within Sempra Generation, and Bangor Gas and Frontier Energy, both within Sempra Pipelines & Storage. | |||||||
6
SEMPRA ENERGY | |||||
Table C | |||||
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CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS | |||||
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| Nine months ended | ||
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| September 30, | ||
(Dollars in millions) | 2006 |
| 2005 | ||
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| (Unaudited) | ||
Cash Flows from Operating Activities: | |||||
Income from continuing operations | $962 |
| $556 | ||
Adjustments to reconcile income from continuing operations to net cash | |||||
provided by operating activities: | |||||
| Depreciation and amortization | 491 |
| 466 | |
| Losses (gains) on sale of assets | 1 |
| (104) | |
| Impairment losses | 3 |
| 12 | |
| Deferred income taxes and investment tax credits | (56) |
| (169) | |
| Equity in income of unconsolidated subsidiaries | (380) |
| (46) | |
| Tax benefits from share-based awards | (18) |
| - | |
| Other | 73 |
| 45 | |
Quasi-reorganization resolution | 12 |
| - | ||
Net changes in other working capital components | 263 |
| (328) | ||
Changes in other assets | 41 |
| (2) | ||
Changes in other liabilities | 12 |
| 335 | ||
| Net cash provided by continuing operations | 1,404 |
| 765 | |
| Net cash used in discontinued operations | (13) |
| (70) | |
| Net cash provided by operating activities | 1,391 |
| 695 | |
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Cash Flows from Investing Activities: | |||||
Expenditures for property, plant and equipment | (1,341) |
| (940) | ||
Proceeds from sale of assets from continuing operations | 36 |
| 275 | ||
Expenditures for investments | (126) |
| (80) | ||
Distribution from investment | 104 |
| - | ||
Purchases of nuclear decommissioning and other trust assets | (500) |
| (200) | ||
Proceeds from sales by nuclear decommissioning and other trusts | 476 |
| 168 | ||
Increase in restricted cash balance | (153) |
| 3 | ||
Dividends received from unconsolidated affiliates | 410 |
| 49 | ||
Other | (27) |
| (12) | ||
| Net cash used in continuing operations | (1,121) |
| (737) | |
| Net cash provided by (used in) discontinued operations | 778 |
| (18) | |
| Net cash used in investing activities | (343) |
| (755) | |
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Cash Flows from Financing Activities: | |||||
Common dividends paid | (203) |
| (193) | ||
Issuances of common stock | 89 |
| 692 | ||
Repurchases of common stock | (12) |
| (95) | ||
Issuances of long-term debt | 422 |
| 255 | ||
Redemption of mandatorily redeemable preferred securities | - |
| (200) | ||
Payments on long-term debt | (81) |
| (207) | ||
Decrease in short-term debt, net | (632) |
| (97) | ||
Financing transaction related to Sempra Financial | 83 |
| - | ||
Tax benefits from share-based awards | 18 |
| - | ||
Other | (2) |
| (3) | ||
| Net cash provided by (used in) continuing operations | (318) |
| 152 | |
| Net cash provided by (used in) discontinued operations | 2 |
| (7) | |
| Net cash provided by (used in) financing activities | (316) |
| 145 | |
Increase in cash and cash equivalents | 732 |
| 85 | ||
Cash and cash equivalents, January 1 | 769 |
| 415 | ||
Cash and cash equivalents, September 30 | $1,501 |
| $500 | ||
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The statements above reflect the decisions in 2006 to dispose of the Twin Oaks power plant, Sempra Energy Production Company, and the Energy Services and Facilities Management businesses, all within Sempra Generation, and Bangor Gas and Frontier Energy, both within Sempra Pipelines & Storage. |
7
SEMPRA ENERGY | |||||||||
Table D | |||||||||
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BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS (Unaudited) | |||||||||
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| Three months ended |
| Nine months ended | ||||
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| September 30, |
| September 30, | ||||
(Dollars in millions) | 2006 |
| 2005 |
| 2006 |
| 2005 | ||
Net Income | |||||||||
Sempra Utilities: | |||||||||
| San Diego Gas & Electric | $70 |
| $102 |
| $182 |
| $190 | |
| Southern California Gas | 61 |
| 36 |
| 168 |
| 163 | |
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| Total Sempra Utilities | 131 |
| 138 |
| 350 |
| 353 |
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Sempra Global: | |||||||||
| Sempra Commodities | 105 |
| 161 |
| 290 |
| 216 | |
| Sempra Generation* | 265 |
| 24 |
| 322 |
| 91 | |
| Sempra Pipelines & Storage* | 19 |
| 19 |
| 58 |
| 48 | |
| Sempra LNG | (13) |
| (5) |
| (35) |
| (15) | |
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| Total Sempra Global | 376 |
| 199 |
| 635 |
| 340 |
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Parent & Other | 36 |
| (121) |
| (23) |
| (137) | ||
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Continuing Operations | 543 |
| 216 |
| 962 |
| 556 | ||
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Discontinued Operations, Net of Income Tax | 110 |
| 5 |
| 319 |
| 9 | ||
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Consolidated Net Income | $653 |
| $221 |
| $1,281 |
| $565 | ||
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| * Excludes amounts now classified as discontinued operations. | ||||||||
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CAPITAL EXPENDITURES & INVESTMENTS (Unaudited) | |||||||||
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| Three months ended |
| Nine months ended | ||||
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| September 30, |
| September 30, | ||||
(Dollars in millions) | 2006 |
| 2005 |
| 2006 |
| 2005 | ||
Capital Expenditures and Investments | |||||||||
Sempra Utilities: | |||||||||
| San Diego Gas & Electric | $157 |
| $146 |
| $880 |
| $342 | |
| Southern California Gas | 91 |
| 99 |
| 284 |
| 245 | |
| Total Sempra Utilities | 248 |
| 245 |
| 1,164 |
| 587 | |
|
|
|
|
|
|
|
|
|
|
Sempra Global: | |||||||||
| Sempra Generation | 2 |
| 110 |
| 37 |
| 193 | |
| Sempra Commodities | 13 |
| 32 |
| 43 |
| 61 | |
| Sempra Pipelines & Storage | 66 |
| 3 |
| 212 |
| 10 | |
| Sempra LNG | 121 |
| 43 |
| 466 |
| 156 | |
| Total Sempra Global | 202 |
| 188 |
| 758 |
| 420 | |
|
|
|
|
|
|
|
|
|
|
Parent & Other | 4 |
| 7 |
| (455) |
| 13 | ||
|
|
|
|
|
|
|
|
|
|
Consolidated Capital Expenditures and Investments | $454 |
| $440 |
| $1,467 |
| $1,020 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
The statements above reflect the decisions in 2006 to dispose of the Twin Oaks power plant, Sempra Energy Production Company, and the Energy Services and Facilities Management businesses, all within Sempra Generation, and Bangor Gas and Frontier Energy, both within Sempra Pipelines & Storage. |
|
| |||||||
|
|
8
SEMPRA ENERGY |
|
|
|
| ||||||
Table E |
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
OTHER OPERATING STATISTICS (Unaudited) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended |
| Nine months ended |
| ||||
|
|
| September 30, |
| September 30, |
| ||||
SEMPRA UTILITIES | 2006 |
| 2005 |
| 2006 |
| 2005 |
| ||
|
|
|
|
|
|
|
|
|
|
|
Revenues (Dollars in millions) | ||||||||||
| SDG&E (excludes intercompany sales) | $700 |
| $596 |
| $2,078 |
| $1,747 |
| |
| SoCalGas (excludes intercompany sales) | $794 |
| $899 |
| $3,112 |
| $3,036 |
| |
|
|
|
|
|
|
|
|
|
|
|
Gas Sales (Bcf) | 62 |
| 67 |
| 292 |
| 290 |
| ||
Transportation and Exchange (Bcf) | 165 |
| 142 |
| 419 |
| 381 |
| ||
Total Deliveries (Bcf) | 227 |
| 209 |
| 711 |
| 671 |
| ||
|
|
|
|
|
|
|
|
|
|
|
Total Gas Customers (Thousands) | 6,446 |
| 6,358 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
Electric Sales (Millions of kWhs) | 5,022 |
| 4,300 |
| 12,897 |
| 11,988 |
| ||
Direct Access (Millions of kWhs) | 915 |
| 865 |
| 2,569 |
| 2,493 |
| ||
Total Deliveries (Millions of kWhs) | 5,937 |
| 5,165 |
| 15,466 |
| 14,481 |
| ||
|
|
|
|
|
|
|
|
|
|
|
Total Electric Customers (Thousands) | 1,350 |
| 1,333 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEMPRA GENERATION | ||||||||||
Power Sold (Millions of kWhs) | 5,470 |
| 4,557 | (1) | 14,054 |
| 12,131 | (1) | ||
|
|
|
|
|
|
|
|
|
|
|
(1) | Revised to exclude the Twin Oaks, Coleto Creek and Topaz power plants. | |||||||||
|
|
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
SEMPRA PIPELINES & STORAGE | ||||||||||
(Represents 100% of these subsidiaries, although only the Mexican subsidiaries are 100% owned by Sempra Energy.) | ||||||||||
Natural Gas Sales (Bcf) | ||||||||||
| Argentina | 89 |
| 88 |
| 208 |
| 210 |
| |
| Mexico | 13 |
| 12 |
| 34 |
| 33 |
| |
| Chile | 1 |
| 1 |
| 2 |
| 2 |
| |
Natural Gas Customers (Thousands) | ||||||||||
| Argentina | 1,527 |
| 1,488 |
| |||||
| Mexico | 100 |
| 98 |
| |||||
| Chile | 39 |
| 37 |
| |||||
Electric Sales (Millions of kWhs) | ||||||||||
| Peru | 1,166 |
| 1,058 |
| 3,488 |
| 3,185 |
| |
| Chile | 385 |
| 511 |
| 1,562 |
| 1,752 |
| |
Electric Customers (Thousands) | ||||||||||
| Peru | 780 |
| 762 |
| |||||
| Chile | 532 |
| 518 |
|
9
SEMPRA ENERGY | ||||||
Table E (Continued) | ||||||
|
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|
|
SEMPRA COMMODITIES | ||||||
|
|
|
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|
|
| Three months ended |
| Nine months ended | ||
|
| September 30, |
| September 30, | ||
Margin* (Dollars in millions) | 2006 | 2005 |
| 2006 | 2005 | |
Geographical: | ||||||
| North America | $233 | $254 |
| $839 | $548 |
| Europe/Asia | 128 | 119 |
| 152 | 113 |
| Total | $361 | $373 |
| $991 | $661 |
|
|
|
|
|
|
|
Product Line: | ||||||
| Gas | $146 | $121 |
| $430 | $122 |
| Power | 116 | 110 |
| 327 | 234 |
| Oil - Crude & Products | 27 | 89 |
| 113 | 160 |
| Metals | 53 | 3 |
| 78 | 42 |
| Other | 19 | 50 |
| 43 | 103 |
| Total | $361 | $373 |
| $991 | $661 |
|
|
|
|
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|
|
* Margin consists of net revenues less related costs (primarily brokerage, transportation and storage) plus or minus net interest expense/income, and is used by management in evaluating its geographical and product line performance. | ||||||
|
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|
| Three months ended |
| Nine months ended | ||
|
| September 30, |
| September 30, | ||
Effect of EITF 02-03 (Dollars in millions) | 2006 | 2005 |
| 2006 | 2005 | |
|
|
|
|
|
|
|
| Mark-to-Market Earnings ** | $86 | $153 |
| $329 | $282 |
| Effect of EITF 02-03 *** | 19 | 8 |
| (39) | (66) |
| GAAP Net Income | $105 | $161 |
| $290 | $216 |
|
|
|
|
|
|
|
** Represents the fair market value of all commodities transactions. This metric is a useful measurement of profitability because it simultaneously recognizes changes in the various components of transactions and reflects how the business is managed. | ||||||
*** Consists of the income statement effect of not recognizing changes in the fair market value of certain physical inventories and capacity contracts for transportation and storage. | ||||||
|
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|
|
|
|
|
| Fair |
|
|
|
|
|
| Market Value |
|
|
|
|
|
| September 30, | Scheduled Maturity (in months) | |||
Net Unrealized Revenue (Dollars in millions) | 2006 | 0 - 12 | 13 - 24 | 25 - 36 | > 36 | |
Sources of Over-the-Counter (OTC) Fair Value: | ||||||
| Prices actively quoted | $1,309 | $480 | $546 | $159 | $124 |
| Prices provided by other external sources | 70 | (4) | 2 | - | 72 |
| Prices based on models and other valuation methods | (13) | - | - | - | (13) |
| Total OTC Fair Value (1) | 1,366 | 476 | 548 | 159 | 183 |
|
|
|
|
|
|
|
| Maturity of OTC Fair Value - Cumulative Percentages | 34.8% | 75.0% | 86.6% | 100.0% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Contracts (2) | (45) | 156 | (71) | (11) | (119) | |
|
|
|
|
|
|
|
Total Net Unrealized Revenue at September 30, 2006 | $1,321 | $632 | $477 | $148 | $64 | |
|
|
|
|
|
|
|
| Net Unrealized Revenue - Cumulative Percentages | 47.8% | 84.0% | 95.2% | 100.0% | |
|
|
|
|
|
|
|
(1) The present value of unrealized revenue to be received or (paid) from outstanding OTC contracts | ||||||
(2) Cash received or (paid) associated with open Exchange Contracts | ||||||
|
|
|
|
|
|
|
|
| September 30, | December 31, | |||
Credit Quality of Unrealized Trading Assets (net of margin) | 2006 | 2005 |
|
|
| |
Commodity Exchanges | 14% | 2% |
|
|
| |
Investment Grade | 60% | 75% |
|
|
| |
Below Investment Grade | 26% | 23% |
|
|
| |
|
|
|
|
|
|
|
|
| Three months ended |
| Nine months ended | ||
|
| September 30, |
| September 30, | ||
Risk Adjusted Performance Indicators (Mark-to-Market Basis) | 2006 | 2005 |
| 2006 | 2005 | |
VaR at 95% (Dollars in millions) (1) | $11.1 | $12.8 |
| $15.8 | $10.3 | |
VaR at 99% (Dollars in millions) (2) | $15.6 | $18.0 |
| $22.3 | $14.6 | |
Risk Adjusted Return on Capital (RAROC) (3) | 36% | 38% |
| 33% | 36% | |
|
|
|
|
|
|
|
(1) Average Daily Value-at-Risk for the period using a 95% confidence level | ||||||
(2) Average Daily Value-at-Risk for the period using a 99% confidence level | ||||||
(3) Average Daily Trading Margin/Average Daily VaR at 95% confidence level | ||||||
|
|
|
|
|
|
|
Physical Statistics | ||||||
Natural Gas (BCF/Day) | 11.8 | 11.7 |
| 12.0 | 11.5 | |
Electric (Billions of kWhs) | 126.1 | 107.0 |
| 350.0 | 300.8 | |
Oil & Liquid Products (Millions Bbls/Day) | 0.6 | 0.7 |
| 0.7 | 0.9 |
10
Exhibit 99.2
SEMPRA ENERGY |
|
|
| ||||||||||||||
Table F (Unaudited) |
|
|
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement Data by Business Unit | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2006 | |||||||||||||||||
|
|
|
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|
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|
|
|
|
|
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|
|
|
|
|
(Dollars in millions) | SDG&E |
| SoCalGas |
| Commodities |
| Generation |
| Pipelines & Storage |
| LNG |
| Consolidating Adjustments, Parent & Other |
|
| Total | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues | $2,089 |
| $3,145 |
| $2,178 |
| $1,032 |
| $227 |
| $(21) |
| $(134) |
|
| $8,516 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales and Other Operating Expenses | 1,496 |
| 2,613 |
| 1,637 |
| 786 |
| 210 |
| 29 |
| (5) |
|
| 6,766 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation Expense (Adjustment) | 3 |
| (3) |
| 8 |
| 30 |
| 3 |
| - |
| 2 |
|
| 43 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & Amortization | 219 |
| 200 |
| 19 |
| 34 |
| 9 |
| - |
| 10 |
|
| 491 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses (Gains) on Sale of Assets, Net | (1) |
| (4) |
| 7 |
| - |
| - |
| - |
| (1) |
|
| 1 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) | 372 |
| 339 |
| 507 |
| 182 |
| 5 |
| (50) |
| (140) |
|
| 1,215 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense), Net | 15 |
| (1) |
| - |
| 354 |
| 3 |
| - |
| 4 |
|
| 375 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before Interest & Taxes (1) | 387 |
| 338 |
| 507 |
| 536 |
| 8 |
| (50) |
| (136) |
|
| 1,590 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Expense (Income) (2) | 79 |
| 31 |
| 48 |
| (2) |
| (2) |
| 3 |
| 50 |
|
| 207 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense (Benefit) | 126 |
| 139 |
| 169 |
| 216 |
| (8) |
| (18) |
| (163) |
|
| 461 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income of Certain Unconsolidated Subsidiaries | - |
| - |
| - |
| - |
| 40 |
| - |
| - |
|
| 40 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations | - |
| - |
| - |
| - |
| - |
| - |
| 319 |
|
| 319 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) | $182 |
| $168 |
| $290 |
| $322 |
| $58 |
| $(35) |
| $296 |
|
| $1,281 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions) | SDG&E |
| SoCalGas |
| Commodities |
| Generation |
| Pipelines & Storage |
| LNG |
| Consolidating Adjustments, Parent & Other |
|
| Total | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues | $1,761 |
| $3,091 |
| $1,695 |
| $1,098 |
| $227 |
| $- |
| $(292) |
|
| $7,580 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales and Other Operating Expenses | 1,259 |
| 2,559 |
| 1,399 |
| 898 |
| 215 |
| 23 |
| (121) |
|
| 6,232 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation Expense | 44 |
| 88 |
| 45 |
| 18 |
| 1 |
| - |
| 145 |
|
| 341 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & Amortization | 197 |
| 198 |
| 21 |
| 28 |
| 9 |
| - |
| 13 |
|
| 466 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on Sale of Assets, Net | (1) |
| - |
| (98) |
| - |
| (4) |
| - |
| (1) |
|
| (104) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) | 262 |
| 246 |
| 328 |
| 154 |
| 6 |
| (23) |
| (328) |
|
| 645 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense), Net | 4 |
| (1) |
| (1) |
| 15 |
| 3 |
| - |
| 4 |
|
| 24 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before Interest & Taxes (1) | 266 |
| 245 |
| 327 |
| 169 |
| 9 |
| (23) |
| (324) |
|
| 669 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Expense (Income) (2) | 37 |
| 27 |
| 20 |
| 16 |
| (1) |
| 1 |
| 77 |
|
| 177 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense (Benefit) | 39 |
| 55 |
| 91 |
| 62 |
| 4 |
| (9) |
| (264) |
|
| (22) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income of Certain Unconsolidated Subsidiaries | - |
| - |
| - |
| - |
| 42 |
| - |
| - |
|
| 42 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations | - |
| - |
| - |
| - |
| - |
| - |
| 9 |
|
| 9 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) | $190 |
| $163 |
| $216 |
| $91 |
| $48 |
| $(15) |
| $(128) |
|
| $565 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Management believes "Income before Interest & Taxes" (Operating Income plus Other Income, Net) is a useful measurement of our business units' performance because it can be used to evaluate the effectiveness of our operations exclusive of interest and income taxes, neither of which is directly relevant to the efficiency of those operations. |
|
|
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Net Interest Expense (Income) includes Interest Income, Interest Expense and Preferred Dividends of Subsidiaries. |
|
SEMPRA ENERGY |
|
|
| ||||||||||||||
Table F (Unaudited) |
|
|
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement Data by Business Unit | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2006 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions) | SDG&E |
| SoCalGas |
| Commodities |
| Generation |
| Pipelines & Storage |
| LNG |
| Consolidating Adjustments, Parent & Other |
|
| Total | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues | $703 |
| $812 |
| $784 |
| $379 |
| $79 |
| $(1) |
| $(62) |
|
| $2,694 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales and Other Operating Expenses | 481 |
| 614 |
| 592 |
| 288 |
| 73 |
| 10 |
| (3) |
|
| 2,055 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation Expense | 2 |
| 2 |
| 1 |
| 2 |
| 1 |
| - |
| 4 |
|
| 12 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & Amortization | 72 |
| 67 |
| 6 |
| 12 |
| 3 |
| - |
| 3 |
|
| 163 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses (Gains) on Sale of Assets, Net | - |
| (3) |
| 2 |
| - |
| - |
| - |
| (1) |
|
| (2) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) | 148 |
| 132 |
| 183 |
| 77 |
| 2 |
| (11) |
| (65) |
|
| 466 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income, Net | 2 |
| - |
| - |
| 364 |
| - |
| 2 |
| 8 |
|
| 376 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before Interest & Taxes (1) | 150 |
| 132 |
| 183 |
| 441 |
| 2 |
| (9) |
| (57) |
|
| 842 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Expense (Income) (2) | 27 |
| 12 |
| 17 |
| (6) |
| (2) |
| 1 |
| 9 |
|
| 58 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense (Benefit) | 53 |
| 59 |
| 61 |
| 182 |
| 1 |
| 3 |
| (102) |
|
| 257 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in Income of Certain Unconsolidated Subsidiaries | - |
| - |
| - |
| - |
| 16 |
| - |
| - |
|
| 16 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations | - |
| - |
| - |
| - |
| - |
| - |
| 110 |
|
| 110 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) | $70 |
| $61 |
| $105 |
| $265 |
| $19 |
| $(13) |
| $146 |
|
| $653 | |
|
|
|
|
|
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|
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|
|
|
|
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(Dollars in millions) | SDG&E |
| SoCalGas |
| Commodities |
| Generation |
| Pipelines & Storage |
| LNG |
| Consolidating Adjustments, Parent & Other |
|
| Total | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues | $601 |
| $910 |
| $791 |
| $412 |
| $90 |
| $- |
| $(94) |
|
| $2,710 | |
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Cost of Sales and Other Operating Expenses | 395 |
| 737 |
| 614 |
| 359 |
| 85 |
| 8 |
| (32) |
|
| 2,166 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation Expense | 44 |
| 88 |
| 38 |
| 10 |
| - |
| - |
| 145 |
|
| 325 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & Amortization | 66 |
| 66 |
| 7 |
| 10 |
| 3 |
| - |
| - |
|
| 152 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on Sale of Assets, Net | (1) |
| - |
| (98) |
| - |
| - |
| - |
| - |
|
| (99) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) | 97 |
| 19 |
| 230 |
| 33 |
| 2 |
| (8) |
| (207) |
|
| 166 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense), Net | 3 |
| - |
| - |
| 15 |
| 4 |
| - |
| (3) |
|
| 19 | |
|
|
|
|
|
|
|
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|
|
|
|
|
|
Income (Loss) before Interest & Taxes (1) | 100 |
| 19 |
| 230 |
| 48 |
| 6 |
| (8) |
| (210) |
|
| 185 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Expense (Income) (2) | 6 |
| 9 |
| 8 |
| 8 |
| (1) |
| - |
| 18 |
|
| 48 | |
|
|
|
|
|
|
|
|
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|
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|
|
|
Income Tax Expense (Benefit) | (8) |
| (26) |
| 61 |
| 16 |
| 4 |
| (3) |
| (107) |
|
| (63) | |
|
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Equity in Income of Certain Unconsolidated Subsidiaries | - |
| - |
| - |
| - |
| 16 |
| - |
| - |
|
| 16 | |
|
|
|
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Discontinued Operations | - |
| - |
| - |
| - |
| - |
| - |
| 5 |
|
| 5 | |
|
|
|
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Net Income (Loss) | $102 |
| $36 |
| $161 |
| $24 |
| $19 |
| $(5) |
| $(116) |
|
| $221 | |
|
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(1) Management believes "Income before Interest & Taxes" (Operating Income plus Other Income, Net) is a useful measurement of our business units' performance because it can be used to evaluate the effectiveness of our operations exclusive of interest and income taxes, neither of which is directly relevant to the efficiency of those operations. |
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(2) Net Interest Expense (Income) includes Interest Income, Interest Expense and Preferred Dividends of Subsidiaries. |
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