PE/SoCalGas 8-K 11/2/2005

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, 2005
- -----------------------

 


Commission
File Number
- ----------------------------

Name of Registrant, State of
Incorporation, Address and
Telephone Number
- --------------------------------------

IRS Employer
Identification
Number
- ----------------------------

1-40

Pacific Enterprises
(A California Corporation)
101 Ash Street
San Diego, California 92101
(619) 696-2000

94-0743670

     

1-1402

Southern California Gas Company
(A California Corporation)
555 West Fifth Street
Los Angeles, California 90013
(213) 244-1200

95-1240705

 

 

---------------------------------------------------------------------
(Former name or former address, if changed since last report.)






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, 2005, Sempra Energy, of which Pacific Enterprises and Southern California Gas Company are consolidated subsidiaries, issued a press release announcing consolidated net income of $221 million, or $0.86 per diluted share of common stock, for the third quarter of 2005. 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 the nine months ended September 30, 2005 and 2004. 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.

In addition to reporting net income for the three-month and nine-month periods ended September 30, 2005 and 2004, the press release states what Southern California Gas Company's net income would have been for the three-month periods excluding the impact of specified unusual factors. Management believes that this presentation assists the reader and the company in understanding trends in earnings.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

99.1 November 2, 2005 Sempra Energy News Release (including tables)

99.2 Sempra Energy's Income Statement Data by Business Unit for the three months and the nine months ended September 30, 2005 and 2004.






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

 

 

Date: November 2, 2005

By: /s/ F. H. Ault
- -----------------------------------------

 

F. H. Ault
Sr. Vice President and Controller

 

 

Southern California Gas Company

Date: November 2, 2005

By: /s/ S.D. Davis
- -----------------------------------------

 

S.D. Davis
Sr. Vice President-External Relations
and Chief Financial Officer

 

SEMPRA ENERGY 9/30/2005 EXHIBIT 99.1

EXHIBIT 99.1

NEWS RELEASE

Media Contacts:

Doug Kline/Jennifer Andrews
Sempra Energy
(877) 866-2066
www.sempra.com

   

Financial Contacts:

Dennis Arriola/Karen Sedgwick
Sempra Energy
(877) 736-7727

   

 

 

SEMPRA ENERGY REPORTS STRONG OPERATING RESULTS IN THIRD-QUARTER

  • Earnings-Per-Share Outlook for 2005 Raised to $3.40 to $3.60 from $3.20 to $3.40
  • Capital Spending for Energy Projects $1 Billion Through Three Quarters

SAN DIEGO, Nov. 2, 2005 - Sempra Energy (NYSE: SRE) today reported third-quarter 2005 earnings of $221 million, or $0.86 per diluted share, compared with third-quarter 2004 earnings of $231 million, or $0.98 per diluted share.

Net income in the third quarter 2005 included the effects of several items, including $71 million from the favorable resolution of prior-years' tax issues, a $38 million gain from the sale of Sempra Commodities' natural gas storage assets, and a $27 million benefit at San Diego Gas & Electric (SDG&E) from an electric-transmission-cost settlement. The quarterly results were negatively affected by a $189 million after-tax effect from an increase in reserves at the parent company and several of its subsidiaries, almost entirely for continuing litigation.

Excluding the impact of discontinued operations and the items listed above, net income would have been $275 million, or $1.07 per diluted share. In the prior-year's period, net income was $227 million, or $0.96 per diluted share, excluding the effects of a $9 million gain from the sale of property and $5 million in tax issues that negatively affected earnings.

For the first nine months of 2005, Sempra Energy's earnings were $565 million, or $2.26 per diluted share, up 3 percent over $549 million, or $2.36 per diluted share, for the same period in 2004.

"Our strong operating results in the third quarter, especially from our commodity operations, have contributed to an improved outlook for the rest of the year," said Stephen L. Baum, chairman and chief executive officer of Sempra Energy. "We are raising our 2005 GAAP earnings-per-share guidance to $3.40 to $3.60 from $3.20 to $3.40."

Sempra Energy's revenues in the third quarter 2005 were $2.7 billion, compared with $2.2 billion in the year-ago quarter, based on higher volatility in commodity prices that led to increased margins in natural gas and power sales at Sempra Commodities.

During the first nine months of 2005, Sempra Energy's capital expenditures totaled $1 billion -- more than half of which have been invested in SDG&E and Southern California Gas Co. (SoCalGas) -- compared with approximately $850 million during the same period last year.

"With energy supplies tight in North America, we continue to invest in natural gas and electric infrastructure to bring new supplies to market," said Baum.

OPERATING HIGHLIGHTS

Sempra Utilities

Third-quarter earnings for SDG&E rose to $102 million in 2005 from $60 million in 2004, due primarily to a $39 million tax benefit and the $27 million electric-transmission-cost settlement, offset by the effect of a $27 million after-tax increase in litigation reserves.

Net income for SoCalGas in the third quarter 2005 was $36 million, compared with $68 million in the third quarter 2004, due primarily to the effect of a $53 million after-tax increase in litigation reserves, partially offset by an $18 million tax benefit. Third-quarter 2004 results included a $9 million gain from a property sale.

SDG&E recently signed several major power-purchase contracts for renewable energy. Last month, the utility entered into an agreement with enXco of Escondido, Calif., for 205.5 megawatts (MW) of wind power with deliveries beginning in 2007-08. In September 2005, SDG&E contracted with Stirling Energy Systems of Arizona for 300 MW of solar power under a 20-year agreement and with San Diego-based Covanta for approximately 4 MW of power from a local landfill gas facility under a 10-year agreement.

"With these new contracts, SDG&E is well on its way to achieving its goal of meeting 20 percent of its customers' needs by 2010 with renewable energy and developing a balanced portfolio of energy resources," said Baum.

Sempra Commodities

Sempra Commodities posted strong quarterly results, earning $161 million in the third quarter 2005, up from $46 million in the same period last year. The bulk of the company's growth during the quarter came from its North American and European natural gas and power sales. The results for the quarter also included a $16 million tax benefit, the $38 million gain related to the sale of its natural gas storage assets and the effect of a $14 million after-tax increase in litigation reserves.

Sempra Generation

Sempra Generation's third-quarter net income was $30 million in 2005, compared with $64 million in 2004. Third-quarter 2005 earnings were affected by higher development costs, $19 million from temporary mark-to-market losses on forward sales and the effect of a $5 million after-tax increase in litigation reserves.  Third-quarter 2004 results included approximately $7 million in temporary mark-to-market gains. 

Sempra Pipelines & Storage

Based on improved performance at the company's distribution operations outside the United States, Sempra Pipelines & Storage's net income more than doubled to $19 million in the third quarter 2005 from $7 million in the same period last year.

During the quarter, Sempra Pipelines & Storage entered into a Memorandum of Understanding with Kinder Morgan Energy Partners, L.P. to pursue development of a proposed new 1,700-mile natural gas pipeline that would link producing areas in the Rocky Mountain region to the upper Midwest and eastern United States.  As designed, the pipeline would have capacity of up to 2 billion cubic feet per day.  Initially, Kinder Morgan would own two-thirds of the equity in the proposed pipeline and Sempra Pipelines & Storage would own one-third.

Sempra LNG

Sempra LNG reported a third-quarter loss of $5 million in 2005, compared with a loss of $4 million last year.

"With construction of our Louisiana and Mexico liquefied natural gas (LNG) terminals now under way and our Texas LNG terminal in the latter stages of permitting, we continue to make good progress toward becoming North America's leading importer of LNG," said Baum. "LNG remains a key to expanding domestic supplies and helping to stabilize natural gas prices in the future."

Last month, Sempra LNG announced that it is proceeding with detailed negotiations to deliver Algerian natural gas to the U.S. Gulf Coast. The negotiations follow a Heads of Agreement (HOA) signed earlier this year with Sonatrach S.A., one of the world's leading energy firms. The non-binding HOA contemplates a 20-year agreement to import the equivalent of 250 million cubic feet per day (MMcfd) to 500 MMcfd of Algerian liquefied natural gas to Sempra LNG's Cameron LNG receipt terminal.

Litigation Update

On Oct. 29, 2005, Sempra Energy, SoCalGas and SDG&E announced that the companies had entered into a legal settlement with the County of Los Angeles and 11 other plaintiffs that fully resolved their claims related to the Continental Forge case. Terms of the agreement were not disclosed.

"This settlement represents a very small part of the overall litigation related to the energy crisis," said Baum. "We are pleased with the mutually agreeable settlement."

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, 9806013.

Sempra Energy (NYSE: SRE), based in San Diego, is a Fortune 500 energy services holding company with 2004 revenues of $9.4 billion. The Sempra Energy companies' 13,000 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/3Q2005_Table_F.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; 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 development 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 company's 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.






SEMPRA ENERGY

Table A

STATEMENTS OF CONSOLIDATED INCOME (Unaudited)

Three months ended

Nine months ended

September 30,

September 30,

(Dollars in millions, except per share amounts)

2005

 

2004

2005

 

2004

Operating revenues

California utilities:

Natural gas

$ 1,032

$ 909

$ 3,520

$ 3,189

Electric

463

445

1,263

1,246

Other

1,231

811

2,907

2,086

Total operating revenues

2,726

2,165

7,690

6,521

Operating expenses

California utilities:

Cost of natural gas

547

438

2,060

1,744

Cost of electric fuel and purchased power

146

143

437

425

Other cost of sales

743

484

1,887

1,186

Other operating expenses

993

530

2,069

1,597

Depreciation and amortization

157

171

481

501

Franchise fees and other taxes

61

54

185

171

Total operating expenses

2,647

1,820

7,119

5,624

Operating income

79

345

571

897

Other income, net

131

40

157

58

Interest income

29

25

52

58

Interest expense

(75

)

(74

)

(221

)

(234

)

Preferred dividends of subsidiaries

(2

)

(2

)

(7

)

(7

)

Income from continuing operations before income taxes

162

334

552

772

Income tax expense (benefit)

(60

)

103

(16

)

191

Income from continuing operations

222

231

568

581

Discontinued operations, net of tax

(1

)

-

(3

)

(32

)

Net income

$ 221

$ 231

$ 565

$ 549

Basic earnings per share:

Income from continuing operations

$ 0.87

$ 1.01

$ 2.33

$ 2.55

Discontinued operations, net of tax

-

-

(0.01

)

(0.14

)

Net income

$ 0.87

$ 1.01

$ 2.32

$ 2.41

Weighted-average number of shares outstanding (thousands)

252,974

229,376

243,342

227,412

Diluted earnings per share:

Income from continuing operations

$ 0.86

$ 0.98

$ 2.27

$ 2.50

Discontinued operations, net of tax

-

-

(0.01)

(0.14)

Net income

$ 0.86

$ 0.98

$ 2.26

$ 2.36

Weighted-average number of shares outstanding (thousands)

257,370

235,936

249,874

232,366

Dividends declared per share of common stock

$ 0.29

$ 0.25

$ 0.87

$ 0.75






SEMPRA ENERGY

Table B

CONSOLIDATED BALANCE SHEETS

September 30,

December 31,

(Dollars in millions)

 

2005

 

2004

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$ 503

$ 419

Short-term investments

12

15

Accounts receivable

800

1,032

Due from unconsolidated affiliate

4

4

Deferred income taxes

36

15

Interest receivable

32

80

Trading-related receivables and deposits, net

3,281

2,606

Derivative trading instruments

5,547

2,339

Commodities owned

2,456

1,547

Regulatory assets arising from fixed-price contracts and other derivatives

121

152

Other regulatory assets

107

103

Inventories

240

172

Other

274

222

Current assets of continuing operations

13,413

8,706

Current assets of discontinued operations

55

70

Total current assets

13,468

8,776

Investments and other assets:

Due from unconsolidated affiliates

27

42

Regulatory assets arising from fixed-price contracts and other derivatives

411

500

Other regulatory assets

564

619

Nuclear decommissioning trusts

631

612

Investments

1,104

1,164

Sundry

994

844

Total investments and other assets

3,731

3,781

Property, plant and equipment, net

11,780

11,086

Total assets

$ 28,979

$ 23,643

Liabilities and Shareholders' Equity

Current liabilities:

Short-term debt

$ 305

$ 405

Accounts payable

1,088

1,126

Due to unconsolidated affiliates (mandatorily redeemable preferred securities)

-

205

Income taxes payable

75

187

Trading-related payables

4,501

3,182

Derivative trading instruments

4,742

1,484

Commodities sold with agreement to repurchase

394

513

Dividends and interest payable

137

123

Regulatory balancing accounts, net

522

509

Fixed-price contracts and other derivatives

128

157

Current portion of long-term debt

401

398

Other

820

776

Current liabilities of continuing operations

13,113

9,065

Current liabilities of discontinued operations

7

17

Total current liabilities

13,120

9,082

Long-term debt

4,346

4,192

Deferred credits and other liabilities:

Due to unconsolidated affiliates

162

162

Customer advances for construction

95

97

Postretirement benefits other than pensions

124

129

Deferred income taxes

227

420

Deferred investment tax credits

74

78

Regulatory liabilities arising from cost of removal obligations

2,444

2,359

Regulatory obligations arising from asset retirement obligations

342

333

Other regulatory liabilities

60

67

Fixed-price contracts and other derivatives

412

500

Asset retirement obligations

334

326

Deferred credits and other

1,183

854

Total deferred credits and other liabilities

5,457

5,325

Preferred stock of subsidiaries

179

179

Shareholders' equity

5,877

4,865

Total liabilities and shareholders' equity

$ 28,979

$ 23,643






SEMPRA ENERGY

Table C

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited)

Nine months ended

September 30,

(Dollars in millions)

 

2005

 

2004

Cash Flows from Operating Activities:

Net income

$ 565

$ 549

Adjustments to reconcile net income to net cash provided by operating

activities:

Loss from discontinued operations, net of tax

3

32

Depreciation and amortization

481

501

Gain on sale of assets

(105

)

(15

)

Impairment losses

11

8

Deferred income taxes and investment tax credits

(161

)

(7

)

Other

7

42

Net changes in other working capital components

(387

)

(519

)

Changes in other assets

(99

)

(72

)

Changes in other liabilities

349

21

Net cash provided by continuing operations

664

540

Net cash used in discontinued operations

(3

)

(30

)

Net cash provided by operating activities

661

510

Cash Flows from Investing Activities:

Expenditures for property, plant and equipment

(957

)

(782

)

Proceeds from sale of assets

274

371

(1)

Proceeds from disposal of discontinued operations

3

137

Investments and acquisitions of subsidiaries, net of cash acquired

(80

)

(70

)

Dividends received from affiliates

46

50

Other

(8

)

8

Net cash used in investing activities

(722

)

(286

)

Cash Flows from Financing Activities:

Common dividends paid

(193

)

(145

)

Issuance of common stock

692

90

Repurchases of common stock

(95

)

(5

)

Issuance of long-term debt

255

897

Payments on long-term debt

(209

)

(1,648

)

Redemption of mandatorily redeemable preferred securities

(200

)

-

Increase (decrease) in short-term debt, net

(102

)

434

Other

(3

)

(4

)

Net cash provided by (used in ) financing activities

145

(381

)

Increase (decrease) in cash and cash equivalents

84

(157

)

Cash and cash equivalents, January 1

419

409

Cash and cash equivalents, September 30

$ 503

$ 252

(1)

Includes $363 proceeds from the sale of U.S. Treasury obligations which previously securitized the Mesquite synthetic lease.






SEMPRA ENERGY

Table D

BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS (Unaudited)

Three months ended

Nine months ended

September 30,

September 30,

(Dollars in millions)

2005

 

2004

2005

 

2004

Net Income

California Utilities:

San Diego Gas & Electric

$ 102

$ 60

$ 190

$ 140

Southern California Gas

36

68

163

174

Total California Utilities

138

128

353

314

Sempra Global:

Sempra Commodities

161

46

216

149

Sempra Generation

30

64

103

118

Sempra Pipelines & Storage

19

7

48

35

Sempra LNG

(5

)

(4

)

(15

)

-

Total Sempra Global

205

113

352

302

Sempra Financial

8

10

19

26

Parent & Other

(129

)

(20

)

(156

)

(61

)

Continuing Operations

222

231

568

581

Discontinued Operations (1)

(1

)

-

(3

)

(32

)

Consolidated Net Income

$ 221

$ 231

$ 565

$ 549

(1)

Reflects Atlantic Electric & Gas.

Three months ended

Nine months ended

September 30,

September 30,

(Dollars in millions)

2005

 

2004

 

2005

 

2004

Capital Expenditures and Investments

California Utilities:

San Diego Gas & Electric

$ 146

$ 102

$ 342

$ 283

Southern California Gas

99

90

245

234

Total California Utilities

245

192

587

517

Sempra Global:

Sempra Generation

115

106

209

154

Sempra Commodities

32

21

61

103

Sempra Pipelines & Storage

4

2

11

18

Sempra LNG

43

13

156

35

Total Sempra Global

194

142

437

310

Parent & Other

7

7

13

25

Consolidated Capital Expenditures and Investments

$ 446

$ 341

$ 1,037

$ 852






SEMPRA ENERGY

Table E

OTHER OPERATING STATISTICS (Unaudited)

Three months ended

Nine months ended

September 30,

 

September 30,

CALIFORNIA UTILITIES

2005

 

2004

 

2005

 

2004

Revenues (Dollars in millions)

SDG&E (excludes intercompany sales)

$ 596

$ 545

$ 1,747

$ 1,649

SoCalGas (excludes intercompany sales)

$ 899

$ 809

$ 3,036

$ 2,786

Gas Sales (Bcf)

67

67

290

288

Transportation and Exchange (Bcf)

142

162

381

411

Total Deliveries (Bcf)

209

229

671

699

Total Gas Customers (Thousands)

6,358

6,271

Electric Sales (Millions of kWhs)

4,300

4,247

11,988

11,806

Direct Access (Millions of kWhs)

865

902

2,493

2,560

Total Deliveries (Millions of kWhs)

5,165

5,149

14,481

14,366

Total Electric Customers (Thousands)

1,333

1,312

SEMPRA GENERATION

 

 

 

 

 

 

Power Sold (Millions of kWhs)

6,317

6,435

16,967

14,796

SEMPRA PIPELINES & STORAGE

(Represents 100% of these subsidiaries, although only the Mexican subsidiaries are 100% owned by Sempra Energy.)

Natural Gas Sales (Bcf)

Argentina

88

78

210

191

Mexico

12

13

33

33

Chile

1

1

2

2

Natural Gas Customers (Thousands)

Argentina

1,488

1,444

Mexico

98

99

Chile

37

37

Electric Sales (Millions of kWhs)

Peru

1,058

997

3,185

3,020

Chile

511

474

1,752

1,484

Electric Customers (Thousands)

Peru

762

744

Chile

518

504






SEMPRA ENERGY

Table E (Continued)

SEMPRA COMMODITIES

 

 

 

 

 

Three months ended

Nine months ended

September 30,

September 30,

Margin * (Dollars in millions)

2005

2004

2005

2004

Geographical:

North America

$ 254

$ 129

$ 548

$ 396

Europe/Asia

119

53

113

173

Total

$ 373

$ 182

$ 661

$ 569

Product Line:

Gas

$ 121

$ (11)

$ 122

$ 83

Power

110

37

234

91

Oil - Crude & Products

89

107

160

198

Metals

3

16

42

125

Other

50

33

103

72

Total

$ 373

$ 182

$ 661

$ 569

* 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.

Three months ended

Nine months ended

September 30,

September 30,

Effect of EITF 02-03 (Dollars in millions)

2005 ****

2004

2005 ****

2004

Mark-to-Market Earnings **

$ 153

$ 84

$ 282

$ 183

Effect of EITF 02-03 ***

8

(38)

(66)

(34)

GAAP Net Income

$ 161

$ 46

$ 216

$ 149

** 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.

**** Includes after-tax gain of $38 million related to the sale of certain storage assets.

Fair

Market Value

September 30,

Scheduled Maturity (in months)

Net Unrealized Revenue (Dollars in millions)

2005

0 - 12

13 - 24

25 - 36

> 36

Sources of Over-the-Counter (OTC) Fair Value:

Prices actively quoted

$ 835

$ 675

$ (120)

$ 197

$ 83

Prices provided by other external sources

32

(6)

3

1

34

Prices based on models and other valuation methods

9

12

 

 

(3)

Total OTC Fair Value (1)

$ 876

$ 681

$ (117)

$ 198

$ 114

Maturity of OTC Fair Value

Percentage

100.0%

77.8%

(13.4%)

22.6%

13.0%

Cumulative Percentages

 

77.8%

64.4%

87.0%

100.0%

 

 

 

 

 

 

Exchange Contracts (2)

$ (276)

$ (198)

$ 143

$ (177)

$ (44)

Total Net Unrealized Revenue at September 30, 2005

$ 600

(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)

2005

2004

Commodity Exchanges

12%

10%

Investment Grade

71%

66%

Below Investment Grade

17%

24%

Three months ended

Nine months ended

September 30,

September 30,

Risk Adjusted Performance Indicators (Mark-to-Market Basis)

2005

2004

2005

2004

VaR at 95% (Dollars in millions) (1)

$ 12.8

$ 8.4

$ 10.3

$ 6.9

VaR at 99% (Dollars in millions) (2)

$ 18.0

$ 11.9

$ 14.6

$ 9.7

Risk Adjusted Return on Capital (RAROC) (3)

41%

45%

38%

40%

(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)

11.7

13.6

11.5

13.4

Electric (Billions of kWhs)

107.0

89.8

300.8

265.6

Oil & Liquid Products (Millions Bbls/Day)

1.9

2.5

2.0

2.1





SEMPRA ENERGY 9/30/2005 Exhibit 99.2

EXHIBIT 99.2

SEMPRA ENERGY

Table F (Unaudited)

Income Statement Data by Business Unit

Three Months Ended September 30, 2005

(Dollars in millions)

SDG&E

SoCal Gas

Commodities

Generation

Pipelines & Storage

LNG

Financial

Consolidating Adjustments, Parent & Other

 

Total

 

Operating Revenues

$ 601

$ 910

$ 754

$ 462

$ 92

$ -

$ -

$ (93

)

 

$ 2,726

 

Operating Expenses

438

825

615

407

88

8

1

108

 

2,490

 

Depreciation & Amortization

66

 

66

 

7

 

14

 

3

 

-

 

(3

)

4

 

 

157

 

Operating Income

97

19

132

41

1

(8

)

2

(205

)

 

79

 

Other Income, net

3

 

-

 

98

 

15

 

20

 

-

 

(13

)

8

 

 

131

 

Income before Interest & Taxes (1)

100

19

230

56

21

(8

)

(11

)

(197

)

 

210

 

Net Interest Expense (2)

6

9

8

7

(1

)

-

1

18

 

48

 

Income Tax Expense/(Benefit)

(8

)

(26

)

61

19

3

(3

)

(20

)

(86

)

 

(60

)

 

Discontinued Operations

-

-

-

-

-

-

-

(1

)

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$ 102

 

$ 36

 

$ 161

 

$ 30

 

$ 19

 

$ (5

$ 8

 

$ (130

 

$ 221

Three Months Ended September 30, 2004

(Dollars in millions)

SDG&E

SoCal Gas

Commodities

Generation

Pipelines & Storage

LNG

Financial

Consolidating Adjustments, Parent & Other

 

Total

 

Operating Revenues

$ 550

$ 826

$ 366

$ 439

$ 73

$ -

$ -

$ (89

)

 

$ 2,165

 

Operating Expenses

368

636

282

334

72

6

1

(50

)

 

1,649

 

Depreciation & Amortization

68

 

75

 

6

 

10

 

3

 

-

 

5

 

4

 

 

171

 

Operating Income

114

115

78

95

(2

)

(6

)

(6

)

(43

)

 

345

 

Other Income, net

1

 

14

 

-

 

12

 

13

 

-

 

1

 

(1

 

40

 

Income before Interest & Taxes (1)

115

129

78

107

11

(6

)

(5

)

(44

)

 

385

 

Net Interest Expense (2)

-

9

3

7

-

-

2

30

 

51

 

Income Tax Expense/(Benefit)

55

52

29

36

4

(2

)

(17

)

(54

)

 

103

 

Discontinued Operations

-

-

-

-

-

-

-

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$ 60

 

$ 68

 

$ 46

 

$ 64

 

$ 7

 

$ (4

$ 10

 

$ (20

 

$ 231

(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 includes Interest Income, Interest Expense and Preferred Dividends of Subsidiaries.






SEMPRA ENERGY

Table F (Unaudited) (continued)

Income Statement Data by Business Unit

Nine Months Ended September 30, 2005

(Dollars in millions)

SDG&E

SoCal Gas

Commodities

Generation

Pipelines & Storage

LNG

Financial

Consolidating Adjustments, Parent & Other

 

Total

 

Operating Revenues

$ 1,761

$ 3,091

$ 1,658

$ 1,237

$ 236

$ -

$ -

$ (293

)

 

$ 7,690

 

Operating Expenses

1,302

2,647

1,408

1,025

218

23

2

13

 

6,638

 

Depreciation & Amortization

197

 

198

 

21

 

41

 

10

 

-

 

8

 

6

 

 

481

 

Operating Income

262

246

229

171

8

(23

)

(10

)

(312

)

 

571

 

Other Income, net

4

 

(1

98

 

15

 

43

 

-

 

(14

12

 

 

157

 

Income before Interest & Taxes (1)

266

245

327

186

51

(23

)

(24

)

(300

)

 

728

 

Net Interest Expense (2)

37

27

20

15

(1

)

1

4

73

 

176

 

Income Tax Expense/(Benefit)

39

55

91

68

4

(9

)

(47

)

(217

)

 

(16

)

 

Discontinued Operations

-

-

-

-

-

-

-

(3

)

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$ 190

 

$ 163

 

$ 216

 

$ 103

 

$ 48

 

$ (15

$ 19

 

$ (159

 

$ 565

Nine Months Ended September 30, 2004

(Dollars in millions)

SDG&E

SoCal Gas

Commodities

Generation

Pipelines & Storage

LNG

Financial

Consolidating Adjustments, Parent & Other

 

Total

 

Operating Revenues

$ 1,666

$ 2,821

$ 1,018

$ 1,175

$ 200

$ -

$ -

$ (359

)

 

$ 6,521

 

Operating Expenses

1,168

2,277

763

937

192

12

2

(228

)

 

5,123

 

Depreciation & Amortization

203

 

225

 

17

 

32

 

10

 

-

 

7

 

7

 

 

501

 

Operating Income

295

319

238

206

(2

)

(12

)

(9

)

(138

)

 

897

 

Other Income, net

4

 

15

 

-

 

(1

54

 

13

 

(26

(1

 

58

 

Income before Interest & Taxes (1)

299

334

238

205

52

1

(35

)

(139

)

 

955

 

Net Interest Expense (2)

31

27

7

20

1

-

6

91

 

183

 

Income Tax Expense/(Benefit)

128

133

82

67

16

1

(67

)

(169

)

 

191

 

Discontinued Operations

-

-

-

-

-

-

-

(32

)

 

(32

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$ 140

 

$ 174

 

$ 149

 

$ 118

 

$ 35

 

$ -

 

$ 26

 

$ (93

 

$ 549

(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 includes Interest Income, Interest Expense and Preferred Dividends of Subsidiaries.