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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




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.)

  

  




 

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:

 

 

[   ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

[   ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

[   ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

[   ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 




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
Sr. Vice President and Chief Financial Officer

 



  

SOUTHERN CALIFORNIA GAS COMPANY
(Registrant)

  

  


Date: November 2, 2006

By: /s/ Dennis V. Arriola

 

Dennis V. Arriola
Sr. Vice President and Chief Financial Officer

 

  





4



Exhibit 99.1

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 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.



4







SEMPRA ENERGY

Table A

 

 

 

 

 

 

 

 

 

STATEMENTS OF CONSOLIDATED INCOME  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

(Dollars in millions)

2006

 

2005

 

 

 

 

 

(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 

 

 

 

Total current assets

 12,735 

 

 13,827 

 

 

 

 

 

 

 

 

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 

 

 

 

Total investments and other assets

 3,631 

 

 3,663 

Property, plant and equipment, net

 12,680 

 

 11,756 

Total assets

 $29,046 

 

 $29,246 

 

 

 

 

 

 

 

 

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 

 

 

Current liabilities of discontinued operations

 174 

 

 151 

 

 

 

Total current liabilities

 10,796 

 

 12,253 

Long-term debt

 4,416 

 

 4,815 

 

 

 

 

 

 

 

 

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 

 

 

 

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 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

 

September 30,

(Dollars in millions)

2006

 

2005

 

 

 

(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 

 

 

 

 

 

 

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)

 

 

 

 

 

 

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 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

 

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 

 

 

Total Sempra Utilities

 131 

 

 138 

 

 350 

 

 353 

 

 

 

 

 

 

 

 

 

 

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)

 

 

Total Sempra Global

 376 

 

 199 

 

 635 

 

 340 

 

 

 

 

 

 

 

 

 

 

Parent & Other

 36 

 

 (121)

 

 (23)

 

 (137)

 

 

 

 

 

 

 

 

 

 

Continuing Operations

 543 

 

 216 

 

 962 

 

 556 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations, Net of Income Tax

 110 

 

 5 

 

 319 

 

 9 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Income

 $653 

 

 $221 

 

 $1,281 

 

 $565 

 

 

 

 

 

 

 

 

 

 

 

* Excludes amounts now classified as discontinued operations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL EXPENDITURES & INVESTMENTS (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

 

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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

SEMPRA COMMODITIES

 

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

* 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)

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.

 

 

 

 

 

 

 

 

 

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

Exhibit 99.2




SEMPRA ENERGY

 

 

 

Table F (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Statement Data by Business Unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




Nine Months Ended September 30, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




Three Months Ended September 30, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense (Benefit)

 (8)

 

 (26)

 

 61 

 

 16 

 

 4 

 

 (3)

 

 (107)

 

 

 (63)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity in Income of Certain Unconsolidated Subsidiaries

 - 

 

 - 

 

 - 

 

 - 

 

 16 

 

 - 

 

 - 

 

 

 16 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 - 

 

 - 

 

 - 

 

 - 

 

 - 

 

 - 

 

 5 

 

 

 5 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 $102 

 

 $36 

 

 $161 

 

 $24 

 

 $19 

 

 $(5)

 

 $(116)

 

 

 $221 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.