SDG&E 8-K 02/22/2006

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):

February 22, 2006
- ----------------------

SAN DIEGO GAS & ELECTRIC COMPANY
- ---------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

CALIFORNIA
- --------------------------------

1-3779
- --------------------------------

95-1184800
- --------------------------------

(State of incorporation
or organization)

(Commission
File Number)

(I.R.S. Employer
Identification No.

8330 CENTURY PARK COURT, SAN DIEGO, CA
- ------------------------------------------------------------------

92123
- ----------------------

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code

(619) 696-2000
- -------------------

---------------------------------------------------------------------
(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))

   






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 San Diego Gas & Electric Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

On February 22, 2006, Sempra Energy, of which San Diego Gas & Electric Company is a consolidated subsidiary, issued a press release announcing consolidated net income of $355 million, or $1.38 per diluted share of common stock, for the fourth 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 years ended December 31, 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 San Diego Gas & Electric Company's results of operations and financial condition.

In addition to reporting net income for the three months and the years ended December 31, 2005 and 2004, the press release states what San Diego Gas & Electric 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 February 22, 2006 Sempra Energy News Release (including tables)

99.2 Sempra Energy's Income Statement Data by Business Unit for the three months and the years ended December 31, 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.

SAN DIEGO GAS & ELECTRIC COMPANY
(Registrant)

Date: February 22, 2006

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

 

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

 

Exhibit 99.1

 

 

Exhibit 99.1

NEWS RELEASE

Media Contact:

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

Financial Contact:

Karen Sedgwick
Sempra Energy
(877) 736-7727

 

SEMPRA ENERGY REPORTS
RECORD 2005 NET INCOME

SAN DIEGO, Feb. 22, 2006 - Based on strong results in its commodities and utility businesses, Sempra Energy (NYSE: SRE) today reported 2005 net income of $920 million, or $3.65 per diluted share, compared with $895 million, or $3.83 per diluted share, in 2004.

Sempra Energy's fourth-quarter 2005 net income was $355 million, or $1.38 per diluted share, compared with $346 million, or $1.46 per diluted share, in 2004.

In 2005, Sempra Energy incurred $311 million after tax in litigation costs related to the Western U.S. energy crisis of 2000-01, compared with $84 million in 2004. In the fourth quarter 2005, the company took an after-tax charge of $116 million for energy-crisis-related litigation costs compared with $74 million in the prior-year quarter.

 

 

-more-

"We are pleased to report record net income in 2005 and a strong fourth quarter, driven by the outstanding operating results in our commodities and power generation businesses, as well as our California utilities," said Donald E. Felsinger, chairman and chief executive officer of Sempra Energy. "We continue to execute our strategy, expanding our competitive businesses in liquefied natural gas (LNG) and natural gas pipelines and storage, while building upon a solid foundation with our utilities, generation and commodities units."

Yesterday, Sempra Energy's board of directors announced an increase in the dividend on common shares on an annualized basis to $1.20 from $1.16.

Revenues for Sempra Energy in 2005 increased to $11.7 billion from $9.4 billion in 2004, due primarily to higher natural gas costs and increased commodities marketing activity. Fourth-quarter 2005 revenues were $4 billion, compared with $2.9 billion in the year-earlier period.

SUBSIDIARY OPERATING RESULTS

Sempra Utilities

Net income for San Diego Gas & Electric (SDG&E) rose to $262 million in 2005 from $208 million in the previous year. SDG&E's fourth-quarter 2005 net income was $72 million, up from $68 million in the fourth quarter 2004, due primarily to regulatory approval of demand-side-management incentives. In the fourth quarter 2004, SDG&E benefited from the settlement of its rate case at the California Public Utilities Commission (CPUC).

Net income for Southern California Gas Co. (SoCalGas) was $211 million in 2005, compared with $232 million in 2004. Fourth-quarter 2005 net income for SoCalGas was $48 million, compared with $58 million earned in the year-earlier period. In the fourth quarter 2005, SoCalGas received regulatory approval of demand-side-management incentives. In the previous-year quarter, SoCalGas benefited from the settlement of its rate case at the CPUC.

 

-more-

Sempra Commodities

Sempra Commodities had record net income of $460 million in 2005, an increase of 44 percent over 2004 net income of $320 million. Fourth-quarter 2005 net income for Sempra Commodities rose to $244 million from $171 million in the same quarter in 2004, due primarily to increased activity in natural gas, power and oil marketing in both Europe and North America.

"Sempra Commodities has built an enviable track record of growth to become an industry leader, achieving 28 consecutive quarters of profitability," Felsinger said.

Sempra Generation

Sempra Generation's 2005 net income was $164 million, up from $137 million the previous year. Fourth-quarter net income for Sempra Generation increased to $61 million in 2005 from $19 million in 2004, due primarily to improved operating results for the company's Western U.S. power-generating fleet.

Sempra Generation announced plans in December 2005 to sell or refinance all of its Texas-based power-generation assets. Last month, the company entered into an agreement to sell one of its Texas power plants, the 305-megawatt coal-fired Twin Oaks Power facility, for $480 million in cash. The sale is expected to close in the second quarter 2006 and result in an after-tax gain of approximately $215 million.

Sempra Pipelines & Storage

Net income for Sempra Pipelines & Storage in 2005 was $64 million, compared with $63 million in 2004. Fourth-quarter 2005 net income for Sempra Pipelines & Storage was $16 million, compared with $28 million in the previous year's quarter. In the fourth quarter 2004, Sempra Pipelines & Storage benefited from the favorable resolution of foreign-tax issues.

 

 

-more-

Sempra LNG

Sempra LNG recorded a loss of $25 million in 2005, compared with a loss of $8 million in 2004. For the fourth quarter, Sempra LNG's loss was $10 million in 2005, compared with a loss of $8 million in 2004.

"Construction of our Mexico and Louisiana LNG receipt facilities is on schedule and we expect to receive final regulatory approvals of our Texas receipt facility by the middle of this year," said Felsinger.

2006 Earnings Outlook

Sempra Energy today updated its 2006 earnings-per-share guidance to $3.40 to $3.60 from previous guidance of $3.20 to $3.40. The updated guidance for 2006 excludes any gains from asset sales.

Internet Broadcast

Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. Eastern Time with senior management of the company. 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, 5624328.

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/4Q2005_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 P ublic 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

Three months ended

Years ended

December 31,

December 31,

(Dollars in millions, except per share amounts)

2005

 

2004

2005

 

2004

(Unaudited)

Operating revenues

California utilities

$ 2,259

$ 1,760

$ 7,042

$ 6,195

Sempra Global and parent

1,735

1,146

4,695

3,239

Total operating revenues

3,994

2,906

11,737

9,434

Operating expenses

California utilities:

Cost of natural gas

1,172

849

3,232

2,593

Cost of electric fuel and purchased power

187

151

624

576

Other cost of sales

828

555

2,715

1,741

Litigation expense

210

126

551

150

Other operating expenses

854

663

2,634

2,243

Depreciation and amortization

165

120

646

621

Franchise fees and other taxes

66

65

251

236

Gains on sale of assets, net

(8

)

(1

)

(112

)

(15

)

Impairment losses

71

1

85

8

Total operating expenses

3,545

2,529

10,626

8,153

Operating income

449

377

1,111

1,281

Other income, net

27

31

51

33

Interest income

23

11

75

69

Interest expense

(90

)

(88

)

(311

)

(322

)

Preferred dividends of subsidiaries

(3

)

(3

)

(10

)

(10

)

Income from continuing operations before income taxes and

equity in earnings of certain unconsolidated subsidiaries

406

328

916

1,051

Income tax expense

58

2

42

193

Equity in income of certain unconsolidated subsidiaries

13

13

55

62

Income from continuing operations

361

339

929

920

Discontinued operations, net of tax

(6

)

7

(9

)

(25

)

Net income

$ 355

$ 346

$ 920

$ 895

Basic earnings per share:

Income from continuing operations

$ 1.42

$ 1.47

$ 3.78

$ 4.03

Discontinued operations, net of tax

(0.02

)

0.03

(0.04

)

(0.11

)

Net income

$ 1.40

$ 1.50

$ 3.74

$ 3.92

Weighted-average number of shares outstanding (thousands)

253,516

230,832

245,906

228,271

Diluted earnings per share:

Income from continuing operations

$ 1.40

$ 1.43

$ 3.69

$ 3.93

Discontinued operations, net of tax

(0.02

)

0.03

(0.04

)

(0.10

)

Net income

$ 1.38

$ 1.46

$ 3.65

$ 3.83

Weighted-average number of shares outstanding (thousands)

257,845

237,500

252,088

233,852

Dividends declared per share of common stock

$ 0.29

$ 0.25

$ 1.16

$ 1.00






SEMPRA ENERGY

Table B

CONSOLIDATED BALANCE SHEETS

December 31,

December 31,

(Dollars in millions)

 

2005

 

2004

Assets

Current assets:

Cash and cash equivalents

$ 772

$ 419

Short-term investments

12

15

Accounts receivable

1,192

1,032

Due from unconsolidated affiliates

3

4

Deferred income taxes

132

15

Interest receivable

29

80

Trading-related receivables and deposits, net

3,370

2,606

Derivative trading instruments

4,502

2,339

Commodities owned

2,498

1,547

Regulatory assets

255

255

Inventories

212

172

Other

291

222

  Current assets of continuing operations

13,268

8,706

  Current assets of discontinued operations

50

70

    Total current assets

13,318

8,776

Investments and other assets:

Due from unconsolidated affiliates

21

42

Regulatory assets arising from fixed-price contracts and other derivatives

398

500

Other regulatory assets

713

751

Nuclear decommissioning trusts

638

612

Investments

1,104

1,164

Sundry

920

844

    Total investments and other assets

3,794

3,913

Property, plant and equipment, net

12,101

11,086

Total assets

$ 29,213

$ 23,775

Liabilities and Shareholders' Equity

Current liabilities:

Short-term debt

$ 1,062

$ 405

Accounts payable

1,412

1,126

Income taxes payable

68

187

Trading-related payables

4,127

3,182

Derivative trading instruments

3,246

1,484

Commodities sold with agreement to repurchase

634

513

Dividends and interest payable

140

123

Regulatory balancing accounts, net

192

509

Fixed-price contracts and other derivatives

130

157

Current portion of long-term debt

101

398

Due to unconsolidated affiliates (mandatorily redeemable preferred securities)

-

205

Other

1,035

776

  Current liabilities of continuing operations

12,147

9,065

  Current liabilities of discontinued operations

10

17

    Total current liabilities

12,157

9,082

Long-term debt

4,823

4,192

Deferred credits and other liabilities:

Due to unconsolidated affiliate

162

162

Customer advances for construction

110

97

Postretirement benefits other than pensions

121

129

Deferred income taxes

245

420

Deferred investment tax credits

73

78

Regulatory liabilities arising from removal obligations

2,313

2,692

Asset retirement obligations

958

326

Other regulatory liabilities

200

199

Fixed-price contracts and other derivatives

400

500

Deferred credits and other

1,312

854

    Total deferred credits and other liabilities

5,894

5,457

Preferred stock of subsidiaries

179

179

Shareholders' equity

6,160

4,865

Total liabilities and shareholders' equity

$ 29,213

$ 23,775






SEMPRA ENERGY

Table C

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

Years ended

December 31,

(Dollars in millions)

 

2005

 

2004

Cash Flows from Operating Activities:

Net income

$ 920

$ 895

Adjustments to reconcile net income to net cash provided by operating

activities:

Loss from discontinued operations, net of tax

9

25

Depreciation and amortization

646

621

Gains on sale of assets, net

(112

)

(15

)

Impairment losses

85

8

Deferred income taxes and investment tax credits

(283

)

13

Other

(48

)

33

Net changes in other working capital components

(1,169

)

(395

)

Changes in other assets

27

(127

)

Changes in other liabilities

451

(27

)

Net cash provided by continuing operations

526

1,031

Net cash used in discontinued operations

(5

)

(30

)

Net cash provided by operating activities

521

1,001

Cash Flows from Investing Activities:

Expenditures for property, plant and equipment

(1,404

)

(1,083

)

Proceeds from sale of assets

277

377

Proceeds from disposal of discontinued operations

5

157

Investments in and acquisitions of subsidiaries, net of cash acquired

(86

)

(74

)

Purchases of nuclear decommissioning and other trust assets

(299

)

(319

)

Proceeds from sales by nuclear decommissioning and other trusts

262

262

Dividends received from unconsolidated affiliates

72

59

Other

(12

)

10

Net cash used in investing activities

(1,185

)

(611

)

Cash Flows from Financing Activities:

Common dividends paid

(268

)

(195

)

Issuances of common stock

694

110

Repurchases of common stock

(95

)

(5

)

Issuances of long-term debt

762

997

Payments on long-term debt

(532

)

(1,670

)

Redemption of mandatorily redeemable preferred securities

(200

)

-

Increase in short-term debt, net

662

397

Other

(6

)

(14

)

Net cash provided by (used in) financing activities

1,017

(380

)

Increase in cash and cash equivalents

353

10

Cash and cash equivalents, January 1

419

409

Cash and cash equivalents, December 31

$ 772

$ 419






SEMPRA ENERGY

Table D

BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS

Three months ended

Years ended

December 31,

 

December 31,

(Dollars in millions)

2005

 

2004

 

2005

 

2004

Net Income

(Unaudited)

California Utilities:

San Diego Gas & Electric

$ 72

$ 68

$ 262

$ 208

Southern California Gas

48

58

211

232

Total California Utilities

120

126

473

440

Sempra Global:

Sempra Commodities

244

171

460

320

Sempra Generation

61

19

164

137

Sempra Pipelines & Storage

16

28

64

63

Sempra LNG

(10

)

(8

)

(25

)

(8

)

Total Sempra Global

311

210

663

512

Sempra Financial

4

10

23

36

Parent & Other (1)

(74

)

(7

)

(230

)

(68

)

Continuing Operations

361

339

929

920

Discontinued Operations (Atlantic Electric & Gas)

(6

)

7

(9

)

(25

)

Consolidated Net Income

$ 355

$ 346

$ 920

$ 895

(1) Reflects after-tax litigation costs of $103 million and $193 million recorded in the three months and the year

ended December 31, 2005, respectively.

Three months ended

Years ended

December 31,

December 31,

(Dollars in millions)

2005

 

2004

2005

 

2004

Capital Expenditures and Investments:

(Unaudited)

California Utilities:

San Diego Gas & Electric

$ 122

$ 131

$ 464

$ 414

Southern California Gas

116

77

361

311

Total California Utilities

238

208

825

725

Sempra Global:

Sempra Generation

46

40

255

194

Sempra Commodities

11

28

72

131

Sempra Pipelines & Storage

8

4

19

22

Sempra LNG

137

20

293

55

Total Sempra Global

202

92

639

402

Parent & Other

13

5

26

30

Consolidated Capital Expenditures and Investments

$ 453

$ 305

$ 1,490

$ 1,157






SEMPRA ENERGY

Table E

OTHER OPERATING STATISTICS (Unaudited)

Three months ended

Years ended

December 31,

 

December 31,

CALIFORNIA UTILITIES

2005

 

2004

 

2005

 

2004

Revenues (Dollars in millions)

SDG&E (excludes intercompany sales)

$ 746

$ 599

$ 2,493

$ 2,248

SoCalGas (excludes intercompany sales)

$ 1,513

$ 1,161

$ 4,549

$ 3,947

Gas Sales

105

125

395

413

Transportation and Exchange

113

139

494

550

Total Deliveries (Bcf)

218

264

889

963

Total Gas Customers (Thousands)

6,383

6,297

Electric Sales

4,002

3,993

15,990

15,799

Direct Access

720

881

3,213

3,441

Total Deliveries (Millions of kWhs)

4,722

4,874

19,203

19,240

Total Electric Customers (Thousands)

1,338

1,319

SEMPRA GENERATION

 

 

 

 

 

 

 

Power Sold (Millions of kWhs)

6,418

5,943

23,384

20,739

SEMPRA PIPELINES & STORAGE

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

 

Natural Gas Sales (Bcf)

Argentina

62

60

272

251

Mexico

9

9

42

42

Chile

1

1

3

3

Natural Gas Customers (Thousands)

Argentina

1,495

1,449

Mexico

98

97

Chile

38

37

Electric Sales (Millions of kWhs)

Peru

1,113

1,024

4,298

4,044

Chile

537

475

2,289

1,959

Electric Customers (Thousands)

Peru

767

748

Chile

521

508






SEMPRA ENERGY

Table E (Continued)

SEMPRA COMMODITIES

 

 

 

 

 

Three months ended

Years ended

December 31,

December 31,

Margin * (Dollars in millions)

2005

2004

2005

2004

Geographical:

North America

$ 543

$ 293

$ 1,091

$ 689

Europe/Asia

142

165

255

338

Total

$ 685

$ 458

$ 1,346

$ 1,027

Product Line:

Gas

$ 317

$ 235

$ 439

$ 318

Power

209

79

443

170

Oil - Crude & Products

132

70

292

268

Metals

12

55

54

180

Other

15

19

118

91

Total

$ 685

$ 458

$ 1,346

$ 1,027

* 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

Years ended

December 31,

December 31,

Effect of EITF 02-03 (Dollars in millions)

2005

2004

2005 ****

2004

Mark-to-Market Earnings **

$ 209

$ 105

$ 491

$ 288

Effect of EITF 02-03 ***

35

66

(31)

32

GAAP Net Income

$ 244

$ 171

$ 460

$ 320

** 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 $41 million related to the sale of certain storage assets.

Fair

Market Value

December 31,

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

$ 1,188

$ 725

$ 92

$ 297

$ 74

Prices provided by other external sources

52

3

2

-

47

Prices based on models and other valuation methods

(12)

-

-

-

(12)

Total OTC Fair Value (1)

$ 1,228

$ 728

$ 94

$ 297

$ 109

Maturity of OTC Fair Value

Percentage

100.0%

59.3%

7.6%

24.2%

8.9%

Cumulative Percentages

 

59.3%

66.9%

91.1%

100.0%

 

 

 

 

 

 

Exchange Contracts (2)

$ 260

$ 464

$ 71

$ (272)

$ (3)

Total Net Unrealized Revenue at December 31, 2005

$ 1,488

(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

December 31,

Credit Quality of Unrealized Trading Assets (net of margin)

2005

2004

Commodity Exchanges

2%

10%

Investment Grade

75%

66%

Below Investment Grade

23%

24%

Three months ended

Years ended

December 31,

December 31,

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

2005

2004

2005

2004

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

$ 14.2

$ 11.2

$ 11.3

$ 7.9

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

$ 20.0

$ 15.7

$ 15.9

$ 11.2

Risk Adjusted Return on Capital (RAROC) (3)

63%

34%

46%

38%

(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)

12.1

11.9

11.7

13.0

Electric (Billions of kWhs)

112.4

108.1

413.2

373.7

Oil & Liquid Products (Millions Bbls/Day)

2.0

2.1

2.0

2.1











SEMPRA ENERGY

Table F (Unaudited)

Income Statement Data by Business Unit

Three Months Ended December 31, 2005

(Dollars in millions)

SDG&E

SoCalGas

Commodities

Generation

Pipelines & Storage

LNG

Financial

Consolidating Adjustments, Parent & Other

 

Total

 

Operating Revenues

$ 751

$ 1,526

$ 1,029

$ 668

$ 93

$ -

$ -

$ (73

)

 

$ 3,994

 

Cost of Sales and Other Operating Expenses

542

1,348

678

463

91

11

-

(26

)

 

3,107

 

Litigation Expense

9

11

(7

)

25

1

1

-

170

 

210

 

Depreciation & Amortization

67

66

7

16

4

-

3

2

 

165

 

Gains on Sale of Assets, Net

-

-

(8

)

-

-

-

-

-

 

(8

)

 

Impairment Losses

2

-

-

66

-

-

2

1

 

71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

131

101

359

98

(3

)

(12

)

(5

)

(220

)

 

449

 

Other Income, Net

9

 

1

 

-

 

11

 

4

 

1

 

1

 

-

 

 

27

 

Income before Interest & Taxes (1)

140

102

359

109

1

(11

)

(4)

(220

)

 

476

 

Net Interest Expense (2)

18

12

15

5

(1

)

1

1

19

 

70

 

Income Tax Expense/(Benefit)

50

42

100

43

(1

)

(2

)

(9)

(165

)

 

58

 

Equity in Income of Certain Unconsolidated Subsidiaries

-

-

-

-

13

-

-

-

 

13

 

Discontinued Operations

-

-

-

-

-

-

-

(6

)

 

(6

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$ 72

 

$ 48

 

$ 244

 

$ 61

 

$ 16

 

$ (10

$ 4

 

$ (80

 

$ 355

Three Months Ended December 31, 2004

(Dollars in millions)

SDG&E

SoCalGas

Commodities

Generation

Pipelines & Storage

LNG

Financial

Consolidating Adjustments, Parent & Other

 

Total

 

Operating Revenues

$ 608

$ 1,176

$ 664

$ 488

$ 69

$ -

$ -

$ (99

)

 

$ 2,906

 

Cost of Sales and Other Operating Expenses

442

1,027

395

413

62

14

1

(71

)

 

2,283

 

Litigation Expense

19

41

4

17

-

-

-

45

 

126

 

Depreciation & Amortization

56

30

7

12

3

-

10

2

 

120

 

Gains on Sale of Assets, Net

(1

)

-

-

-

-

-

-

-

 

(1

)

 

Impairment Losses (Adjustments)

(6

)

2

-

-

-

-

5

-

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

98

76

258

46

4

(14

)

(16

)

(75

)

 

377

 

Other Income, Net

7

 

12

 

-

 

5

 

(2

-

 

(1

10

 

 

31

 

Income before Interest & Taxes (1)

105

88

258

51

2

(14

)

(17

)

(65

)

 

408

 

Net Interest Expense (2)

17

9

8

8

(1

)

-

2

37

 

80

 

Income Tax Expense/(Benefit)

20

21

79

24

(12

)

(6

)

(29

)

(95

)

 

2

 

Equity in Income of Certain Unconsolidated Subsidiaries

-

-

-

-

13

-

-

-

 

13

 

Discontinued Operations

-

-

-

-

-

-

-

7

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$ 68

 

$ 58

 

$ 171

 

$ 19

 

$ 28

 

$ (8

$ 10

 

$ -

 

 

$ 346

(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

Year Ended December 31, 2005

(Dollars in millions)

SDG&E

SoCalGas

Commodities

Generation

Pipelines & Storage

LNG

Financial

Consolidating Adjustments, Parent & Other

 

Total

 

Operating Revenues

$ 2,512

$ 4,617

$ 2,724

$ 1,921

$ 329

$ -

$ -

$ (366

)

 

$ 11,737

 

Cost of Sales and Other Operating Expenses

1,802

3,905

2,077

1,486

308

34

2

(158

)

 

9,456

 

Litigation Expense

52

99

38

43

2

1

-

316

 

551

 

Depreciation & Amortization

264

264

28

57

14

-

10

9

 

646

 

Gains on Sale of Assets, Net

(1

)

-

(106

)

-

(4

)

-

-

(1

(112

)

 

Impairment Losses

2

2

-

66

6

-

7

2

 

85

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

393

347

687

269

3

(35

)

(19

)

(534

)

 

1,111

 

Other Income, Net

14

 

(2

-

 

26

 

7

 

1

 

(8

13

 

 

51

 

Income before Interest & Taxes (1)

407

345

687

295

10

(34

)

(27

)

(521

)

 

1,162

 

Net Interest Expense (2)

56

37

35

20

(2

)

2

6

92

 

246

 

Income Tax Expense/(Benefit)

89

97

192

111

3

(11

)

(56

)

(383

)

 

42

 

Equity in Income of Certain Unconsolidated Subsidiaries

-

-

-

-

55

-

-

-

 

55

 

Discontinued Operations

-

-

-

-

-

-

-

(9

)

 

(9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$ 262

 

$ 211

 

$ 460

 

$ 164

 

$ 64

 

$ (25

$ 23

 

$ (239

 

$ 920

Year Ended December 31, 2004

(Dollars in millions)

SDG&E

SoCalGas

Commodities

Generation

Pipelines & Storage

LNG

Financial

Consolidating Adjustments, Parent & Other

 

Total

 

Operating Revenues

$ 2,274

$ 3,997

$ 1,689

$ 1,662

$ 269

$ -

$ -

$ (457

)

 

$ 9,434

 

Cost of Sales and Other Operating Expenses

1,610

3,305

1,153

1,338

252

26

3

(298

)

 

7,389

 

Litigation Expense

19

41

17

29

-

-

-

44

 

150

 

Depreciation & Amortization

259

255

23

44

14

-

17

9

 

621

 

Gains on Sale of Assets, Net

(1

)

(15

)

-

-

-

-

-

1

 

(15

)

 

Impairment Losses (Adjustments)

(6

)

2

-

-

-

-

12

-

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

393

409

496

251

3

(26

)

(32

)

(213

)

 

1,281

 

Other Income, Net

11

 

13

 

-

 

4

 

3

 

13

 

(20

9

 

 

33

 

Income before Interest & Taxes (1)

404

422

496

255

6

(13

)

(52

)

(204

)

 

1,314

 

Net Interest Expense (2)

48

36

15

27

-

-

8

129

 

263

 

Income Tax Expense/(Benefit)

148

154

161

91

5

(5

)

(96)

(265

)

 

193

 

Equity in Income of Certain Unconsolidated Subsidiaries

-

-

-

-

62

-

-

-

 

62

 

Discontinued Operations

-

-

-

-

-

-

-

(25

)

 

(25

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$ 208

 

$ 232

 

$ 320

 

$ 137

 

$ 63

 

$ (8

$ 36

 

$ (93

 

$ 895

(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.