|
||||||||||||
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|
||||||||||||
FORM 10-Q
|
||||||||||||
(Mark One)
|
||||||||||||
[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|||||||||||
For the quarterly period ended
|
March 31, 2012
|
|||||||||||
or
|
||||||||||||
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|||||||||||
For the transition period from
|
to
|
|||||||||||
Commission File No.
|
Exact Name of Registrants as Specified in their Charters, Address and Telephone Number
|
States of Incorporation
|
I.R.S. Employer
Identification Nos.
|
Former name, former address and former fiscal year, if changed since last report
|
||||||||
1-14201
|
SEMPRA ENERGY
|
California
|
33-0732627
|
No change
|
||||||||
101 Ash Street
|
||||||||||||
San Diego, California 92101
|
||||||||||||
(619)696-2000
|
||||||||||||
1-3779
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
California
|
95-1184800
|
No change
|
||||||||
8326 Century Park Court
|
||||||||||||
San Diego, California 92123
|
||||||||||||
(619)696-2000
|
||||||||||||
1-1402
|
SOUTHERN CALIFORNIA GAS COMPANY
|
California
|
95-1240705
|
No change
|
||||||||
555 West Fifth Street
|
||||||||||||
Los Angeles, California 90013
|
||||||||||||
(213)244-1200
|
||||||||||||
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
|
||||||||||||
Yes
|
X
|
No
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).
|
||||||||||||
Sempra Energy
|
Yes
|
X
|
No
|
|||||||||
San Diego Gas & Electric Company
|
Yes
|
X
|
No
|
|||||||||
Southern California Gas Company
|
Yes
|
X
|
No
|
|||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
||||||||||||
Large
accelerated filer
|
Accelerated filer
|
Non-accelerated filer
|
Smaller reporting company
|
|||||||||
Sempra Energy
|
[ X ]
|
[ ]
|
[ ]
|
[ ]
|
||||||||
San Diego Gas & Electric Company
|
[ ]
|
[ ]
|
[ X ]
|
[ ]
|
||||||||
Southern California Gas Company
|
[ ]
|
[ ]
|
[ X ]
|
[ ]
|
||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
||||||||||||
Sempra Energy
|
Yes
|
No
|
X
|
|||||||||
San Diego Gas & Electric Company
|
Yes
|
No
|
X
|
|||||||||
Southern California Gas Company
|
Yes
|
No
|
X
|
|||||||||
Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date.
|
||||||||||||
Common stock outstanding on April 30, 2012:
|
||||||||||||
Sempra Energy
|
240,991,088 shares
|
|||||||||||
San Diego Gas & Electric Company
|
Wholly owned by Enova Corporation, which is wholly owned by Sempra Energy
|
|||||||||||
Southern California Gas Company
|
Wholly owned by Pacific Enterprises, which is wholly owned by Sempra Energy
|
|||||||||||
SEMPRA ENERGY FORM 10-Q
SAN DIEGO GAS & ELECTRIC COMPANY FORM 10-Q
SOUTHERN CALIFORNIA GAS COMPANY FORM 10-Q
TABLE OF CONTENTS
|
||
Page
|
||
Information Regarding Forward-Looking Statements
|
4
|
|
PART I – FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements
|
5
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
62
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
92
|
Item 4.
|
Controls and Procedures
|
93
|
PART II – OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
94
|
Item 1A.
|
Risk Factors
|
94
|
Item 6.
|
Exhibits
|
94
|
Signatures
|
96
|
|
§
|
local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments;
|
§
|
actions by the California Public Utilities Commission, California State Legislature, Federal Energy Regulatory Commission, U.S. Department of Energy, Nuclear Regulatory Commission, California Energy Commission, California Air Resources Board, and other regulatory, governmental and environmental bodies in the United States and other countries in which we operate;
|
§
|
capital markets conditions, including the availability of credit and the liquidity of our investments;
|
§
|
inflation, interest and exchange rates;
|
§
|
the impact of benchmark interest rates, generally U.S. Treasury bond and Moody’s A-rated utility bond yields, on our California Utilities’ cost of capital;
|
§
|
the timing and success of business development efforts and construction, maintenance and capital projects, including risks inherent in the ability to obtain, and the timing of granting of, permits, licenses, certificates and other authorizations;
|
§
|
energy markets, including the timing and extent of changes and volatility in commodity prices;
|
§
|
the availability of electric power, natural gas and liquefied natural gas, including disruptions caused by failures in the North American transmission grid, pipeline explosions and equipment failures;
|
§
|
weather conditions, natural disasters, catastrophic accidents, and conservation efforts;
|
§
|
risks inherent in nuclear power generation and radioactive materials storage, including the catastrophic release of such materials;
|
§
|
risks posed by decisions and actions of third parties who control the operations of investments in which we do not have a controlling interest;
|
§
|
wars, terrorist attacks and cybersecurity threats;
|
§
|
business, regulatory, environmental and legal decisions and requirements;
|
§
|
expropriation of assets by foreign governments and title and other property disputes;
|
§
|
the status of deregulation of retail natural gas and electricity delivery;
|
§
|
the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements;
|
§
|
the resolution of litigation; and
|
§
|
other uncertainties, all of which are difficult to predict and many of which are beyond our control.
|
SEMPRA ENERGY
|
|
|
|
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
||||||
(Dollars in millions, except per share amounts)
|
|
|
|
|
||||||
|
|
|
||||||||
|
|
Three months ended March 31,
|
||||||||
|
|
2012
|
2011(1)
|
|||||||
|
|
(unaudited)
|
||||||||
REVENUES
|
|
|
|
|
||||||
Utilities
|
$
|
2,091
|
$
|
1,946
|
||||||
Energy-related businesses
|
|
292
|
|
488
|
||||||
Total revenues
|
|
2,383
|
|
2,434
|
||||||
EXPENSES AND OTHER INCOME
|
|
|
|
|
||||||
Utilities:
|
|
|
|
|
||||||
Cost of natural gas
|
|
(431)
|
|
(642)
|
||||||
Cost of electric fuel and purchased power
|
|
(388)
|
|
(171)
|
||||||
Energy-related businesses:
|
|
|
|
|
||||||
Cost of natural gas, electric fuel and purchased power
|
|
(129)
|
|
(230)
|
||||||
Other cost of sales
|
|
(33)
|
|
(23)
|
||||||
Operation and maintenance
|
|
(671)
|
|
(639)
|
||||||
Depreciation and amortization
|
|
(257)
|
|
(230)
|
||||||
Franchise fees and other taxes
|
|
(96)
|
|
(95)
|
||||||
Equity earnings, before income tax
|
|
12
|
|
1
|
||||||
Other income, net
|
|
75
|
|
43
|
||||||
Interest income
|
|
5
|
|
3
|
||||||
Interest expense
|
|
(113)
|
|
(108)
|
||||||
Income before income taxes and equity earnings
|
|
|
|
|
||||||
of certain unconsolidated subsidiaries
|
|
357
|
|
343
|
||||||
Income tax expense
|
|
(117)
|
|
(114)
|
||||||
Equity earnings, net of income tax
|
|
11
|
|
31
|
||||||
Net income
|
|
251
|
|
260
|
||||||
Earnings attributable to noncontrolling interests
|
|
(13)
|
|
(4)
|
||||||
Preferred dividends of subsidiaries
|
|
(2)
|
|
(2)
|
||||||
Earnings
|
$
|
236
|
$
|
254
|
||||||
|
|
|
|
|
|
|||||
Basic earnings per common share
|
$
|
0.98
|
$
|
1.06
|
||||||
Weighted-average number of shares outstanding, basic (thousands)
|
|
240,566
|
|
240,128
|
||||||
|
|
|
|
|
|
|||||
Diluted earnings per common share
|
$
|
0.97
|
$
|
1.05
|
||||||
Weighted-average number of shares outstanding, diluted (thousands)
|
|
243,761
|
|
241,903
|
||||||
Dividends declared per share of common stock
|
$
|
0.60
|
$
|
0.48
|
||||||
(1)
|
As adjusted for the retrospective effect of a change in accounting principle as we discuss in Note 1.
|
|||||||||
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
SEMPRA ENERGY
|
||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||||||||
(Dollars in millions)
|
||||||||||||||
|
|
Three months ended March 31,
|
||||||||||||
|
|
2012
|
|
2011(1)
|
||||||||||
|
|
(unaudited)
|
||||||||||||
|
|
|
Non-
|
|
|
|
Non-
|
|
||||||
|
|
Sempra
|
controlling
|
|
|
Sempra
|
controlling
|
|
||||||
|
|
Energy
|
Interests
|
Total
|
|
Energy
|
Interests
|
Total
|
||||||
Net income
|
$
|
238
|
$
|
13
|
$
|
251
|
|
$
|
256
|
$
|
4
|
$
|
260
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
67
|
|
4
|
|
71
|
|
|
(6)
|
|
―
|
|
(6)
|
|
Net actuarial gain
|
|
1
|
|
―
|
|
1
|
|
|
2
|
|
―
|
|
2
|
|
Financial instruments
|
|
3
|
|
―
|
|
3
|
|
|
2
|
|
1
|
|
3
|
|
Total other comprehensive income (loss)
|
|
71
|
|
4
|
|
75
|
|
|
(2)
|
|
1
|
|
(1)
|
|
Total comprehensive income
|
|
309
|
|
17
|
|
326
|
|
|
254
|
|
5
|
|
259
|
|
Preferred dividends of subsidiaries
|
|
(2)
|
|
―
|
|
(2)
|
|
|
(2)
|
|
―
|
|
(2)
|
|
Total comprehensive income, after preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dividends of subsidiaries
|
$
|
307
|
$
|
17
|
$
|
324
|
|
$
|
252
|
$
|
5
|
$
|
257
|
|
(1)
|
As adjusted for the retrospective effect of a change in accounting principle as we discuss in Note 1.
|
|||||||||||||
See Notes to Condensed Consolidated Financial Statements.
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
2012
|
2011(1)(2)
|
|||
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
404
|
$
|
252
|
|
Restricted cash
|
|
23
|
|
24
|
|
Trade accounts receivable, net
|
|
1,062
|
|
1,198
|
|
Other accounts and notes receivable, net
|
|
177
|
|
147
|
|
Inventories
|
|
222
|
|
346
|
|
Regulatory balancing accounts — undercollected
|
|
71
|
|
38
|
|
Regulatory assets
|
|
105
|
|
89
|
|
Fixed-price contracts and other derivatives
|
|
83
|
|
85
|
|
Settlement receivable related to wildfire litigation
|
|
5
|
|
10
|
|
Other
|
|
146
|
|
143
|
|
Total current assets
|
|
2,298
|
|
2,332
|
|
|
|
|
|
|
|
Investments and other assets:
|
|
|
|
|
|
Restricted cash
|
|
24
|
|
22
|
|
Regulatory assets arising from pension and other postretirement
|
|
|
|
|
|
benefit obligations
|
|
1,074
|
|
1,126
|
|
Regulatory assets arising from wildfire litigation costs
|
|
603
|
|
594
|
|
Other regulatory assets
|
|
1,070
|
|
1,060
|
|
Nuclear decommissioning trusts
|
|
865
|
|
804
|
|
Investments
|
|
1,722
|
|
1,671
|
|
Goodwill
|
|
1,071
|
|
1,036
|
|
Other intangible assets
|
|
443
|
|
448
|
|
Sundry
|
|
799
|
|
691
|
|
Total investments and other assets
|
|
7,671
|
|
7,452
|
|
|
|
|
|
|
|
Property, plant and equipment:
|
|
|
|
|
|
Property, plant and equipment
|
|
31,995
|
|
31,192
|
|
Less accumulated depreciation and amortization
|
|
(7,919)
|
|
(7,727)
|
|
Property, plant and equipment, net ($488 and $494 at March 31, 2012 and
December 31, 2011, respectively, related to VIE)
|
|
24,076
|
|
23,465
|
|
Total assets
|
$
|
34,045
|
$
|
33,249
|
|
(1)
|
As adjusted for the retrospective effect of a change in accounting principle as we discuss in Note 1.
|
||||
(2)
|
Derived from audited financial statements.
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
2012
|
2011(1)(2)
|
|||
|
|
(unaudited)
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Short-term debt
|
$
|
426
|
$
|
449
|
|
Accounts payable — trade
|
|
901
|
|
983
|
|
Accounts payable — other
|
|
112
|
|
124
|
|
Income taxes payable
|
|
53
|
|
5
|
|
Deferred income taxes
|
|
172
|
|
173
|
|
Dividends and interest payable
|
|
297
|
|
219
|
|
Accrued compensation and benefits
|
|
203
|
|
323
|
|
Regulatory balancing accounts — overcollected
|
|
240
|
|
105
|
|
Current portion of long-term debt
|
|
713
|
|
336
|
|
Fixed-price contracts and other derivatives
|
|
92
|
|
92
|
|
Customer deposits
|
|
148
|
|
142
|
|
Reserve for wildfire litigation
|
|
441
|
|
586
|
|
Other
|
|
682
|
|
615
|
|
Total current liabilities
|
|
4,480
|
|
4,152
|
|
Long-term debt ($342 and $345 at March 31, 2012 and December 31, 2011, respectively,
related to VIE)
|
|
10,180
|
|
10,078
|
|
|
|
|
|
|
|
Deferred credits and other liabilities:
|
|
|
|
|
|
Customer advances for construction
|
|
143
|
|
142
|
|
Pension and other postretirement benefit obligations, net of plan assets
|
|
1,373
|
|
1,423
|
|
Deferred income taxes
|
|
1,601
|
|
1,520
|
|
Deferred investment tax credits
|
|
48
|
|
49
|
|
Regulatory liabilities arising from removal obligations
|
|
2,621
|
|
2,551
|
|
Asset retirement obligations
|
|
1,927
|
|
1,905
|
|
Other regulatory liabilities
|
|
80
|
|
87
|
|
Fixed-price contracts and other derivatives
|
|
281
|
|
301
|
|
Deferred credits and other
|
|
862
|
|
784
|
|
Total deferred credits and other liabilities
|
|
8,936
|
|
8,762
|
|
Contingently redeemable preferred stock of subsidiary
|
|
79
|
|
79
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 10)
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Preferred stock (50 million shares authorized; none issued)
|
|
―
|
|
―
|
|
Common stock (750 million shares authorized; 241 million and 240 million shares
|
|
|
|
|
|
outstanding at March 31, 2012 and December 31, 2011, respectively; no par value)
|
|
2,117
|
|
2,104
|
|
Retained earnings
|
|
8,254
|
|
8,162
|
|
Deferred compensation
|
|
(1)
|
|
(2)
|
|
Accumulated other comprehensive income (loss)
|
|
(418)
|
|
(489)
|
|
Total Sempra Energy shareholders’ equity
|
|
9,952
|
|
9,775
|
|
Preferred stock of subsidiaries
|
|
20
|
|
20
|
|
Other noncontrolling interests
|
|
398
|
|
383
|
|
Total equity
|
|
10,370
|
|
10,178
|
|
Total liabilities and equity
|
$
|
34,045
|
$
|
33,249
|
|
(1)
|
As adjusted for the retrospective effect of a change in accounting principle as we discuss in Note 1.
|
||||
(2)
|
Derived from audited financial statements.
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
SEMPRA ENERGY
|
|||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
|
Three months ended March 31,
|
|||||||||
|
|
2012
|
2011(1)
|
||||||||
|
|
(unaudited)
|
|||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|||||||
Net income
|
$
|
251
|
$
|
260
|
|||||||
Adjustments to reconcile net income to net cash provided
|
|
|
|
|
|||||||
by operating activities:
|
|
|
|
|
|||||||
Depreciation and amortization
|
|
257
|
|
230
|
|||||||
Deferred income taxes and investment tax credits
|
|
31
|
|
82
|
|||||||
Equity earnings
|
|
(23)
|
|
(32)
|
|||||||
Fixed-price contracts and other derivatives
|
|
(12)
|
|
(9)
|
|||||||
Other
|
|
14
|
|
(13)
|
|||||||
Net change in other working capital components
|
|
168
|
|
297
|
|||||||
Changes in other assets
|
|
12
|
|
(5)
|
|||||||
Changes in other liabilities
|
|
1
|
|
(5)
|
|||||||
Net cash provided by operating activities
|
|
699
|
|
805
|
|||||||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|||||||
Expenditures for property, plant and equipment
|
|
(811)
|
|
(607)
|
|||||||
Expenditures for investments
|
|
(51)
|
|
(4)
|
|||||||
Distributions from investments
|
|
8
|
|
21
|
|||||||
Purchases of nuclear decommissioning and other trust assets
|
|
(134)
|
|
(45)
|
|||||||
Proceeds from sales by nuclear decommissioning and other trusts
|
|
135
|
|
46
|
|||||||
Decrease in restricted cash
|
|
39
|
|
160
|
|||||||
Increase in restricted cash
|
|
(40)
|
|
(320)
|
|||||||
Other
|
|
(5)
|
|
(7)
|
|||||||
Net cash used in investing activities
|
|
(859)
|
|
(756)
|
|||||||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|||||||
Common dividends paid
|
|
(115)
|
|
(94)
|
|||||||
Preferred dividends paid by subsidiaries
|
|
(2)
|
|
(2)
|
|||||||
Issuances of common stock
|
|
13
|
|
15
|
|||||||
Repurchases of common stock
|
|
(16)
|
|
(18)
|
|||||||
Issuances of debt (maturities greater than 90 days)
|
|
1,008
|
|
803
|
|||||||
Payments on debt (maturities greater than 90 days)
|
|
(347)
|
|
(260)
|
|||||||
Decrease in short-term debt, net
|
|
(224)
|
|
(192)
|
|||||||
Other
|
|
(7)
|
|
6
|
|||||||
Net cash provided by financing activities
|
|
310
|
|
258
|
|||||||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
2
|
|
―
|
|||||||
|
|
|
|
|
|
||||||
Increase in cash and cash equivalents
|
|
152
|
|
307
|
|||||||
Cash and cash equivalents, January 1
|
|
252
|
|
912
|
|||||||
Cash and cash equivalents, March 31
|
$
|
404
|
$
|
1,219
|
|||||||
(1)
|
As adjusted for the retrospective effect of a change in accounting principle as we discuss in Note 1.
|
||||||||||
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
|||||||
SEMPRA ENERGY
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||
(Dollars in millions)
|
||||
|
Three months ended March 31,
|
|||
|
2012
|
2011
|
||
|
(unaudited)
|
|||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
Interest payments, net of amounts capitalized
|
$
|
62
|
$
|
63
|
Income tax payments, net of refunds
|
|
38
|
|
37
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES
|
|
|
|
|
Accrued capital expenditures
|
$
|
336
|
$
|
233
|
Dividends declared but not paid
|
|
151
|
|
118
|
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||
(Dollars in millions)
|
||||
|
|
|||
|
Three months ended March 31,
|
|||
|
2012
|
2011
|
||
|
(unaudited)
|
|||
Operating revenues
|
|
|
|
|
Electric
|
$
|
671
|
$
|
665
|
Natural gas
|
|
163
|
|
175
|
Total operating revenues
|
|
834
|
|
840
|
Operating expenses
|
|
|
|
|
Cost of electric fuel and purchased power
|
|
163
|
|
171
|
Cost of natural gas
|
|
67
|
|
83
|
Operation and maintenance
|
|
268
|
|
273
|
Depreciation and amortization
|
|
112
|
|
103
|
Franchise fees and other taxes
|
|
46
|
|
47
|
Total operating expenses
|
|
656
|
|
677
|
Operating income
|
|
178
|
|
163
|
Other income, net
|
|
30
|
|
16
|
Interest expense
|
|
(36)
|
|
(36)
|
Income before income taxes
|
|
172
|
|
143
|
Income tax expense
|
|
(60)
|
|
(49)
|
Net income
|
|
112
|
|
94
|
Earnings attributable to noncontrolling interest
|
|
(6)
|
|
(4)
|
Earnings
|
|
106
|
|
90
|
Preferred dividend requirements
|
|
(1)
|
|
(1)
|
Earnings attributable to common shares
|
$
|
105
|
$
|
89
|
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||||||||||
(Dollars in millions)
|
|||||||||||||
|
Three months ended March 31,
|
||||||||||||
|
2012
|
|
2011
|
||||||||||
|
(unaudited)
|
||||||||||||
|
|
Non-
|
|
|
|
Non-
|
|
||||||
|
|
controlling
|
|
|
|
controlling
|
|
||||||
|
SDG&E
|
Interest
|
Total
|
|
SDG&E
|
Interest
|
Total
|
||||||
Net income
|
$
|
106
|
$
|
6
|
$
|
112
|
|
$
|
90
|
$
|
4
|
$
|
94
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial instruments
|
|
―
|
|
―
|
|
―
|
|
|
―
|
|
1
|
|
1
|
Total other comprehensive income
|
|
―
|
|
―
|
|
―
|
|
|
―
|
|
1
|
|
1
|
Total comprehensive income
|
$
|
106
|
$
|
6
|
$
|
112
|
|
$
|
90
|
$
|
5
|
$
|
95
|
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
|
2012
|
2011(1)
|
||
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
139
|
$
|
29
|
|
Restricted cash
|
|
18
|
|
21
|
|
Accounts receivable – trade, net
|
|
228
|
|
267
|
|
Accounts receivable – other, net
|
|
23
|
|
23
|
|
Due from unconsolidated affiliates
|
|
1
|
|
67
|
|
Income taxes receivable
|
|
109
|
|
102
|
|
Inventories
|
|
77
|
|
82
|
|
Regulatory balancing accounts, net
|
|
71
|
|
38
|
|
Regulatory assets arising from fixed-price contracts and other derivatives
|
|
81
|
|
67
|
|
Other regulatory assets
|
|
11
|
|
11
|
|
Fixed-price contracts and other derivatives
|
|
28
|
|
27
|
|
Settlement receivable related to wildfire litigation
|
|
5
|
|
10
|
|
Other
|
|
37
|
|
51
|
|
Total current assets
|
|
828
|
|
795
|
|
|
|
|
|
|
|
Other assets:
|
|
|
|
|
|
Restricted cash
|
|
24
|
|
22
|
|
Deferred taxes recoverable in rates
|
|
585
|
|
570
|
|
Regulatory assets arising from fixed-price contracts and other derivatives
|
|
183
|
|
191
|
|
Regulatory assets arising from pension and other postretirement
|
|
|
|
|
|
benefit obligations
|
|
314
|
|
309
|
|
Regulatory assets arising from wildfire litigation costs
|
|
603
|
|
594
|
|
Other regulatory assets
|
|
162
|
|
160
|
|
Nuclear decommissioning trusts
|
|
865
|
|
804
|
|
Income taxes receivable
|
|
104
|
|
―
|
|
Sundry
|
|
73
|
|
70
|
|
Total other assets
|
|
2,913
|
|
2,720
|
|
|
|
|
|
|
|
Property, plant and equipment:
|
|
|
|
|
|
Property, plant and equipment
|
|
13,352
|
|
13,003
|
|
Less accumulated depreciation and amortization
|
|
(3,045)
|
|
(2,963)
|
|
Property, plant and equipment, net ($488 and $494 at March 31, 2012 and
December 31, 2011, respectively, related to VIE)
|
|
10,307
|
|
10,040
|
|
Total assets
|
$
|
14,048
|
$
|
13,555
|
|
(1)
|
Derived from audited financial statements.
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
|
2012
|
2011(1)
|
||
|
|
(unaudited)
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
$
|
305
|
$
|
375
|
|
Due to unconsolidated affiliates
|
|
36
|
|
14
|
|
Deferred income taxes
|
|
59
|
|
62
|
|
Accrued compensation and benefits
|
|
65
|
|
124
|
|
Current portion of long-term debt
|
|
19
|
|
19
|
|
Fixed-price contracts and other derivatives
|
|
59
|
|
55
|
|
Customer deposits
|
|
67
|
|
62
|
|
Reserve for wildfire litigation
|
|
441
|
|
586
|
|
Other
|
|
202
|
|
139
|
|
Total current liabilities
|
|
1,253
|
|
1,436
|
|
Long-term debt ($342 and $345 at March 31, 2012 and December 31, 2011,
respectively, related to VIE)
|
|
4,303
|
|
4,058
|
|
|
|
|
|
|
|
Deferred credits and other liabilities:
|
|
|
|
|
|
Customer advances for construction
|
|
19
|
|
20
|
|
Pension and other postretirement benefit obligations, net of plan assets
|
|
347
|
|
342
|
|
Deferred income taxes
|
|
1,337
|
|
1,167
|
|
Deferred investment tax credits
|
|
25
|
|
26
|
|
Regulatory liabilities arising from removal obligations
|
|
1,527
|
|
1,462
|
|
Asset retirement obligations
|
|
704
|
|
693
|
|
Fixed-price contracts and other derivatives
|
|
232
|
|
243
|
|
Deferred credits and other
|
|
270
|
|
188
|
|
Total deferred credits and other liabilities
|
|
4,461
|
|
4,141
|
|
Contingently redeemable preferred stock
|
|
79
|
|
79
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 10)
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Common stock (255 million shares authorized; 117 million shares outstanding;
|
|
|
|
|
|
no par value)
|
|
1,338
|
|
1,338
|
|
Retained earnings
|
|
2,516
|
|
2,411
|
|
Accumulated other comprehensive income (loss)
|
|
(10)
|
|
(10)
|
|
Total SDG&E shareholder's equity
|
|
3,844
|
|
3,739
|
|
Noncontrolling interest
|
|
108
|
|
102
|
|
Total equity
|
|
3,952
|
|
3,841
|
|
Total liabilities and equity
|
$
|
14,048
|
$
|
13,555
|
|
(1)
|
Derived from audited financial statements.
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||
(Dollars in millions)
|
||||
|
Three months ended
March 31,
|
|||
|
2012
|
2011
|
||
|
(unaudited)
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
$
|
112
|
$
|
94
|
Adjustments to reconcile net income to net cash provided by
|
|
|
|
|
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
112
|
|
103
|
Deferred income taxes and investment tax credits
|
|
152
|
|
75
|
Fixed price contracts and other derivatives
|
|
(3)
|
|
(4)
|
Other
|
|
(27)
|
|
(12)
|
Net change in other working capital components
|
|
(85)
|
|
241
|
Changes in other assets
|
|
8
|
|
7
|
Changes in other liabilities
|
|
(3)
|
|
(3)
|
Net cash provided by operating activities
|
|
266
|
|
501
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
Expenditures for property, plant and equipment
|
|
(398)
|
|
(348)
|
Purchases of nuclear decommissioning trust assets
|
|
(133)
|
|
(44)
|
Proceeds from sales by nuclear decommissioning trusts
|
|
131
|
|
42
|
Decrease in restricted cash
|
|
37
|
|
109
|
Increase in restricted cash
|
|
(36)
|
|
(311)
|
Net cash used in investing activities
|
|
(399)
|
|
(552)
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
Capital contribution
|
|
―
|
|
200
|
Preferred dividends paid
|
|
(1)
|
|
(1)
|
Issuance of long-term debt
|
|
249
|
|
―
|
Payments on long-term debt
|
|
(3)
|
|
(3)
|
Other
|
|
(2)
|
|
―
|
Net cash provided by financing activities
|
|
243
|
|
196
|
|
|
|
|
|
Increase in cash and cash equivalents
|
|
110
|
|
145
|
Cash and cash equivalents, January 1
|
|
29
|
|
127
|
Cash and cash equivalents, March 31
|
$
|
139
|
$
|
272
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
Interest payments, net of amounts capitalized
|
$
|
17
|
$
|
17
|
Income tax (refunds) payments, net
|
|
(62)
|
|
24
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES
|
|
|
|
|
Accrued capital expenditures
|
$
|
134
|
$
|
145
|
Dividends declared but not paid
|
|
1
|
|
1
|
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||
(Dollars in millions)
|
||||
|
|
|||
|
Three months ended March 31,
|
|||
|
2012
|
2011
|
||
|
(unaudited)
|
|||
|
|
|
|
|
Operating revenues
|
$
|
880
|
$
|
1,056
|
Operating expenses
|
|
|
|
|
Cost of natural gas
|
|
349
|
|
531
|
Operation and maintenance
|
|
289
|
|
288
|
Depreciation and amortization
|
|
87
|
|
81
|
Franchise fees and other taxes
|
|
36
|
|
37
|
Total operating expenses
|
|
761
|
|
937
|
Operating income
|
|
119
|
|
119
|
Other income, net
|
|
4
|
|
3
|
Interest expense
|
|
(17)
|
|
(17)
|
Income before income taxes
|
|
106
|
|
105
|
Income tax expense
|
|
(40)
|
|
(37)
|
Net income/Earnings attributable to common shares
|
$
|
66
|
$
|
68
|
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
|||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||
(Dollars in millions)
|
|||||
|
Three months ended March 31,
|
||||
|
2012
|
|
2011
|
||
|
(unaudited)
|
||||
Net income
|
$
|
66
|
|
$
|
68
|
Total other comprehensive income, net of tax
|
|
―
|
|
|
―
|
Comprehensive income attributable to common and preferred shareholders
|
$
|
66
|
|
$
|
68
|
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
|
2012
|
2011(1)
|
||
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
70
|
$
|
36
|
|
Accounts receivable – trade, net
|
|
457
|
|
578
|
|
Accounts receivable – other, net
|
|
70
|
|
63
|
|
Due from unconsolidated affiliates
|
|
229
|
|
40
|
|
Income taxes receivable
|
|
―
|
|
17
|
|
Inventories
|
|
42
|
|
151
|
|
Regulatory assets
|
|
7
|
|
9
|
|
Temporary LIFO liquidation
|
|
32
|
|
―
|
|
Other
|
|
26
|
|
28
|
|
Total current assets
|
|
933
|
|
922
|
|
|
|
|
|
|
|
Other assets:
|
|
|
|
|
|
Regulatory assets arising from pension and other postretirement
|
|
|
|
|
|
benefit obligations
|
|
751
|
|
808
|
|
Other regulatory assets
|
|
138
|
|
137
|
|
Sundry
|
|
8
|
|
8
|
|
Total other assets
|
|
897
|
|
953
|
|
|
|
|
|
|
|
Property, plant and equipment:
|
|
|
|
|
|
Property, plant and equipment
|
|
10,679
|
|
10,565
|
|
Less accumulated depreciation and amortization
|
|
(4,017)
|
|
(3,965)
|
|
Property, plant and equipment, net
|
|
6,662
|
|
6,600
|
|
Total assets
|
$
|
8,492
|
$
|
8,475
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
|
2012
|
2011(1)
|
||
|
|
(unaudited)
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable – trade
|
$
|
195
|
$
|
315
|
|
Accounts payable – other
|
|
73
|
|
78
|
|
Due to unconsolidated affiliate
|
|
―
|
|
2
|
|
Income taxes payable
|
|
5
|
|
―
|
|
Deferred income taxes
|
|
44
|
|
44
|
|
Accrued compensation and benefits
|
|
82
|
|
99
|
|
Regulatory balancing accounts, net
|
|
240
|
|
105
|
|
Current portion of long-term debt
|
|
256
|
|
257
|
|
Customer deposits
|
|
76
|
|
75
|
|
Other
|
|
197
|
|
172
|
|
Total current liabilities
|
|
1,168
|
|
1,147
|
|
Long-term debt
|
|
1,063
|
|
1,064
|
|
Deferred credits and other liabilities:
|
|
|
|
|
|
Customer advances for construction
|
|
111
|
|
110
|
|
Pension and other postretirement benefit obligations, net of plan assets
|
|
778
|
|
833
|
|
Deferred income taxes
|
|
599
|
|
576
|
|
Deferred investment tax credits
|
|
22
|
|
23
|
|
Regulatory liabilities arising from removal obligations
|
|
1,080
|
|
1,075
|
|
Asset retirement obligations
|
|
1,173
|
|
1,161
|
|
Deferred taxes refundable in rates
|
|
80
|
|
87
|
|
Deferred credits and other
|
|
209
|
|
206
|
|
Total deferred credits and other liabilities
|
|
4,052
|
|
4,071
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 10)
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
Preferred stock
|
|
22
|
|
22
|
|
Common stock (100 million shares authorized; 91 million shares outstanding;
|
|
|
|
|
|
no par value)
|
|
866
|
|
866
|
|
Retained earnings
|
|
1,342
|
|
1,326
|
|
Accumulated other comprehensive income (loss)
|
|
(21)
|
|
(21)
|
|
Total shareholders' equity
|
|
2,209
|
|
2,193
|
|
Total liabilities and shareholders' equity
|
$
|
8,492
|
$
|
8,475
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||
(Dollars in millions)
|
||||
|
Three months ended March 31,
|
|||
|
2012
|
2011
|
||
|
(unaudited)
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
$
|
66
|
$
|
68
|
Adjustments to reconcile net income to net cash provided by
|
|
|
|
|
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
87
|
|
81
|
Deferred income taxes and investment tax credits
|
|
14
|
|
48
|
Other
|
|
(1)
|
|
(2)
|
Net change in other working capital components
|
|
280
|
|
168
|
Changes in other assets
|
|
3
|
|
12
|
Changes in other liabilities
|
|
―
|
|
(4)
|
Net cash provided by operating activities
|
|
449
|
|
371
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
Expenditures for property, plant and equipment
|
|
(165)
|
|
(168)
|
Increase in loans to affiliates, net
|
|
(200)
|
|
(287)
|
Net cash used in investing activities
|
|
(365)
|
|
(455)
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
Common dividends paid
|
|
(50)
|
|
(50)
|
Payment of long-term debt
|
|
―
|
|
(250)
|
Net cash used in financing activities
|
|
(50)
|
|
(300)
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
34
|
|
(384)
|
Cash and cash equivalents, January 1
|
|
36
|
|
417
|
Cash and cash equivalents, March 31
|
$
|
70
|
$
|
33
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
Interest payments, net of amounts capitalized
|
$
|
5
|
$
|
8
|
Income tax refunds, net
|
|
17
|
|
14
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES
|
|
|
|
|
Accrued capital expenditures
|
$
|
64
|
$
|
76
|
See Notes to Condensed Consolidated Financial Statements.
|
§
|
San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas);
|
§
|
Sempra International, which includes our Sempra South American Utilities and Sempra Mexico reportable segments; and
|
§
|
Sempra U.S. Gas & Power, which includes our Sempra Renewables and Sempra Natural Gas reportable segments.
|
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
|
|
|
|
|
|
||
(Dollars in millions, except per share amounts)
|
|
|
|
|
|
||
|
|
Three months ended March 31, 2011
|
|||||
|
|
|
As
|
|
|
|
|
|
|
|
Originally
|
|
|
|
Retrospectively
|
Sempra Energy Consolidated
|
Reported
|
|
Adjustments
|
|
Adjusted
|
||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
|
|
|
|
|
||
Depreciation and amortization
|
$
|
231
|
$
|
(1)
|
$
|
230
|
|
Income before income taxes and equity earnings
|
|
|
|
|
|
|
|
of certain unconsolidated subsidiaries
|
|
342
|
|
1
|
|
343
|
|
Income tax expense
|
|
109
|
|
5
|
|
114
|
|
Net income
|
|
264
|
|
(4)
|
|
260
|
|
Earnings
|
|
258
|
|
(4)
|
|
254
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
$
|
1.07
|
$
|
(0.01)
|
$
|
1.06
|
|
Diluted earnings per common share
|
$
|
1.07
|
$
|
(0.02)
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
|
|
|
|
||
Net income
|
$
|
264
|
$
|
(4)
|
$
|
260
|
|
Adjustments to reconcile net income to net cash provided by
|
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
231
|
|
(1)
|
|
230
|
|
Deferred income taxes and investment tax credits
|
|
88
|
|
(6)
|
|
82
|
|
Net change in other working capital components (income taxes)
|
|
286
|
|
11
|
|
297
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2011
|
|||||
|
|
|
As
|
|
|
|
|
|
|
|
Originally
|
|
|
|
Retrospectively
|
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
|
|
|
|
||
Property, plant and equipment
|
$
|
31,303
|
$
|
(111)
|
$
|
31,192
|
|
Less accumulated depreciation and amortization
|
|
(7,731)
|
|
4
|
|
(7,727)
|
|
Property, plant and equipment, net
|
$
|
23,572
|
$
|
(107)
|
$
|
23,465
|
|
|
|
|
|
|
|
|
|
Income taxes payable
|
$
|
16
|
$
|
(11)
|
$
|
5
|
|
Deferred income taxes, noncurrent liability
|
|
1,554
|
|
(34)
|
|
1,520
|
|
Deferred credits and other
|
|
783
|
|
1
|
|
784
|
|
Retained earnings(1)
|
|
8,225
|
|
(63)
|
|
8,162
|
|
(1)
|
Adjustment includes the cumulative effect of the change in accounting principle of reductions in net income and earnings of $26 million, $30 million, a negligible amount, and $7 million for the years ended December 31, 2011, 2010, 2009 and 2008, respectively.
|
§
|
quantitative information about the unobservable inputs
|
§
|
a description of the valuation process
|
§
|
a qualitative discussion about the sensitivity of the measurements
|
|
|
Three months ended
|
|
(Dollars in millions)
|
March 31, 2011
|
||
Revenues
|
$
|
2,777
|
|
Earnings
|
|
279
|
§
|
the purpose and design of the VIE;
|
§
|
the nature of the VIE’s risks and the risks we absorb;
|
§
|
the power to direct activities that most significantly impact the economic performance of the VIE; and
|
§
|
the obligation to absorb losses or right to receive benefits that could be significant to the VIE.
|
AMOUNTS ASSOCIATED WITH OTAY MESA VIE
|
|||||||
(Dollars in millions)
|
|||||||
|
|
|
|
Three months ended March 31,
|
|||
|
|
|
2012
|
2011
|
|||
|
|
|
|