SEC Filing | Sempra

View:

Download DOC

Download PDF

Download XLS

SDG&E 5-5-2009 8-K

UNITED STATES

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):	May 5, 2009

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)	(IRS Employer Identification No.)


8326 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 May 5, 2009, Sempra Energy, of which San Diego Gas & Electric Company is a consolidated subsidiary, issued a press release announcing consolidated earnings of $316 million, or $1.29 per diluted share of common stock, for the first quarter of 2009. 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 Statement of Operations Data by Business Unit for the three months ended March 31, 2009 and 2008. 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.

Item 9.01 Financial Statements and Exhibits.

Exhibits

99.1

May 5, 2009 Sempra Energy News Release (including tables)

99.2

Sempra Energy's Statement of Operations Data by Business Unit for the three months ended March 31, 2009 and 2008.

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: May 5, 2009	By: /s/ Robert Schlax
	Robert Schlax Vice President, Controller 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:	Glen Donovan
	Sempra Energy
	(877) 736-7727
	investor@sempra.com

SEMPRA ENERGY’S FIRST-QUARTER 2009

EARNINGS PER SHARE RISE 40 PERCENT

SAN DIEGO, May 5, 2009 – Boosted by improved results in nearly all of its operations, Sempra Energy (NYSE: SRE) today reported first-quarter 2009 earnings of $316 million, or $1.29 per diluted share, an increase of 40 percent per share over first-quarter 2008 earnings of $242 million, or $0.92 per diluted share.

“We had an outstanding first quarter – a solid step toward meeting our 2009 financial objectives,” said Donald E. Felsinger, chairman and chief executive officer of Sempra Energy. “In a tough economy, our businesses are continuing to grow and build long-term value for our shareholders.”

SUBSIDIARY OPERATING RESULTS

San Diego Gas & Electric

First-quarter earnings for San Diego Gas & Electric (SDG&E) rose to $99 million in 2009 from $74 million in 2008. Earnings were higher primarily due to the favorable impact of SDG&E's rate case, which was approved by the California Public Utilities Commission and went into effect in the third quarter 2008. This improvement was partially offset by a favorable resolution in 2008 of prior-year’s income-tax issues.

In March, SDG&E expanded the roll-out of smart meters for its 1.4 million customers. The new digital meters will allow two-way communications between SDG&E and its customers, increasing operational efficiency and giving customers more information with which to manage their energy usage. All of the new meters are expected to be installed by the end of 2011.

Southern California Gas Co.

Earnings for Southern California Gas Co. (SoCalGas) in the first quarter 2009 were $59 million, compared with $57 million in the prior-year’s quarter.

RBS Sempra Commodities

First-quarter earnings from Sempra Energy’s commodity operations nearly doubled in 2009 to $114 million. During the most recent quarter, the RBS Sempra Commodities joint venture benefited from improved results in natural gas and oil marketing. First-quarter 2008 results of $59 million represented 100 percent of the earnings of Sempra Energy’s commodities-marketing business prior to the formation of the joint venture and reflected a $17 million write-down related to a credit issue with a counterparty.

Sempra Generation

Sempra Generation’s earnings were $43 million in the first quarter 2009, compared with $45 million in last year’s first quarter.

On April 15, Sempra Generation announced its intention to construct a new 48-megawatt (MW) expansion of its existing 10-MW photovoltaic power-generation facility near Las Vegas. The combined 58-MW installation would become the largest operational photovoltaic solar-power facility in North America. Construction will commence after Sempra Generation contracts with customers for the facility’s power output.

Sempra Pipelines & Storage

First-quarter earnings for Sempra Pipelines & Storage rose 42 percent to $37 million in 2009 from $26 million in 2008, due primarily to increased contributions from its Mexico pipeline operations and Mobile Gas, offset by the negative effect of foreign currency exchange rates. Mobile Gas typically reports its highest earnings in the first quarter, when heating demand is stronger due to colder weather.

Sempra LNG

Sempra LNG recorded a loss of $7 million in the first quarter 2009, compared with a loss of $9 million in last year’s first quarter.

INTERNET BROADCAST

Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. EDT 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 (888) 203-1112 and entering passcode 8962347.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2008 revenues of nearly $11 billion. The Sempra Energy companies’ 13,600 employees serve about 29 million consumers worldwide.

Complete financial tables, including earnings information by business unit, are available on Sempra Energy’s Web site at http://www.sempra.com/downloads/1Q2009.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. These statements can be identified by words like “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “may,” “would,” ”could,” “should,” or similar expressions, or discussions of strategies, plans or intentions. 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, nationa l and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, California State Legislature, California Department of Water Resources, Federal Energy Regulatory Commission, Federal Reserve Board, and other regulatory and governmental bodies in the United States, the United Kingdom and other countries; capital market conditions and inflation, interest and exchange rates; energy and trading markets, including the timing and extent of changes and volatility in commodity prices; the availability of electric power, 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 development efforts; the resolution of litigation; and other uncertainties, all of which are diffi cult to predict and many of which are beyond the control of the company. These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the Securities and Exchange Commission. These reports are available through the IDEA system without charge at the SEC’s Web site, www.sec.gov and on the company’s Web site, at www.sempra.com.

Sempra Pipelines & Storage, Sempra Generation, Sempra LNG and Sempra Commodities are not the same companies as the utility, San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra Pipelines & Storage, Sempra Generation, Sempra LNG and Sempra Commodities are not regulated by the California Public Utilities Commission.

###


SEMPRA ENERGY
Table A


*CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS*

	Three months ended
	March 31,
(Dollars in millions, except per share amounts)	2009	2008*
	(unaudited)
REVENUES
Sempra Utilities	$ 1,642	$ 2,290
Sempra Global and parent	466	980
Total revenues	2,108	3,270
EXPENSES AND OTHER INCOME
Sempra Utilities:
Cost of natural gas	(540)	(1,235)
Cost of electric fuel and purchased power	(171)	(163)
Sempra Global and parent:
Cost of natural gas, electric fuel and purchased power	(268)	(409)
Other cost of sales	(17)	(136)
Operation and maintenance	(516)	(698)
Depreciation and amortization	(183)	(175)
Franchise fees and other taxes	(82)	(83)
Equity earnings:
RBS Sempra Commodities LLP	153	-
Other	7	6
Other income, net	3	19
Interest income	6	14
Interest expense	(82)	(60)
Income before income taxes and equity earnings of certain unconsolidated subsidiaries	418	350
Income tax expense	(109)	(127)
Equity earnings, net of income tax	16	21
Net income	325	244
Earnings attributable to noncontrolling interests	(7)	-
Preferred dividends of subsidiaries	(2)	(2)
Earnings	$ 316	$ 242

Basic earnings per common share	$ 1.31	$ 0.94
Weighted-average number of shares outstanding, basic (thousands)	241,766	258,624

Diluted earnings per common share	$ 1.29	$ 0.92
Weighted-average number of shares outstanding, diluted (thousands)	245,017	262,671
Dividends declared per share of common stock	$ 0.39	$ 0.32

* As adjusted for the retrospective adoption of SFAS 160.


SEMPRA ENERGY
Table B

*CONSOLIDATED BALANCE SHEETS*

			March 31,	December 31,
(Dollars in millions)			2009	2008*
			(unaudited)
Assets
Current assets:
	Cash and cash equivalents		$ 720	$ 331
	Short-term investments		176	176
	Restricted cash		27	27
	Accounts receivable, net		882	981
	Income taxes receivable		2	195
	Deferred income taxes		48	31
	Inventories		150	320
	Regulatory assets		122	121
	Fixed-price contracts and other derivatives		123	160
	Insurance receivable related to wildfire litigation		900	-
	Other		177	134
		Total current assets	3,327	2,476

Investments and other assets:
	Regulatory assets arising from fixed-price contracts and other derivatives		263	264
	Regulatory assets arising from pension and other postretirement benefit obligations		1,210	1,188
	Other regulatory assets		543	534
	Nuclear decommissioning trusts		537	577
	Investment in RBS Sempra Commodities LLP		1,958	2,082
	Other investments		1,228	1,166
	Goodwill and other intangible assets		531	539
	Sundry		529	709
		Total investments and other assets	6,799	7,059
Property, plant and equipment, net			17,208	16,865
Total assets			$ 27,334	$ 26,400

Liabilities and Equity
Current liabilities:
	Short-term debt		$ 426	$ 503
	Accounts payable		622	856
	Due to unconsolidated affiliates		31	38
	Dividends and interest payable		187	156
	Accrued compensation and benefits		146	280
	Regulatory balancing accounts, net		609	335
	Current portion of long-term debt		921	410
	Fixed-price contracts and other derivatives		196	180
	Customer deposits		159	170
	Reserve for wildfire litigation		900	-
	Other		703	684
		Total current liabilities	4,900	3,612
Long-term debt			6,044	6,544

Deferred credits and other liabilities:
	Due to unconsolidated affiliate		102	102
	Customer advances for construction		153	155
	Pension and other postretirement benefit obligations, net of plan assets		1,508	1,487
	Deferred income taxes		944	946
	Deferred investment tax credits		55	57
	Regulatory liabilities arising from removal obligations		2,402	2,430
	Asset retirement obligations		1,177	1,159
	Other regulatory liabilities		216	219
	Fixed-price contracts and other derivatives		366	392
	Deferred credits and other		875	909
		Total deferred credits and other liabilities	7,798	7,856
Preferred stock of subsidiary			79	79
Total Sempra Energy shareholders' equity			8,247	7,969
Preferred stock of subsidiaries			100	100
Other noncontrolling interests			166	240
		Total equity	8,513	8,309
Total liabilities and equity			$ 27,334	$ 26,400

* As adjusted for the retrospective adoption of SFAS 160.
* As adjusted for the retrospective adoption of SFAS 160.


SEMPRA ENERGY
Table C

*CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS*
		Three months ended
		March 31,
(Dollars in millions)		2009	2008*
		(unaudited)
Cash Flows from Operating Activities:
Net income		$ 325	$ 244
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization	183	175
	Deferred income taxes and investment tax credits	(29)	(58)
	Equity earnings	(176)	(27)
	Other	49	32
Net changes in other working capital components		491	390
Distribution from RBS Sempra Commodities LLP		305	--
Changes in other assets		10	(3)
Changes in other liabilities		(19)	(22)
	Net cash provided by operating activities	1,139	731

Cash Flows from Investing Activities:
Expenditures for property, plant and equipment		(492)	(544)
Proceeds from sale of assets		--	10
Expenditures for investments		(25)	(579)
Distributions from investments		5	4
Purchases of nuclear decommissioning and other trust assets		(45)	(134)
Proceeds from sales by nuclear decommissioning and other trusts		42	135
Other		(7)	(1)
	Net cash used in investing activities	(522)	(1,109)

Cash Flows from Financing Activities:
Common dividends paid		(86)	(82)
Preferred dividends paid by subsidiaries		(2)	(2)
Issuances of common stock		10	4
Repurchases of common stock		--	(2)
(Decrease) increase in short-term debt, net		(77)	566
Issuances of long-term debt		22	52
Payments on long-term debt		(6)	(10)
Purchase of noncontrolling interest		(94)	--
Other		5	(10)
	Net cash (used in) provided by financing activities	(228)	516

Increase in cash and cash equivalents		389	138
Cash and cash equivalents, January 1		331	668
Cash and cash equivalents, March 31		$ 720	$ 806

* As adjusted for the retrospective adoption of SFAS 160.


SEMPRA ENERGY
Table D


*BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS*


		Three months ended
		March 31,
(Dollars in millions)		2009	2008
		(unaudited)
Earnings (Losses)
San Diego Gas & Electric		$ 99	$ 74
Southern California Gas		59	57
Sempra Commodities⁽¹⁾		114	59
Sempra Generation		43	45
Sempra Pipelines & Storage		37	26
Sempra LNG		(7)	(9)
Parent & Other		(29)	(10)
Earnings		$ 316	$ 242

⁽¹⁾	Results for 2009 include the company's portion of RBS Sempra Commodities' joint venture earnings and interest, income taxes, cost allocations and other items associated with the joint venture. Results for 2008 include 100% of the commodities-marketing businesses. Both 2009 and 2008 include the results of Sempra Rockies Marketing.





		Three months ended
		March 31,
(Dollars in millions)		2009	2008
		(unaudited)
Capital Expenditures and Investments
San Diego Gas & Electric		$ 229	$ 471	⁽¹⁾
Southern California Gas		112	116
Sempra Commodities		-	37
Sempra Generation		3	11
Sempra Pipelines & Storage		101	209
Sempra LNG		71	97
Parent & Other		1	182	⁽¹⁾
Consolidated Capital Expenditures and Investments		$ 517	$ 1,123

⁽¹⁾	Purchases of industrial development bonds for SDG&E and Parent & Other were $236 and $177, respectively, in the three months ended March 31, 2008.


SEMPRA ENERGY
Table E


*OTHER OPERATING STATISTICS (Unaudited)*


		Three months ended
		March 31,
*SEMPRA UTILITIES*		2009	2008
Revenues (Dollars in millions)
SDG&E (excludes intercompany sales)		$ 730	$ 742
SoCalGas (excludes intercompany sales)		$ 912	$ 1,548

Gas Sales (bcf)		131	144
Transportation and Exchange (bcf)		128	138
Total Deliveries (bcf)		259	282
Total Gas Customers (Thousands)		6,582	6,543

Electric Sales (Millions of kWhs)		4,164	4,275
Direct Access (Millions of kWhs)		740	765
Total Deliveries (Millions of kWhs)		4,904	5,040
Total Electric Customers (Thousands)		1,373	1,366


*SEMPRA GENERATION*
Power Sold (Millions of kWhs)		5,727	5,612


*SEMPRA PIPELINES & STORAGE*
(Represents 100% of the distribution operations of these subsidiaries, although subsidiaries in Argentina, Chile and Peru are not 100% owned by Sempra Energy. These subsidiaries are not consolidated within Sempra Energy and the related investments are accounted for under the equity method).
Natural Gas Sales (bcf)
	Argentina	65	71
	Mexico	5	5
	Mobile Gas	9	-	*
Natural Gas Customers (Thousands)
	Argentina	1,680	1,613
	Mexico	94	95
	Mobile Gas	94	-	*
Electric Sales (Millions of kWhs)
	Peru	1,393	1,362
	Chile	677	664
Electric Customers (Thousands)
	Peru	845	815
	Chile	566	553

* Mobile Gas was acquired in October 2008.


SEMPRA ENERGY
Table E (Continued)



*SEMPRA COMMODITIES*
The following information for the Sempra Commodities segment includes information related to RBS Sempra Commodities LLP. RBS Sempra Commodities LLP acquired the commodity-marketing businesses of Sempra Energy on April 1, 2008. For the three months ended March 31, 2009, the Sempra Commodities segment is composed primarily of the company's equity interest in RBS Sempra Commodities LLP, but also includes the results of Sempra Rockies Marketing. The margin and financial data below represent the total results of RBS Sempra Commodities LLP as calculated under International Financial Reporting Standards (IFRS).

*RBS Sempra Commodities LLP*

*Operating Statistics*
(in millions of US dollars)
			Three
			months ended
RBS Sempra Commodities LLP - Joint Venture level margin*			March 31, 2009

Geographical:
	North America		$ 252
	Europe/Asia		102
	Total		$ 354

Product Line:
	Oil - Crude & Products		$ 123
	Power		93
	Natural Gas		78
	Metals		54
	Other		6
	Total		$ 354

* Margin consists of operating revenues less cost of sales (primarily transportation and storage costs) reduced by certain transaction-related execution costs (primarily brokerage and other fees) and net interest income/expense.

*Financial Information*
(in millions of US dollars)

RBS Sempra Commodities LLP		Three months ended March 31, 2009
		Joint Venture	Sempra
		Total	Share**
	Fee income and trading revenue, net of selling costs	$ 354
	Operating and other expenses	(200)
	Joint Venture distributable income	$ 154


	Preferred return on capital	$ 77	$ 59
	1^st allocation - 70% Sempra / 30% RBS***	77	55
	2^nd allocation - 30% Sempra / 70% RBS	-	-
	Distributable income	$ 154	$ 114

*Sempra Commodities Earnings*

			Three
			months ended
(in millions of US dollars)			March 31, 2009
	Sempra share of distributable income - IFRS basis		$ 114
	U.S. GAAP conversion impact		39
	Sempra equity earnings before income taxes - U.S. GAAP basis		153
	Income tax expense		(37)
	Sempra equity earnings from RBS Sempra Commodities LLP		116
	Other segment activity		(2)
	Sempra Commodities earnings		$ 114

**	After a 15% preferred return to Sempra and then a 15% return to RBS, Sempra receives 70% of the next $500 million and 30% of any remaining income on an annual basis.

***	Includes certain transition costs specifically allocated to Sempra and RBS.

Exhibit 99.2

Exhibit 99.2


SEMPRA ENERGY
Table F (Unaudited)

*Statement of Operations Data by Business Unit*

Three Months Ended March 31, 2009

(Dollars in millions)	SDG&E	SoCalGas	Commodities	Generation	Pipelines & Storage	LNG	Consolidating Adjustments, Parent & Other	Total

Revenues	$ 732	$ 920	$ 13	$ 297	$ 132	$ 32	$ (18)	$2,108

Cost of Sales and Other Expenses	(480)	(738)	(12)	(227)	(95)	(43)	1	(1,594)

Depreciation & Amortization	(77)	(72)	-	(14)	(10)	(6)	(4)	(183)

Equity Earnings (Losses) Recorded Before Income Tax	-	-	153	-	10	-	(3)	160

Other Income (Expense), Net	17	1	-	-	(1)	-	(14)	3

Income (Loss) Before Interest & Tax ⁽¹⁾	192	111	154	56	36	(17)	(38)	494

Net Interest Expense ⁽²⁾	(26)	(16)	(3)	(1)	(3)	(2)	(27)	(78)

Income Tax (Expense) Benefit	(60)	(36)	(37)	(12)	(12)	12	36	(109)

Equity Earnings Recorded Net of Income Tax	-	-	-	-	16	-	-	16

Earnings Attributable to Noncontrolling Interests	(7)	-	-	-	-	-	-	(7)

Earnings (Losses)	$ 99	$ 59	$ 114	$ 43	$ 37	$ (7)	$ (29)	$ 316


Three Months Ended March 31, 2008

(Dollars in millions)	SDG&E	SoCalGas	Commodities	Generation	Pipelines & Storage	LNG	Consolidating Adjustments, Parent & Other	Total

Revenues	$ 746	$ 1,556	$ 457	$ 446	$ 93	$ (10)	$ (18)	$3,270

Cost of Sales and Other Expenses	(540)	(1,375)	(351)	(357)	(88)	(12)	(1)	(2,724)

Depreciation & Amortization	(77)	(71)	(6)	(14)	(2)	-	(5)	(175)

Equity Earnings (Losses) Recorded Before Income Tax	-	-	-	2	8	-	(4)	6

Other Income, Net	3	-	-	1	-	15	-	19

Income (Loss) Before Interest & Tax ⁽¹⁾	132	110	100	78	11	(7)	(28)	396

Net Interest (Expense) Income ⁽²⁾	(26)	(13)	(5)	(2)	1	(1)	(2)	(48)

Income Tax (Expense) Benefit	(32)	(40)	(39)	(31)	(4)	(1)	20	(127)

Equity Earnings Recorded Net of Income Tax	-	-	3	-	18	-	-	21

Earnings (Losses)	$ 74	$ 57	$ 59	$ 45	$ 26	$ (9)	$ (10)	$ 242

⁽¹⁾ Management believes "Income (Loss) before Interest & Tax" 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 tax, 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.