CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | |||||||||||||||||||
In Millions, except Share data in Thousands | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 | |||||||||||||||
Sempra Energy Consolidated | |||||||||||||||||||
REVENUES | |||||||||||||||||||
Sempra Utilities | $1,424 | $2,013 | [1] | $4,382 | $6,190 | [1] | |||||||||||||
Sempra Global and parent | 429 | 679 | [1] | 1,268 | 2,275 | [1] | |||||||||||||
Total revenues | 1,853 | 2,692 | [1] | 5,650 | 8,465 | [1] | |||||||||||||
Sempra Utilities: | |||||||||||||||||||
Cost of natural gas | (208) | (689) | [1] | (997) | (2,708) | [1] | |||||||||||||
Cost of electric fuel and purchased power | (208) | (311) | [1] | (508) | (694) | [1] | |||||||||||||
Sempra Global and parent: | |||||||||||||||||||
Cost of natural gas, electric fuel and purchased power | (220) | (431) | [1] | (675) | (1,353) | [1] | |||||||||||||
Other cost of sales | (19) | (15) | [1] | (52) | (168) | [1] | |||||||||||||
Operation and maintenance | (571) | (564) | [1] | (1,676) | (1,816) | [1] | |||||||||||||
Depreciation and amortization | (196) | (162) | [1] | (568) | (508) | [1] | |||||||||||||
Franchise fees and other taxes | (77) | (76) | [1] | (228) | (230) | [1] | |||||||||||||
Gains on sale of assets | 0 | 0 | [1] | 3 | 114 | [1] | |||||||||||||
Write-off of long-lived assets | 0 | 0 | [1] | (132) | 0 | [1] | |||||||||||||
Equity earnings (losses): | |||||||||||||||||||
RBS Sempra Commodities LLP | 105 | (4) | [1] | 384 | 142 | [1] | |||||||||||||
Other | 18 | 14 | [1] | 27 | 29 | [1] | |||||||||||||
Other income (expense), net | 24 | (21) | [1] | 97 | 30 | [1] | |||||||||||||
Interest income | 5 | 12 | [1] | 16 | 36 | [1] | |||||||||||||
Interest expense | (96) | (67) | [1] | (257) | (165) | [1] | |||||||||||||
Income before income taxes and equity earnings of certain unconsolidated subsidiaries | 410 | 378 | [1] | 1,084 | 1,174 | [1] | |||||||||||||
Income tax expense | (128) | (94) | [1] | (327) | (423) | [1] | |||||||||||||
Equity earnings, net of income tax | 20 | 18 | [1] | 59 | 57 | [1] | |||||||||||||
Net income | 302 | 302 | [1] | 816 | 808 | [1] | |||||||||||||
(Earnings) losses attributable to noncontrolling interests | 17 | 8 | [1] | 22 | (7) | [1] | |||||||||||||
Preferred dividends of subsidiaries | (2) | (2) | [1] | (7) | (7) | [1] | |||||||||||||
Earnings | 317 | 308 | [1] | 831 | 794 | [1] | |||||||||||||
Basic earnings per share: | |||||||||||||||||||
Basic earnings per common share | 1.3 | 1.26 | [1] | 3.42 | 3.18 | [1] | |||||||||||||
Basic earnings per share, weighted-average number of shares outstanding (thousands) | 243,925 | 243,793 | [1] | 242,806 | 249,311 | [1] | |||||||||||||
Diluted earnings per share: | |||||||||||||||||||
Diluted earnings per common share | 1.27 | 1.24 | [1] | 3.37 | 3.13 | [1] | |||||||||||||
Diluted earnings per share, weighted-average number of shares outstanding (thousands) | 248,461 | 247,904 | [1] | 246,875 | 253,407 | [1] | |||||||||||||
Dividends declared per share of common stock | 0.39 | 0.35 | [1] | 1.17 | 1.02 | [1] | |||||||||||||
San Diego Gas and Electric Company and Subsidiary | |||||||||||||||||||
Utility operating revenues | |||||||||||||||||||
Electric | 695 | 817 | [1] | 1,783 | 1,901 | [1] | |||||||||||||
Natural gas | 78 | 132 | [1] | 353 | 548 | [1] | |||||||||||||
Total utility operating revenues | 773 | 949 | [1] | 2,136 | 2,449 | [1] | |||||||||||||
Utility operating expenses | |||||||||||||||||||
Utility cost of natural gas | 30 | 84 | [1] | 154 | 349 | [1] | |||||||||||||
Utility cost of electric fuel and purchased power | 208 | 311 | [1] | 508 | 694 | [1] | |||||||||||||
Utility operation and maintenance | 234 | 222 | [1] | 655 | 595 | [1] | |||||||||||||
Utility depreciation and amortization | 81 | 68 | [1] | 239 | 223 | [1] | |||||||||||||
Utility franchise fees and other taxes | 46 | 43 | [1] | 126 | 117 | [1] | |||||||||||||
Utility litigation expense | 2 | 29 | [1] | (6) | 38 | [1] | |||||||||||||
Total utility operating expenses | 601 | 757 | [1] | 1,676 | 2,016 | [1] | |||||||||||||
Utility operating income | 172 | 192 | [1] | 460 | 433 | [1] | |||||||||||||
Equity earnings (losses): | |||||||||||||||||||
Other income (expense), net | 1 | 3 | [1] | 45 | 26 | [1] | |||||||||||||
Interest income | 1 | 1 | [1] | 1 | 5 | [1] | |||||||||||||
Interest expense | (29) | (24) | [1] | (75) | (73) | [1] | |||||||||||||
Income before income taxes and equity earnings of certain unconsolidated subsidiaries | 145 | 172 | [1] | 431 | 391 | [1] | |||||||||||||
Income tax expense | (53) | (54) | [1] | (141) | (121) | [1] | |||||||||||||
Net income | 92 | 118 | [1] | 290 | 270 | [1] | |||||||||||||
(Earnings) losses attributable to noncontrolling interests | 18 | 7 | [1] | (9) | (8) | [1] | |||||||||||||
Earnings | 110 | 125 | [1] | 281 | 262 | [1] | |||||||||||||
Preferred dividend requirements | (2) | (2) | [1] | (4) | (4) | [1] | |||||||||||||
Earnings attributable to common shares | 108 | 123 | [1] | 277 | 258 | [1] | |||||||||||||
Pacific Enterprises and Subsidiaries | |||||||||||||||||||
Utility operating revenues | |||||||||||||||||||
Total utility operating revenues | 662 | 1,077 | [1] | 2,276 | 3,776 | [1] | |||||||||||||
Utility operating expenses | |||||||||||||||||||
Utility cost of natural gas | 180 | 609 | [1] | 849 | 2,369 | [1] | |||||||||||||
Utility operation and maintenance | 249 | 241 | [1] | 766 | 756 | [1] | |||||||||||||
Utility depreciation and amortization | 73 | 67 | [1] | 220 | 209 | [1] | |||||||||||||
Utility franchise fees and other taxes | 25 | 29 | [1] | 81 | 100 | [1] | |||||||||||||
Total utility operating expenses | 527 | 946 | [1] | 1,916 | 3,434 | [1] | |||||||||||||
Utility operating income | 135 | 131 | [1] | 360 | 342 | [1] | |||||||||||||
Equity earnings (losses): | |||||||||||||||||||
Other income (expense), net | (4) | 1 | [1] | 1 | 2 | [1] | |||||||||||||
Interest income | 0 | 5 | [1] | 3 | 18 | [1] | |||||||||||||
Interest expense | (17) | (15) | [1] | (52) | (47) | [1] | |||||||||||||
Income before income taxes and equity earnings of certain unconsolidated subsidiaries | 114 | 122 | [1] | 312 | 315 | [1] | |||||||||||||
Income tax expense | (41) | (42) | [1] | (117) | (119) | [1] | |||||||||||||
Net income | 73 | 80 | [1] | 195 | 196 | [1] | |||||||||||||
Preferred dividends of subsidiaries | 0 | 0 | [1] | (1) | (1) | [1] | |||||||||||||
Earnings | 73 | 80 | [1] | 194 | 195 | [1] | |||||||||||||
Preferred dividend requirements | (1) | (1) | [1] | (3) | (3) | [1] | |||||||||||||
Earnings attributable to common shares | 72 | 79 | [1] | 191 | 192 | [1] | |||||||||||||
Southern California Gas Company and Subsidiaries | |||||||||||||||||||
Utility operating revenues | |||||||||||||||||||
Total utility operating revenues | 662 | 1,077 | 2,276 | 3,776 | |||||||||||||||
Utility operating expenses | |||||||||||||||||||
Utility cost of natural gas | 180 | 609 | 849 | 2,369 | |||||||||||||||
Utility operation and maintenance | 252 | 241 | 768 | 756 | |||||||||||||||
Utility depreciation and amortization | 73 | 67 | 220 | 209 | |||||||||||||||
Utility franchise fees and other taxes | 25 | 29 | 81 | 100 | |||||||||||||||
Total utility operating expenses | 530 | 946 | 1,918 | 3,434 | |||||||||||||||
Utility operating income | 132 | 131 | 358 | 342 | |||||||||||||||
Equity earnings (losses): | |||||||||||||||||||
Other income (expense), net | (1) | (1) | 4 | 1 | |||||||||||||||
Interest income | 1 | 2 | 3 | 9 | |||||||||||||||
Interest expense | (16) | (14) | (51) | (44) | |||||||||||||||
Income before income taxes and equity earnings of certain unconsolidated subsidiaries | 116 | 118 | 314 | 308 | |||||||||||||||
Income tax expense | (42) | (41) | (115) | (117) | |||||||||||||||
Net income | 74 | 77 | 199 | 191 | |||||||||||||||
Earnings | 74 | 77 | 199 | 191 | |||||||||||||||
Preferred dividend requirements | 0 | 0 | (1) | (1) | |||||||||||||||
Earnings attributable to common shares | $74 | $77 | $198 | $190 | |||||||||||||||
[1]As adjusted for the retrospective adoption of ASC 810 (SFAS 160). |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | |||||||||||||||||||
In Millions | Sep. 30, 2009
| Dec. 31, 2008
| |||||||||||||||||
Sempra Energy Consolidated | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $756 | $331 | |||||||||||||||||
Short-term investments | 0 | 176 | |||||||||||||||||
Restricted cash | 27 | 27 | |||||||||||||||||
Trade accounts receivable, net | 618 | 903 | |||||||||||||||||
Other accounts and notes receivable, net | 126 | 78 | |||||||||||||||||
Due from unconsolidated affiliates | 19 | 4 | |||||||||||||||||
Income taxes receivable | 139 | 195 | |||||||||||||||||
Deferred income taxes, net current assets | 117 | 31 | |||||||||||||||||
Inventories | 296 | 320 | |||||||||||||||||
Regulatory assets | 48 | 121 | |||||||||||||||||
Fixed-price contracts and other derivatives, current assets | 111 | 160 | |||||||||||||||||
Insurance receivable related to wildfire litigation (Note 10) | 266 | 0 | |||||||||||||||||
Other current assets | 173 | 130 | |||||||||||||||||
Total current assets | 2,696 | 2,476 | |||||||||||||||||
Investments and other assets: | |||||||||||||||||||
Regulatory assets arising from fixed-price contracts and other derivatives - noncurrent | 232 | 264 | |||||||||||||||||
Regulatory assets arising from pension and other postretirement benefit obligations | 1,218 | 1,188 | |||||||||||||||||
Other regulatory assets | 568 | 534 | |||||||||||||||||
Nuclear decommissioning trusts | 664 | 577 | |||||||||||||||||
Investment in RBS Sempra Commodities LLP | 2,094 | 2,082 | |||||||||||||||||
Other investments | 2,019 | 1,166 | |||||||||||||||||
Goodwill and other intangible assets | 527 | 539 | |||||||||||||||||
Sundry | 605 | 709 | |||||||||||||||||
Total investments and other assets | 7,927 | 7,059 | |||||||||||||||||
Property, plant and equipment: | |||||||||||||||||||
Property, plant and equipment | 24,379 | 23,153 | |||||||||||||||||
Less accumulated depreciation and amortization | (6,607) | (6,288) | |||||||||||||||||
Property, plant and equipment, net | 17,772 | 16,865 | |||||||||||||||||
Total assets | 28,395 | 26,400 | |||||||||||||||||
Current liabilities: | |||||||||||||||||||
Short-term debt | 851 | 503 | [1] | ||||||||||||||||
Accounts payable - trade | 436 | 606 | [1] | ||||||||||||||||
Accounts payable - other | 145 | 250 | [1] | ||||||||||||||||
Due to unconsolidated affiliates | 16 | 38 | [1] | ||||||||||||||||
Dividends and interest payable | 209 | 156 | [1] | ||||||||||||||||
Accrued compensation and benefits | 221 | 280 | [1] | ||||||||||||||||
Regulatory balancing accounts, net | 605 | 335 | [1] | ||||||||||||||||
Current portion of long-term debt | 622 | 410 | [1] | ||||||||||||||||
Fixed-price contracts and other derivatives, current liabilities | 99 | 180 | [1] | ||||||||||||||||
Customer deposits | 145 | 170 | [1] | ||||||||||||||||
Reserve for wildfire litigation (Note 10) | 289 | 0 | [1] | ||||||||||||||||
Other current liabilities | 672 | 684 | [1] | ||||||||||||||||
Total current liabilities | 4,310 | 3,612 | [1] | ||||||||||||||||
Long-term debt | 6,845 | 6,544 | [1] | ||||||||||||||||
Deferred credits and other liabilities: | |||||||||||||||||||
Due to unconsolidated affiliate | 102 | 102 | [1] | ||||||||||||||||
Customer advances for construction | 144 | 155 | [1] | ||||||||||||||||
Pension and other postretirement benefit obligations, net of plan assets | 1,518 | 1,487 | [1] | ||||||||||||||||
Deferred income taxes, net noncurrent liabilities | 1,278 | 946 | [1] | ||||||||||||||||
Deferred investment tax credits | 54 | 57 | [1] | ||||||||||||||||
Regulatory liabilities arising from removal obligations | 2,546 | 2,430 | [1] | ||||||||||||||||
Asset retirement obligations | 1,212 | 1,159 | [1] | ||||||||||||||||
Other regulatory liabilities | 202 | 219 | [1] | ||||||||||||||||
Fixed-price contracts and other derivatives, noncurrent liabilities | 348 | 392 | [1] | ||||||||||||||||
Deferred credits and other | 774 | 909 | [1] | ||||||||||||||||
Total deferred credits and other liabilities | 8,178 | 7,856 | [1] | ||||||||||||||||
Contingently redeemable preferred stock | 79 | 79 | [1] | ||||||||||||||||
Equity: | |||||||||||||||||||
Preferred Stock | 0 | 0 | [1] | ||||||||||||||||
Common Stock | 2,381 | 2,265 | [1] | ||||||||||||||||
Retained earnings | 6,779 | 6,235 | [1] | ||||||||||||||||
Deferred compensation | (14) | (18) | [1] | ||||||||||||||||
Accumulated other comprehensive income (loss) | (401) | (513) | [1] | ||||||||||||||||
Total shareholders' equity | 8,745 | 7,969 | [1] | ||||||||||||||||
Preferred stock of subsidiaries | 100 | 100 | [1] | ||||||||||||||||
Other noncontrolling interests | 138 | 240 | [1] | ||||||||||||||||
Total equity | 8,983 | 8,309 | [1] | ||||||||||||||||
Total liabilities and equity | 28,395 | 26,400 | [1] | ||||||||||||||||
San Diego Gas and Electric Company and Subsidiary | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | 291 | 19 | |||||||||||||||||
Short-term investments | 0 | 24 | |||||||||||||||||
Trade accounts receivable, net | 275 | 225 | |||||||||||||||||
Other accounts and notes receivable, net | 66 | 30 | |||||||||||||||||
Due from unconsolidated affiliates | 5 | 29 | |||||||||||||||||
Income taxes receivable | 51 | 22 | |||||||||||||||||
Deferred income taxes, net current assets | 42 | 17 | |||||||||||||||||
Inventories | 67 | 62 | |||||||||||||||||
Regulatory assets arising from fixed-price contracts and other derivatives - current | 32 | 94 | |||||||||||||||||
Regulatory assets | 5 | 8 | |||||||||||||||||
Fixed-price contracts and other derivatives, current assets | 61 | 39 | |||||||||||||||||
Insurance receivable related to wildfire litigation (Note 10) | 266 | 0 | |||||||||||||||||
Other current assets | 49 | 15 | |||||||||||||||||
Total current assets | 1,210 | 584 | |||||||||||||||||
Investments and other assets: | |||||||||||||||||||
Due from unconsolidated affiliate | 3 | 4 | |||||||||||||||||
Deferred taxes recoverable in rates | 399 | 369 | |||||||||||||||||
Regulatory assets arising from fixed-price contracts and other derivatives - noncurrent | 232 | 264 | |||||||||||||||||
Regulatory assets arising from pension and other postretirement benefit obligations | 393 | 393 | |||||||||||||||||
Other regulatory assets | 55 | 59 | |||||||||||||||||
Nuclear decommissioning trusts | 664 | 577 | |||||||||||||||||
Sundry | 56 | 154 | |||||||||||||||||
Total investments and other assets | 1,802 | 1,820 | |||||||||||||||||
Property, plant and equipment: | |||||||||||||||||||
Property, plant and equipment | 9,797 | 9,095 | |||||||||||||||||
Less accumulated depreciation and amortization | (2,535) | (2,420) | |||||||||||||||||
Property, plant and equipment, net | 7,262 | 6,675 | |||||||||||||||||
Total assets | 10,274 | 9,079 | |||||||||||||||||
Current liabilities: | |||||||||||||||||||
Accounts payable - trade | 250 | 261 | [1] | ||||||||||||||||
Due to unconsolidated affiliates | 9 | 1 | [1] | ||||||||||||||||
Accrued compensation and benefits | 84 | 105 | [1] | ||||||||||||||||
Regulatory balancing accounts, net | 321 | 114 | [1] | ||||||||||||||||
Current portion of long-term debt | 10 | 2 | [1] | ||||||||||||||||
Fixed-price contracts and other derivatives, current liabilities | 53 | 77 | [1] | ||||||||||||||||
Customer deposits | 54 | 53 | [1] | ||||||||||||||||
Reserve for wildfire litigation (Note 10) | 289 | 0 | [1] | ||||||||||||||||
Other current liabilities | 201 | 163 | [1] | ||||||||||||||||
Total current liabilities | 1,271 | 776 | [1] | ||||||||||||||||
Long-term debt | 2,587 | 2,142 | [1] | ||||||||||||||||
Deferred credits and other liabilities: | |||||||||||||||||||
Customer advances for construction | 21 | 26 | [1] | ||||||||||||||||
Pension and other postretirement benefit obligations, net of plan assets | 419 | 419 | [1] | ||||||||||||||||
Deferred income taxes, net noncurrent liabilities | 721 | 628 | [1] | ||||||||||||||||
Deferred investment tax credits | 25 | 26 | [1] | ||||||||||||||||
Regulatory liabilities arising from removal obligations | 1,308 | 1,212 | [1] | ||||||||||||||||
Asset retirement obligations | 575 | 550 | [1] | ||||||||||||||||
Fixed-price contracts and other derivatives, noncurrent liabilities | 287 | 347 | [1] | ||||||||||||||||
Deferred credits and other | 168 | 204 | [1] | ||||||||||||||||
Total deferred credits and other liabilities | 3,524 | 3,412 | [1] | ||||||||||||||||
Contingently redeemable preferred stock | 79 | 79 | [1] | ||||||||||||||||
Equity: | |||||||||||||||||||
Common Stock | 1,138 | 1,138 | [1] | ||||||||||||||||
Retained earnings | 1,544 | 1,417 | [1] | ||||||||||||||||
Accumulated other comprehensive income (loss) | (10) | (13) | [1] | ||||||||||||||||
Total shareholders' equity | 2,672 | 2,542 | [1] | ||||||||||||||||
Other noncontrolling interests | 141 | 128 | [1] | ||||||||||||||||
Total equity | 2,813 | 2,670 | [1] | ||||||||||||||||
Total liabilities and equity | 10,274 | 9,079 | [1] | ||||||||||||||||
Pacific Enterprises and Subsidiaries | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | 418 | 206 | |||||||||||||||||
Trade accounts receivable, net | 252 | 572 | |||||||||||||||||
Other accounts and notes receivable, net | 29 | 20 | |||||||||||||||||
Due from unconsolidated affiliates | 5 | 5 | |||||||||||||||||
Income taxes receivable | 0 | 108 | |||||||||||||||||
Deferred income taxes, net current assets | 9 | 0 | |||||||||||||||||
Inventories | 189 | 167 | |||||||||||||||||
Regulatory assets | 11 | 18 | |||||||||||||||||
Other current assets | 39 | 37 | |||||||||||||||||
Total current assets | 952 | 1,133 | |||||||||||||||||
Investments and other assets: | |||||||||||||||||||
Due from unconsolidated affiliate | 514 | 457 | |||||||||||||||||
Regulatory assets arising from pension and other postretirement benefit obligations | 825 | 795 | |||||||||||||||||
Other regulatory assets | 114 | 105 | |||||||||||||||||
Sundry | 42 | 49 | |||||||||||||||||
Total investments and other assets | 1,495 | 1,406 | |||||||||||||||||
Property, plant and equipment: | |||||||||||||||||||
Property, plant and equipment | 9,083 | 8,816 | |||||||||||||||||
Less accumulated depreciation and amortization | (3,557) | (3,448) | |||||||||||||||||
Property, plant and equipment, net | 5,526 | 5,368 | |||||||||||||||||
Total assets | 7,973 | 7,907 | |||||||||||||||||
Current liabilities: | |||||||||||||||||||
Accounts payable - trade | 121 | 257 | [1] | ||||||||||||||||
Accounts payable - other | 105 | 163 | [1] | ||||||||||||||||
Due to unconsolidated affiliates | 100 | 106 | [1] | ||||||||||||||||
Income taxes payable | 2 | 0 | [1] | ||||||||||||||||
Deferred income taxes, net current liabilities | 0 | 6 | [1] | ||||||||||||||||
Accrued compensation and benefits | 81 | 92 | [1] | ||||||||||||||||
Regulatory balancing accounts, net | 284 | 221 | [1] | ||||||||||||||||
Current portion of long-term debt | 101 | 100 | [1] | ||||||||||||||||
Customer deposits | 89 | 114 | [1] | ||||||||||||||||
Other current liabilities | 175 | 213 | [1] | ||||||||||||||||
Total current liabilities | 1,058 | 1,272 | [1] | ||||||||||||||||
Long-term debt | 1,269 | 1,270 | [1] | ||||||||||||||||
Deferred credits and other liabilities: | |||||||||||||||||||
Customer advances for construction | 123 | 131 | [1] | ||||||||||||||||
Pension and other postretirement benefit obligations, net of plan assets | 850 | 823 | [1] | ||||||||||||||||
Deferred income taxes, net noncurrent liabilities | 218 | 157 | [1] | ||||||||||||||||
Deferred investment tax credits | 28 | 30 | [1] | ||||||||||||||||
Regulatory liabilities arising from removal obligations | 1,238 | 1,218 | [1] | ||||||||||||||||
Asset retirement obligations | 607 | 581 | [1] | ||||||||||||||||
Deferred taxes refundable in rates | 196 | 214 | [1] | ||||||||||||||||
Deferred credits and other | 233 | 251 | [1] | ||||||||||||||||
Total deferred credits and other liabilities | 3,493 | 3,405 | [1] | ||||||||||||||||
Equity: | |||||||||||||||||||
Preferred Stock | 80 | 80 | [1] | ||||||||||||||||
Common Stock | 1,462 | 1,462 | [1] | ||||||||||||||||
Retained earnings | 617 | 426 | [1] | ||||||||||||||||
Accumulated other comprehensive income (loss) | (26) | (28) | [1] | ||||||||||||||||
Total shareholders' equity | 2,133 | 1,940 | [1] | ||||||||||||||||
Preferred stock of subsidiaries | 20 | 20 | [1] | ||||||||||||||||
Total equity | 2,153 | 1,960 | [1] | ||||||||||||||||
Total liabilities and equity | 7,973 | 7,907 | [1] | ||||||||||||||||
Southern California Gas Company and Subsidiaries | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | 418 | 206 | |||||||||||||||||
Trade accounts receivable, net | 252 | 572 | |||||||||||||||||
Other accounts and notes receivable, net | 27 | 20 | |||||||||||||||||
Income taxes receivable | 0 | 41 | |||||||||||||||||
Deferred income taxes, net current assets | 9 | 0 | |||||||||||||||||
Inventories | 189 | 167 | |||||||||||||||||
Regulatory assets | 11 | 18 | |||||||||||||||||
Other current assets | 39 | 37 | |||||||||||||||||
Total current assets | 945 | 1,061 | |||||||||||||||||
Investments and other assets: | |||||||||||||||||||
Regulatory assets arising from pension and other postretirement benefit obligations | 825 | 795 | |||||||||||||||||
Other regulatory assets | 114 | 105 | |||||||||||||||||
Sundry | 15 | 24 | |||||||||||||||||
Total investments and other assets | 954 | 924 | |||||||||||||||||
Property, plant and equipment: | |||||||||||||||||||
Property, plant and equipment | 9,081 | 8,814 | |||||||||||||||||
Less accumulated depreciation and amortization | (3,557) | (3,448) | |||||||||||||||||
Property, plant and equipment, net | 5,524 | 5,366 | |||||||||||||||||
Total assets | 7,423 | 7,351 | |||||||||||||||||
Current liabilities: | |||||||||||||||||||
Accounts payable - trade | 121 | 257 | |||||||||||||||||
Accounts payable - other | 102 | 163 | |||||||||||||||||
Due to unconsolidated affiliates | 13 | 23 | |||||||||||||||||
Income taxes payable | 4 | 0 | |||||||||||||||||
Deferred income taxes, net current liabilities | 0 | 6 | |||||||||||||||||
Accrued compensation and benefits | 81 | 92 | |||||||||||||||||
Regulatory balancing accounts, net | 284 | 221 | |||||||||||||||||
Current portion of long-term debt | 101 | 100 | |||||||||||||||||
Customer deposits | 89 | 114 | |||||||||||||||||
Other current liabilities | 175 | 211 | |||||||||||||||||
Total current liabilities | 970 | 1,187 | |||||||||||||||||
Long-term debt | 1,269 | 1,270 | |||||||||||||||||
Deferred credits and other liabilities: | |||||||||||||||||||
Customer advances for construction | 123 | 131 | |||||||||||||||||
Pension and other postretirement benefit obligations, net of plan assets | 850 | 823 | |||||||||||||||||
Deferred income taxes, net noncurrent liabilities | 226 | 167 | |||||||||||||||||
Deferred investment tax credits | 28 | 30 | |||||||||||||||||
Regulatory liabilities arising from removal obligations | 1,238 | 1,218 | |||||||||||||||||
Asset retirement obligations | 607 | 581 | |||||||||||||||||
Deferred taxes refundable in rates | 196 | 214 | |||||||||||||||||
Deferred credits and other | 226 | 240 | |||||||||||||||||
Total deferred credits and other liabilities | 3,494 | 3,404 | |||||||||||||||||
Equity: | |||||||||||||||||||
Preferred Stock | 22 | 22 | |||||||||||||||||
Common Stock | 866 | 866 | |||||||||||||||||
Retained earnings | 828 | 630 | |||||||||||||||||
Accumulated other comprehensive income (loss) | (26) | (28) | |||||||||||||||||
Total shareholders' equity | 1,690 | 1,490 | |||||||||||||||||
Total equity | 1,690 | 1,490 | |||||||||||||||||
Total liabilities and equity | $7,423 | $7,351 | |||||||||||||||||
[1]As adjusted for the retrospective adoption of ASC 810 (SFAS 160). |
1_CONDENSED CONSOLIDATED BALANC
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | ||
Share data in Millions | Sep. 30, 2009
| Dec. 31, 2008
|
Sempra Energy Consolidated | ||
Preferred Stock Shares Authorized | 50 | 50 |
Preferred Stock Shares Issued | 0 | 0 |
Common Stock Shares Authorized | 750 | 750 |
Common Stock Shares Outstanding | 246 | 243 |
San Diego Gas and Electric Company and Subsidiary | ||
Common Stock Shares Authorized | 255 | 255 |
Common Stock Shares Outstanding | 117 | 117 |
Pacific Enterprises and Subsidiaries | ||
Common Stock Shares Authorized | 600 | 600 |
Common Stock Shares Outstanding | 84 | 84 |
Southern California Gas Company and Subsidiaries | ||
Common Stock Shares Authorized | 100 | 100 |
Common Stock Shares Outstanding | 91 | 91 |
CONDENSED STATEMENTS OF CONSOLI
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (USD $) | |||||||||||||||||||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 | |||||||||||||||||
Sempra Energy Consolidated | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||||
Net income | $816 | $808 | [1] | ||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
Depreciation and amortization | 568 | 508 | [1] | ||||||||||||||||
Deferred income taxes and investment tax credits | 181 | 165 | [1] | ||||||||||||||||
Equity earnings | (470) | (228) | [1] | ||||||||||||||||
Gains on sale of assets | (3) | (114) | [1] | ||||||||||||||||
Write-off of long-lived assets | 132 | 0 | [1] | ||||||||||||||||
Fixed-price contracts and other derivatives | (27) | 0 | [1] | ||||||||||||||||
Other adjustments to reconcile net income to net cash provided by operating activities | 45 | 76 | [1] | ||||||||||||||||
Net changes in other working capital components | 220 | (408) | [1] | ||||||||||||||||
Distributions from RBS Sempra Commodities LLP | 407 | 56 | [1] | ||||||||||||||||
Changes in other assets | 81 | (3) | [1] | ||||||||||||||||
Changes in other liabilities | (66) | (55) | [1] | ||||||||||||||||
Net cash provided by operating activities | 1,884 | 805 | [1] | ||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||
Expenditures for property, plant and equipment | (1,371) | (1,541) | [1] | ||||||||||||||||
Proceeds from sale of assets, net of cash sold | 179 | 2,071 | [1] | ||||||||||||||||
Expenditures for investments and acquisition of businesses, net of cash acquired | (762) | (2,180) | [1] | ||||||||||||||||
Distributions from investments | 16 | 23 | [1] | ||||||||||||||||
Purchases of nuclear decommissioning and other trust assets | (167) | (361) | [1] | ||||||||||||||||
Proceeds from sales by nuclear decommissioning and other trusts | 155 | 350 | [1] | ||||||||||||||||
Decrease (increase) in loans to unconsolidated affiliates, net | 0 | 60 | [1] | ||||||||||||||||
Other cash flows from investing activities | (20) | (18) | [1] | ||||||||||||||||
Net cash used in investing activities | (1,970) | (1,596) | [1] | ||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||
Common dividends paid | (255) | (252) | [1] | ||||||||||||||||
Preferred dividends paid by subsidiaries | (7) | (7) | [1] | ||||||||||||||||
Issuances of common stock | 52 | 17 | [1] | ||||||||||||||||
Repurchases of common stock | 0 | (1,002) | [1] | ||||||||||||||||
Issuances of long-term debt | 1,181 | 650 | [1] | ||||||||||||||||
Payments on long-term debt | (325) | (75) | [1] | ||||||||||||||||
Increase (decrease) in short-term debt, net | (52) | 985 | [1] | ||||||||||||||||
Purchase of noncontrolling interest | (94) | 0 | [1] | ||||||||||||||||
Other cash flows from financing activities | 11 | 5 | [1] | ||||||||||||||||
Net cash provided by (used in) financing activities | 511 | 321 | [1] | ||||||||||||||||
Increase (decrease) in cash and cash equivalents | 425 | (470) | [1] | ||||||||||||||||
Cash and cash equivalents, beginning of period | 331 | 668 | |||||||||||||||||
Cash and cash equivalents, end of period | 756 | 198 | [1] | ||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||||||||||
Interest payments, net of amounts capitalized | 201 | 142 | |||||||||||||||||
Income tax payments, net of refunds | 98 | 120 | |||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF NON CASH ACTIVITIES | |||||||||||||||||||
Increase (decrease) in accounts payable from investments in property, plant and equipment | (114) | (41) | |||||||||||||||||
Dividends declared but not paid | 99 | 89 | |||||||||||||||||
San Diego Gas and Electric Company and Subsidiary | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||||
Net income | 290 | 270 | [1] | ||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
Utility depreciation and amortization | 239 | 223 | [1] | ||||||||||||||||
Deferred income taxes and investment tax credits | 35 | 77 | [1] | ||||||||||||||||
Fixed-price contracts and other derivatives | (28) | (7) | [1] | ||||||||||||||||
Other adjustments to reconcile net income to net cash provided by operating activities | (14) | (4) | [1] | ||||||||||||||||
Net changes in other working capital components | 115 | (41) | [1] | ||||||||||||||||
Changes in other assets | 20 | (7) | [1] | ||||||||||||||||
Changes in other liabilities | (38) | 3 | [1] | ||||||||||||||||
Net cash provided by operating activities | 619 | 514 | [1] | ||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||
Expenditures for property, plant and equipment | (633) | (638) | [1] | ||||||||||||||||
Expenditures for short-term investments | (152) | (304) | [1] | ||||||||||||||||
Proceeds from sale of short-term investments | 176 | 236 | [1] | ||||||||||||||||
Purchases of nuclear decommissioning and other trust assets | (161) | (347) | [1] | ||||||||||||||||
Proceeds from sales by nuclear decommissioning and other trusts | 155 | 348 | [1] | ||||||||||||||||
Decrease (increase) in loans to unconsolidated affiliates, net | 33 | (6) | [1] | ||||||||||||||||
Other cash flows from investing activities | 2 | 1 | [1] | ||||||||||||||||
Net cash used in investing activities | (580) | (710) | [1] | ||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||
Common dividends paid | (150) | 0 | [1] | ||||||||||||||||
Preferred dividends paid | (4) | (4) | [1] | ||||||||||||||||
Redemptions of preferred stock | 0 | (14) | [1] | ||||||||||||||||
Issuances of long-term debt | 386 | 138 | [1] | ||||||||||||||||
Capital contribution received by Otay Mesa VIE | 4 | 9 | [1] | ||||||||||||||||
Other cash flows from financing activities | (3) | (1) | [1] | ||||||||||||||||
Net cash provided by (used in) financing activities | 233 | 128 | [1] | ||||||||||||||||
Increase (decrease) in cash and cash equivalents | 272 | (68) | [1] | ||||||||||||||||
Cash and cash equivalents, beginning of period | 19 | 158 | |||||||||||||||||
Cash and cash equivalents, end of period | 291 | 90 | [1] | ||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||||||||||
Interest payments, net of amounts capitalized | 51 | 59 | |||||||||||||||||
Income tax payments, net of refunds | 144 | (54) | |||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF NON CASH ACTIVITIES | |||||||||||||||||||
Increase (decrease) in accounts payable from investments in property, plant and equipment | (58) | (11) | |||||||||||||||||
Dividends declared but not paid | 1 | 1 | |||||||||||||||||
Pacific Enterprises and Subsidiaries | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||||
Net income | 195 | 196 | [1] | ||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
Utility depreciation and amortization | 220 | 209 | [1] | ||||||||||||||||
Deferred income taxes and investment tax credits | 24 | 74 | [1] | ||||||||||||||||
Other adjustments to reconcile net income to net cash provided by operating activities | 2 | (2) | [1] | ||||||||||||||||
Net changes in other working capital components | 129 | (134) | [1] | ||||||||||||||||
Changes in other assets | 8 | 25 | [1] | ||||||||||||||||
Changes in other liabilities | (33) | (63) | [1] | ||||||||||||||||
Net cash provided by operating activities | 545 | 305 | [1] | ||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||
Expenditures for property, plant and equipment | (336) | (350) | [1] | ||||||||||||||||
Decrease (increase) in loans to unconsolidated affiliates, net | 8 | 132 | [1] | ||||||||||||||||
Other cash flows from investing activities | (1) | 0 | [1] | ||||||||||||||||
Net cash used in investing activities | (329) | (218) | [1] | ||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||
Common dividends paid | 0 | (200) | [1] | ||||||||||||||||
Preferred dividends paid | (3) | (3) | [1] | ||||||||||||||||
Preferred dividends paid by subsidiaries | (1) | (1) | [1] | ||||||||||||||||
Increase (decrease) in short-term debt, net | 0 | 96 | [1] | ||||||||||||||||
Net cash provided by (used in) financing activities | (4) | (108) | [1] | ||||||||||||||||
Increase (decrease) in cash and cash equivalents | 212 | (21) | [1] | ||||||||||||||||
Cash and cash equivalents, beginning of period | 206 | 59 | |||||||||||||||||
Cash and cash equivalents, end of period | 418 | 38 | [1] | ||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||||||||||
Interest payments, net of amounts capitalized | 40 | 37 | |||||||||||||||||
Income tax payments, net of refunds | 54 | 113 | |||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF NON CASH ACTIVITIES | |||||||||||||||||||
Increase (decrease) in accounts payable from investments in property, plant and equipment | (10) | (30) | |||||||||||||||||
Dividends declared but not paid | 1 | 1 | |||||||||||||||||
Southern California Gas Company and Subsidiaries | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||||
Net income | 199 | 191 | |||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
Utility depreciation and amortization | 220 | 209 | |||||||||||||||||
Deferred income taxes and investment tax credits | 22 | 71 | |||||||||||||||||
Other adjustments to reconcile net income to net cash provided by operating activities | 6 | 1 | |||||||||||||||||
Net changes in other working capital components | 125 | (135) | |||||||||||||||||
Changes in other assets | 4 | 21 | |||||||||||||||||
Changes in other liabilities | (27) | (60) | |||||||||||||||||
Net cash provided by operating activities | 549 | 298 | |||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||||
Expenditures for property, plant and equipment | (336) | (350) | |||||||||||||||||
Decrease (increase) in loans to unconsolidated affiliates, net | 0 | 136 | |||||||||||||||||
Net cash used in investing activities | (336) | (214) | |||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||||
Common dividends paid | 0 | (200) | |||||||||||||||||
Preferred dividends paid | (1) | (1) | |||||||||||||||||
Increase (decrease) in short-term debt, net | 0 | 96 | |||||||||||||||||
Net cash provided by (used in) financing activities | (1) | (105) | |||||||||||||||||
Increase (decrease) in cash and cash equivalents | 212 | (21) | |||||||||||||||||
Cash and cash equivalents, beginning of period | 206 | 59 | |||||||||||||||||
Cash and cash equivalents, end of period | 418 | 38 | |||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||||||||||
Interest payments, net of amounts capitalized | 40 | 35 | |||||||||||||||||
Income tax payments, net of refunds | 54 | 113 | |||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF NON CASH ACTIVITIES | |||||||||||||||||||
Increase (decrease) in accounts payable from investments in property, plant and equipment | ($10) | ($30) | |||||||||||||||||
[1]As adjusted for the retrospective adoption of ASC 810 (SFAS 160). |
GENERAL
GENERAL | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
General Disclosure | NOTE 1. GENERAL Principles of ConsolidationSempra EnergySempra Energy's Condensed Consolidated Financial Statements include the accounts of Sempra Energy, a California-based Fortune 500 holding company, its consolidated subsidiaries, and variable interest entities. Sempra Energys principal subsidiaries are: San Diego Gas Electric Company (SDGE) and Southern California Gas Company (SoCalGas), which we collectively refer to as the Sempra Utilities; and Sempra Global, which is the holding company for Sempra Commodities, Sempra Generation, Sempra Pipelines Storage, Sempra LNG and other, smaller businesses. Sempra Energy uses the equity method to account for investments in affiliated companies over which we have the ability to exercise significant influence, but not control.SDGESDGE's Condensed Consolidated Financial Statements include its accounts, the accounts of its sole subsidiary, SDGE Funding LLC, and the accounts of Otay Mesa Energy Center LLC (Otay Mesa VIE) and Orange Grove L.P., which are variable interest entities of which SDGE is the primary beneficiary, as discussed in Note 5 under "Variable Interest Entities." SDGEs common stock is wholly owned by Enova Corporation, which is a wholly owned subsidiary of Sempra Energy. The activities of SDGE Funding LLC were substantially complete in 2007, and the entity was dissolved in 2008. Pacific Enterprises and SoCalGasThe Condensed Consolidated Financial Statements of Pacific Enterprises include the accounts of Pacific Enterprises (PE) and its subsidiary, SoCalGas. Sempra Energy owns all of PEs common stock and PE owns all of SoCalGas common stock. SoCalGas Condensed Consolidated Financial Statements include its subsidiaries, which comprise less than one percent of its consolidated financial position and results of operations. PE's operations consist solely of those of SoCalGas and additional items (e.g., cash, intercompany accounts and equity) attributable to being a holding company for SoCalGas. Basis of PresentationThis is a combined report of Sempra Energy, SDGE, PE and SoCalGas. We provide separate information for SDGE, PE and SoCalGas as required. When only information for SoCalGas is provided, it is the same for PE. References in this report to "we," "our" and "Sempra Energy Consolidated" are to Sempra Energy and its consolidated entities, unless otherwise indicated by the context. We have eliminated intercompany accounts and transactions within each set of consolidated financial statements.We have prepared the Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) and in accordance with the interim-period-reporting requirements of Form 10-Q. Results of operations for interim periods are not necessarily indicative of results for the entire year. We evaluated events and transactions that occurred after September 30, 2009 but before the issuance of these financial statements on November 9, 2009, and in the opinion of management, the accompanying statements reflect all adjustments necessary for a fair presentation. These adjustments are only of a normal, recurring nature, except as we discuss bel |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
New Accounting Standards Disclosure | NOTE 2. NEW ACCOUNTING STANDARDS We describe below recent pronouncements that have had or may have a significant effect on our financial statements. We do not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to our financial condition, results of operations, or disclosures. SEMPRA ENERGY, SDGE, PE AND SOCALGAS SFAS 168, "The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB Statement No. 162" (SFAS 168): The FASB Accounting Standards Codification (the Codification) became the official source of GAAP on July 1, 2009 and for convenience, we have provided the prior GAAP source references in addition to the Codification reference throughout this Form 10-Q. In addition, the Codification changed the referencing system used to identify new accounting guidance. As a result, we refer to an accounting update issued after July 1, 2009 as an Accounting Standards Update (ASU). We refer to new pronouncements issued before July 1, 2009 by their original title.ASU 2009-05, Measuring Liabilities at Fair Value (ASU 2009-05): ASU 2009-05 addresses practical difficulties that arise when calculating the fair value of a liability, or the price at which the liability may be transferred to a market participant. Generally, a quoted price for an identical liability is not available because few liabilities are transferred to another party. In the absence of a quoted price in an active market for an identical liability, ASU 2009-05 allows the following valuation techniques: a quoted price of an identical or similar liability traded as an asset a valuation technique consistent with ASC 820, Fair Value Measurements and Disclosures ASU 2009-05 applies to us prospectively beginning October 1, 2009. We are in the process of evaluating the effects of this statement on our financial position and results of operations.SFAS 167, "Amendments to FASB Interpretation No. 46(R)" (SFAS 167): SFAS 167 amends FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities an interpretation of ARB No. 51 (FIN 46(R)), which provides consolidation guidance related to variable interest entities. SFAS 167 requires a qualitative approach for identifying the primary beneficiary of a variable interest entity based on 1) the power to direct activities that most significantly impact the economic performance of the entity, and 2) the obligation to absorb losses or right to receive benefits that could be significant to the entity; ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; and separate disclosure by the primary beneficiary on the face of the balance sheet to identify 1) assets that can only be used to settle obligations of the variable interest entity, and 2) liabilities for which creditors do not have recourse to the primary beneficiary. SFAS 167 applies to us beginning with the first quarter of 2010. We are in the process of evaluating the effects of this statement on our financial position and results of operations.SFAS 165, "Subsequent Events" (SFAS 165): SFAS 165 (ASC 855) requires management to eva |
RECENT EQUITY TRANSACTION
RECENT EQUITY TRANSACTION | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Recent Equity Transaction Disclosure | NOTE 3. RECENT EQUITY TRANSACTIONSEMPRA PIPELINES STORAGESempra Midstream, owned by Sempra Pipelines Storage, owned 60 percent of Mississippi Hub, LLC (Mississippi Hub) at December 31, 2008. On January 16, 2009, Sempra Midstream purchased the remaining 40-percent ownership interest of Mississippi Hub for $94 million in cash. |
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Available-for-sale Securities Disclosure | NOTE 4. INVESTMENTS IN UNCONSOLIDATED ENTITIES SEMPRA ENERGY AND SDGEAvailable-for-Sale SecuritiesDuring the nine months ended September 30, 2008, Sempra Energy and SDGE purchased $345 million and $68 million, respectively, of SDGE's industrial development bonds, net of purchases and sales between Sempra Energy and SDGE as the cash flow needs of each entity changed. After the remarketing of $237 million of these bonds in the fourth quarter of 2008, the remaining $176 million, $24 million of which were held by SDGE, were classified as available-for-sale securities and included in Short-Term Investments on the Condensed Consolidated Balance Sheets. In June 2009, SDGE remarketed the remaining $176 million of these bonds at a fixed rate of 5.875 percent, maturing in 2034. Prior to SDGE's remarketing of the remaining bonds in 2009, SDGE purchased $152 million of the bonds from Sempra Energy. We discuss these bonds further in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report. Nuclear Decommissioning Trusts We discuss our investments in nuclear decommissioning trust funds in Note 7 of the Notes to Consolidated Financial Statements in the Annual Report. The following table shows the fair values and gross unrealized gains and losses for the securities held in the trust funds: NUCLEAR DECOMMISSIONING TRUSTS (Dollars in millions) Gross Gross Estimated Unrealized Unrealized Fair Cost Gains Losses Value As of September 30, 2009: Debt securities U.S. government* $ 141 $ 17 $ (1) $ 157 Municipal bonds** 67 3 (2) 68 Total debt securities 208 20 (3) 225 Equity securities 236 171 (6) 401 Cash and other securities*** 35 3 - 38 Total available-for-sale securities $ 479 $ 194 $ (9) $ 664 As of December 31, 2008: Debt securities U.S. government $ 127 $ 28 $ - $ 155 Municipal bonds 69 1 (9) 61 Total debt securities 196 29 (9) 216 Equity securities 251 105 (36) 320 Cash and other securities 40 3 (2) 41 Total available-for-sale securities $ 487 $ 137 $ (47) $ 577 * Maturity dates are 2012-2039 ** Maturity dates are 2010-2057 *** Maturity dates are 2009-2049 The following table shows the proceeds from sales of securities in the trusts and gross realized gains and losses on those sales: SALES OF SECURITIES (Dollars in millions) Three months ended September 30, Nine months ended September 30, 2009 2008 2009 2008 Proceeds from sales $ 62 $ 173 $ 150 $ 342 Gross realized gains - 4 4 11 Gross realized losses (6) (11) (30) (22) Net unrealized gains (losses) are included in Regulatory Liabilities Arising from Removal Obligations on the Condensed Consolidated Balance Sheets. We determine the cost of securities in the trusts on the basis of specific identification. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Investments in Unconsolidated Entities Disclosure | SEMPRA COMMODITIESOn April 1, 2008, Sempra Energy and The Royal Bank of Scotland (RBS) completed the formation of RBS Sempra Commodities LLP (RBS Sempra Commodities), a limited liability partnership formed in the United Kingdom to own and operate the commodities-marketing businesses previously operated through wholly owned subsidiaries of Sempra Energy. We account for our investment in RBS Sempra Commodities under the equity method, and our share of partnership earnings is reported in the Sempra Commodities segment. For the three months and nine months ended September 30, 2009, we had $105 million and $384 million, respectively, of pretax equity earnings from RBS Sempra Commodities. For the three months and nine months ended September 30, 2008, pretax equity earnings (losses) from RBS Sempra Commodities were $(4) million and $142 million, respectively. The partnership income that is distributable to us on an annual basis is computed on the partnership's basis of accounting, International Financial Reporting Standards (IFRS) as adopted by the European Union. For the three months and nine months ended September 30, 2009, this distributable income, on an IFRS basis, was $60 million and $276 million, respectively. In the three months ended September 30, 2008, the distributable income, on an IFRS basis, decreased by $29 million. For the nine months ended September 30, 2008, the distributable income was $136 million. In the first quarter of 2009, we received the remaining distribution of 2008 partnership income of $305 million, and through the nine months ended September 30, 2009, we received $102 million to fund estimated tax payments as provided in the partnership agreement. We have indemnified the partnership for certain litigation and tax liabilities related to the businesses purchased by the partnership. We recorded these obligations at a fair value of $5 million on April 1, 2008, the date we formed the partnership, and they are being amortized over 4 years. We provide information regarding the Sempra Commodities segment in Note 11. The following table shows summarized financial information for RBS Sempra Commodities (on a GAAP basis): Three months ended September 30, Nine months ended September 30, (Dollars in millions) 2009 2008 2009 2008 Gross revenues and fee income $ 291 $ 48 $ 1,167 $ 586 Gross profit 268 23 1,096 540 Income (loss) from continuing operations 115 (56) 504 198 Partnership net income (loss) 115 (56) 504 198 SEMPRA GENERATIONIn September 2009, Sempra Generation contributed $182 million to become an equal partner with BP Wind Energy, a wholly owned subsidiary of BP p.l.c., in the development of the 200-megawatt (MW) Fowler Ridge II Wind Farm (Fowler Ridge) which is under construction near Indianapolis, Indiana. We expect it to be operational in late 2009. The project will use 133 wind turbines, each with the ability to generate 1.5 MW. The project's entire power output has been sold under four long-term contracts, each for 50 MW and 20-year terms. Our investment in Fowler Ridge will be accounted for as an equity method investment. SEMPRA PIPELINES STORAGEIn the three months and nine months ended S |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Variable Interest Entities Disclosure | NOTE 5. OTHER FINANCIAL DATA VARIABLE INTEREST ENTITIESASC 810, Consolidation (ASC 810) (FIN 46(R)), requires an enterprise to consolidate a variable interest entity (VIE), as defined in ASC 810, if the company is the primary beneficiary of the VIEs activities. Our determination of whether we are the primary beneficiary is based upon qualitative and quantitative analyses, which assess the purpose and design of the VIE; the nature of the VIE's risks and the risks we absorb; and whether the variable interest holders will absorb a majority of the VIE's expected losses or receive a majority of its expected residual returns (or both). SDGE has a 10-year agreement to purchase power to be generated at the Otay Mesa Energy Center (OMEC), a 573-MW generating facility. The facility began commercial operations in October 2009. As defined in ASC 810, the facility owner, Otay Mesa Energy Center LLC (OMEC LLC), is a VIE (Otay Mesa VIE), of which SDGE is the primary beneficiary. Accordingly, Sempra Energy and SDGE have consolidated Otay Mesa VIE. SDGE has no OMEC LLC voting rights and does not operate OMEC.Otay Mesa VIE's equity of $141 million at September 30, 2009 and $128 million at December 31, 2008 is included on the Condensed Consolidated Balance Sheets in Other Noncontrolling Interests for Sempra Energy and in Noncontrolling Interests for SDGE. We provide additional information about Otay Mesa VIE in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.OMEC LLC has a project finance credit facility with third party lenders, secured by its assets, that provides for up to $377 million for the construction of OMEC. SDGE is not a party to the credit agreement and does not have any additional implicit or explicit financial responsibility to Otay Mesa VIE. The loan matures in April2019. Borrowings under the facility bear interest at rates varying with market rates. OMEC LLC had $344 million of outstanding borrowings under this facility at September 30, 2009. In addition, OMEC LLC has entered into interest-rate swap agreements to moderate its exposure to interest-rate changes on this facility. We provide additional information concerning the interest-rate swaps in Note 7. SDGE has a 25-year agreement to purchase power to be generated by Orange Grove Energy L.P. (Orange Grove), at its 94-MW generating facility located in San Diego County, California. The facility is currently under construction, and we expect it to be available for commercial operation during the second quarter of 2010. As defined in ASC 810, Orange Grove is a VIE of which SDGE is the primary beneficiary. During the third quarter of 2009, all of the conditions precedent in the purchased-power agreement were satisfied, therefore, effective on September 30, 2009, Sempra Energy and SDGE have consolidated Orange Grove. Orange Grove has credit facilities that provide for a total of $100 million for construction of the generating facility. These credit agreements are with a third party lender and are secured by Orange Grove's assets. SDGE is not a party to the credit agreements and does not have any additional implicit or explicit financial responsibility to Orange |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Pension and Other Postretirement Benefits Disclosure | PENSION AND OTHER POSTRETIREMENT BENEFITSNet Periodic Benefit CostThe following three tables provide the components of net periodic benefit cost: NET PERIODIC BENEFIT COST -- SEMPRA ENERGY CONSOLIDATED (Dollars in millions) Pension Benefits Other Postretirement Benefits Three months ended September 30, Three months ended September 30, 2009 2008 2009 2008 Service cost $ 17 $ 17 $ 7 $ 5 Interest cost 42 41 14 13 Expected return on assets (34) (40) (11) (12) Amortization of: Prior service cost 1 1 - - Actuarial loss 6 2 1 - Curtailment - - - (1) Regulatory adjustment (14) 15 1 (5) Total net periodic benefit cost $ 18 $ 36 $ 12 $ - Nine months ended September 30, Nine months ended September 30, 2009 2008 2009 2008 Service cost $ 56 $ 53 $ 21 $ 18 Interest cost 127 124 43 40 Expected return on assets (104) (120) (35) (36) Amortization of: Prior service cost (credit) 3 3 (1) (1) Actuarial loss 18 6 3 - Curtailment - - - (3) Regulatory adjustment (53) (7) 5 (4) Total net periodic benefit cost $ 47 $ 59 $ 36 $ 14 NET PERIODIC BENEFIT COST -- SDGE (Dollars in millions) Pension Benefits Other Postretirement Benefits Three months ended September 30, Three months ended September 30, 2009 2008 2009 2008 Service cost $ 5 $ 6 $ 2 $ 1 Interest cost 12 12 3 3 Expected return on assets (8) (11) (1) (1) Amortization of: Prior service cost - - 1 1 Actuarial loss 4 - - - Regulatory adjustment (2) 23 - (3) Total net periodic benefit cost $ 11 $ 30 $ 5 $ 1 Nine months ended September 30, Nine months ended September 30, 2009 2008 2009 2008 Service cost $ 17 $ 17 $ 5 $ 4 Interest cost 36 36 7 7 Expected return on assets (24) (34) (3) (3) Amortization of: Prior service cost 1 1 3 3 Actuarial loss 12 1 - - Regulatory adjustment (16) 19 1 (5) Total net periodic benefit cost $ 26 $ 40 $ 13 $ 6 NET PERIODIC BENEFIT COST -- SOCALGAS (Dollars in millions) Pension Benefits Other Postretirement Benefits Three months ended September 30, Three months ended September 30, 2009 2008 2009 2008 Service cost $ 9 $ 10 $ 6 $ 3 Interest cost 25 24 11 10 Expected return on assets (24) (26) (10) (10) Amortization of: Prior service cost (credit) 1 1 (1) (1) Actuarial loss - - 1 - Regulatory adjustment (10) (8) 1 (2) Total net periodic benefit cost $ 1 $ 1 $ 8 $ - Nine months ended September 30, Nine months ended September 30, 2009 2008 2009 2008 Service cost $ 31 $ 30 $ 15 $ 12 Interest cost 74 73 34 31 Expected return on assets (70) (77) (31) (32) Amortization of: Prior service cost (credit) 2 2 (3) (3) Actuarial loss - - 3 - Regulatory adjustment (35) (26) 4 1 Total net periodic benefit cost $ 2 $ 2 $ 22 $ 9 Future PaymentsThe following table shows our year-to-date contributions to our pension and other postretirement benefit plans and the amounts we expect to contribute in 2009: Sempra Energy (Dollars in millions) Consolidated SDGE SoCalGas Contributions through September 30, 2 |
EARNINGS PER SHARE
EARNINGS PER SHARE | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Earnings Per Share Disclosure | EARNINGS PER SHARE The following table provides the per share computations for our earnings for the three months and nine months ended September 30, 2009 and 2008. Basic EPS is calculated by dividing earnings attributable to common stock by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. EARNINGS PER SHARE COMPUTATIONS (Dollars in millions, except per share amounts; shares in thousands) Three months ended September 30, Nine months ended September 30, 2009 2008 2009 2008 Numerator: Earnings $ 317 $ 308 $ 831 $ 794 Denominator: Weighted-average common shares outstanding for basic EPS 243,925 243,793 242,806 249,311 Dilutive effect of stock options, restricted stock awards and restricted stock units 4,536 4,111 4,069 4,096 Weighted-average common shares outstanding for diluted EPS 248,461 247,904 246,875 253,407 Earnings per share: Basic $ 1.30 $ 1.26 $ 3.42 $ 3.18 Diluted $ 1.27 $ 1.24 $ 3.37 $ 3.13 The dilution from common stock options is based on the treasury stock method. Under this method, proceeds based on the exercise price plus unearned compensation and windfall tax benefits or tax shortfalls, as defined by ASC 718, Compensation Stock Compensation (ASC 718) (SFAS 123(R)), are assumed to be used to repurchase shares on the open market at the average market price for the period. The windfall tax benefits are tax deductions we would receive upon the assumed exercise of stock options in excess of the deferred income taxes we recorded related to the compensation expense on the stock options. Tax shortfalls occur when the assumed tax deductions are less than recorded deferred income taxes. The calculation excludes stock options for which the exercise price for common stock was greater than the average market price during the period. We had 1,505,096 and 1,513,721 of such stock options outstanding during the three months ended September 30, 2009 and 2008, respectively, and 1,507,361 and 1,494,935 of such stock options outstanding during the nine months ended September 30, 2009 and 2008, respectively. We had 890,781 stock options outstanding during the nine months ended September 30, 2009, that were antidilutive because of the unearned compensation and windfall tax benefits included in the assumed proceeds under the treasury stock method. We had no such antidilutive stock options outstanding during the three months ended September 30, 2009, nor the three months and nine months ended September 30, 2008.The dilution from unvested restricted stock awards and units is also based on the treasury stock method. Assumed proceeds equal to the unearned compensation and windfall tax benefits or tax shortfalls related to the awards, as defined by ASC 718, are assumed to be used to repurchase shares on the open market at the average market price for the period. The windfall tax benefits or tax shortfalls are the difference between tax deductions we would recei |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Share-based Compensation Disclosure | SHARE-BASED COMPENSATIONWe discuss our share-based compensation plans in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report. We recorded share-based compensation expense, net of income taxes, of $15 million and $22 million for the nine months ended September 30, 2009 and 2008, respectively. Pursuant to our share-based compensation plans, we granted 918,200 non-qualified stock options, 37,200 restricted stock awards and 907,700 restricted stock units during the nine months ended September 30, 2009, primarily in January 2009. |
CAPITALIZED FINANCING COSTS
CAPITALIZED FINANCING COSTS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Capitalized Financing Costs Disclosure | CAPITALIZED FINANCING COSTSCapitalized financing costs include capitalized interest costs and, at the Sempra Utilities, an allowance for funds used during construction (AFUDC) related to both debt and equity financing of construction projects. The following table shows capitalized financing costs for the three months and nine months ended September 30, 2009 and 2008. CAPITALIZED FINANCING COSTS (Dollars in millions) Three months ended September 30, Nine months ended September 30, 2009 2008 2009 2008 SDGE: AFUDC related to debt $ 3 $ 3 $ 7 $ 7 AFUDC related to equity 8 7 21 19 Other capitalized financing costs 2 4 4 8 Total SDGE 13 14 32 34 SoCalGas: AFUDC related to debt 1 - 4 2 AFUDC related to equity 2 2 7 6 Other capitalized financing costs 1 - 1 - Total SoCalGas 4 2 12 8 Sempra Global: Capitalized financing costs 12 19 57 67 Total Sempra Energy Consolidated $ 29 $ 35 $ 101 $ 109 |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Comprehensive Income Disclosure | COMPREHENSIVE INCOMEThe following tables provide a reconciliation of net income to comprehensive income. COMPREHENSIVE INCOME (Dollars in millions) Three months ended September 30, 2009 2008 Share- Non- Share- Non- holders' controlling Total holders' controlling Total Equity* Interests Equity Equity* Interests Equity Sempra Energy Consolidated: Net income (loss)** $ 319 $ (17) $ 302 $ 310 $ (8) $ 302 Foreign currency translation adjustments (11) - (11) (30) - (30) Financial instruments (5) - (5) (2) 1 (1) Available-for-sale securities 8 - 8 - - - Net actuarial gain 2 - 2 1 - 1 Prior service cost - - - (1) - (1) Comprehensive income $ 313 $ (17) $ 296 $ 278 $ (7) $ 271 SDGE: Net income (loss) $ 110 $ (18) $ 92 $ 125 $ (7) $ 118 Financial instruments - - - 2 1 3 Comprehensive income $ 110 $ (18) $ 92 $ 127 $ (6) $ 121 PE: Net income** $ 73 $ - $ 73 $ 80 $ - $ 80 Financial instruments - - - (6) - (6) Comprehensive income $ 73 $ - $ 73 $ 74 $ - $ 74 SoCalGas: Net income $ 74 $ - $ 74 $ 77 $ - $ 77 Financial instruments - - - (6) - (6) Comprehensive income $ 74 $ - $ 74 $ 71 $ - $ 71 * Shareholders' equity of Sempra Energy Consolidated, SDGE, PE or SoCalGas as indicated in left margin. **Before preferred dividends of subsidiaries. COMPREHENSIVE INCOME (Continued) (Dollars in millions) Nine months ended September 30, 2009 2008 Share- Non- Share- Non- holders' controlling Total holders' controlling Total Equity* Interests Equity Equity* Interests Equity Sempra Energy Consolidated: Net income (loss)** $ 838 $ (22) $ 816 $ 801 $ 7 $ 808 Foreign currency translation adjustments 69 - 69 (45) - (45) Financial instruments 18 (3) 15 5 (16) (11) Available-for-sale securities 21 - 21 (12) - (12) Net actuarial gain 4 - 4 5 - 5 Prior service cost - - - (1) - (1) Comprehensive income $ 950 $ (25) $ 925 $ 753 $ (9) $ 744 SDGE: Net income $ 281 $ 9 $ 290 $ 262 $ 8 $ 270 Financial instruments 2 (3) (1) 1 (16) (15) Net actuarial gain 1 - 1 1 - 1 Comprehensive income $ 284 $ 6 $ 290 $ 264 $ (8) $ 256 PE: Net income** $ 195 $ - $ 195 $ 196 $ - $ 196 Financial instruments 2 - 2 (6) - (6) Comprehensive income $ 197 $ - $ 197 $ 190 $ - $ 190 SoCalGas: Net income $ 199 $ - $ 199 $ 191 $ - $ 191 Financial instruments 2 - 2 (6) - (6) Comprehensive income $ 201 $ - $ 201 $ 185 $ - $ 185 * Shareholders' equity of Sempra Energy Consolidated, SDGE, PE or SoCalGas as indicated in left margin. **Before preferred dividends of subsidiaries. The amounts for comprehensive income in the tables above are net of income tax expense (benefit) as follows: INCOME TAX EXPENSE (BENEFIT) ASSOCIATED WITH OTHER COMPREHENSIVE INCOME (Dollars in millions) Three months ended September 30, 2009 2008 Share- Non- Share- Non- holders' controlling Total holders' controlling Total Equity* Interests Equity Equity* Interests Equity Sempra Energy Consolidate |
SHAREHOLDERS' EQUITY AND NONCON
SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Shareholders' Equity and Noncontrolling Interests Disclosure | SHAREHOLDERS EQUITY AND NONCONTROLLING INTERESTSSempra Energy, SDGE and PE account for noncontrolling interests in their Condensed Consolidated Financial Statements under ASC 810 (SFAS 160), as discussed in Note 2. The following two tables provide a reconciliation of Sempra Energy and SDGE shareholders equity and noncontrolling interests for the nine months ended September 30, 2009 and 2008. There were no changes in the equity of PE's noncontrolling interests in the three- or nine-month periods of 2009 or 2008. SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS (Dollars in millions) Sempra Energy Non- Shareholders' controlling Total Equity Interests Equity Balance at December 31, 2008 $ 7,969 $ 340 $ 8,309 Comprehensive income 950 (25) 925 Purchase of noncontrolling interest in subsidiary (10) (84) (94) Share-based compensation expense 28 - 28 Common stock dividends declared (287) - (287) Preferred dividends of subsidiaries (7) - (7) Issuance of common stock 81 - 81 Tax benefit related to share-based compensation 10 - 10 Common stock released from ESOP 11 - 11 Equity contributed by noncontrolling interests - 7 7 Balance at September 30, 2009 $ 8,745 $ 238 $ 8,983 Balance at December 31, 2007 $ 8,339 $ 248 $ 8,587 Comprehensive income 753 (9) 744 Share-based compensation expense 39 - 39 Common stock dividends declared (256) - (256) Preferred dividends of subsidiaries (7) (7) Issuance of common stock 17 - 17 Tax benefit related to share-based compensation 3 - 3 Repurchase of common stock (1,002) - (1,002) Common stock released from ESOP 12 - 12 Equity contributed by noncontrolling interests - 65 65 Balance at September 30, 2008 $ 7,898 $ 304 $ 8,202 SHAREHOLDERS' EQUITY AND NONCONTROLLING INTERESTS (Dollars in millions) SDGE Non- Shareholders' controlling Total Equity Interests Equity Balance at December 31, 2008 $ 2,542 $ 128 $ 2,670 Comprehensive income 284 6 290 Common stock dividends declared (150) - (150) Preferred stock dividends declared (4) - (4) Equity contributed by noncontrolling interest - 7 7 Balance at September 30, 2009 $ 2,672 $ 141 $ 2,813 Balance at December 31, 2007 $ 2,200 $ 135 $ 2,335 Comprehensive income 264 (8) 256 Preferred stock dividends declared (4) - (4) Equity contributed by noncontrolling interest - 61 61 Balance at September 30, 2008 $ 2,460 $ 188 $ 2,648 |
TRANSACTIONS WITH AFFILIATES
TRANSACTIONS WITH AFFILIATES | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Transactions With Affiliates Disclosure | TRANSACTIONS WITH AFFILIATES Loans to Unconsolidated Affiliates Sempra Pipelines Storage has a U.S. dollar-denominated loan to Camuzzi Gas del Sur S.A., an affiliate of Sempra Pipelines Storages Argentine investments, which we discuss in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report. The balance outstanding was $27 million at September 30, 2009. The loan is due in June 2010 and bears interest at a variable rate of 7.59 percent as of September 30, 2009. The loan is fully reserved at September 30, 2009. Loans from Unconsolidated AffiliatesSempra Pipelines Storage has a note payable, bearing interest at 6.73 percent, due to Chilquinta Energa Finance Co. LLC, an unconsolidated affiliate. The balance outstanding was $100 million at September 30, 2009. The note is secured by Sempra Pipelines Storages investments in Chilquinta Energa S.A. and Luz del Sur S.A.A., which we discuss in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report. Other Affiliate TransactionsSempra Energy, SDGE and SoCalGas provide certain services to each other, and are charged an allocable share of the cost of such services. Amounts due to/from affiliates are as follows: AMOUNTS DUE TO AND FROM AFFILIATES AT SDGE, PE AND SOCALGAS (Dollars in millions) September 30, December 31, 2009 2008 SDGE Current: Due from Sempra Energy $ - $ 20 Due from SoCalGas 5 8 Due from various affiliates - 1 $ 5 $ 29 Due to various affiliates $ - $ 1 Due to Sempra Energy 9 - $ 9 $ 1 Income taxes due to (from) Sempra Energy* $ (31) $ 7 Noncurrent: Promissory note due from Sempra Energy, variable rate based on short-term commercial paper rates (0.14% at September 30, 2009) $ 3 $ 4 Pacific Enterprises Current: Due from various affiliates $ 5 $ 5 Due to affiliate $ 84 $ 83 Due to Sempra Energy 11 15 Due to SDGE 5 8 $ 100 $ 106 Income taxes due to (from) Sempra Energy* $ 39 $ (66) Noncurrent: Promissory note due from Sempra Energy, variable rate based on short-term commercial paper rates (0.14% at September 30, 2009) $ 514 $ 457 SoCalGas Current: Due to Sempra Energy $ 8 $ 15 Due to SDGE 5 8 $ 13 $ 23 Income taxes due to Sempra Energy* $ 37 $ 1 * SDGE, PE and SoCalGas are included in the consolidated income tax return of Sempra Energy and are allocated income tax expense from Sempra Energy in an amount equal to that which would result from the companies' having always filed a separate return. Revenues from unconsolidated affiliates at the Sempra Utilities are as follows: REVENUES FROM UNCONSOLIDATED AFFILIATES AT THE SEMPRA UTILITIES (Dollars in millions) Three months ended September 30, Nine months ended September 30, 2009 2008 2009 2008 SDGE $ 2 $ 4 $ 6 $ 10 SoCalGas 9 9 24 25 Transactions with RBS Sempra CommoditiesSeveral of our business units engage in transactions with RBS Sempra Commodities. Amounts in our Condensed Consolidated Financial Statements related to these transactions are as follows: AMOUNTS RECORDED FOR TRANSACTIONS WITH RBS SEMPRA COMMODITIES (Dollars in millions) Th |
WRITE-OFF OF LONG-LIVED ASSETS
WRITE-OFF OF LONG-LIVED ASSETS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Write-off of Long-lived Assets Disclosure | WRITE-OFF OF LONG-LIVED ASSETSIn the second quarter of 2009, we recorded a $132 million pretax write-off related to certain assets at one of Sempra Pipelines Storages Liberty Gas Storage natural gas storage projects. This amount is recorded as Write-off of Long-Lived Assets on our Condensed Consolidated Statement of Operations for the nine months ended September 30, 2009. Sempra Pipelines Storage owns 75 percent of the partnership that is developing the project. Our partner's 25-percent share of the pretax charge is $33 million, which is included in (Earnings) Losses Attributable to Noncontrolling Interests on our Condensed Consolidated Statement of Operations for the nine months ended September 30, 2009. The impact to our net income and to our earnings is $97 million and $64 million, respectively, for the nine months ended September 30, 2009. In September 2009, the members of the partnership unanimously voted to proceed with the abandonment of the assets that were written off. |
OTHER INCOME
OTHER INCOME | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Other Income (Expense), Net Disclosure | OTHER INCOME (EXPENSE), NETOther Income (Expense), Net on the Condensed Consolidated Statements of Operations consists of the following: OTHER INCOME (EXPENSE), NET (Dollars in millions) Three months ended September 30, Nine months ended September 30, 2009 2008* 2009 2008* Sempra Energy Consolidated: Allowance for equity funds used during construction $ 10 $ 9 $ 28 $ 25 Regulatory interest, net 4 (2) 4 (8) Investment gains (losses)** 20 (13) 40 (9) Gain (loss) on interest-rate swaps (Otay Mesa VIE) (12) (8) 18 7 Sundry, net*** 2 (7) 7 15 Total $ 24 $ (21) $ 97 $ 30 SDGE: Allowance for equity funds used during construction $ 8 $ 7 $ 21 $ 19 Regulatory interest, net 5 - 5 (4) Gain (loss) on interest-rate swaps (Otay Mesa VIE) (12) (8) 18 7 Sundry, net - 4 1 4 Total $ 1 $ 3 $ 45 $ 26 SoCalGas and PE: Allowance for equity funds used during construction $ 2 $ 2 $ 7 $ 6 Regulatory interest, net (1) (2) (1) (4) Sundry, net (2) (1) (2) (1) Total at SoCalGas (1) (1) 4 1 Additional at PE: Sundry, net (3) 2 (3) 1 Total at PE $ (4) $ 1 $ 1 $ 2 * Amounts for Sempra Energy Consolidated, SDGE, and PE have been adjusted for the retrospective adoption of ASC 810 (SFAS 160). ** Represents investment gains (losses) on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are partially offset by corresponding changes in compensation expense related to the plans. *** The nine months ended September 30, 2008 includes a $16 million cash payment received for the early termination of a capacity agreement for the Cameron LNG receipt terminal. |
INCOME TAXES
INCOME TAXES | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Income Taxes Disclosure | INCOME TAXES INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES (Dollars in millions) Three months ended September 30, 2009 2008 Income Tax Effective Income Income Tax Effective Income Expense Tax Rate Expense Tax Rate* Sempra Energy Consolidated $ 128 31 % $ 94 25 % SDGE 53 37 54 31 PE 41 36 42 34 SoCalGas 42 36 41 35 Nine months ended September 30, 2009 2008 Income Tax Effective Income Income Tax Effective Income Expense Tax Rate Expense Tax Rate* Sempra Energy Consolidated $ 327 30 % $ 423 36 % SDGE 141 33 121 31 PE 117 38 119 38 SoCalGas 115 37 117 38 * Amounts for Sempra Energy Consolidated, SDGE and PE have been adjusted for the retrospective adoption of ASC 810 (SFAS 160). Changes in Effective Income Tax RatesSempra Energy ConsolidatedThe increase in the effective income tax rate for the three months ended September 30, 2009 was due primarily to lower pretax income in countries with lower statutory rates, and higher estimated investment tax credits in 2008 for Sempra Generation's solar-energy facility in Nevada.The decrease in the effective income tax rate for the first nine months of 2009 was due to: higher pretax income in countries with lower statutory rates; lower income tax expense related to Mexican currency translation and inflation adjustments; and higher favorable impact of the resolution of prior years' income tax issues. SDGEThe increase in the effective income tax rate for the three months ended September 30, 2009 was due to: lower favorable impact from the resolution of prior years' income tax issues; offset by higher deductions allowed for depreciation not treated as deferred tax liabilities for ratemaking purposes; higher deductions for self-developed software; and higher deductions for asset removal costs. The increase in the effective income tax rate for the nine months ended September 30, 2009 was due to: lower favorable impact from the resolution of prior years' income tax issues; and lower deductions allowed for depreciation not treated as deferred tax liabilities for ratemaking purposes; offset by higher deductions for self-developed software costs; and higher deductions for asset removal costs. PE and SoCalGasThe increases in the effective income tax rates for both PE and SoCalGas for the three months ended September 30, 2009 were due to: lower favorable impact from the resolution of prior years' income tax issues; offset by higher deductions for self-developed software costs; and higher Medicare subsidy, as discussed in Note 9 of the Notes to Consolidated Financial Statements in the Annual Report. The effective income tax rates for PE and SoCalGas for the first nine months of 2009 were impacted by: higher deductions for self-developed software costs; and higher Medicare subsidy. |
DEBT AND CREDIT FACILITIES
DEBT AND CREDIT FACILITIES | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Debt and Credit Facilities Disclosure | NOTE 6. DEBT AND CREDIT FACILITIES Committed Lines of CreditAt September 30, 2009, Sempra Energy had $4.3 billion in committed lines of credit to provide liquidity and to support commercial paper and variable-rate demand notes, the major components of which are detailed below. Available unused credit on these lines at September 30, 2009 was $3.1 billion. We discuss the terms of our credit agreements in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.These amounts exclude lines of credit associated with Sempra Commodities, some of which we continue to guarantee, as we discuss below in "RBS Sempra Commodities." RBS has replaced Sempra Energy as guarantor on all uncommitted lines of credit associated with Sempra Commodities. To the extent that Sempra Energy's credit support arrangements, including Sempra Commodities' committed facilities, have not been terminated or replaced, RBS has indemnified Sempra Energy for any claims or losses arising in connection with those arrangements. Sempra GlobalSempra Global has a $2.5 billion, three-year syndicated revolving credit agreement expiring in 2011. At September 30, 2009, Sempra Global had letters of credit of $4 million outstanding and no outstanding borrowings under the facility. The facility provides support for $926 million of commercial paper outstanding at September 30, 2009. At September 30, 2009, $200 million of the commercial paper outstanding has been classified as long-term debt based on managements intent and ability to maintain this level of borrowing on a long-term basis either supported by this credit facility or by issuing long-term debt.Sempra GenerationSempra Generation has a $1 billion, three-year syndicated revolving credit agreement expiring in 2011. At September 30, 2009, Sempra Generation had no outstanding borrowings under the facility. Sempra UtilitiesSDGE and SoCalGas have a combined $800 million, three-year syndicated revolving credit agreement expiring in 2011. The agreement permits each utility to individually borrow up to $600 million, subject to a combined limit of $800 million. At September 30, 2009, SDGE and SoCalGas had no outstanding borrowings under this facility. SDGE had $25 million of outstanding letters of credit and $237 million of variable-rate demand notes outstanding supported by this facility at September 30, 2009. WEIGHTED AVERAGE INTEREST RATEAt September 30, 2009, the weighted average interest rate on the total short-term debt outstanding at Sempra Energy, including commercial paper borrowings classified as long-term, was 0.68 percent. LONG-TERM DEBTIn May 2009, Sempra Energy publicly offered and sold $750 million of 6.5-percent notes, maturing in 2016. Also in May 2009, SDGE publicly offered and sold $300 million of 6.0-percent first mortgage bonds, maturing in 2039.In July 2009, to secure an approved exemption from sales and use tax, Sempra Pipelines Storage incurred $47 million out of a maximum available $265 million of long-term debt related to the construction and equipping of its Mississippi Hub Gas Storage facility. The debt is payable to the Mississippi Business Finance Corporation (MBFC), and we recorded bonds re |
GUARANTEES
GUARANTEES | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Guarantees Disclosure | RBS Sempra CommoditiesRBS is obligated to provide RBS Sempra Commodities with all growth capital, working-capital requirements and credit support. However, as a transitional measure, we continue to provide back-up guarantees for a portion of RBS Sempra Commodities trading obligations and for a credit facility with third party lenders pending novation (legal transfer) of the remaining trading obligations to RBS. Some of these back-up guarantees may continue for a prolonged period of time. RBS, which is controlled by the government of the United Kingdom, has fully indemnified us for any claims or losses in connection with these arrangements. RBS Sempra Commodities net trading liabilities supported by Sempra Energys guarantees at September 30, 2009 were $722 million, consisting of guaranteed trading obligations net of collateral. The amount of guaranteed net trading liabilities varies from day to day with the value of the trading obligations and related collateral.Sempra Energy also has guaranteed $344 million of $1.72 billion of RBS Sempra Commodities' commitments under a credit facility expiring September 29, 2010. Extensions of credit under the committed facility, which total $1.1 billion at September 30, 2009, are limited to and secured by a borrowing base consisting of receivables, inventories and other joint venture assets that are valued at varying percentages of current market value. At September 30, 2009, the gross market value of the borrowing base assets was $2.3 billion. The facility will be reduced and end as the borrowing base assets are transferred to RBS as established by the joint venture agreement. OTHER GUARANTEES Sempra Energy, Conoco Phillips (Conoco) and Kinder Morgan Energy Partners, L.P. (KMP) currently hold 25 percent, 24 percent and 51 percent ownership interests, respectively, in Rockies Express. Rockies Express is near completion of a natural gas pipeline to link natural gas producing areas in the Rocky Mountain region to the upper Midwest and the eastern United States. Rockies Express has a $2 billion, five-year credit facility expiring in 2011 that provides for revolving extensions of credit that are guaranteed by Sempra Energy, Conoco and KMP in proportion to their respective ownership percentages. Borrowings under the facility bear interest at rates varying with market rates plus a margin that varies with the credit ratings of the lowest-rated guarantor. The facility requires each guarantor to comply with various financial and other covenants comparable to those contained in its senior unsecured credit facilities. In the case of Sempra Energy, the primary requirement is that we maintain a ratio of total indebtedness to total capitalization (as defined in the facility) of no more than 65 percent at the end of each quarter. Rockies Express had $1.9 billion of outstanding borrowings under this facility at September 30, 2009. The fair value to us of these guarantees is negligible. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Derivative Financial Instruments Disclosure | NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTSOn January 1, 2009, we adopted SFAS 161 (ASC 815) as discussed in Note 2. The adoption of SFAS 161 had no impact on our consolidated financial statements, but requires additional disclosures, which we provide below. Comparative disclosures for periods prior to the date of adoption are not required and we have not provided them. We use derivative instruments primarily to manage exposures arising in the normal course of business. These exposures are commodity market risk and benchmark interest rate risk. Our use of derivatives for these risks is integrated into the economic management of our anticipated revenues, anticipated expenses, assets and liabilities. Derivatives may be effective in mitigating these risks that could lead to declines in anticipated revenues or increases in anticipated expenses, or that our asset values may fall or our liabilities increase. Accordingly, our derivative activity summarized below generally represents an impact that is intended to offset associated revenues, expenses, assets or liabilities that are not presented below. All derivatives are recorded at fair value on the Condensed Consolidated Balance Sheets. Each derivative is designated as 1) a cash flow hedge, 2) a fair value hedge, or 3) is undesignated.Depending on the applicability of hedge accounting and, for the Sempra Utilities, the requirement to pass impacts through to customers, the impact of derivative instruments may be offset in other comprehensive income (cash flow hedge), on the balance sheet (fair value hedges and regulatory offsets), or recognized in earnings. In certain cases, we apply the normal purchase or sale exception to derivative accounting and have other commodity contracts that are not derivatives. These contracts are not recorded at fair value and are therefore excluded from the disclosures below. HEDGE ACCOUNTINGWe may designate a derivative as a cash flow hedging instrument if it effectively converts anticipated revenues or expenses to a fixed dollar amount. We may utilize cash flow hedge accounting for derivative commodity instruments and interest-rate instruments. Designating cash flow hedges is dependent on the business context in which the instrument is being used, the effectiveness of the instrument in offsetting the risk that a given future revenue or expense item may vary, and other criteria.We may designate an interest-rate derivative as a fair value hedging instrument if it effectively converts our own debt from a fixed interest rate to a variable rate. The combination of the derivative and debt instruments results in fixing that portion of the fair value of the debt that is related to benchmark interest rates. Designating fair value hedges is dependent on the instrument being used, the effectiveness of the instrument in offsetting changes in the fair value of our debt instruments, and other criteria. ENERGY DERIVATIVESOur market risk is primarily related to natural gas and electricity price volatility and the specific physical locations where we transact. We use energy derivatives to manage these risks. The use of energy derivatives in our various businesses depends on the par |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Fair Value of Financial Instruments Disclosure | NOTE 8. FAIR VALUE MEASUREMENTSFair Value of Financial InstrumentsThe fair values of certain of our financial instruments (cash, temporary investments, accounts and notes receivable, dividends and accounts payable, short-term debt and customer deposits) approximate their carrying amounts. The following table provides the carrying amounts and fair values of the remaining financial instruments at September 30, 2009 and December 31, 2008: FAIR VALUE OF FINANCIAL INSTRUMENTS (Dollars in millions) September 30, 2009 December 31, 2008 Carrying Fair Carrying Fair Amount Value Amount Value Sempra Energy Consolidated: Investments in affordable housing partnerships (1) $ 37 $ 57 $ 43 $ 63 Total long-term debt (2) 7,478 8,173 6,962 7,013 Due to unconsolidated affiliates 102 106 102 101 Preferred stock of subsidiaries 179 152 179 149 SDGE: Total long-term debt (3) $ 2,601 $ 2,780 $ 2,146 $ 2,073 Contingently redeemable preferred stock 79 73 79 71 PE and SoCalGas: Total long-term debt (4) $ 1,372 $ 1,463 $ 1,372 $ 1,333 PE: Preferred stock $ 80 $ 61 $ 80 $ 59 Preferred stock of subsidiary 20 18 20 19 $ 100 $ 79 $ 100 $ 78 SoCalGas: Preferred stock $ 22 $ 19 $ 22 $ 20 (1) We discuss our investments in affordable housing partnerships in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report. (2) Before reductions for unamortized discount of $11 million at September 30, 2009 and $8 million at December 31, 2008. (3) Before reductions for unamortized discount of $4 million at September 30, 2009 and $2 million at December 31, 2008. (4) Before reductions for unamortized discount of $2 million at September 30, 2009 and $2 million at December 31, 2008. Sempra Energy based the fair values of investments in affordable housing partnerships on the present value of estimated future cash flows, discounted at rates available for similar investments. Sempra Energy estimated the fair values of debt incurred to acquire affordable housing partnerships based on the present value of the future cash flows, discounted at rates available for similar notes with comparable maturities.All entities based the fair values of the long-term debt and preferred stock on their quoted market prices or quoted market prices for similar securities. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Fair Value Hierarchy Disclosure | Fair Value HierarchyWe discuss the valuation techniques we use to measure fair value and the definition of the three levels of the fair value hierarchy, as defined in ASC 820, Fair Value Measurements and Disclosures (ASC 820) (SFAS 157), and our netting policy for derivative positions in Notes 1, 2 and 11 of the Notes to Consolidated Financial Statements in the Annual Report.The three tables below, by level within the fair value hierarchy, set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2009 and December 31, 2008. As required by ASC 820, we classify financial assets and liabilities in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities, and their placement within the fair value hierarchy levels. The determination of fair values incorporates various factors required under ASC 820, including but not limited to, the credit standing of the counterparties involved and the impact of credit enhancements (such as cash deposits, letters of credit and priority interests).The fair value of commodity derivative assets and liabilities is determined in accordance with our netting policy as discussed above. RECURRING FAIR VALUE MEASURES -- SEMPRA ENERGY CONSOLIDATED (Dollars in millions) At fair value as of September 30, 2009 Collateral Level 1 Level 2 Level 3 Netted Total Assets: Nuclear decommissioning trusts* $ 510 $ 147 $ - $ - $ 657 Investments 1 - - - 1 Commodity derivatives 54 72 32 (35) 123 Other derivatives - 59 - - 59 Total $ 565 $ 278 $ 32 $ (35) $ 840 Liabilities: Commodity derivatives $ 13 $ 85 $ - $ (13) $ 85 Other derivatives - 81 - - 81 Total $ 13 $ 166 $ - $ (13) $ 166 At fair value as of December 31, 2008 Collateral Level 1 Level 2 Level 3 Netted Total Assets: Nuclear decommissioning trusts* $ 421 $ 148 $ - $ - $ 569 Investments 1 176 - - 177 Commodity derivatives 55 76 27 (38) 120 Other derivatives - 76 - - 76 Total $ 477 $ 476 $ 27 $ (38) $ 942 Liabilities: Commodity derivatives $ 63 $ 110 $ - $ (63) $ 110 Other derivatives - 130 - - 130 Total $ 63 $ 240 $ - $ (63) $ 240 * Excludes cash balances. RECURRING FAIR VALUE MEASURES -- SDGE (Dollars in millions) At fair value as of September 30, 2009 Collateral Level 1 Level 2 Level 3 Netted Total Assets: Nuclear decommissioning trusts* $ 510 $ 147 $ - $ - $ 657 Commodity derivatives 43 2 32 - 77 Total $ 553 $ 149 $ 32 $ - $ 734 Liabilities: Commodity derivatives $ 13 $ 3 $ - $ (13) $ 3 Other derivatives - 56 - - 56 Total $ 13 $ 59 $ - $ (13) $ 59 At fair value as of December 31, 2008 Collateral Level 1 Level 2 Level 3 Netted Total Assets: Nuclear decommissioning trusts* $ 421 $ 148 $ - $ - $ 569 Commodity derivatives 21 - 27 - 48 Short-term investments - 24 - - 24 Total |
SEMPRA UTILITIES' REGULATORY MA
SEMPRA UTILITIES' REGULATORY MATTERS | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Sempra Utilities' Regulatory Matters Disclosure | NOTE 9. SEMPRA UTILITIES' REGULATORY MATTERS POWER PROCUREMENT AND RESOURCE PLANNING Sunrise Powerlink Electric Transmission LineIn December 2008, the California Public Utilities Commission (CPUC) issued a final decision authorizing SDGE to construct a 500-kilovolt (kV) electric transmission line between the Imperial Valley and the San Diego region (Sunrise Powerlink). This line is designed to provide 1,000 MW of increased import capability into the San Diego area. The decision allows SDGE to construct the Sunrise Powerlink along a route that would generally run south of the Anza-Borrego Desert State Park. The decision also approves the environmental impact review conducted jointly by the CPUC and the Bureau of Land Management (BLM) and establishes a total project cost cap of $1.883 billion, including approximately $190 million for environmental mitigation costs. In January 2009, the BLM issued its decision approving the project, route and environmental review. We provided the details of the CPUC's decision in Note 14 of the Notes to Consolidated Financial Statements in the Annual Report.After the issuance of the CPUC final decision, applications for rehearing before the CPUC were filed by the Utility Consumers Action Network (UCAN) and the Center for Biological Diversity/Sierra Club (CBD). The CPUC issued a final decision in July 2009 denying the requests for rehearing. UCAN and CBD jointly filed a petition with the California Supreme Court in August 2009 challenging the CPUC's decision with regard to implementation of the California Environmental Quality Act (CEQA). UCAN also filed a petition with the California Court of Appeal challenging the decision on other legal grounds. The CPUC, the California Independent System Operator (ISO) and SDGE filed separate motions with the California Supreme Court requesting transfer of the UCAN petition to the California Supreme Court. Responses to both petitions will be filed once the California Supreme Court has ruled on the transfer requests. Three appeals of the BLM decision approving the segment of the route in its jurisdiction were filed by individuals, a community organization, and the Viejas Indian tribe in March 2009. A request to stay the BLM's decision was also filed. The Interior Board of Land Appeals (IBLA) has dismissed the appeal filed by the individuals and issued a ruling in July 2009 denying the request for stay. In addition, the Viejas Indian tribe withdrew its appeal in July 2009. The IBLA is still reviewing the one remaining appeal. The Sunrise Powerlink also requires approval from the United States Forest Service (USFS). SDGE expects the USFS to issue a decision approving the segment of the route in its jurisdiction in the first quarter of 2010. The USFS decision is also subject to administrative and judicial review.SDGE commenced procurement activities in the first quarter of 2009, but before construction can begin, additional agency permits must be obtained. The total amount invested by SDGE in the Sunrise Powerlink project as of September 30, 2009 was $184 million, which is included in Property, Plant and Equipment on the Condensed Consolidated Balance Sheets of Sempra Energy |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Commitments and Contingencies Disclosure | NOTE 10. COMMITMENTS AND CONTINGENCIESLegal ProceedingsThe uncertainties that exist in legal proceedings make it difficult to estimate with reasonable certainty the costs and effects of resolving these matters. Accordingly, actual costs incurred may differ materially from insured or reserved amounts and could materially adversely affect our business, cash flows, results of operations, and financial condition. We record reserves for legal proceedings in accordance with ASC 450, Contingencies (ASC 450) (SFAS 5). At September 30, 2009, Sempra Energy's reserves for unresolved legal proceedings, on a consolidated basis, were $258 million. At September 30, 2009, SDGE and SoCalGas had reserves for unresolved legal proceedings of $240 million and $11 million, respectively. The amounts for Sempra Energy Consolidated and SDGE include $219 million of expected insurance settlements related to the SDGE 2007 wildfire litigation discussed below. SDGE 2007 Wildfire Litigation In October 2007, San Diego County experienced catastrophic wildfires. In July 2008, the California Department of Forestry and Fire Protection (Cal Fire) issued investigation reports stating that two fires (the Witch and Rice fires) were SDGE "power line caused" and that a third fire (the Guejito fire) occurred when a wire securing a Cox Communications' fiber optic cable came into contact with an SDGE power line "causing an arc and starting the fire." Cal Fire states that the Rice fire burned approximately 9,500 acres and damaged 206 homes and two commercial properties. The reports indicate that the Witch and Guejito fires merged and eventually burned approximately 198,000 acres, resulted in two fatalities, injured approximately 40 firefighters and destroyed approximately 1,141 homes. In September 2008, the Consumer Protection and Safety Division of the CPUC issued a staff investigative report reaching substantially the same conclusions as the Cal Fire reports. However, the staff report also opines that the power lines involved in the Witch and Rice fires and the lashing wire involved in the Guejito fire were not properly designed, constructed and maintained as required by CPUC rules. In November 2008, the CPUC initiated investigations to determine whether SDGE and Cox Communications violated any rules or regulations in connection with the fires. In October 2009, SDGE and the Consumer Protection and Safety Division entered into a $14.75 million settlement that, if approved by the CPUC, would resolve the investigations without any admission of SDGE responsibility for the wildfires.Approximately 175 lawsuits have been filed against SDGE and Sempra Energy in San Diego County Superior Court seeking to recover damages in unspecified amounts, including punitive damages and other costs associated with the three fires. The lawsuits assert various bases for recovery, including inverse condemnation based upon a California Court of Appeal decision finding that another California investor-owned utility was subject to strict liability, without regard to foreseeability or negligence, for damages resulting from a wildfire ignited by power lines. SDGE has filed cross-complaints against Cox Communica |
SEGMENT INFORMATION
SEGMENT INFORMATION | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Condensed Consolidated Financial Statements | |
Segment Information Disclosure | NOTE 11. SEGMENT INFORMATIONWe have five separately managed reportable segments, as follows: SDGE provides electric service in California to San Diego and southern Orange counties and natural gas service to San Diego County. SoCalGas is a natural gas distribution utility, serving customers throughout most of Southern California and part of central California. Sempra Commodities holds our investment in RBS Sempra Commodities, a joint venture with RBS. The partnership was formed on April 1, 2008 from our commodities-marketing businesses previously reported in this segment. The partnership's commodity trading businesses serve customers in natural gas, electricity, petroleum and petroleum products, and base metals. Sempra Commodities also includes the operating results of Sempra Rockies Marketing, which holds firm service capacity on the Rockies Express Pipeline. Sempra Generation develops, owns and operates, or holds interests in, electric power plants and energy projects in Arizona, California, Nevada, Indiana and Mexico to serve wholesale electricity markets in North America. Sempra Pipelines Storage develops, owns and operates, or holds interests in, natural gas pipelines and storage facilities in the United States and Mexico, and companies that provide natural gas or electricity services in Argentina, Chile, Mexico and Peru. We are currently pursuing the sale of our interests in the Argentine utilities, which we discuss further in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report. Sempra Pipelines Storage also operates a small natural gas distribution utility in Southwest Alabama. We evaluate each segment's performance based on its contribution to Sempra Energy's reported earnings. The Sempra Utilities operate in essentially separate service territories, under separate regulatory frameworks and rate structures set by the CPUC. The Sempra Utilities' operations are based on rates set by the CPUC and the FERC. We describe the accounting policies of our segments in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.The following tables show selected information by segment from our Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets. Amounts labeled as "all other" in the following tables consist primarily of parent organizations and Sempra LNG. SEGMENT INFORMATION (Dollars in millions) Three months ended September 30, Nine months ended September 30, 2009 2008 2009 2008 REVENUES SDGE $ 773 42 % $ 949 35 % $ 2,136 38 % $ 2,449 29 % SoCalGas 662 36 1,077 40 2,276 40 3,776 44 Sempra Commodities 24 1 13 - 50 1 486 6 Sempra Generation 250 13 498 18 792 14 1,426 17 Sempra Pipelines Storage 98 5 127 5 328 6 338 4 All other 68 4 49 2 125 2 44 1 Adjustments and eliminations (2) - - - (2) - (5) - Intersegment revenues (20) (1) (21) - (55) (1) (49) (1) Total $ 1,853 100 % $ 2,692 100 % $ 5,650 100 % $ 8,465 100 % INTEREST EXPENSE SDGE $ 29 $ 24 $ 75 $ 73 SoCalGas 16 14 51 44 Sempra Commodities 1 3 7 19 Sempra Generation |
DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION (USD $) | |
In Billions, except Share data in Millions | 9 Months Ended
Sep. 30, 2009 |
Document Information Line Items | |
Document Type | 10-Q |
Document Period End Date | 2009-09-30 |
Amendment Flag | false |
Entity Information Line Items | |
Entity Registrant Name | Sempra Energy |
Entity Central Index Key | 0001032208 |
Current Fiscal Year End Date | --12-31 |
Entity Well Known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Public Float | 13.8 |
Entity Common Shares Outstanding | 246,442,856 |