Exhibit 99.1
NEWS RELEASE
Media Contact: | Doug Kline |
Financial Contact: | Karen Sedgwick |
SEMPRA ENERGY POSTS 38-PERCENT INCREASE IN
2004 NET INCOME
- Earnings Per Share Rise 26 Percent to $3.83
- Commodity-Trading, Electric-Generation Units Pace Growth
- Company Raises 2005 Earnings-Per-Share Guidance to $3.10 to $3.30
From $3.00 to $3.20
SAN DIEGO, Feb. 23, 2005 - Sempra Energy (NYSE: SRE) today reported 2004 earnings of $895 million, or $3.83 per diluted share, up 38 percent over 2003 earnings of $649 million, or $3.03 per diluted share.
For the fourth quarter 2004, Sempra Energy's earnings were $346 million, or $1.46 per diluted share, an increase of 48 percent over fourth-quarter 2003 earnings of $234 million, or $1.03 per diluted share.
"This marks the sixth consecutive year of record earnings for Sempra Energy, a period during which we have averaged earnings growth of more than 20 percent annually," said Stephen L. Baum, chairman and chief executive officer. "In 2004, we further strengthened our balance sheet and significantly advanced our liquefied natural gas (LNG) business. Our commodity-trading and electric-generation businesses experienced robust growth and our California utilities continue to excel."
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Yesterday, Sempra Energy's board of directors announced a dividend increase of 16 percent, raising the quarterly dividend on common shares to 29 cents ($1.16 on an annualized basis). The increase was the first change in the company's dividend since 2000.
Revenues for Sempra Energy in 2004 were $9.4 billion, compared with $7.9 billion in 2003, due to increased power sales and commodity trading. Fourth-quarter 2004 revenues were $2.9 billion, up from $2.1 billion in the year-earlier period.
SUBSIDIARY OPERATING RESULTS
Sempra Utilities
Net income for Southern California Gas Co. (SoCalGas) increased to $232 million in 2004 from $209 million in 2003, due primarily to lower operating expenses, the favorable settlement of its rate case at the California Public Utilities Commission (CPUC) and a one-time gain from a property sale. Fourth-quarter 2004 net income for SoCalGas was $58 million, versus $61 million in the year-earlier period.
Net income for San Diego Gas & Electric (SDG&E) in 2004 was $208 million, compared with $334 million in 2003. SDG&E's net income was $68 million in the fourth quarter 2004, compared with $128 million in the same quarter of 2003. In the fourth quarter 2004, SDG&E benefited from the settlement of its rate case at the CPUC. The 2003 results for SDG&E included a $79 million gain recorded in the fourth quarter for the favorable resolution of tax issues and a $65 million gain recorded in the third quarter for a contract settlement with the CPUC.
In December 2004, the CPUC approved base rates for SDG&E and SoCalGas for a four-year period extending through 2007.
"The approval of new rate plans for SDG&E and SoCalGas ensures that our utilities will continue to earn a reasonable return as they invest in critical new infrastructure to serve their customers," Baum said.
-more-
Sempra Commodities
In 2004, net income for Sempra Commodities (formerly Sempra Energy Trading) more than doubled to $320 million from $157 million in 2003, due to improved performance in all of its key commodity segments worldwide, including natural gas, petroleum and base metals. Fourth-quarter 2004 net income for Sempra Commodities increased to $171 million from $73 million in the year-earlier period on the strength of its natural gas and power trading.
"In 2004, Sempra Commodities recorded its best year ever," said Baum. "Quarter after quarter, Sempra Commodities has remained consistently profitable, while carefully managing risk and entering into transactions that convert to cash quickly."
Sempra Generation
Net income for Sempra Generation (formerly Sempra Energy Resources) rose to $137 million in 2004 from $71 million in the previous year, due primarily to a full year of contributions from the company's new generating fleet in the Pacific Southwest, as well as power plants acquired in Texas.
Sempra Generation's fourth-quarter net income was $19 million in 2004, compared with $32 million in 2003, due primarily to litigation reserves.
Sempra Pipelines & Storage
Sempra Pipelines & Storage (formerly Sempra Energy International) recorded net income of $63 million in 2004, up from $3 million in 2003. Results for 2003 included an impairment charge of $50 million in the third quarter. In 2004, Sempra Pipelines & Storage also benefited from a $5 million gain from reducing its ownership in Luz del Sur, a Peruvian utility, to 38 percent from 44 percent. For the fourth quarter, net income for Sempra Pipelines & Storage increased to $28 million in 2004 from $10 million in 2003, due primarily to favorable resolution of foreign-tax issues.
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Sempra LNG
Last month, Sempra LNG (formerly Sempra Energy LNG) awarded the engineering and construction contracts for its Energía Costa Azul and Cameron LNG receipt terminals in Baja California, Mexico, and Louisiana. Construction has commenced on the Energía Costa Azul terminal, which is expected to be operational in 2008.
Also last month, Sempra LNG was awarded a 15-year natural gas contract to supply Mexico's state-owned electric utility, Comisión Federal de Electricidad.
On Jan. 27, 2005, Sempra LNG announced it had signed a Heads of Agreement (HOA) to provide Tractebel LNG North America LLC with up to one-third of the processing capacity of the Cameron LNG receipt terminal for a period of 20 years, beginning in 2008. The non-binding HOA contemplates finalizing a definitive agreement by June 30, 2005. Additional supply and capacity agreements involving Cameron LNG are being negotiated. The facility is expected to be operational in 2008.
2005 Earnings Outlook
Sempra Energy today updated its 2005 earnings-per-share guidance to $3.10 to $3.30 from previous guidance of $3.00 to $3.20. The company also announced a capital budget of approximately $1.6 billion for 2005.
Internet Broadcast
Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. Eastern Time with senior management of the company. Access is available by logging onto the Web site at www.sempra.com. For those unable to log onto the live Webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (706) 645-9291 and entering the passcode, 3346152.
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2004 revenues of $9.4 billion. The Sempra Energy companies' 13,000 employees serve more than 10 million customers in the United States, Europe, Canada, Mexico, South America and Asia.
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This presentation contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When the company uses words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "would," "should" or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Pu blic Utilities Commission, the California State Legislature, the California Department of Water Resources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; and other uncertainties, all of which are difficult to predict and many of which are beyond the company's control. These risks and uncertainties are further discussed in the company's reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site,www.sec.govand on the company's Web site,www.sempra.com.
SEMPRA ENERGY | |||||||||
Table A | |||||||||
STATEMENTS OF CONSOLIDATED INCOME | |||||||||
Three months ended | Years ended | ||||||||
December 31, | December 31, | ||||||||
(Dollars in millions, except per share amounts) | 2004 |
| 2003 | 2004 |
| 2003 | |||
(Unaudited) | |||||||||
Operating revenues | |||||||||
California utilities: | |||||||||
Natural gas | $ 1,348 | $ 1,049 | $ 4,537 | $ 4,010 | |||||
Electric | 412 | 419 | 1,658 | 1,787 | |||||
Other | 1,129 | 598 | 3,215 | 2,090 | |||||
Total operating revenues | 2,889 | 2,066 | 9,410 | 7,887 | |||||
Operating expenses | |||||||||
California utilities: | |||||||||
Cost of natural gas | 849 | 542 | 2,593 | 2,071 | |||||
Cost of electric fuel and purchased power | 151 | 113 | 576 | 541 | |||||
Other cost of sales | 555 | 318 | 1,741 | 1,204 | |||||
Other operating expenses | 774 | 656 | 2,371 | 2,287 | |||||
Depreciation and amortization | 120 | 160 | 621 | 615 | |||||
Franchise fees and other taxes | 65 | 63 | 236 | 230 | |||||
Total operating expenses | 2,514 | 1,852 | 8,138 | 6,948 | |||||
Operating income | 375 | 214 | 1,272 | 939 | |||||
Other income (expense) - net | 46 | (12) | 104 | 26 | |||||
Interest income | 11 | 74 | 69 | 104 | |||||
Interest expense | (88) | (85) | (322) | (308) | |||||
Preferred dividends / distributions by subsidiaries | (3) | (2) | (10) | (19) | |||||
Income from continuing operations before income taxes | 341 | 189 | 1,113 | 742 | |||||
Income tax expense (benefit) | 2 | (62) | 193 | 47 | |||||
Income from continuing operations | 339 | 251 | 920 | 695 | |||||
Income (loss) from discontinued operations, net of tax | 7 | - | (23) | - | |||||
Loss on disposal of discontinued operations, net of tax | - | - | (2) | - | |||||
Income before cumulative effect of changes in accounting principles | 346 | 251 | 895 | 695 | |||||
Cumulative effect of changes in accounting principles, net of tax | - | (17) | - | (46) | |||||
Net income | $ 346 | $ 234 | $ 895 | $ 649 | |||||
Basic earnings per share: | |||||||||
Income from continuing operations | $ 1.47 | $ 1.12 | $ 4.03 | $ 3.29 | |||||
Discontinued operations, net of tax | 0.03 | - | (0.11) | - | |||||
Cumulative effect of changes in accounting principles, net of tax | - | (0.07) | - | (0.22) | |||||
Net income | $ 1.50 | $ 1.05 | $ 3.92 | $ 3.07 | |||||
Weighted-average number of shares outstanding (thousands) | 230,832 | 223,962 | 228,271 | 211,740 | |||||
Diluted earnings per share: | |||||||||
Income from continuing operations | $ 1.43 | $ 1.11 | $ 3.93 | $ 3.24 | |||||
Discontinued operations, net of tax | 0.03 | - | (0.10) | - | |||||
Cumulative effect of changes in accounting principles, net of tax | - | (0.08) | - | (0.21) | |||||
Net income | $ 1.46 | $ 1.03 | $ 3.83 | $ 3.03 | |||||
Weighted-average number of shares outstanding (thousands) | 237,500 | 227,214 | 233,852 | 214,482 | |||||
Dividends declared per share of common stock | $ 0.25 | $ 0.25 | $ 1.00 | $ 1.00 | |||||
SEMPRA ENERGY | ||||||
Table B | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
December 31, | December 31, | |||||
(Dollars in millions) |
| 2004 |
| 2003 | ||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 419 | $ 409 | ||||
Short-term investments | 15 | 386 | ||||
Accounts receivable | 1,032 | 874 | ||||
Due from unconsolidated affiliate | 4 | - | ||||
Deferred income taxes | 15 | - | ||||
Interest receivable | 80 | 62 | ||||
Trading-related receivables and deposits, net | 2,606 | 2,350 | ||||
Derivative trading instruments | 2,339 | 1,607 | ||||
Commodities owned | 1,547 | 1,420 | ||||
Regulatory assets arising from fixed-price contracts and other derivatives | 152 | 144 | ||||
Other regulatory assets | 103 | 89 | ||||
Inventories | 172 | 147 | ||||
Other | 222 | 158 | ||||
Current assets of continuing operations | 8,706 | 7,646 | ||||
Current assets of discontinued operations | 70 | 220 | ||||
Total current assets | 8,776 | 7,866 | ||||
Investments and other assets: | ||||||
Due from unconsolidated affiliates | 42 | 55 | ||||
Regulatory assets arising from fixed-price contracts and other derivatives | 500 | 650 | ||||
Other regulatory assets | 619 | 552 | ||||
Nuclear decommissioning trusts | 612 | 570 | ||||
Investments | 1,164 | 1,112 | ||||
Sundry | 844 | 707 | ||||
Total investments and other assets | 3,781 | 3,646 | ||||
Property, plant and equipment - net | 11,086 | 10,476 | ||||
Total assets | $ 23,643 | $ 21,988 | ||||
Liabilities and Shareholders' Equity | ||||||
Current liabilities: | ||||||
Short-term debt | $ 405 | $ 28 | ||||
Accounts payable | 1,126 | 788 | ||||
Due to unconsolidated affiliates | 205 | 1 | ||||
Income taxes payable | 187 | 336 | ||||
Deferred income taxes | - | 31 | ||||
Trading-related payables | 3,182 | 2,255 | ||||
Derivative trading instruments sold, not yet purchased | 1,484 | 1,340 | ||||
Commodities sold with agreement to repurchase | 513 | 922 | ||||
Dividends and interest payable | 123 | 136 | ||||
Regulatory balancing accounts - net | 509 | 424 | ||||
Fixed-price contracts and other derivatives | 157 | 148 | ||||
Current portion of long-term debt | 398 | 1,433 | ||||
Other | 776 | 675 | ||||
Current liabilities of continuing operations | 9,065 | 8,517 | ||||
Current liabilities of discontinued operations | 17 | 52 | ||||
Total current liabilities | 9,082 | 8,569 | ||||
Long-term debt | 4,192 | 3,841 | ||||
Deferred credits and other liabilities: | ||||||
Due to unconsolidated affiliates | 162 | 362 | ||||
Customer advances for construction | 97 | 89 | ||||
Postretirement benefits other than pensions | 129 | 131 | ||||
Deferred income taxes | 420 | 368 | ||||
Deferred investment tax credits | 78 | 84 | ||||
Regulatory liabilities arising from cost of removal obligations | 2,359 | 2,238 | ||||
Regulatory liabilities arising from asset retirement obligations | 333 | 303 | ||||
Other regulatory liabilities | 67 | 109 | ||||
Fixed-price contracts and other derivatives | 500 | 680 | ||||
Asset retirement obligations | 326 | 313 | ||||
Deferred credits and other | 854 | 832 | ||||
Total deferred credits and other liabilities | 5,325 | 5,509 | ||||
Preferred stock of subsidiaries | 179 | 179 | ||||
Shareholders' equity | 4,865 | 3,890 | ||||
Total liabilities and shareholders' equity | $ 23,643 | $ 21,988 | ||||
SEMPRA ENERGY | ||||||
Table C | ||||||
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS | ||||||
Years ended | ||||||
December 31, | ||||||
(Dollars in millions) |
| 2004 |
| 2003 | ||
Cash Flows from Operating Activities: | ||||||
Net income | $ 895 | $ 649 | ||||
Adjustments to reconcile net income to net cash provided by operating | ||||||
activities: | ||||||
Discontinued operations, net of tax | 25 | - | ||||
Cumulative effect of changes in accounting principles, net of tax | - | 46 | ||||
Depreciation and amortization | 621 | 615 | ||||
Deferred income taxes and investment tax credits | 13 | (118) | ||||
Impairment losses | 12 | 101 | ||||
Other - net | 61 | 99 | ||||
Net changes in other working capital components | (427) | (154) | ||||
Changes in other assets | (200) | (71) | ||||
Changes in other liabilities | (21) | (26) | ||||
Net cash provided by continuing operations | 979 | 1,141 | ||||
Net cash used in discontinued operations | (30) | - | ||||
Net cash provided by operating activities | 949 | 1,141 | ||||
Cash Flows from Investing Activities: | ||||||
Expenditures for property, plant and equipment | (1,083) | (1,049) | ||||
Investments in and acquisitions of subsidiaries, net of cash acquired | (74) | (202) | ||||
Proceeds from disposal of discontinued operations | 157 | - | ||||
Net proceeds from sale of assets | 372 | (1) | 29 | |||
Dividends received from unconsolidated affiliates | 59 | 72 | ||||
Affiliate loans | - | (99) | ||||
Other - net | 10 | 1 | ||||
Net cash used in investing activities | (559) | (1,248) | ||||
Cash Flows from Financing Activities: | ||||||
Common dividends paid | (195) | (182) | ||||
Issuances of common stock | 110 | 505 | ||||
Repurchases of common stock | (5) | (7) | ||||
Issuances of long-term debt | 997 | 900 | ||||
Payments on long-term debt | (1,670) | (601) | ||||
Increase (decrease) in short-term debt - net | 397 | (518) | ||||
Other - net | (14) | (8) | ||||
Net cash (used in) provided by financing activities | (380) | 89 | ||||
Increase (decrease) in cash and cash equivalents | 10 | (18) | (2) | |||
Cash and cash equivalents, January 1 | 409 | 427 | ||||
Cash and cash equivalents, December 31 | $ 419 | $ 409 | ||||
(1) | Primarily proceeds from the sale of U.S. Treasury obligations which previously securitized the Mesquite synthetic lease. | |||||
(2) | Change from $(23) as reported in prior year reflects reclassification of restricted cash. | |||||
Table D | ||||||||||
BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS (Unaudited) | ||||||||||
Three months ended | Years ended | |||||||||
December 31, |
| December 31, | ||||||||
(Dollars in millions) | 2004 |
| 2003 |
| 2004 |
| 2003 | |||
Net Income | ||||||||||
California Utilities: | ||||||||||
San Diego Gas & Electric | $ 68 | $ 128 | $ 208 | $ 334 | ||||||
Southern California Gas | 58 | 61 | 232 | 209 | ||||||
Total California Utilities | 126 | 189 | 440 | 543 | ||||||
Sempra Global: | ||||||||||
Sempra Commodities | 171 | 73 | 320 | 157 | ||||||
Sempra Generation | 19 | 32 | 137 | 71 | ||||||
Sempra Pipelines & Storage | 28 | 10 | 63 | 3 | (3) | |||||
Sempra LNG | (8) | (2) | (8) | (2) | ||||||
Total Sempra Global | 210 | 113 | 512 | 229 | ||||||
Sempra Financial | 10 | 9 | 36 | 41 | ||||||
Parent & Other | (7) | (60) | (4) | (68) | (118) | (4) | ||||
Continuing Operations | 339 | 251 | 920 | 695 | ||||||
Discontinued Operations (1) | 7 | - | (25) | - | ||||||
Cumulative Effect of Changes in Accounting Principles | - | (17) | (2) | - | (46) | (2) | ||||
Consolidated Net Income | $ 346 | $ 234 | $ 895 | $ 649 | ||||||
(1) | Reflects Atlantic Electric & Gas and for the three months ended December 31, 2004 includes $7 related to favorable tax adjustment. | |||||||||
(2) | The effects were ($29) at Sempra Commodities, $9 at Sempra Generation and ($26) at Parent & Other, respectively. The effects at Sempra Generation and Parent & Other were recorded in the three months ended December 31, 2003. | |||||||||
(3) | Includes ($50) write-down of the carrying value of assets of Frontier Energy. | |||||||||
(4) | Includes the ($21) impairment of the carrying value of assets of AEG at Parent & Other. | |||||||||
Three months ended | Years ended | |||||||||
December 31, | December 31, | |||||||||
(Dollars in millions) | 2004 |
| 2003 | 2004 |
| 2003 | ||||
Capital Expenditures and Investments: | ||||||||||
California Utilities: | ||||||||||
San Diego Gas & Electric | $ 131 | $ 159 | $ 414 | $ 444 | ||||||
Southern California Gas | 77 | 101 | 311 | 318 | ||||||
Total California Utilities | 208 | 260 | 725 | 762 | ||||||
Sempra Global: | ||||||||||
Sempra Generation | 41 | 69 | 194 | 300 | ||||||
Sempra Commodities | 28 | 31 | 131 | 51 | ||||||
Sempra Pipelines & Storage | 4 | 13 | 22 | 50 | ||||||
Sempra LNG | 20 | 23 | 55 | 51 | ||||||
Total Sempra Global | 93 | 136 | 402 | 452 | ||||||
Parent & Other | 4 | 9 | 30 | 37 | ||||||
Consolidated Capital Expenditures and Investments | $ 305 | $ 405 | $ 1,157 | $ 1,251 | ||||||
SEMPRA ENERGY | ||||||||||
Table E | ||||||||||
OTHER OPERATING STATISTICS (Unaudited) | ||||||||||
Three months ended | Years Ended | |||||||||
December 31, | December 31, | |||||||||
CALIFORNIA UTILITIES | 2004 |
| 2003 | 2004 |
| 2003 | ||||
Revenues (Dollars in millions) | ||||||||||
SDG&E (excludes intercompany sales) | $ 599 | $ 557 | $ 2,248 | $ 2,292 | ||||||
SoCalGas (excludes intercompany sales) | $ 1,161 | $ 911 | $ 3,947 | $ 3,505 | ||||||
Gas Sales (Bcf) | 125 | 115 | 413 | 394 | ||||||
Transportation and Exchange (Bcf) | 139 | 130 | 550 | 540 | ||||||
Total Deliveries (Bcf) | 264 | 245 | 963 | 934 | ||||||
Total Gas Customers (Thousands) | 6,297 | 6,210 | ||||||||
Electric Sales (Millions of kWhs) | 3,993 | 3,817 | 15,799 | 15,040 | ||||||
Direct Access (Millions of kWhs) | 881 | 866 | 3,441 | 3,322 | ||||||
Total Deliveries (Millions of kWhs) | 4,874 | 4,683 | 19,240 | 18,362 | ||||||
Total Electric Customers (Thousands) | 1,319 | 1,296 | ||||||||
SEMPRA GENERATION |
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Power Sold (Millions of kWhs) | 5,943 | 3,787 | 20,739 | 11,251 | ||||||
SEMPRA PIPELINES & STORAGE | ||||||||||
(Represents 100% of these subsidiaries, although only the Mexican subsidiaries are 100% owned by Sempra Energy). | ||||||||||
Natural Gas Sales (Bcf) | ||||||||||
Argentina | 60 | 58 | 251 | 232 | ||||||
Mexico | 9 | 10 | 42 | 40 | ||||||
Chile | 1 | 1 | 3 | 3 | ||||||
Natural Gas Customers (Thousands) | ||||||||||
Argentina | 1,449 | 1,404 | ||||||||
Mexico | 97 | 95 | ||||||||
Chile | 37 | 37 | ||||||||
Electric Sales (Millions of kWhs) | ||||||||||
Peru | 1,024 | 1,023 | 4,044 | 4,032 | ||||||
Chile | 475 | 453 | 1,959 | 1,832 | ||||||
Electric Customers (Thousands) | ||||||||||
Peru | 748 | 732 | ||||||||
Chile | 508 | 496 | ||||||||
SEMPRA ENERGY | |||||||
Table E (Continued) | |||||||
SEMPRA COMMODITIES |
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Three months ended | Years ended | ||||||
December 31, | December 31, | ||||||
Trading Margin* (Dollars in millions) | 2004 | 2003 | 2004 | 2003 | |||
Geographical: | |||||||
North America | $ 300 | $ 120 | $ 689 | $ 439 | |||
Europe/Asia | 165 | 75 | 338 | 172 | |||
Total | $ 465 | $ 195 | $ 1,027 | $ 611 | |||
Product Line: | |||||||
Gas | $ 234 | $ 29 | $ 314 | $ 146 | |||
Power | 85 | 36 | 166 | 137 | |||
Oil - Crude & Products | 69 | 51 | 265 | 128 | |||
Metals | 54 | 49 | 179 | 96 | |||
Other | 23 | 30 | 103 | 104 | |||
Total | $ 465 | $ 195 | $ 1,027 | $ 611 | |||
* Trading margin consists of net trading revenues less related costs (primarily brokerage, transportation and storage) plus or minus | |||||||
net interest income/expense. | |||||||
Physical Statistics |
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Natural Gas (BcF/Day) | 11.9 | 13.0 | 13.0 | 13.3 | |||
Electric (Billions of kWhs) | 108.1 | 102.6 | 373.7 | 324.4 | |||
Oil & Liquid Products (Millions Bbls/Day) | 2.1 | 2.0 | 2.1 | 1.7 | |||
Fair | |||||||
Market Value | |||||||
December 31, | Scheduled Maturity (in months) | ||||||
Net Unrealized Revenue (Dollars in millions) | 2004 | 0 - 12 | 13 - 24 | 25 - 36 | > 36 | ||
Sources of Over-the-Counter (OTC) Fair Value: | |||||||
Prices actively quoted | $ 844 | $ 788 | $ 12 | $ 10 | $ 34 | ||
Prices provided by other external sources | 23 | (14) | - | - | 37 | ||
Prices based on models and other valuation methods | (21) | (20) | - | - | (1) | ||
Total OTC Fair Value (1) | $ 846 | $ 754 | $ 12 | $ 10 | $ 70 | ||
Maturity of OTC Fair Value | |||||||
Percentage | 100.0% | 89.1% | 1.4% | 1.2% | 8.3% | ||
Cumulative Percentages |
| 89.1% | 90.5% | 91.7% | 100.0% | ||
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Exchange Contracts (2) | $ 347 | $ 337 | $ 21 | $ 8 | $ (19) | ||
Total Net Unrealized Revenue | $ 1,193 | ||||||
(1) The present value of unrealized revenue to be received or (paid) from outstanding OTC contracts | |||||||
(2) Cash received associated with open Exchange Contracts | |||||||
December 31, | December 31, | ||||||
Credit Quality of Unrealized Trading Assets (net of margin) | 2004 | 2003 | |||||
Commodity Exchanges | 10% | 8% | |||||
Investment Grade | 66% | 68% | |||||
Below Investment Grade | 24% | 24% | |||||
100% | 100% | ||||||
Three months ended | Years ended | ||||||
December 31, | December 31, | ||||||
Risk Adjusted Performance Indicators | 2004 | 2003 | 2004 | 2003 | |||
VaR at 95% (Dollars in millions) (1) | $ 11.2 | $ 4.4 | $ 7.9 | $ 6.5 | |||
VaR at 99% (Dollars in millions) (2) | $ 15.7 | $ 6.3 | $ 11.2 | $ 9.2 | |||
Risk Adjusted Return on Capital (RAROC) (3) | 34% | 38% | 38% | 23% | |||
(1) Average Daily Value-at-Risk for the period using a 95% confidence level | |||||||
(2) Average Daily Value-at-Risk for the period using a 99% confidence level | |||||||
(3) Average Daily Trading Margin/Average Daily VaR at 95% confidence level | |||||||