Sempra Energy Reports Higher First-Quarter 2005 Earnings


SAN DIEGO, May 4, 2005 (PRIMEZONE) -- Sempra Energy (NYSE:SRE) today reported first-quarter 2005 earnings of $223 million, or $0.92 per diluted share, compared with $197 million, or $0.85 per diluted share, in the first quarter 2004.

"Operating results in the first quarter were solid for all of our businesses and put us on track to accomplish our financial goals for the year," said Stephen L. Baum, chairman and chief executive officer of Sempra Energy. "We are reaffirming our earnings-per-share guidance for 2005 of $3.10 to $3.30."

Net income in the first quarter 2005 included $59 million related to the favorable resolution of federal and state income-tax issues from prior years for both the parent company and the California utilities. First-quarter 2004 results included a $24 million loss related to discontinued operations and $16 million in net income related to the favorable resolution of prior years' income-tax issues.

Revenues in the first quarter 2005 were $2.7 billion, compared with $2.4 billion in the same quarter last year, due to increased power and commodity sales.

SUBSIDIARY OPERATING RESULTS

Sempra Utilities

Net income for San Diego Gas & Electric was $59 million in the first quarter 2005, up from $50 million in the year-ago quarter. The increase was due primarily to the favorable resolution of income-tax issues.

Net income for Southern California Gas Co. in the first quarter 2005 rose to $69 million from $56 million in the first quarter 2004, primarily due to a favorable adjustment related to the utility's recent rate-making decision.

Sempra Commodities

Sempra Commodities' first-quarter 2005 net income was $29 million, versus $57 million in the same quarter last year. The decrease in quarterly net income was primarily due to lower income in natural gas and metals trading.

"Accounting rules impact the timing of earnings recognition for our commodity operations, as was the case in our natural gas trading operations during the first quarter," Baum said. "Even though we will continue to see quarter-to-quarter variation in reported earnings for this business, we expect Sempra Commodities to meet its 2005 financial plan."

Sempra Generation

First-quarter net income for Sempra Generation rose to $46 million in 2005 from $35 million last year, primarily as a result of increased power sales from the company's generating facilities in Texas. Sempra Generation acquired its half of the Coleto Creek facility and eight other Texas power plants in July 2004.

Sempra Pipelines & Storage

Sempra Pipelines & Storage had net income of $13 million during the first quarter 2005, up from $11 million in the year-ago quarter, due primarily to improved results from the company's Latin American utility operations.

Sempra LNG

Sempra LNG recorded a net loss of $5 million during the first quarter 2005, versus net income of $6 million in the first quarter 2004. Last year's quarterly results included an $8 million contribution from the favorable buy-out of a future obligation related to the Cameron LNG project.

"We are pleased that our liquefied natural gas business is making good progress," Baum said. "Capacity for our Energia Costa Azul receipt terminal in Baja California, Mexico, is fully subscribed and construction on the terminal is underway. We are working toward finalizing several non-binding, preliminary agreements this summer for capacity at our Cameron LNG terminal in Louisiana and expect to begin construction later this year. Finally, last week we announced a preliminary agreement with Gazprom - the world's largest natural gas producer - which wants to enter the North American market with sufficient quantities of gas to launch our Port Arthur LNG terminal in Texas. We expect to receive federal regulatory approvals for this terminal by year-end."

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 passcode number 5582676.

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' more than 13,000 employees serve more than 10 million customers in the United States, Europe, Canada, Mexico, South America and Asia.

This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When the company uses words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "would," "should" or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, the California State Legislature, the California Department of Water Resources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; the outcome of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company. These risks and uncertainties are further discussed in the company's reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov and on the company's Web site, www.sempra.com.

Sempra LNG and Sempra Pipelines & Storage are not the same companies as the utilities, SDG&E or SoCalGas, and are not regulated by the California Public Utilities Commission. Sempra Energy Trading, doing business as Sempra Commodities, and Sempra Generation are not the same companies as the utilities, SDG&E or SoCalGas, and the California Public Utilities Commission does not regulate the terms of their products and services.



                             SEMPRA ENERGY
                                Table A

 STATEMENTS OF CONSOLIDATED INCOME (Unaudited)

 (Dollars in millions, except per share amounts)

                                                Three months ended
                                                     March 31,
                                            -------------------------
                                               2005           2004
 --------------------------------------------------------------------
 Operating revenues
 California utilities:
   Natural gas                              $   1,433       $   1,333
   Electric                                       394             381
 Other                                            865             646
                                            ---------       ---------
    Total operating revenues                    2,692           2,360
                                            ---------       ---------
 Operating expenses
 California utilities:
   Cost of natural gas                            913             824
   Cost of electric fuel and
    purchased power                               145             127
 Other cost of sales                              584             327
 Other operating expenses                         542             521
 Depreciation and amortization                    161             165
 Franchise fees and other taxes                    68              64
                                            ---------       ---------
    Total operating expenses                    2,413           2,028
                                            ---------       ---------
 Operating income                                 279             332

 Other income, net                                 17               5
 Interest income                                   11              23
 Interest expense                                 (74)            (80)
 Preferred dividends of subsidiaries               (2)             (2)
                                            ---------       ---------
 Income from continuing operations
  before income taxes                             231             278
 Income tax expense                                 8              57
                                            ---------       ---------
 Income from continuing operations                223             221
 Loss from discontinued operations,
  net of tax                                       --             (24)
                                            ---------       ---------
 Net income                                 $     223       $     197
                                            =========       =========

 Basic earnings per share:

 Income from continuing operations          $    0.96       $    0.97
 Discontinued operations, net of tax               --           (0.11)
                                            ---------       ---------
 Net income                                 $    0.96       $    0.86
                                            =========       =========
 Weighted-average number of
  shares outstanding (thousands)              232,939         228,055
                                            =========       =========

 Diluted earnings per share:

 Income from continuing operations          $    0.92       $    0.96
 Discontinued operations, net of tax               --           (0.11)
                                            ---------       ---------
 Net income                                 $    0.92       $    0.85
                                            =========       =========
 Weighted-average number of
  shares outstanding (thousands)              241,105         231,136
                                            =========       =========
 Dividends declared per share
  of common stock                           $    0.29       $    0.25
                                            =========       =========


                             SEMPRA ENERGY
                                Table B

 CONSOLIDATED BALANCE SHEETS (Unaudited)

 (Dollars in millions)

                                              March 31,   December 31,
                                                2005         2004
 --------------------------------------------------------------------
 Assets
 Current assets:
  Cash and cash equivalents                   $   609      $   419
  Short-term investments                           12           15
  Accounts receivable                             874        1,032
  Due from unconsolidated affiliate                 5            4
  Deferred income taxes                            47           15
  Interest receivable                              47           80
  Trading-related receivables and
   deposits, net                                2,442        2,606
  Derivative trading instruments                3,023        2,339
  Commodities owned                             1,201        1,547
  Regulatory assets arising from
   fixed-price contracts and other
   derivatives                                    143          152
  Other regulatory assets                         107          103
  Inventories                                      70          172
  Other                                           196          222
                                              -------      -------
   Current assets of continuing operations      8,776        8,706
   Current assets of discontinued operations       60           70
                                              -------      -------
    Total current assets                        8,836        8,776
                                              -------      -------
 Investments and other assets:
  Due from unconsolidated affiliates               27           42
  Regulatory assets arising from fixed-price
   contracts and other derivatives                470          500
  Other regulatory assets                         601          619
  Nuclear decommissioning trusts                  613          612
  Investments                                   1,147        1,164
  Sundry                                          821          844
                                              -------      -------
    Total investments and other assets          3,679        3,781
                                              -------      -------
 Property, plant and equipment, net            11,245       11,086
                                              -------      -------
 Total assets                                 $23,760      $23,643
                                              =======      =======

 Liabilities and Shareholders' Equity
 Current liabilities:
  Short-term debt                             $   340      $   405
  Accounts payable                                692        1,126
  Due to unconsolidated affiliates                 --          205
  Income taxes payable                            255          187
  Trading-related payables                      2,795        3,182
  Derivative trading instruments sold,
   not yet purchased                            2,414        1,484
  Commodities sold with agreement
   to repurchase                                  291          513
  Dividends and interest payable                  132          123
  Regulatory balancing accounts, net              599          509
  Fixed-price contracts and other derivatives     146          157
  Current portion of long-term debt               394          398
  Temporary LIFO liquidation                      200           --
  Other                                           780          776
                                              -------      -------
   Current liabilities of continuing
    operations                                  9,038        9,065
   Current liabilities of discontinued
    operations                                      7           17
                                              -------      -------
    Total current liabilities                   9,045        9,082
                                              -------      -------
 Long-term debt                                 4,132        4,192
                                              -------      -------
 Deferred credits and other liabilities:
  Due to unconsolidated affiliates                162          162
  Customer advances for construction               94           97
  Postretirement benefits other than pensions     127          129
  Deferred income taxes                           386          420
  Deferred investment tax credits                  77           78
  Regulatory liabilities arising from cost of
   removal obligations                          2,386        2,359
  Regulatory liabilities arising from asset
   retirement obligations                         330          333
  Other regulatory liabilities                     72           67
  Fixed-price contracts and other derivatives     472          500
  Asset retirement obligations                    330          326
  Deferred credits and other                      837          854
                                              -------      -------
   Total deferred credits and
    other liabilities                           5,273        5,325
                                              -------      -------
 Preferred stock of subsidiaries                  179          179
                                              -------      -------
 Shareholders' equity                           5,131        4,865
                                              -------      -------
 Total liabilities and shareholders' equity   $23,760      $23,643
                                              =======      =======

                             SEMPRA ENERGY
                                Table C

 CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited)

 (Dollars in millions)

                                                 Three months ended
                                                      March 31,
                                                 ------------------
                                                    2005     2004
 ------------------------------------------------------------------
 Cash Flows from Operating Activities:

 Net income                                        $ 223    $ 197
 Adjustments to reconcile net income to
  net cash provided by operating activities:
   Loss from discontinued operations,
    net of tax                                        --       24
   Depreciation and amortization                     161      165
   Deferred income taxes and investment
    tax credits                                      (68)     (22)
   Other, net                                          9       27
 Net changes in other working capital components     393      408
 Changes in other assets                               4        7
 Changes in other liabilities                         (3)     (13)
                                                   -----    -----
  Net cash provided by continuing operations         719      793
  Net cash used in discontinued operations            --       (2)
                                                   -----    -----
  Net cash provided by operating activities          719      791
                                                   -----    -----
 Cash Flows from Investing Activities:

 Expenditures for property, plant and equipment     (269)    (219)
 Proceeds from sale of assets                          6      363(a)
 Investments in and acquisitions of
  subsidiaries, net of cash acquired                  (1)      (7)
 Dividends received from affiliates                    2       10
 Other, net                                           16       10
                                                   -----    -----
  Net cash provided by (used in) investing
   activities                                       (246)     157
                                                   -----    -----

 Cash Flows from Financing Activities:

 Common dividends paid                               (50)     (48)
 Issuances of common stock                            90       35
 Repurchases of common stock                          (6)      (2)
 Issuances of long-term debt                          --       21
 Redemption of mandatorily redeemable
  preferred securities                              (200)      --
 Payments on long-term debt                          (50)    (857)
 Increase (decrease) in short-term debt, net         (64)     134
 Other, net                                           (3)      (2)
                                                   -----    -----
  Net cash used in financing activities             (283)    (719)
                                                   -----    -----
 Increase in cash and cash equivalents               190      229(b)
 Cash and cash equivalents, January 1                419      409
                                                   -----    -----
 Cash and cash equivalents, March 31               $ 609    $ 638
                                                   =====    =====

 (a) Proceeds from the sale of U.S. Treasury obligations which
     previously securitized the Mesquite synthetic lease.
 (b) Change from $221 as reported in prior year reflects
     reclassification of restricted cash.


                            SEMPRA ENERGY
                               Table D

 BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES
 & INVESTMENTS (Unaudited)

 (Dollars in millions)

                                               Three months ended
                                                    March 31,
                                               ------------------
                                               2005          2004
 ----------------------------------------------------------------
 Net Income
 California Utilities:
  San Diego Gas & Electric                     $  59       $  50
  Southern California Gas                         69          56
                                               -----       -----
    Total California Utilities                   128         106
                                               -----       -----

 Sempra Global:
  Sempra Commodities                              29          57
  Sempra Generation                               46          35
  Sempra Pipelines & Storage                      13          11
  Sempra LNG                                      (5)          6
                                               -----       -----
   Total Sempra Global                            83         109
                                               -----       -----

 Sempra Financial                                  4          10

 Parent & Other                                    8          (4)
                                               -----       -----
 Continuing Operations                           223         221

 Discontinued Operations(a)                       --         (24)
                                               -----       -----
 Consolidated Net Income                       $ 223       $ 197
                                               =====       =====

 Capital Expenditures and Investments
 California Utilities:
  San Diego Gas & Electric                     $  94       $  69
  Southern California Gas                         63          62
                                               -----       -----
   Total California Utilities                    157         131
                                               -----       -----
 Sempra Global:
  Sempra Generation                               49          14
  Sempra Commodities                              13          46
  Sempra Pipelines & Storage                       4           5
  Sempra LNG                                      45          22
                                               -----       -----
   Total Sempra Global                           111          87
                                               -----       -----
 Parent & Other                                    2           8
                                               -----       -----
 Consolidated Capital Expenditures
  and Investments                              $ 270       $ 226
                                               =====       =====
 (a) Reflects Atlantic Electric & Gas.


                             SEMPRA ENERGY
                                Table E

 OTHER OPERATING STATISTICS (Unaudited)


                                                   Three months ended
                                                        March 31,
                                                   ------------------
 CALIFORNIA UTILITIES                               2005        2004
 --------------------------------------------------------------------
 Revenues (Dollars in millions)
  SDG&E (excludes intercompany sales)             $   616     $   575
  SoCalGas (excludes intercompany sales)          $ 1,211     $ 1,139

 Gas Sales (Bcf)                                      137         140
 Transportation and Exchange (Bcf)                    122         121
                                                  -------     -------
 Total Deliveries (Bcf)                               259         261
                                                  -------     -------
 Total Gas Customers (Thousands)                    6,316       6,231

 Electric Sales (Millions of kWhs)                  3,906       3,812
 Direct Access (Millions of kWhs)                     820         729
                                                  -------     -------
 Total Deliveries (Millions of kWhs)                4,726       4,541
                                                  -------     -------
 Total Electric Customers (Thousands)               1,323       1,301


 SEMPRA GENERATION
 --------------------------------------------------------------------
 Power Sold (Millions of kWhs)                      5,639       4,477


 SEMPRA PIPELINES & STORAGE
  (Represents 100% of these subsidiaries,
  although only the Mexican subsidiaries 
  are 100% owned by Sempra Energy).
 --------------------------------------------------------------------
 Natural Gas Sales (Bcf)
  Argentina                                            51          51
  Mexico                                               10          10
  Chile                                                 1           1
 Natural Gas Customers (Thousands)
  Argentina                                         1,459       1,414
  Mexico                                               97         101
  Chile                                                38          37
 Electric Sales (Millions of kWhs)
  Peru                                              1,052       1,007
  Chile                                               733         508
 Electric Customers (Thousands)
  Peru                                                753         736
  Chile                                               512         499

                             SEMPRA ENERGY
                          Table E (Continued)


 SEMPRA COMMODITIES
 --------------------------------------------------------------------

                                               Three months ended
                                                     March 31,
                                               -------------------
 Margin(a) (Dollars in millions)                 2005        2004
 --------------------------------------------------------------------
 Geographical:
  North America                                 $ 125       $ 120
  Europe/Asia                                      29          84
                                               --------------------
   Total                                        $ 154       $ 204
                                               --------------------
 Product Line:
  Gas                                           $ (15)       $ 42
  Power                                            42          45
  Oil - Crude & Products                           80          42
  Metals                                           14          58
  Other                                            33          17
                                               --------------------
   Total                                        $ 154       $ 204
                                               --------------------

 (a) Margin consists of net trading revenues less related costs
     (primarily brokerage, transportation and storage) plus or minus
     net interest income/expense.

 Physical Statistics
 --------------------------------------------------------------------
 Natural Gas (BCF/Day)                           12.2        13.8
 Electric (Billions of kWhs)                    107.8        96.6
 Oil & Liquid Products (Millions Bbls/Day)        1.9         2.0


 Net Unrealized Revenue (Dollars in millions)

                            Fair
                         Market Value  Scheduled Maturity (in months)
                           March 31,  -------------------------------
                             2005     0 - 12  13 - 24  25 - 36  > 36
 --------------------------------------------------------------------
 Sources of Over-the-Counter
 (OTC) Fair Value:
  Prices actively quoted     $ 568    $ 475   $   9   $  19    $  65
  Prices provided by other
   external sources             34       --      --      --       34
  Prices based on models and
   other valuation methods      (6)       5      --      --      (11)
                             ---------------------------------------
    Total OTC Fair Value(a)  $ 596    $ 480   $   9   $  19    $  88

 Maturity of OTC Fair Value
                             ----------------------------------------
  Percentage                 100.0%    80.5%    1.5%    3.2%    14.8%
  Cumulative Percentages               80.5%   82.0%   85.2%   100.0%
                             ----------------------------------------
 --------------------------------------------------------------------
 Exchange Contracts(b)       $  (7)   $(127)  $ 173   $ (63)   $  10
                             ----------------------------------------
 Total Net Unrealized
  Revenue                    $ 589
                             -----
 (a) The present value of unrealized revenue to be received or
     (paid) from outstanding OTC contracts
 (b) Cash received or (paid) associated with open Exchange
     Contracts

                                                                      
 Credit Quality of 
  Unrealized Trading            March 31,      December 31,
  Assets (net of margin)          2005            2004
 ---------------------------------------------------------------------
 Commodity Exchanges               10%             10%
 Investment Grade                  70%             66%
 Below Investment Grade            20%             24%


                                   Three months ended
                                       March 31,
                                  --------------------
 Risk Adjusted 
  Performance Indicators          2005            2004
 ---------------------------------------------------------------------
 VaR at 95% (Dollars in 
  millions) (a)                  $ 8.5           $ 5.7
 VaR at 99% (Dollars in 
  millions) (b)                  $11.9           $ 8.1
 Risk Adjusted Return 
  on Capital (RAROC) (c)           33%             41%


 (a) Average Daily Value-at-Risk for the period using a 95% confidence
     level 
 (b) Average Daily Value-at-Risk for the period using a 99% confidence
     level 
 (c) Average Daily Trading Margin/Average Daily VaR at 95% confidence
     level


            

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