What is the financial performance of Sempra Utilities (SoCalGas and SDG&E) for the reported period?

For the nine months ended September 30, 2008, net income for Sempra Utilities increased to $448 million from $408 million in the prior year. SoCalGas' net income rose to $190 million from $172 million, and SDG&E's net income increased to $258 million from $236 million, driven by higher authorized margins and regulatory adjustments.

How did the formation of RBS Sempra Commodities impact Sempra Energy's financial results?

The formation of RBS Sempra Commodities in April 2008 resulted in Sempra Energy receiving approximately $1.2 billion in net cash and recording an after-tax gain. While this reduced the segment's reported revenues and expenses, Sempra Energy now accounts for its investment under the equity method, contributing $142 million in equity earnings (pre-tax) for the nine months ended September 30, 2008. The Sempra Commodities segment reported a pre-tax loss of $8 million for the third quarter of 2008.

What is the company's liquidity position and how is it managing its financing?

Sempra Energy maintained a strong liquidity position with $198 million in unrestricted cash and $2.9 billion in available unused committed lines of credit as of September 30, 2008. The company expects cash flows from operations to fund dividends and capital expenditures, and it plans to replace short-term borrowings used for the EnergySouth acquisition with long-term financing. However, management notes the ongoing global credit crisis could impact the availability and cost of financing.

Are there any significant regulatory or legal matters that investors should be aware of?

Yes, several key matters are ongoing. The California Public Utilities Commission (CPUC) has issued draft decisions regarding the Sunrise Powerlink transmission line, which could significantly impact SDG&E's capital expenditures and project timeline. Both SoCalGas and SDG&E received decisions on their 2008 general rate cases, which included retroactive revenue adjustments. The company also faces ongoing litigation related to wildfires, energy crisis matters, and other environmental issues, with reserves set aside for some, but potential future impacts remain uncertain.

SRE/SREA 10-Q Quarterly Report Q3 FY2008 — Revenue, Net Income, EPS

Summary

Sempra Energy's (SRE) Q3 2008 filing shows a slight increase in net income to $308 million from $305 million in the same quarter of the prior year, driven by improved performance in its utilities and global segments, partially offset by weaker results in its commodities business. For the nine months ended September 30, 2008, net income slightly decreased to $794 million from $810 million in 2007, primarily due to reduced earnings from Sempra Commodities and higher net losses in other segments, despite gains from Sempra Utilities and Generation. The company completed a significant transaction in April 2008, forming a partnership with RBS for its commodity-marketing businesses, which resulted in a substantial cash inflow and a recognized gain. Liquidity remains a focus, with $2.9 billion in available unused committed credit lines at quarter-end. Sempra Energy also announced the completion of the EnergySouth acquisition on October 1, 2008, expanding its midstream and distribution operations. Investors should note ongoing regulatory proceedings, particularly regarding the Sunrise Powerlink transmission line and general rate cases for its utilities, which could impact future revenue and capital expenditures. The company also continues to manage significant litigation and environmental liabilities.

Key Highlights

1Net income for the third quarter of 2008 was $308 million, a slight increase from $305 million in Q3 2007.
2Nine-month net income decreased to $794 million from $810 million year-over-year, impacted by lower Sempra Commodities earnings.
3In April 2008, Sempra formed RBS Sempra Commodities, a partnership for its commodity-marketing businesses, receiving $1.2 billion in net cash and recording a gain.
4The company completed the acquisition of EnergySouth, Inc. on October 1, 2008, for $511 million.
5Total assets stood at $23.8 billion at September 30, 2008, down from $28.7 billion at December 31, 2007, reflecting the impact of the RBS transaction.
6Available unused committed credit lines were $2.9 billion as of September 30, 2008, providing significant liquidity.
7Significant regulatory developments are ongoing, including CPUC decisions on the Sunrise Powerlink project and general rate cases for its utilities.

SEMPRA Quarterly Report for Q3 Ended Sep 30, 2008

Summary

Key Highlights

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