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Last updated on April 18, 2014 at 17:24 EDT

Sempra Energy Reports First-Quarter 2013 Earnings

May 2, 2013

- Successful Initial Public Offering of Mexican Subsidiary IEnova Completed

SAN DIEGO, May 2, 2013 /PRNewswire/ — Sempra Energy (NYSE: SRE) today reported first-quarter 2013 earnings of $178 million, or $0.72 per diluted share, compared with $236 million, or $0.97 per diluted share, in the first quarter 2012. First-quarter 2013 earnings included a one-time charge for income tax expense of $63 million related to a reorganization in connection with the initial public offering of Sempra Energy’s Mexican subsidiary.

“While our reported earnings declined in the first quarter, the performance of our businesses remains solid and we completed several key strategic milestones, including the sale of half of our ownership interest in our Arizona gas-fired power plant and the successful public offerings at our Sempra Mexico unit,” said Debra L. Reed, chairman and CEO of Sempra Energy. “During the quarter, we raised nearly $1 billion in external capital and attracted strong local ownership in our Mexican company, IEnova.”

Additionally, Reed said that the company continues to make progress in permitting its proposed Cameron LNG export project in Louisiana. Last month, the Federal Energy Regulatory Commission (FERC) issued a notice of its schedule for the environmental review of the project. Cameron LNG is the first and only proposed LNG export application currently pending before the FERC to have reached this milestone in the permitting process. Based on the published schedule, the FERC is expected to release the final Environmental Impact Statement for the project in November and issue its final ruling in early 2014. The company expects to receive the other major permit for the project from the U.S. Department of Energy by the end of this year. The project is slated to begin operations in 2017 and process up to 1.7 billion cubic feet per day of natural gas for export to international markets.

CALIFORNIA UTILITIES
On March 29, the California Public Utilities Commission (CPUC) issued a draft decision in the General Rate Case for San Diego Gas & Electric (SDG&E) and Southern California Gas Co. (SoCalGas). Until the CPUC reaches a final decision, both utilities are recording revenues based on 2011 authorized levels, as adjusted for the recovery of incremental wildfire insurance premiums at SDG&E. SoCalGas and SDG&E will record the cumulative change resulting from the decision, retroactive to the beginning of 2012, in the quarter a final decision is approved. A final decision on the General Rate Case is expected in the second quarter.

Due to the delay in the final rate case decision, first-quarter 2013 earnings were lower for both SDG&E and SoCalGas. The two utilities had higher operating expenses, including depreciation, with no increase in authorized revenue.

San Diego Gas & Electric
SDG&E had first-quarter earnings of $91 million in 2013, compared with $105 million in 2012.

Southern California Gas Co.
Earnings for SoCalGas in the first quarter 2013 were $46 million, compared with $66 million in last year’s first quarter.

SEMPRA INTERNATIONAL
Sempra South American Utilities
Sempra South American Utilities recorded earnings of $37 million in the first quarter 2013, compared with $40 million in the first quarter 2012. The decrease in earnings was due primarily to an impairment charge on its investment in Argentine utilities, partially offset by higher earnings in Chilean and Peruvian operations.

Sempra Mexico
Sempra Mexico’s earnings in the first quarter 2013 were $31 million, compared with $33 million in last year’s first quarter.

During the first quarter 2013, Sempra Mexico completed separate debt and equity offerings raising nearly $1 billion of external capital. The initial public offering – the first for an energy company in Mexico – sold nearly 19 percent of the equity in the company. The Mexican operating company was renamed “IEnova.”

SEMPRA U.S. GAS & POWER
Sempra Renewables
Sempra Renewables had first-quarter earnings of $4 million in 2013, compared with $10 million in 2012, due to lower tax benefits from solar projects, partially reflecting the impact of the federal government’s sequestration.

Sempra Natural Gas
Earnings for Sempra Natural Gas were $53 million in the first quarter 2013, up from $1 million in first quarter 2012, due primarily to a $44 million gain related to the sale of half of the Mesquite Power natural gas-fired power plant in February.

2013 EARNINGS EXPECTATIONS
Sempra Energy does not plan to update its previous 2013 earnings guidance until after the CPUC issues a final decision in the General Rate Case for SDG&E and SoCalGas. If, however, the terms of the General Rate Case draft decision are adopted in the final decision, the company would expect earnings to be at the low end of the current per-share guidance range for 2013 of $4.30 to $4.80.

INTERNET BROADCAST
Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. EDT with senior management of the company. Access is available by logging onto the website at www.sempra.com. For those unable to log onto the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 2913728.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2012 revenues of approximately $10 billion. The Sempra Energy companies’ nearly 17,000 employees serve more than 31 million consumers worldwide.

This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by words like “believes,” “expects,” “anticipates,” “intends,” “plans,” “forecasts,” “estimates,” “may,” “will,” “would,” “could,” “should,” “potential,” “target,” “outlook,” “depends,” “pursue” or similar expressions, or discussions of guidance, strategies, plans, goals, initiatives, objectives or intentions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions and the timing of actions by the California Public Utilities Commission, California State Legislature, Federal Energy Regulatory Commission, U.S. Department of Energy, Nuclear Regulatory Commission, California Energy Commission, California Air Resources Board, and other regulatory, governmental and environmental bodies in the United States and other countries where the company does business; capital market conditions, including the availability of credit and the liquidity of investments; inflation, interest and exchange rates; the impact of benchmark interest rates, generally Moody’s A-rated utility bond yields, on the California utilities’ cost of capital; the timing and success of business development efforts and construction, maintenance and capital projects, including risks inherent in the ability to obtain, and the timing of the granting of, permits, licenses, certificates and other authorizations; energy markets, including the timing and extent of changes and volatility in commodity prices; the availability of electric power, natural gas and liquefied natural gas, including disruptions caused by failures in the North American transmission grid, pipeline explosions and equipment failures; weather conditions, natural disasters, catastrophic accidents, and conservation efforts; risks inherent in nuclear power generation and radioactive materials storage, including catastrophic release of such materials, the disallowance of the recovery of the investment in, or operating costs of, the generation facility due to an extended outage, and increased regulatory oversight; risks posed by decisions and actions of third parties who control the operations of investments in which the company does not have a controlling interest; wars, terrorist attacks and cyber security threats; business, regulatory, environmental and legal decisions and requirements; expropriation of assets by foreign governments and title and other property disputes; the impact on reliability of SDG&E’s electric transmission and distribution system due to increased power supply from renewable energy sources; the impact on competitive customer rates of the growth in distributed and local power generation and the corresponding decrease in demand for power delivered through our electric transmission and distribution system; the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements; the resolution 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 reports that Sempra Energy has filed with the Securities and Exchange Commission. These reports are available through the EDGAR system free-of-charge on the SEC’s website, www.sec.gov, and on the company’s website at www.sempra.com.

These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.

Sempra International, LLC, and Sempra U.S. Gas & Power, LLC, are not the same companies as San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas) and Sempra International, LLC and Sempra U.S. Gas & Power, LLC are not regulated by the California Public Utilities Commission. Sempra International’s underlying entities include Sempra Mexico and Sempra South American Utilities. Sempra U.S. Gas & Power’s underlying entities include Sempra Renewables and Sempra Natural Gas.

                              SEMPRA ENERGY

                                 Table A

    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                     Three months ended
                                                         March 31,
                                                    -------------------

    (Dollars in millions, except
     per share amounts)                                  2013              2012
    ----------------------------                         ----              ----

                                                       (unaudited)

    REVENUES

    Utilities                                          $2,334            $2,091

    Energy-related businesses                             316               292

        Total revenues                                  2,650             2,383

    EXPENSES AND OTHER INCOME

    Utilities:

        Cost of natural gas                              (556)             (431)

        Cost of electric fuel and
         purchased power                                 (447)             (388)

    Energy-related businesses:

        Cost of natural gas, electric
         fuel and purchased power                        (111)             (129)

        Other cost of sales                               (48)              (33)

    Operation and maintenance                            (724)             (671)

    Depreciation and amortization                        (295)             (257)

    Franchise fees and other taxes                       (106)              (96)

    Gain on sale of asset                                  74                 -

    Equity earnings, before income
     tax                                                   10                12

    Other income, net                                      37                75

    Interest income                                         6                 5

    Interest expense                                     (138)             (113)
                                                         ----              ----

    Income before income taxes and equity earnings

        of certain unconsolidated
         subsidiaries                                     352               357

    Income tax expense                                   (178)             (117)

    Equity earnings, net of income
     tax                                                    4                11
                                                          ---               ---

    Net income                                            178               251

    Losses (earnings) attributable
     to noncontrolling interests                            2               (13)

    Preferred dividends of
     subsidiaries                                          (2)               (2)
                                                          ---               ---

    Earnings                                             $178              $236
                                                         ====              ====

    Basic earnings per common
     share                                              $0.73             $0.98
                                                        =====             =====

    Weighted-average number of
     shares outstanding, basic
     (thousands)                                      243,294           240,566
                                                      =======           =======

    Diluted earnings per common
     share                                              $0.72             $0.97
                                                        =====             =====

    Weighted-average number of
     shares outstanding, diluted
     (thousands)                                      247,534           243,761
                                                      =======           =======

    Dividends declared per share
     of common stock                                    $0.63             $0.60
                                                        =====             =====

                                                                       SEMPRA ENERGY

                                                                          Table B

    CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                          March 31,                                December 31,

    (Dollars in millions)                                                                                2013                                      2012(1)
    --------------------                                                                                 ----                                       ------

                                                                                         (unaudited)

    Assets

    Current assets:

                            Cash and cash
                            equivalents                                 $1,471                                    $475

                           Restricted cash                                  57                                      46

                            Accounts
                            receivable                                   1,329                                   1,299

                            Income taxes
                            receivable                                      73                                      56

                            Deferred income
                            taxes                                           28                                     148

                           Inventories                                     270                                     408

                            Regulatory
                            balancing
                            accounts -
                            undercollected                                 411                                     395

                           Regulatory assets                                42                                      62

                            Fixed-price
                            contracts and
                            other derivatives                               88                                      95

                            U.S. Treasury
                            grants receivable                              236                                     258

                            Asset held for
                            sale, power plant                                -                                     296

                           Other                                           118                                     157
                                                                           ---

                                                Total current assets                                    4,123                                        3,695
                                                                                                        -----                                        -----

    Investments and other assets:

                           Restricted cash                                  19                                      22

                            Regulatory assets
                            arising from
                            pension and other
                            postretirement

                               benefit
                                obligations                              1,167                                   1,151

                            Regulatory assets
                            arising from
                            wildfire
                            litigation costs                               360                                     364

                            Other regulatory
                            assets                                       1,233                                   1,227

                            Nuclear
                            decommissioning
                            trusts                                         952                                     908

                           Investments                                   1,519                                   1,516

                           Goodwill                                      1,113                                   1,111

                            Other intangible
                            assets                                         434                                     436

                           Sundry                                          895                                     878

                                                 Total investments and other
                                                 assets                                                 7,692                                        7,613
                                                                                                        -----                                        -----

    Property, plant and equipment, net                                                                 25,458                                       25,191
                                                                                                       ------                                       ------

    Total assets                                                                                      $37,273                                      $36,499
                                                                                                      =======                                      =======

    Liabilities and Equity

    Current liabilities:

                           Short-term debt                                $762                                    $546

                           Accounts payable                                990                                   1,110

                            Dividends and
                            interest payable                               323                                     266

                            Accrued
                            compensation and
                            benefits                                       217                                     337

                            Regulatory
                            balancing
                            accounts -
                            overcollected                                  294                                     141

                            Current portion of
                            long-term debt                               1,381                                     725

                            Fixed-price
                            contracts and
                            other derivatives                               71                                      77

                           Customer deposits                               142                                     143

                            Reserve for
                            wildfire
                            litigation                                     221                                     305

                           Other                                           788                                     608

                                                Total current liabilities                               5,189                                        4,258
                                                                                                        -----                                        -----

    Long-term debt                                                                                     10,680                                       11,621
                                                                                                       ------                                       ------

    Deferred credits and other liabilities:

                            Customer advances
                            for construction                               139                                     144

                            Pension and other
                            postretirement
                            benefit
                            obligations, net
                            of plan assets                               1,466                                   1,456

                            Deferred income
                            taxes                                        2,248                                   2,100

                            Deferred
                            investment tax
                            credits                                         46                                      46

                            Regulatory
                            liabilities
                            arising from
                            removal
                            obligations                                  2,783                                   2,720

                            Asset retirement
                            obligations                                  2,056                                   2,033

                            Fixed-price
                            contracts and
                            other derivatives                              254                                     252

                            Reserve for
                            wildfire
                            litigation                                      45                                      22

                            Deferred credits
                            and other                                    1,027                                   1,085

                                                 Total deferred credits and
                                                 other liabilities                                     10,064                                        9,858
                                                                                                       ------                                        -----

    Contingently redeemable preferred stock of subsidiary                                                  79                                           79
                                                                                                          ---                                          ---

    Equity:

                            Total Sempra
                            Energy
                            shareholders'
                            equity                                      10,423                                  10,282

                            Preferred stock of
                            subsidiary                                      20                                      20

                            Other
                            noncontrolling
                            interests                                      818                                     381

                                                Total equity                                           11,261                                       10,683
                                                                                                       ------

    Total liabilities and equity                                                                      $37,273                                      $36,499
                                                                                                      =======                                      =======

                      (1)  Derived from audited financial statements.

                                                SEMPRA ENERGY

                                                   Table C

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                            Three months ended
                                                                                March 31,
                                                                              ---------

    (Dollars in millions)                                                    2013               2012
    --------------------                                                                        ----

                                                                             (unaudited)

    Cash Flows from Operating Activities

    Net income                                                               $178               $251

    Adjustments to reconcile net income
     to net cash provided

      by operating activities:

                                          Depreciation and amortization       295                257

                                           Deferred income taxes and
                                           investment tax credits             252                 31

                                          Gain on sale of asset               (74)                 ?

                                          Equity earnings                     (14)               (23)

                                           Fixed-price contracts and other
                                           derivatives                         17                (12)

                                          Other                                 6                 14

    Net change in other working capital
     components                                                               149                168

    Changes in other assets                                                    17                 12

    Changes in other liabilities                                                9                  1

                                           Net cash provided by operating
                                           activities                         835                699

    Cash Flows from Investing Activities

    Expenditures for property, plant and
     equipment                                                               (531)              (811)

    Expenditures for investments                                               (5)               (51)

    Proceeds from sale of asset                                               371                  ?

    Distributions from investments                                             15                  8

    Purchases of nuclear decommissioning
     and other trust assets                                                  (136)              (134)

    Proceeds from sales by nuclear
     decommissioning and other trusts                                         134                135

    Decrease in restricted cash                                                52                 39

    Increase in restricted cash                                               (60)               (40)

    Other                                                                      (2)                (5)

                                           Net cash used in investing
                                           activities                        (162)              (859)

    Cash Flows from Financing Activities

    Common dividends paid                                                    (145)              (115)

    Preferred dividends paid by
     subsidiaries                                                              (2)                (2)

    Issuances of common stock                                                  15                 13

    Repurchases of common stock                                               (45)               (16)

    Issuances of debt (maturities
     greater than 90 days)                                                    608              1,008

    Payments on debt (maturities greater
     than 90 days)                                                           (645)              (347)

    Proceeds from sale of noncontrolling
     interests, net of $25 in offering
     costs                                                                    574                  ?

    Decrease in short-term debt, net                                          (43)              (224)

    Distributions to noncontrolling
     interests                                                                 (1)                (3)

    Other                                                                       4                 (4)

                                           Net cash provided by financing
                                           activities                         320                310

    Effect of exchange rate changes on
     cash and cash equivalents                                                  3                  2

    Increase in cash and cash
     equivalents                                                              996                152

    Cash and cash equivalents, January 1                                      475                252
                                                                              ---

    Cash and cash
     equivalents, March 31                                                 $1,471               $404
                                                                           ======               ====

                                          SEMPRA ENERGY

                                             Table D

    SEGMENT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS

                                                Three months
                                                    ended

                                                 March 31,
                                                 ---------

    (Dollars in millions)                                 2013  2012
    --------------------                                  ----  ----

                                                  (unaudited)

    Earnings (Losses)

    California Utilities:

    San Diego Gas & Electric                               $91  $105

    Southern California Gas                                 46    66

    Sempra International:

    Sempra South American Utilities                         37    40

    Sempra Mexico                                           31    33

    Sempra U.S. Gas & Power:

    Sempra Renewables                                        4    10

    Sempra Natural Gas                                      53     1

    Parent and other                                       (84)  (19)

    Earnings                                              $178  $236
                                                          ====  ====

                                                Three months
                                                    ended

                                                 March 31,
                                                 ---------

    (Dollars in millions)                                 2013  2012
    --------------------                                  ----  ----

                                                  (unaudited)

    Capital Expenditures and Investments

    California Utilities:

    San Diego Gas & Electric                              $237  $398

    Southern California Gas                                179   165

    Sempra International:

    Sempra South American Utilities                         22    20

    Sempra Mexico                                           61     5

    Sempra U.S. Gas & Power:

    Sempra Renewables                                       11   251

    Sempra Natural Gas                                      26    22

    Parent and other                                         -     1

    Consolidated Capital Expenditures and
     Investments                                          $536  $862
                                                          ====  ====

                                                 SEMPRA ENERGY

                                                    Table E

                                     OTHER OPERATING STATISTICS (Unaudited)

                                               Three months ended
                                                    March 31,
                                              -------------------

    UTILITIES                                                                   2013                       2012
    ---------                                                                   ----                       ----

    California Utilities - SDG&E and SoCalGas

    Gas Sales (bcf)(1)                                                           140                        134

    Transportation (bcf)(1)                                                      168                        171

    Total Deliveries (bcf)(1)                                                    308                        305
                                                                                 ---                        ---

    Total Gas Customers (Thousands)                                            6,685                      6,660

    Electric Sales (Millions of kWhs)(1)                                       4,024                      4,089

    Direct Access (Millions of kWhs)                                             835                        752

    Total Deliveries (Millions of kWhs)(1)                                     4,859                      4,841
                                                                               -----                      -----

    Total Electric Customers (Thousands)                                       1,403                      1,395

    Other Utilities(2)

    Natural Gas Sales (bcf)

                              Argentina                                           64                         73

                              Mexico                                               6                          6

                              Mobile Gas                                          11                         12

                               Willmut
                               Gas(3)                                              1                          -

    Natural Gas Customers (Thousands)

                              Argentina                                        1,868                      1,819

                              Mexico                                              94                         90

                              Mobile Gas                                          89                         90

                               Willmut
                               Gas(3)                                             20                          -

    Electric Sales (Millions of kWhs)

                              Peru                                             1,746                      1,690

                              Chile                                              761                        745

    Electric Customers (Thousands)

                              Peru                                               968                        934

                              Chile                                              628                        613

    ENERGY-RELATED BUSINESSES
    -------------------------

    Sempra International

    Power Sold (Millions of kWhs)

                               Sempra
                               Mexico                                          1,044                      1,078

    Sempra U.S. Gas & Power

    Power Sold (Millions of kWhs)

                               Sempra
                               Renewables(4)                  698                        273

                               Sempra
                               Natural
                               Gas                                             1,132                      1,940

    (1) Includes intercompany sales.

    (2) Represents 100% of the distribution
     operations of the subsidiary, although the
     subsidiary in Argentina is not consolidated
     within Sempra Energy and the related
     investments are accounted for under the
     equity method.

    (3) Acquired in May 2012.

    (4) Includes 50% of total power sold related
     to wind projects in which Sempra Energy has a
     50% ownership. These subsidiaries are not
     consolidated within Sempra Energy and the
     related investments are accounted for under
     the equity method.

                                                                                                                     SEMPRA ENERGY

                                                                                                                   Table F (Unaudited)

    Statement of Operations Data by Segment

    Three Months Ended March 31, 2013

    (Dollars in millions)                   SDG&E        SoCalGas            Sempra South American   Sempra Mexico                     Sempra Renewables         Sempra Natural Gas       Consolidating Adjustments, Parent
                                                                                   Utilities                                                                                                           & Other                   Total
    --------------------                          -----           --------  ----------------------       -------------                        -----------------      ------------------  ---------------------------------       -----

    Revenues                                       $939               $983                     $384               $168                                      $21                    $253                                $(98)           $2,650

    Cost of Sales and Other
     Expenses                                      (637)              (800)                    (301)              (113)                                     (13)                   (220)                                 92            (1,992)

    Gain on Sale of Asset                             -                  -                        -                  -                                        -                      74                                   -                74

    Depreciation & Amortization                    (134)              (100)                     (15)               (16)                                      (8)                    (20)                                 (2)             (295)

    Equity Earnings Recorded
     Before Income Tax                                -                  -                        -                  -                                        1                       9                                   -                10

    Other Income, Net                                11                  4                        3                  9                                        -                       2                                   8                37
                                                    ---                ---                      ---                ---                                      ---                     ---                                 ---               ---

    Income Before Interest &
     Tax (1)                                        179                 87                       71                 48                                        1                      98                                   -               484

    Net Interest Expense (2)                        (48)               (17)                      (2)                (1)                                      (5)                    (12)                                (49)             (134)

    Income Tax (Expense)
     Benefit                                        (51)               (24)                     (17)               (26)                                       8                     (33)                                (35) (3)         (178)

    Equity (Losses) Earnings
     Recorded Net of Income Tax                       -                  -                       (7)                11                                        -                       -                                   -                 4

    Losses (Earnings)
     Attributable to
     Noncontrolling Interests                        11                  -                       (8)                (1)                                       -                       -                                   -                 2

    Earnings (Losses)                               $91                $46                      $37                $31                                       $4                     $53                                $(84)             $178
                                                    ---                ---                      ---                ---                                      ---                     ---                                ----              ----

    Three Months Ended March 31, 2012

    (Dollars in millions)                   SDG&E        SoCalGas            Sempra South American   Sempra Mexico                     Sempra Renewables         Sempra Natural Gas       Consolidating Adjustments, Parent
                                                                                   Utilities                                                                                                           & Other                   Total
    --------------------                          -----           --------  ----------------------       -------------                        -----------------      ------------------  ---------------------------------       -----

    Revenues                                       $834               $880                     $357               $136                                       $8                    $269                               $(101)           $2,383

    Cost of Sales and Other
     Expenses                                      (544)              (674)                    (281)               (75)                                      (9)                   (245)                                 80            (1,748)

    Depreciation & Amortization                    (112)               (87)                     (13)               (16)                                      (3)                    (23)                                 (3)             (257)

    Equity Earnings Recorded
     Before Income Tax                                -                  -                        -                  -                                        1                      11                                   -                12

    Other Income, Net                                30                  4                        2                 15                                        -                       -                                  24                75
                                                    ---                ---                      ---                ---                                      ---                     ---                                 ---               ---

    Income (Loss) Before
     Interest & Tax (1)                             208                123                       65                 60                                       (3)                     12                                   -               465

    Net Interest Expense (2)                        (37)               (17)                      (6)                (3)                                      (4)                     (9)                                (34)             (110)

    Income Tax (Expense)
     Benefit                                        (60)               (40)                     (13)               (35)                                      17                      (2)                                 16              (117)

    Equity Earnings Recorded
     Net of Income Tax                                -                  -                        -                 11                                        -                       -                                   -                11

    Earnings Attributable to
     Noncontrolling Interests                        (6)                 -                       (6)                 -                                        -                       -                                  (1)              (13)

    Earnings (Losses)                              $105                $66                      $40                $33                                      $10                      $1                                $(19)             $236
                                                   ----                ---                      ---                ---                                      ---                     ---                                ----              ----

    (1) Management believes "Income (Loss) Before Interest & Tax" is a useful measurement of our segments'
     performance because it can be used to evaluate the effectiveness of our operations exclusive of interest
     and income tax, neither of which is directly relevant to the efficiency of those operations.

    (2) Net Interest Expense includes Interest Income, Interest Expense and Preferred Dividends of
     Subsidiaries.

    (3) Includes $63 million income tax expense resulting from a corporate reorganization in connection with
     the IEnova stock offerings.

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SOURCE Sempra Energy


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