<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended December 31, 1998
Commission File Number 1-14201
A. Full title of the Plans and the address of the Plans, if different from
that of the issuer named below: Sempra Energy Savings Plan, Sempra
Energy Trading Retirement Savings Plan, Pacific Enterprises Retirement
Savings Plan, San Diego Gas & Electric Company Savings Plan and
Southern California Gas Company Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the Plans and the
address of its principal executive office: Sempra Energy, 101 Ash
Street, San Diego, CA 92101-3017
<PAGE>
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THE PACIFIC ENTERPRISES RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 AND
INDEPENDENT AUDITORS' REPORT
<PAGE>
THE PACIFIC ENTERPRISES RETIREMENT
SAVINGS PLAN
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997
AND FOR THE YEARS THEN ENDED:
Statements of Assets Available for Benefits 2
Statements of Changes in Assets Available for Benefits 3
Notes to Financial Statements 4-9
</TABLE>
All schedules required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 are omitted because of the absence of conditions under which they are
required or as they are filed by the trustee of the Master Trust in which the
Plan participates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Pacific Enterprises Retirement Savings Plan:
We have audited the accompanying statements of assets available for benefits of
Pacific Enterprises Retirement Savings Plan (the "Plan") as of December 31, 1998
and 1997, and the related statements of changes in assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 1998 and 1997, and the changes in assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
June 11, 1999
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<PAGE>
PACIFIC ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
(DOLLARS IN THOUSANDS)
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<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 8
INVESTMENTS:
At fair value:
Investment in Master Trust $ 19,839 51,147
Participant Loans 128 831
-------- ------
Total investments 19,967 51,978
-------- ------
RECEIVABLES:
Employer contributions 3
Participating employee contributions 1
--------
Total receivables 4
--------
ASSETS AVAILABLE FOR BENEFITS $ 19,971 $51,986
-------- ------
-------- ------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
PACIFIC ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1998 AND 1997
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
ADDITIONS:
Net investment income:
Equity in net investment income of the Master Trust $ 4,754 $ 10,219
Less investment expenses 13 17
-------- --------
Net investment income 4,741 10,202
-------- --------
Contributions:
Employer 612 955
Participating employees 2,056 2,799
-------- --------
Total contributions 2,668 3,754
-------- --------
Other 2
-------- --------
Total additions 7,409 13,958
-------- --------
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries 9,801 2,151
Other 8
-------- --------
Total deductions 9,809 2,151
-------- --------
TRANSFERS (TO) FROM PLANS OF RELATED ENTITIES (29,615) 932
-------- --------
NET INCREASE (DECREASE) (32,015) 12,739
ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 51,986 39,247
-------- --------
End of year $ 19,971 $ 51,986
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
PACIFIC ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997 (DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------
1. PLAN DESCRIPTION AND RELATED INFORMATION
The following description of the Pacific Enterprises Retirement Savings
Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
GENERAL - The Plan is a defined contribution plan that provides employees
of Pacific Enterprises or any affiliate who has adopted this Plan (the
"Company" or "Employer") with retirement benefits. Through June 30, 1998,
employees were required to complete one year in which they completed 1,000
hours of service in order to participate in the Plan, and make regular
savings investments in Sempra Energy, formerly Pacific Enterprises, common
stock and other optional investments permitted by the Plan. On July 1,
1998, the Plan was amended to allow for immediate plan participation for
salary deferrals. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
At June 26, 1998, Pacific Enterprises, the holding company for Southern
California Gas Company, and Enova Corporation, the holding company for San
Diego Gas & Electric Company, combined into a new company named Sempra
Energy. As a result of the combination, each outstanding share of common
stock of Pacific Enterprises was converted into 1.5038 shares of common
stock of Sempra Energy, and each outstanding share of common stock of
Enova Corporation was converted into one share of common stock of Sempra
Energy. The combination was approved by the shareholders of both companies
on March 11, 1997. As a result of the combination, employees were moved
among the related companies of Sempra Energy and their existing account
balances in the savings plans in which they participated were transferred
to the appropriate company's savings plan, if the employee requested in
writing.
ADMINISTRATION - Certain administrative functions are performed by
officers or employees of the Company. No such officer or employee receives
compensation from the Plan. Administrative expenses are paid directly by
the Company; however, investment expenses are paid by the Plan.
CONTRIBUTIONS - Contributions to the Plan can be made under the following
provisions:
PARTICIPATING EMPLOYEE CONTRIBUTIONS - Pursuant to Section 401(a) of
the Internal Revenue Code (the "IRC"), each participant may
contribute, on a pre-tax basis, up to 15% of base compensation.
Additional after-tax contributions may be made up to a total
contribution (before and after-tax) of 15% of each participant's base
pay. Total individual pre-tax contributions in calendar years 1998
and 1997 were limited by law to $10,000 and $9,500, respectively.
Prior to July 1, 1998, the maximum pre-tax contribution was 9% and
the maximum total employee contribution was 14% of base compensation.
EMPLOYER NONELECTIVE MATCHING CONTRIBUTIONS - After one year of
service, the Company makes contributions to the Plan equal to 50% of
each participant's contribution, up to the first 6%. The Company's
contributions are invested in Sempra Energy (formerly Pacific
Enterprises) common stock. Beginning October 1, 1992, employer
contributions have been funded in part from the Pacific Enterprises
Stock Ownership Plan and Trust.
- 4 -
<PAGE>
PARTICIPANT ACCOUNTS - Separate accounts are maintained for each
participant. Each participant employee's account is credited with the
participant's contributions and allocations of the Employer's nonelective
matching contribution, investment earnings of the Plan, and fees.
Allocations are based on participants' contributions or account balances,
as defined in the Plan document.
VESTING - All participant accounts are fully vested and nonforfeitable at
all times.
INVESTMENT OPTIONS - Beginning April 1, 1996, all investments are held in
a Master Trust (see Note 6). Employees elect to have their contributions
invested in increments of 10% in Sempra Energy Common Stock or the
following funds offered by T. Rowe Price, trustee of the Plan:
BLENDED STABLE VALUE FUND - invests in investment contracts issued by
high quality insurance companies and banks.
PERSONAL STRATEGY BALANCED FUND - invests in a combination of stocks,
bonds, and money market securities.
PERSONAL STRATEGY INCOME FUND - invests in a combination of bonds,
money market securities, and stocks.
PERSONAL STRATEGY GROWTH FUND - invests in a combination of stocks,
bonds, and money market securities.
INTERNATIONAL STOCK FUND - invests primarily in common stocks of
established, non-U.S. companies.
NEW HORIZONS FUND - invests primarily in common stocks of small,
rapidly growing companies.
NEW INCOME FUND - invests primarily in marketable debt securities.
PRIME RESERVE FUND - invests in high-quality, U.S. dollar-denominated
money market securities with an average weighted maturity not
exceeding 90 days.
EQUITY INDEX FUND - invests in stocks of 500 U.S. companies.
PAYMENT OF BENEFITS - Provisions of the Plan include certain restrictions
on the form and timing of distributions to withdrawing participants. In
general, benefits are payable upon retirement, death, disability or
termination of service.
PLAN TERMINATION - Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of ERISA.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The Plan maintains its financial statements on the
accrual basis of accounting.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of net assets
and disclosures at the date of the financial statements and the reported
changes in net assets during the reporting period. Actual results could
differ from those estimates.
- 5 -
<PAGE>
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value based on quoted market prices. Loans are carried at
cost plus accrued interest which approximates fair value.
Purchases and sales of securities are recorded on the trade date.
Dividends are recorded on the ex-dividend date.
BENEFIT PAYMENTS - Payments are recorded when paid. Net assets available
for plan benefits at December 31, 1998 and 1997 include $256 and $22,
respectively, for participants who have withdrawn from the Plan but have
not yet been paid their vested benefits.
3. INVESTMENTS
The Plan's investments were held by T. Rowe Price, the trustee, for the
years ended December 31, 1998 and 1997. Investments that represent 5% or
more of the Plan's net assets are identified below.
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1998 1997
<S> <C> <C>
Investment in Master Trust (Note 6) $19,839 $51,147
</TABLE>
4. TAX STATUS
On January 16, 1996, the Internal Revenue Service issued the Plan a
favorable determination letter stating that the Plan, as then designed,
was in compliance with the applicable sections of the IRC, and the
underlying trust is therefore exempt from taxation under Section 501(a) of
the IRC. Once qualified, the Plan is required to operate in accordance
with applicable sections of the IRC and ERISA. The Plan has been amended
since receiving the determination letter. The Plan's administrator and the
Plan's tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the IRC.
5. PARTICIPANT LOANS
Effective April 1, 1996, the Plan was amended to allow participants to
borrow against the balances in their individual accounts within the Plan.
A participant is limited to borrowing a maximum of 50% of the present
value of his/her account balance or $50,000, whichever is less. The
minimum amount that can be borrowed is $1,000, and the fee charged to
processing a loan is paid by the participant who takes out the loan. All
loans have a maximum repayment period of five years. The loans bear
interest at 1% above the prime rate as published monthly in the Wall
Street Journal at the time the loan is made.
6. INVESTMENTS IN THE MASTER TRUST
The Plan's assets are held in a trust account at T. Rowe Price, the
trustee of the Plan, and consist of an interest in the Sempra Energy
Savings Master Trust, formerly the Pacific Enterprises Retirement Savings
Plan and Southern California Gas Company Retirement Savings Plan Master
Trust, (the "Master Trust"). Use of the Master Trust permits the
commingling of the trust assets of two or more similar employee benefit
plans sponsored by Sempra Energy, formerly Pacific Enterprises, for
investment and administrative purposes. The Plan has an approximate 4%
interest in the net assets available for plan benefits of the Master Trust
at December 31, 1998.
- 6 -
<PAGE>
Net earnings of the Master Trust are allocated daily by T. Rowe Price to
each participating account balance. Net earnings include interest income,
dividend income and net appreciation (depreciation) of investments.
Benefit payments, contributions and expenses are made on a
specific-identification basis.
The net assets available for plan benefits of the Master Trust at December
31, 1998 and 1997 are summarized as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Sempra Energy (formerly Pacific Enterprises) common stock $359,143 $373,038
Equity Index Fund 124,475 99,830
Personal Strategy Balance Fund 26,497 26,862
Blended Stable Value Fund 24,437 25,614
Prime Reserve Fund 12,099 9,485
New Horizons Fund 11,811 7,668
Personal Strategy Growth Fund 6,515 4,326
International Stock Fund 5,929 3,382
Personal Strategy Income fund 2,405 1,535
New Income Fund 3,702 1,361
-------- --------
Total $577,013 $553,101
-------- --------
-------- --------
</TABLE>
Net appreciation, dividends and interest income of the Master Trust for
the years ended December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Net appreciation of investments $43,439 $96,985
Dividends 23,384 21,080
Interest 1,372 1,207
</TABLE>
- 7 -
<PAGE>
7. BY FUND INFORMATION
Information regarding significant additions to and deductions from assets
available for benefits of the Plan by fund option for the years ended
December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
DISTRIBUTIONS
PARTICIPATING NET TO PARTICIPANTS INTERFUND
YEAR ENDED EMPLOYER EMPLOYEE INVESTMENT OR THEIR AND TRANSFERS
DECEMBER 31, 1998 CONTRIBUTIONS CONTRIBUTIONS INCOME BENEFICIARIES (TO) FROM
<S> <C> <C> <C> <C> <C>
Sempra Energy
Common Stock $ 612 $ 297 $ 1,221 $ 3,759 $ (13,013)
Blended Stable Value Fund 223 168 963 (1,486)
Personal Strategy
Income Fund 22 37 176 4
Personal Strategy
Balanced Fund 214 438 894 (2,870)
Personal Strategy
Growth Fund 379 58 65 (810)
International Stock Fund 70 55 231 (403)
New Horizons Fund 102 (50) 192 (618)
New Income Fund 13 9 25 (9)
Prime Reserve Fund 47 33 144 (476)
Equity Index Fund 689 2,772 3,352 (9,311)
Participant Loans (623)
----- -------- -------- -------- ----------
Total $ 612 $ 2,056 $ 4,741 $ 9,801 $ (29,615)
----- -------- -------- -------- ----------
----- -------- -------- -------- ----------
</TABLE>
- 8 -
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
PARTICIPATING NET TO PARTICIPANTS INTERFUND
YEAR ENDED EMPLOYER EMPLOYEE INVESTMENT OR THEIR AND TRANSFERS
DECEMBER 31, 1997 CONTRIBUTIONS CONTRIBUTIONS INCOME BENEFICIARIES (TO) FROM
<S> <C> <C> <C> <C> <C>
Pacific Enterprises
Common Stock $ 955 $ 549 $ 5,443 $ 998 $ (682)
Blended Stable Value Fund 285 225 139 (618)
Personal Strategy
Income Fund 32 47 4 114
Personal Strategy
Balanced Fund 337 699 128 139
Personal Strategy
Growth Fund 86 62 31 303
International Stock Fund 159 (13) 26 319
New Horizons Fund 176 63 23 270
New Income Fund 10 8 1 47
Prime Reserve Fund 82 41 145 (23)
Equity Index Fund 1,083 3,627 613 992
Participant Loans 43 71
----- -------- -------- -------- --------
Total $ 955 $ 2,799 $ 10,202 $ 2,151 $ 932
----- -------- -------- -------- --------
----- -------- -------- -------- --------
</TABLE>
8. SUBSEQUENT EVENT
Sempra Energy announced its intention to merge the Plan with the Sempra
Energy Savings Plan effective August 31, 1999.
* * * * * *
- 9 -
<PAGE>
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SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997,
SUPPLEMENTAL SCHEDULES FOR THE YEAR ENDED DECEMBER 31, 1998, AND INDEPENDENT
AUDITORS' REPORT
<PAGE>
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997
AND FOR THE YEARS THEN ENDED:
Statements of Assets Available for Benefits 2
Statements of Changes in Assets Available for Benefits 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1998
AND FOR THE YEAR THEN ENDED:
Item 27a - Schedule of Assets Held for Investment Purposes 9
Item 27d - Schedule of Reportable Transactions 10
</TABLE>
All other schedules required by the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974 are omitted because of the absence of conditions under which they are
required.
<PAGE>
INDEPENDENT AUDITORS' REPORT
San Diego Gas & Electric Company Savings Plan:
We have audited the accompanying statements of assets available for benefits of
the San Diego Gas & Electric Company Savings Plan (the "Plan") as of December
31, 1998 and 1997, and the related statements of changes in assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan as of
December 31, 1998 and 1997, and the changes in assets available for benefits of
the Plan for the years then ended in conformity with generally accepted
accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of December 31, 1998, and (2) reportable
transactions for the year ended December 31, 1998, are presented for the purpose
of additional analysis and are not a required part of the basic 1998 financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. Such supplemental schedules have been
subjected to the auditing procedures applied in our audit of the basic 1998
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic 1998 financial statements taken as a whole.
/S/ DELOITTE & TOUCHE LLP
June 11, 1999
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<PAGE>
SAN DIEGO GAS & ELECTRIC COMPANY
SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
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<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 746,705 $ 339,603
------------ ------------
INVESTMENTS - At fair value:
Sempra Energy common stock 205,544,250 246,152,063
Mutual funds 158,761,310 156,537,547
------------ ------------
Total investments 364,305,560 402,689,610
------------ ------------
RECEIVABLES:
Dividends and interest 3,175,036 3,566,388
Employer contributions 107,918 116,769
Participating employee contributions 391,574 448,041
------------ ------------
Total receivables 3,674,528 4,131,198
------------ ------------
ASSETS AVAILABLE FOR BENEFITS $368,726,793 $407,160,411
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
SAN DIEGO GAS & ELECTRIC COMPANY
SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
ADDITIONS
<S> <C> <C>
NET INVESTMENT INCOME:
Net appreciation in fair value of investments $ 7,795,971 $ 65,391,664
Cash dividends on common stock of Plan sponsor 13,488,190 14,900,966
Interest and dividends 1,732,445 1,713,137
------------- --------------
Total investment income 23,016,606 82,005,767
Less investment expenses 601,705 564,823
------------- --------------
Net investment income 22,414,901 81,440,944
------------- --------------
CONTRIBUTIONS:
Employer 3,912,941 4,091,835
Participating employees 14,586,701 14,850,973
------------- --------------
Total contributions 18,499,642 18,942,808
------------- --------------
Total additions 40,914,543 100,383,752
------------- --------------
DEDUCTIONS
DISTRIBUTIONS TO PARTICIPANTS OR THEIR
BENEFICIARIES 62,722,743 23,529,126
TRANSFERS TO PLANS OF RELATED ENTITIES 16,625,418
------------- --------------
TOTAL DEDUCTIONS 79,348,161 23,529,126
------------- --------------
NET (DECREASE) INCREASE (38,433,618) 76,854,626
ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF YEAR 407,160,411 330,305,785
------------- --------------
END OF YEAR $ 368,726,793 $ 407,160,411
------------- --------------
------------- --------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF PLAN - The San Diego Gas & Electric Company Savings Plan
(the "Plan") is a contributory defined contribution plan. It is subject to
the provisions of the Employee Retirement Income Security Act of 1974
("ERISA"). The terms of the Plan are described more completely in the most
recent Summary Plan Description dated January 1996, which has been
distributed to all participants.
On December 6, 1995, San Diego Gas & Electric Company ("SDG&E" or the
"Company") announced the formation of Enova Corporation ("Enova") as the
parent company for SDG&E and its unregulated subsidiaries. On January 1,
1996, Enova became the parent of SDG&E and the sponsor of the Plan.
SDG&E's outstanding common stock was converted on a share-for-share basis
to Enova common stock.
At June 26, 1998, Pacific Enterprises, the holding company for Southern
California Gas Company, and Enova Corporation, the holding company for San
Diego Gas & Electric Company, combined into a new company named Sempra
Energy. As a result of the combination, each outstanding share of common
stock of Pacific Enterprises was converted into 1.5038 shares of common
stock of Sempra Energy, and each outstanding share of common stock of
Enova Corporation was converted into one share of common stock of Sempra
Energy. The combination was approved by the shareholders of both companies
on March 11, 1997. As a result of the combination, employees were moved
among the related companies of Sempra Energy. Plan account balances of
Sempra Energy employees were transferred if the employee so requested in
writing.
Effective April 1, 1998, the Plan was amended to allow the Company, in its
discretion, to authorize the transfer of a participant's interest in the
Plan in a direct trust-to-trust transfer from the trustee of the Plan to
the trustee of another qualified retirement plan.
ELIGIBILITY - Substantially all regular employees of SDG&E and the other
subsidiaries of Enova may enroll in the Plan if they have completed at
least one year of service and are at least age 21.
Effective January 1, 1999, the Plan was amended to allow for immediate
Plan participation for salary deferrals and employer matching
contributions after one year of service.
CONTRIBUTIONS - Each year, participants may elect to contribute up to 15%
of pre-tax or after-tax compensation or a combination of both. The Plan
provides for employer contributions equal to 50% of the amount a
participant elects to contribute, within specified limits of up to 6% of
the participant's basic compensation, as defined in the Plan document,
based on the participant's age.
Employer contributions are invested solely in common stock of Sempra
Energy. Employer contributions are reduced by the fair value of common
stock forfeited by participants under the terms of the Plan.
- 4 -
<PAGE>
Due to a Plan amendment effective January 1, 1998, the amount of the
employer matching contribution provided to employees not covered by a
collective bargaining agreement is no longer dependent upon the
participant's age. As a result of the change, contributions in the amount
of 6% of a nonclassified participant's pay are eligible for Company
matching contributions of 50% of such amount. Effective January 1, 1999,
the Plan was amended to make the same changes for employees covered by a
collective bargaining agreement.
INVESTMENT FUNDS - Participants may direct the investment of their
contributions to the following fund options offered by the Plan:
COMMON STOCK OF SEMPRA ENERGY
FIDELITY INSTITUTIONAL CASH PORTFOLIOS MONEY MARKET PORTFOLIO - Invests
in a portfolio of money market instruments.
FIDELITY SELECT EQUITY DISCIPLINE MARKET INDEX PORTFOLIO - Invests in
large capitalization publicly traded stocks.
FIDELITY SELECT INTERNATIONAL EQUITY PORTFOLIO - Invests in the common
stocks of companies based outside the United States.
FIDELITY SELECT EQUITY SMALL CAPITALIZATION COLLECTIVE TRUST - Invests
in the common or preferred stocks of smaller companies.
FIDELITY U.S. BOND INDEX PORTFOLIO - Invests in a diversified portfolio
of long-term, investment-grade bonds with ten to thirty year
maturities.
Participants may transfer their funds among investment options and change
their contribution percentage and allocation monthly.
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution and allocations of (a) the employer's
contribution and (b) Plan earnings, and charged with an allocation of
administrative expenses. Allocations are calculated in accordance with
provisions of the Plan. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account.
VESTING - Participants' contributions plus actual earnings thereon are
fully and immediately vested. Prior to June 30, 1995, the employer's
contributions vested after five years of employment; effective July 1,
1995, the employer's contributions fully and immediately vest for all
employees not governed by a collective bargaining agreement. A participant
is fully vested in the event of early or normal retirement, death, or
total and permanent disability, as defined in the Plan document.
Effective January 1, 1999, the Plan was amended to allow for immediate
vesting for employees governed by a collective bargaining agreement.
PAYMENT OF BENEFITS - Provisions of the Plan include certain restrictions
on the form and timing of distributions to withdrawing participants. In
general, benefits are payable upon retirement, death, disability or
termination of service.
PAYMENT OF DIVIDENDS - Effective December 1, 1994, the Plan became a
defined contribution Employee Stock Ownership Plan ("ESOP"). The ESOP must
invest in the Plan sponsor's stock. Under the terms of the ESOP, cash
dividends on Sempra Energy's stock are required to be distributed to
participants who are former employees of Enova or the Company. Active
employees not covered by a collective bargaining agreement have the option
to elect to receive distributions of cash dividends on Sempra Energy's
stock in their accounts or to have the dividends reinvested in Sempra
Energy stock. Active employees covered by a collective bargaining
agreement must have cash dividends reinvested.
- 5 -
<PAGE>
Effective January 1, 1999, the Plan was amended to give employees covered
by a collective bargaining agreement the option to elect to receive
distributions of cash dividends on Sempra Energy stock.
TAX STATUS - The Company received its latest determination letter from the
Internal Revenue Service dated May 23, 1995, indicating the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the Plan administrator and the Plan's tax
counsel believe that the Plan is designed and is currently being operated
in compliance with the applicable requirements of the Internal Revenue
Code. Therefore, they believe the Plan is qualified and the related trust
is tax-exempt.
TERMINATION OF THE PLAN - Although it has not expressed any intent to do
so, the Company has the right under the Plan to discontinue its
contributions and to terminate the Plan at any time subject to the
provisions of ERISA. Upon termination of the Plan, the participants become
100% vested in their accounts.
SIGNIFICANT ACCOUNTING POLICIES - The Plan's financial statements are
prepared on the accrual basis of accounting. Investments are carried at
fair value based on quoted market prices. Investment transactions are
accounted for on the trade date. Dividend income is recorded on the
ex-dividend date. Participant distributions are recorded when paid.
ACCOUNTING ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires Plan
management to make estimates and assumptions that affect the reported
amounts of assets at the date of the financial statements and the reported
amounts of additions and deductions during the reporting period. Actual
results may differ from those estimates.
2. INVESTMENT INFORMATION
The Plan's investments are held by a bank-administered trust fund. The
fair values of the investments representing 5% or more of the Plan's
assets at December 31, 1998 and 1997 are separately identified below.
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Sempra Energy common stock:
Participant Directed $ 108,837,678 $ 131,151,028
Non-Participant Directed 96,706,572 115,001,035
Mutual funds:
Fidelity Select Equity Discipline Market Index Portfolio 88,583,057 76,515,616
Fidelity Select Equity Small Capitalization Collective Trust 32,682,524 39,542,789
Other 37,495,729 40,479,142
------------- -------------
Total Investments $ 364,305,560 $ 402,689,610
------------- -------------
------------- -------------
</TABLE>
The net appreciation (depreciation) in the fair value of investments is
summarized as follows for the years ended December 31, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Sempra Energy common stock $ (14,845,131) $ 38,280,914
Mutual funds 22,641,102 27,110,750
------------- -------------
Net appreciation $ 7,795,971 $ 65,391,664
------------- -------------
------------- -------------
</TABLE>
- 6 -
<PAGE>
3. BY FUND INFORMATION
Information regarding significant additions to and deductions from assets
available for benefits by fund option for the years ended December 31,
1998 and 1997 are as follows:
<TABLE>
<CAPTION>
DISTRIBUTIONS TRANSFERS TO
PARTICIPATING NET TO PARTICIPANTS PLANS OF
EMPLOYER EMPLOYEE INVESTMENT OR THEIR RELATED
1998 CONTRIBUTIONS CONTRIBUTIONS INCOME BENEFICIARIES ENTITIES
PARTICIPANT DIRECTED
<S> <C> <C> <C> <C> <C>
Sempra Energy Common Stock $ 4,985,094 $ (476,097) $ 23,337,488 $ 208,421
Fidelity Institutional Cash Portfolios
Money Market Portfolio 612,037 769,346 4,172,810 1,568,400
Fidelity Select Equity Discipline
Market Index Portfolio 4,542,871 21,427,539 8,265,390 7,959,800
Fidelity Select International
Equity Portfolio 967,525 1,852,497 1,206,344 1,291,632
Fidelity Select Equity Small
Capitalization Collective Trust 2,730,577 (1,442,878) 3,669,834 3,840,630
Fidelity U.S. Bond Index Portfolio 748,597 1,150,890 2,694,569 1,583,491
NON-PARTICIPANT DIRECTED
Sempra Energy Common Stock $3,912,941 (866,396) 19,376,308 173,044
---------- ----------- ----------- ----------- ------------
Total $3,912,941 $14,586,701 $22,414,901 $62,722,743 $16,625,418
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
</TABLE>
- 7 -
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
PARTICIPATING NET TO PARTICIPANTS
EMPLOYER EMPLOYEE INVESTMENT OR THEIR
1997 CONTRIBUTIONS CONTRIBUTIONS INCOME BENEFICIARIES
<S> <C> <C> <C> <C>
PARTICIPANT DIRECTED
Enova Corporation Common Stock $ 5,322,243 $29,764,590 $ 9,452,623
Fidelity Institutional Cash
Portfolios Money
Market Portfolio 743,529 826,443 1,213,355
Fidelity Select Equity Discipline
Market Index Portfolio 4,239,882 17,529,084 3,077,916
Fidelity Select International
Equity Portfolio 1,095,141 402,931 431,472
Fidelity Select Equity Small
Capitalization Collective Trust 2,660,543 8,377,150 1,462,797
Fidelity U.S. Bond
Index Portfolio 789,635 1,088,420 656,460
NON-PARTICIPANT DIRECTED
Enova Corporation Common Stock 4,091,835 23,452,326 7,234,503
---------- ----------- ----------- -----------
Total $4,091,835 $14,850,973 $81,440,944 $23,529,126
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
</TABLE>
4. CONTINGENCIES
In September 1997, a complaint was filed against the Company on behalf of
temporary employees and independent contractors employed by the Company
during the last 31 years. The plaintiffs allege that they are common law
employees of the Company and, as such, under a recent Ninth Circuit Court
of Appeals decision, are and have been entitled to participate in the
Company's health and welfare, defined benefit and defined contribution
plans. The plaintiffs seek to recover past and future benefits under each
plan. In October 1997, the Company filed its answer to the complaint,
denying the appropriateness of the claim.
The ultimate liability, if any, that may be assessed in this regard cannot
presently be determined and would be assessed against the Plan sponsor
rather than the Plan. Consequently, no provision has been recorded in the
accompanying financial statements.
5. SUBSEQUENT EVENT
The Company has approved the change of the Plan's recordkeeper and trustee
from Watson Wyatt Worldwide Company and Union Bank of California,
respectively, to T. Rowe Price effective October 1, 1999. In addition, the
Plan will allow participant loans.
* * * * * *
- 8 -
<PAGE>
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
FAIR
DESCRIPTION COST VALUE
<S> <C> <C>
CASH
Highmark Money Market Diversified Obligations Fund $ 729,910 $ 729,910
* Union Bank of California Interest Bearing Cash 16,795 16,795
-------------- ------------
Total Cash $ 746,705 $ 746,705
-------------- ------------
-------------- ------------
* SEMPRA ENERGY COMMON STOCK $142,671,643 $205,544,250
-------------- ------------
MUTUAL FUNDS
Fidelity Select Equity Discipline Market Index
Portfolio 38,497,862 88,583,057
Fidelity Select Equity Small Capitalization
Collective Trust 23,435,193 32,682,524
Fidelity Institutional Cash Portfolios Money
Market Portfolio 12,976,637 12,976,637
Fidelity U.S. Bond Index Portfolio 12,973,436 13,295,719
Fidelity Select International Equity Portfolio 8,716,215 11,223,373
-------------- ------------
Total Mutual Funds 96,599,343 158,761,310
-------------- ------------
TOTAL INVESTMENTS $239,270,986 $364,305,560
-------------- ------------
-------------- ------------
</TABLE>
* Party-in-interest
- 9 -
<PAGE>
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
SERIES OF TRANSACTIONS INVOLVING SECURITIES OF THE SAME ISSUE:
<TABLE>
<CAPTION>
PURCHASES
----------------------------------------
NUMBER OF PURCHASE
DESCRIPTION OF ASSET TRANSACTIONS PRICE
<S> <C> <C>
Highmark Money Market Diversified
Obligations Fund 65 $ 41,591,643
Fidelity Institutional Cash Portfolios Money
Market Portfolio 83 12,422,087
Fidelity Select Equity Discipline Market
Index Portfolio 35 8,032,733
Enova Corporation Common Stock* 53 9,198,003
Sempra Corporation Common Stock* 3 256,738,629
SINGLE REPORTABLE TRANSACTIONS INVOLVING
SECURITIES OF THE SAME ISSUE:
Enova Corporation Common Stock*
Sempra Energy Corporation Common Stock* 254,333,364
</TABLE>
<TABLE>
<CAPTION>
SALES
-------------------------------------------------------------------------------
NUMBER OF SELLING COST NET
DESCRIPTION OF ASSET TRANSACTIONS PRICE OF ASSET GAIN
<S> <C> <C> <C> <C>
Highmark Money Market Diversified
Obligations Fund 70 $ 41,185,696 $ 41,185,696 -
Fidelity Institutional Cash Portfolios Money
Market Portfolio 47 15,913,425 15,913,425 -
Fidelity Select Equity Discipline Market
Index Portfolio 53 17,592,889 8,408,715 $ 9,184,174
Enova Corporation Common Stock* 8 257,047,093 245,243,617 11,803,476
Sempra Corporation Common Stock* 7 5,836,498 4,144,010 1,692,488
SINGLE REPORTABLE TRANSACTIONS INVOLVING
SECURITIES OF THE SAME ISSUE:
Enova Corporation Common Stock* 254,333,364 243,469,810 10,863,554
Sempra Energy Corporation Common Stock*
</TABLE>
* As a result of the June 26, 1998 merger of Enova Corporation and Pacific
Enterprises forming Sempra Energy all shares of Enova Corporation stock
held by the Plan were converted on a one-for-one basis into Sempra Energy
shares.
NOTE: The transactions included in this schedule meet the definition of
reportable transactions under Section 103 of the Employee Retirement
Income Security Act of 1974 and consist of single or series of
transactions during the year involving investment assets of an amount in
excess of 5% of the fair value of Plan assets as of the beginning of the
Plan year.
- 10 -
<PAGE>
- -------------------------------------------------------------------------------
SEMPRA ENERGY
SAVINGS PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND FOR THE PERIOD JULY 1, 1998
(INCEPTION) THROUGH DECEMBER 31, 1998 AND INDEPENDENT AUDITORS' REPORT
<PAGE>
SEMPRA ENERGY SAVINGS PLAN
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statement of Assets Available for Benefits as of December 31, 1998 2
Statement of Changes in Assets Available for Benefits for the period
July 1, 1998 (Inception) through December 31, 1998 3
Notes to Financial Statements 4-7
</TABLE>
All schedules required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 are omitted because of the absence of conditions under which they are
required or as they are filed by the trustee of the Master Trust in which the
Plan participates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Sempra Energy Savings Plan:
We have audited the accompanying statement of assets available for benefits of
Sempra Energy Savings Plan (the "Plan") as of December 31, 1998, and the related
statement of changes in assets available for benefits for the period July 1,
1998 (inception) through December 31, 1998. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 1998, and the changes in assets available for benefits of the Plan for the
period July 1, 1998 (inception) through December 31, 1998 in conformity with
generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
June 11, 1999
- 1 -
<PAGE>
SEMPRA ENERGY SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 (DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
CASH AND CASH EQUIVALENTS $ 15
INVESTMENTS:
At fair value:
Investment in Master Trust 87,952
Participant Loans 1,803
-------
Total investments 89,755
-------
RECEIVABLES:
Employer contributions 89
Participating employee contributions 283
-------
Total receivables 372
-------
ASSETS AVAILABLE FOR BENEFITS $90,142
-------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
SEMPRA ENERGY SAVINGS PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
PERIOD OF JULY 1, 1998 (INCEPTION) THROUGH DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ADDITIONS:
Net investment income:
Equity in net investment income of the Master Trust $12,533
Less investment expenses 18
-------
Net investment income 12,515
-------
Contributions:
Employer 988
Participating employees 3,296
-------
Total contributions 4,284
-------
Transfers from plans of related entities 74,987
Other 3
-------
Total additions 91,789
DEDUCTIONS:
Distributions to participants or their beneficiaries 1,647
-------
NET INCREASE 90,142
ASSETS AVAILABLE FOR PLAN BENEFITS:
Inception of plan 0
-------
End of year $90,142
-------
-------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
SEMPRA ENERGY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
JULY 1, 1998 (INCEPTION) THROUGH DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------
1. PLAN DESCRIPTION AND RELATED INFORMATION
The following description of the Sempra Energy Savings Plan (the "Plan")
is provided for general information purposes only. Participants should
refer to the Plan document for a more complete description of the Plan's
provisions.
GENERAL - The Plan is a defined contribution plan, adopted on July 1,
1998, that provides employees of Sempra Energy or any affiliate who has
adopted this Plan (the "Company" or "Employer") with retirement benefits.
The Company was formed on June 26, 1998, upon the combination of Pacific
Enterprises and Enova Corporation. As a result of the combination,
employees were moved among the related companies of Sempra Energy and
their existing account balances in the savings plans in which they
participated were transferred to the appropriate company's savings plan,
if the employee requested in writing.
Employees may participate immediately in the Plan and, after one year in
which they complete 1,000 hours of service, receive an employer
contribution. Employees may make regular savings investments in Sempra
Energy common stock and other optional investments permitted by the Plan.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
ADMINISTRATION - Certain administrative functions are performed by
officers or employees of the Company. No such officer or employee receives
compensation from the Plan. Administrative expenses are paid directly by
the Company; however, investment expenses are paid by the Plan.
CONTRIBUTIONS - Contributions to the Plan can be made under the following
provisions:
PARTICIPATING EMPLOYEE CONTRIBUTIONS - Pursuant to Section 401(a)
of the Internal Revenue Code (the "IRC"), each participant may
contribute up to 15% of base pay on a pre-tax basis, an after-tax
basis, or a combination. Total individual pre-tax contributions in
calendar year 1998 were limited by law to $10,000.
EMPLOYER NONELECTIVE MATCHING CONTRIBUTIONS - The Company makes
contributions to the Plan equal to 50% of each participant's
pre-tax contribution, up to the first 6%. The Company's
contributions are invested in Sempra Energy common stock.
PARTICIPANT ACCOUNTS - Separate accounts are maintained for each
participant. Each participant employee's account is credited with the
participant's contributions and the Employer's nonelective matching
contribution, as well as an allocation of investment earnings of the Plan,
and fees. Allocations are based on participants' contributions or account
balances, as defined in the Plan document.
VESTING - All participant accounts are fully vested and nonforfeitable at
all times.
- 4 -
<PAGE>
INVESTMENT OPTIONS - All investments are held in a Master Trust (see Note
6). Employees elect to have their contributions invested in increments of
10% in Sempra Energy Common Stock or the following funds offered by T.
Rowe Price, trustee of the Plan:
BLENDED STABLE VALUE FUND - invests in investment contracts issued
by high quality insurance companies and banks.
PERSONAL STRATEGY BALANCED FUND - invests in a combination of
stocks, bonds, and money market securities.
PERSONAL STRATEGY INCOME FUND - invests in a combination of bonds,
money market securities, and stocks.
PERSONAL STRATEGY GROWTH FUND - invests in a combination of
stocks, bonds, and money market securities.
INTERNATIONAL STOCK FUND - invests primarily in common stocks of
established, non-U.S. companies.
NEW HORIZONS FUND - invests primarily in common stocks of small,
rapidly growing companies.
NEW INCOME FUND - invests primarily in marketable debt securities.
PRIME RESERVE FUND - invests in high-quality, U.S.
dollar-denominated money market securities with an average
weighted maturity not exceeding 90 days.
EQUITY INDEX FUND - invests in stocks of 500 U.S. companies.
PAYMENT OF BENEFITS - Provisions of the Plan include certain restrictions
on the form and timing of distributions to withdrawing participants. In
general, benefits are payable upon retirement, death, disability or
termination of service.
PLAN TERMINATION - Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of ERISA.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The Plan maintains its financial statements on the
accrual basis of accounting.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of net assets
and disclosures at the date of the financial statements and the reported
changes in net assets during the reporting period. Actual results could
differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value based on quoted market prices. Loans are carried at
cost plus accrued interest which approximates fair value.
Purchases and sales of securities are recorded on trade date. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
BENEFIT PAYMENTS - Payments are recorded when paid.
- 5 -
<PAGE>
3. INVESTMENTS
The Plan's investments were held by T. Rowe Price, the trustee, for the
period ended December 31, 1998. Investments that represent 5% or more of
the Plan's net assets are identified below.
Investment in Master Trust (Note 6) $87,952
4. TAX STATUS
The Company has not yet requested from the Internal Revenue Service a
determination letter stating that the Plan, as designed, is in compliance
with the applicable requirements of the Internal Revenue Code ("IRC"). The
Plan's administrator and tax counsel believe that the Plan is designed and
operated in accordance with the applicable sections of the IRC, and that
the underlying trust is exempt from taxation under Section 501(a) of the
IRC.
5. PARTICIPANT LOANS
Participants may borrow against the balances in their individual accounts
within the Plan. A participant is limited to borrowing a maximum of 50% of
the present value of his/her account balance or $50,000, whichever is
less. The minimum amount that can be borrowed is $1,000, and the fee
charged to process a loan is paid by the participant who takes out the
loan. Loans have a maximum repayment period of five years. The loans bear
interest at 1% above the prime rate as published monthly in the Wall
Street Journal at the time the loan is made.
6. INVESTMENTS IN THE MASTER TRUST
The Plan's assets are held in a trust account at T. Rowe Price, the
trustee of the Plan, and consist of an interest in the Sempra Energy
Savings Master Trust (the "Master Trust"). Use of the Master Trust permits
the commingling of the trust assets of two or more similar employee
benefit plans sponsored by Sempra Energy for investment and administrative
purposes. The Plan has an approximate 15% interest in the net assets
available for plan benefits of the Master Trust at December 31, 1998.
Net earnings of the Master Trust are allocated daily by T. Rowe Price to
each participating account balance. Net earnings include interest income,
dividend income and net appreciation (depreciation) of investments.
Benefit payments, contributions and expenses are made on a
specific-identification basis.
The net assets available for plan benefits of the Master Trust at December
31, 1998 are summarized as follows:
<TABLE>
<CAPTION>
<S> <C>
Sempra Energy common stock $ 359,143
Equity Index Fund 124,475
Personal Strategy Balance Fund 26,497
Blended Stable Value Fund 24,437
Prime Reserve Fund 12,099
New Horizons Fund 11,811
Personal Strategy Growth Fund 6,515
International Stock Fund 5,929
Personal Strategy Income Fund 2,405
New Income Fund 3,702
--------
Total $577,013
--------
--------
</TABLE>
- 6 -
<PAGE>
Net appreciation, dividend and interest income of the Master Trust for the
year ended December 31, 1998 is summarized as follows:
<TABLE>
<CAPTION>
<S> <C>
Net appreciation $43,439
Dividends 23,384
Interest 1,372
</TABLE>
7. BY FUND INFORMATION
Information regarding significant additions to and deductions from assets
available for benefits of the Plan by fund option for the period July 1,
1998 through December 31, 1998 is as follows:
<TABLE>
<CAPTION>
DISTRIBUTIONS
PARTICIPATING NET TO PARTICIPANTS INTERFUND
EMPLOYER EMPLOYEE INVESTMENT OR THEIR AND TRANSFERS
CONTRIBUTIONS CONTRIBUTIONS INCOME BENEFICIARIES (TO) FROM
<S> <C> <C> <C> <C> <C>
Sempra Energy
Common Stock $ 988 $ 456 $ 7,592 $ 531 $ 29,035
Stable Value Fund 130 72 327 3,113
Personal Strategy
Income Fund 51 19 25 285
Personal Strategy
Balanced Fund 292 314 120 4,413
Personal Strategy
Growth Fund 271 139 12 1,440
International Stock Fund 189 170 44 2,082
New Horizons Fund 384 668 171 4,883
New Income Fund 91 27 1,894
Prime Reserve Fund 152 48 38 2,763
Equity Index Fund 1,280 3,466 379 23,741
Settlement Account 15
Participant Loans 1,323
------- ------- -------- --------- ---------
Total $ 988 $ 3,296 $ 12,515 $ 1,647 $ 74,987
------- ------- -------- --------- ---------
------- ------- -------- --------- ---------
</TABLE>
8. SUBSEQUENT EVENT
Sempra Energy announced its intention to merge the Pacific Enterprises
Retirement Savings Plan with the Plan effective August 31, 1999.
* * * * * *
- 7 -
<PAGE>
- -------------------------------------------------------------------------------
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES FOR THE YEAR ENDED DECEMBER
31, 1998, AND INDEPENDENT AUDITORS' REPORT
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT
SAVINGS PLAN
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998
AND FOR THE YEAR THEN ENDED:
Statement of Assets Available for Benefits 2
Statement of Changes in Assets Available for Benefits 3
Notes to Financial Statements 4-7
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1998
AND FOR THE YEAR THEN ENDED:
Item 27a - Schedule of Assets Held for Investment Purposes 8
Item 27d - Schedule of Series Reportable Transactions 9
Item 27d - Schedule of Single Reportable Transactions 10-14
</TABLE>
All other schedules required by the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974 are omitted because of the absence of conditions under which they are
required.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Sempra Energy Trading Retirement Savings Plan:
We have audited the accompanying statement of assets available for benefits of
Sempra Energy Trading Retirement Savings Plan (the "Plan") as of December 31,
1998, and the related statement of changes in assets available for benefits for
the year then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 1998, and the changes in assets available for benefits for the year then
ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of December 31, 1998, and (2) reportable
transactions for the year ended December 31, 1998, are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules are the
responsibility of the Plan's management. Such supplemental schedules have been
subjected to the auditing procedures applied in our audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/S/ DELOITTE & TOUCHE LLP
June 11, 1999
- 1 -
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENTS:
<S> <C>
At fair value:
Mutual funds $ 2,167,393
Sempra Energy common stock 933,553
Participant loans 31,907
------------
ASSETS AVAILABLE FOR BENEFITS $ 3,132,853
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADDITIONS:
<S> <C>
Net investment income:
Net appreciation in fair value of investments $ 43,295
Interest and dividends 92,751
-------------
Total investment income 136,046
Less investment expenses 6,566
-------------
Net investment income 129,480
-------------
Contributions:
Employer 349,980
Participating employees 1,142,065
-------------
Total contributions 1,492,045
-------------
Transfers from plans of related entities 1,543,759
-------------
Total additions 3,165,284
-------------
DEDUCTIONS:
Distributions to participants or their beneficiaries 32,431
-------------
NET INCREASE 3,132,853
ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 0
-------------
End of year $ 3,132,853
-------------
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
1. PLAN DESCRIPTION AND RELATED INFORMATION
The following description of the Sempra Energy Trading Retirement Savings
Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
GENERAL - The Plan is a defined contribution plan adopted on January 1,
1998, that provides employees of Sempra Energy Trading or any affiliate
who has adopted this Plan (the "Company" or "Employer") with retirement
benefits. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
At June 26, 1998, Pacific Enterprises, the holder of a 50% interest in the
Company, and Enova Corporation, the holder of the other 50% interest in
the Company, combined into a new company named Sempra Energy. As a result
of the combination, employees were moved among the related companies of
Sempra Energy and their existing account balances in the savings plans in
which they participated were transferred to the appropriate company's
savings plan, if the employee requested in writing.
Effective July 1, 1998, the Plan was amended to allow for immediate Plan
participation for salary deferrals.
ADMINISTRATION - Certain administrative functions are performed by
officers or employees of the Company. No such officer or employee receives
compensation from the Plan. Administrative expenses are paid directly by
the Company; however, investment expenses are paid by the Plan.
CONTRIBUTIONS - Contributions to the Plan can be made under the following
provisions:
PARTICIPATING EMPLOYEE CONTRIBUTIONS - Pursuant to Section 401(a) of
the Internal Revenue Code (the "IRC"), each participant may
contribute, on a pre-tax basis, up to 9% of base pay. Additional
after-tax contributions may be made up to a total contribution (before
and after-tax) of 14% of a participant's base pay. Total individual
pre-tax contributions in calendar year 1998 were limited by law to
$10,000.
EMPLOYER NONELECTIVE MATCHING CONTRIBUTION - After one year of service
in which employees worked at least 1,000 hours of service, the Company
makes contributions to the Plan based on the participant's pre-tax
contributions and years of service as follows:
Less than five years of service..1/3 of the first 6% of contributions
Five to ten years of service.....2/3 of the first 6% of contributions
Ten years or more of service.....100% of the first 6% of contributions
The Company will also provide an additional matching contribution of 15%
of the participant's pre-tax contribution, subject to certain limitations
described in the Plan document.
The Company's contributions are invested in Sempra Energy (formerly
Pacific Enterprises) common stock.
- 4 -
<PAGE>
Effective January 1, 1999, the Plan was amended to increase the maximum
employee pre-tax contributions from 9% to 15% of base pay and to determine
Company contributions based on employee pre-tax and after-tax
contributions, up to a maximum of 6% of base compensation.
PARTICIPANT ACCOUNTS - Separate accounts are maintained for each
participant. Each participant employee's account is credited with the
participant's contributions, allocations of the Employer's non-elective
matching contribution, investment earnings of the Plan, and fees.
Allocations are based on participants' contributions or account balances,
as defined in the Plan document.
VESTING - All participant accounts are fully vested and nonforfeitable at
all times.
INVESTMENT OPTIONS - Employees elect to have their contributions invested
in increments of 10% in Sempra Energy Common Stock or the following funds
offered by T. Rowe Price, trustee of the Plan:
BLENDED STABLE VALUE FUND - invests in investment contracts issued
by high quality insurance companies and banks.
PERSONAL STRATEGY BALANCED FUND - invests in a combination of
stocks, bonds, and money market securities.
PERSONAL STRATEGY INCOME FUND - invests in a combination of bonds,
money market securities, and stocks.
PERSONAL STRATEGY GROWTH FUND - invests in a combination of stocks,
bonds, and money market securities.
INTERNATIONAL STOCK FUND - invests primarily in common stocks of
established, non-U.S. companies.
NEW HORIZONS FUND - invests primarily in common stocks of small,
rapidly growing companies.
NEW INCOME FUND - invests primarily in marketable debt securities.
PRIME RESERVE FUND - invests in high-quality, U.S.
dollar-denominated money market securities with an average weighted
maturity not exceeding 90 days.
EQUITY INDEX FUND - invests in stocks of 500 U.S. companies.
PAYMENT OF BENEFITS - Provisions of the Plan include certain restrictions
on the form and timing of distributions to withdrawing participants. In
general, benefits are payable upon retirement, death, disability or
termination of service.
PLAN TERMINATION - Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of ERISA.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The Plan maintains its financial statements on the
accrual basis of accounting.
- 5 -
<PAGE>
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of net assets
and disclosures at the date of the financial statements and the reported
changes in net assets during the reporting period. Actual results could
differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value based on quoted market prices. Loans are carried at
cost plus accrued interest, which approximates fair value.
Purchases and sales of securities are recorded on the trade date. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
BENEFIT PAYMENTS - Payments are recorded when paid.
3. INVESTMENTS
The Plan's investments were held by T. Rowe Price, the trustee, for the
year ended December 31, 1998. Investments that represent 5% or more of the
Plan's net assets at December 31, 1998 are identified below.
<TABLE>
<CAPTION>
<S> <C>
Sempra Energy Common Stock $ 933,553
Mutual Funds:
Equity Index 500 Fund 610,402
Personal Strategy - Income 355,004
Personal Strategy - Growth 288,414
New Horizons Fund 285,503
International Stock Fund 233,963
Personal Strategy - Balanced 212,430
</TABLE>
The net appreciation in the fair value of investments is summarized as
follows for the year ended December 31, 1998:
<TABLE>
<CAPTION>
<S> <C>
Sempra Energy Common Stock $ (12,345)
Mutual funds 55,640
------------
Total $ 43,295
------------
------------
</TABLE>
4. TAX STATUS
The Company has not yet requested from the Internal Revenue Service a
determination letter stating that the Plan, as designed, is in compliance
with the applicable requirements of the Internal Revenue Code ("IRC"). The
Plan's administrator and tax counsel believe that the Plan is designed and
operated in accordance with the applicable sections of the IRC, and that
the underlying trust is exempt from taxation under Section 501(a) of the
IRC.
5. PARTICIPANT LOANS
Participants may borrow against the balances in their individual accounts
within the Plan. A participant is limited to borrowing a maximum of 50% of
the present value of his/her account balance or $50,000, whichever is
less. The minimum amount that can be borrowed is $1,000, and the fee
charged for processing a loan is paid by the participant who takes out the
loan. Loans have a maximum repayment period of five years. The loans bear
interest at 1% above the prime rate as published monthly in the Wall
Street Journal at the time the loan is made.
- 6 -
<PAGE>
6. BY FUND INFORMATION
Information regarding significant additions to and deductions from assets
available for benefits by fund option for the year ended December 31, 1998
are as follows:
<TABLE>
<CAPTION>
DISTRIBUTIONS
PARTICIPATING NET TO PARTICIPANTS INTERFUND
EMPLOYER EMPLOYEE INVESTMENT OR THEIR AND TRANSFERS
CONTRIBUTIONS CONTRIBUTIONS INCOME BENEFICIARIES (TO) FROM
<S> <C> <C> <C> <C> <C>
Sempra Energy
Common Stock $349,980 $ 14,072 $7,490 $8,406 $ 576,820
Blended Stable
Value Fund 51,388 1,445 (34,795)
Personal Strategy
Income Fund 125,067 16,160 3,121 222,890
Personal Strategy
Balanced Fund 89,825 11,661 2,724 116,587
Personal Strategy
Growth Fund 141,158 18,980 9,387 145,435
International
Stock Fund 122,826 7,829 2,335 107,841
New Horizons Fund 243,326 (5,878) 1,265 55,796
New Income Fund 26,530 2,435 989 58,484
Prime Reserve Fund 4,237 2,286 71,222
Equity Index Fund 323,636 67,072 4,204 223,479
--------- ----------- --------- -------- -----------
Total $ 349,980 $ 1,142,065 $ 129,480 $ 32,431 $ 1,543,759
--------- ----------- --------- -------- -----------
--------- ----------- --------- -------- -----------
</TABLE>
* * * * * *
- 7 -
<PAGE>
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FAIR
DESCRIPTION COST VALUE
<S> <C> <C>
* Sempra Energy Common Stock $ 946,467 $ 933,553
----------- ---------
T Rowe Price Mutual Funds:
Equity Index Fund 542,939 610,402
Personal Strategy Balanced Fund 211,056 212,430
Blended Stable Value Fund 17,989 17,989
New Horizons Fund 299,955 285,503
Prime Reserve Fund 77,707 77,707
International Stock Fund 234,517 233,963
Personal Strategy Growth Fund 281,760 288,414
Personal Strategy Income Fund 351,560 355,004
New Income Fund 88,230 85,981
----------- ---------
Total mutual funds 2,105,713 2,167,393
Participant loans (interest rates from 8.75% to 9.5%;
maturities to 2003) 31,907 31,907
----------- ---------
Total investments $3,084,087 $3,132,853
----------- ---------
</TABLE>
* Represents a party-in-interest to the Plan.
- 8 -
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF SERIES REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------------------------------------------------------------------------
NUMBER OF PURCHASE NUMBER OF SELLING COST OF NET
DESCRIPTION OF ASSET TRANSACTIONS PRICE TRANSACTIONS PRICE ASSET GAIN (LOSS)
<S> <C> <C> <C> <C> <C> <C>
Blended Stable Value Fund 16 $ 50,385 1 $ 50,385 $ 50,385
Equity Index 500 Fund 47 556,807 16 14,141 13,899 $ 242
International Stock Fund 36 244,288 11 9,678 9,819 (141)
New Horizons Fund 34 354,398 16 48,202 54,478 (6,276)
New Income Fund 42 89,563 3 1,324 1,333 (9)
Personal Strategy Balanced Fund 35 216,970 12 5,760 5,914 (154)
Personal Strategy Growth Fund 36 300,035 15 18,540 18,279 261
Personal Strategy Income Fund 37 364,650 12 13,012 13,089 (77)
Prime Reserve Fund 38 76,987 1 2 2
TRP Stable Value Fund Schedule E 24 57,703 2 39,714 39,714
Pacific Enterprises Common Stock* 19 519,249 2 519,340 519,295 45
Sempra Energy Common Stock* 20 677,980 16 14,065 13,588 477
</TABLE>
* As a result of the June 26, 1998 merger of Enova Corporation and Pacific
Enterprises forming Sempra Energy all shares of Pacific Enterprises stock
held by the Plan were converted on a basis of one share of Sempra Energy
stock for 1.5038 shares of Pacific Enterprises stock.
NOTE: The transactions included in this schedule meet the definition of
reportable transactions under Section 103 of the Employee Retirement
Income Security Act of 1974 and consist of series of transactions
during the year involving investment assets of an amount in excess of
5% of the fair value of Plan assets as of the beginning of the Plan
year.
- 9 -
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF SINGLE REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASES SALES
---------------- -----------------------------------------------
PURCHASE SELLING COST OF NET
DESCRIPTION OF ASSET PRICE PRICE ASSET GAIN (LOSS)
<S> <C> <C> <C> <C>
Blended Stable Value Fund $ 45,877 $ 50,385 $ 50,385
Equity Index 500 Fund 10,346 3,652 3,962 $(310)
10,749
47,847
8,091
8,027
7,946
8,546
3,105
51,913
9,076
12,588
9,117
178,352
8,815
8,609
8,613
3,513
8,530
3,923
7,260
7,808
7,519
35,548
7,361
7,677
7,385
7,338
6,862
6,458
6,141
5,802
10,445
5,846
9,417
International Stock Fund 4,092 5,125 4,980 145
4,349
30,609
4,317
2,941
2,780
2,610
(Continued)
</TABLE>
- 10 -
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF SINGLE REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASES SALES
---------------- -----------------------------------------------
PURCHASE SELLING COST OF NET
DESCRIPTION OF ASSET PRICE PRICE ASSET GAIN (LOSS)
<S> <C> <C> <C> <C>
International Stock Fund (continued) 3,105
22,810
2,878
2,774
107,882
2,600
2,762
2,614
2,614
2,469
5,084
8,474
2,336
New Horizons Fund 5,720 38,401 44,126 (5,725)
5,749 5,084 5,453 (369)
32,423
5,449
4,131
4,030
4,192
9,193
104,512
4,569
85,000
4,296
4,098
17,223
3,657
2,266
3,089
3,089
3,066
3,061
3,014
2,984
2,977
2,946
3,082
2,673
2,638
2,343
14,498
2,884
(Continued)
</TABLE>
- 11 -
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF SINGLE REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASES SALES
---------------- -----------------------------------------------
PURCHASE SELLING COST OF NET
DESCRIPTION OF ASSET PRICE PRICE ASSET GAIN (LOSS)
<S> <C> <C> <C> <C>
New Income Fund 11,433
53,358
5,125
Personal Strategy Balanced Fund 2,729
2,915
9,900
2,673
2,527
2,947
3,111
3,105
3,420
3,547
3,236
96,491
3,242
3,221
23,370
3,246
2,674
2,672
2,643
2,613
2,612
2,553
2,542
2,594
2,729
2,498
2,573
2,377
6,184
4,003
Personal Strategy Growth Fund 4,684 5,111 4,980 131
4,705 6,243 6,045 198
20,452
5,719
3,880
3,796
4,011
3,105
9,322
13,218
(Continued)
</TABLE>
- 12 -
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF SINGLE REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASES SALES
---------------- -----------------------------------------------
PURCHASE SELLING COST OF NET
DESCRIPTION OF ASSET PRICE PRICE ASSET GAIN (LOSS)
<S> <C> <C> <C> <C>
Personal Strategy Growth Fund (Continued) 4,345
78,600
3,982
4,242
37,497
3,876
3,029
3,029
2,983
38,401
2,848
2,932
2,879
2,864
2,933
2,998
2,655
3,379
3,056
11,718
4,089
Personal Strategy Income Fund 2,351 5,081 5,028 53
3,105 2,450 2,540 (90)
4,790 2,353 2,434 (81)
76,308
3,417
227,971
3,303
3,089
2,622
3,445
Prime Reserve Fund 60,309 35,439 35,439
10,192 4,274 4,274
TRP Stable Value Fund Schedule E 50,635 518,848 518,848
3,651
Pacific Enterprises Common Stock* 14,174
14,599
78,821
12,279
10,426
9,476
(Continued)
</TABLE>
- 13 -
<PAGE>
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF SINGLE REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASES SALES
---------------- -----------------------------------------------
PURCHASE SELLING COST OF NET
DESCRIPTION OF ASSET PRICE PRICE ASSET GAIN (LOSS)
<S> <C> <C> <C> <C>
Pacific Enterprises Common Stock*
(Continued) 10,706
12,447
12,049
269,174
11,801
11,632
34,029
4,820
11,344
Sempra Energy Common Stock* 518,848 3,404 3,231 173
5,017
9,894
10,179
3,592
10,026
9,945
2,972
9,824
10,738
10,853
23,264
10,459
10,229
10,113
9,153
12,517
</TABLE>
* As a result of the June 26, 1998 merger of Enova Corporation and Pacific
Enterprises forming Sempra Energy all shares of Pacific Enterprises stock
held by the Plan were converted on a basis of one share of Sempra Energy
stock for 1.5038 shares of Pacific Enterprises stock.
NOTE: The transactions included in this schedule meet the definition of
reportable transactions under Section 103 of the Employee Retirement
Income Security Act of 1974 and consist of single transactions during
the year involving investment assets of an amount in excess of 5% of
the fair value of Plan assets as of the beginning of the Plan year.
(Concluded)
- 14 -
<PAGE>
----------------------------------------------------------------------------
SOUTHERN CALIFORNIA GAS COMPANY RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997 AND INDEPENDENT
AUDITORS' REPORT
<PAGE>
SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997
AND FOR THE YEARS THEN ENDED:
Statements of Assets Available for Benefits 2
Statements of Changes in Assets Available for Benefits 3
Notes to Financial Statements 4-9
</TABLE>
All schedules required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 are omitted because of the absence of conditions under which they are
required or as they are filed by the trustee of the Master Trust in which the
Plan participates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Southern California Gas Company Retirement Savings Plan:
We have audited the accompanying statements of assets available for benefits of
Southern California Gas Company Retirement Savings Plan (the "Plan") as of
December 31, 1998 and 1997, and the related statements of changes in assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 1998 and 1997, and the changes in assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
June 11, 1999
- 1 -
<PAGE>
SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 1 $ 28
INVESTMENTS:
At fair value:
Investment in Master Trust 469,222 501,954
Participant loans 13,745 14,219
--------- ---------
Total investments 482,967 516,173
--------- ---------
RECEIVABLES:
Employer contributions 230
Participating employee contributions 639
Interest 45
--------
Total receivables 914
--------
ASSETS AVAILABLE FOR BENEFITS $483,882 $516,201
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1998 AND 1997
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
--------- --------
<S> <C> <C>
ADDITIONS:
Net investment income:
Equity in net investment income of the Master Trust $ 50,907 $109,054
Less investment expenses 255 256
-------- --------
Net investment income 50,652 108,798
-------- --------
Contributions:
Employer 7,248 7,231
Participating employees 19,744 19,294
-------- --------
Total contributions 26,992 26,525
-------- --------
Other 2
-------- --------
Total additions 77,644 135,325
-------- --------
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries 83,064 26,576
Other 1,058
-------- --------
Total deductions 84,122 26,576
-------- --------
TRANSFERS TO PLANS OF RELATED ENTITIES 25,841 932
-------- --------
NET INCREASE (DECREASE) (32,319) 107,817
ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 516,201 408,384
-------- --------
End of year $483,882 $516,201
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- 3 -
<PAGE>
SOUTHERN CALIFORNIA GAS COMPANY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997 (DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------
1. PLAN DESCRIPTION AND RELATED INFORMATION
The following description of the Southern California Gas Company
Retirement Savings Plan (the "Plan") is provided for general
information purposes only. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
GENERAL - The Plan is a defined contribution plan that provides
employees of Southern California Gas Company or any affiliate who has
adopted this Plan (the "Company" or "Employer") with retirement
benefits. Employees may participate upon completion of one year of
service, in which they work 1,000 hours, and may make regular savings
investments in Sempra Energy, formerly Pacific Enterprises, common
stock and other optional investments permitted by the Plan. The Plan
also permits employees to defer part of their earnings on a pre-tax
basis. On July 1, 1998, the Plan was amended to allow for immediate
plan participation for salary deferrals. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
At June 26, 1998, Pacific Enterprises, the holding company for Southern
California Gas Company, and Enova Corporation, the holding company for
San Diego Gas & Electric Company, combined into a new company named
Sempra Energy. As a result of the combination, each outstanding share
of common stock of Pacific Enterprises was converted into 1.5038 shares
of common stock of Sempra Energy, and each outstanding share of common
stock of Enova Corporation was converted into one share of common stock
of Sempra Energy. The combination was approved by the shareholders of
both companies on March 11, 1997. As a result of the combination,
employees were moved among the related companies of Sempra Energy and
their existing account balances in the savings plans in which they
participated were transferred to the appropriate company's savings
plan, if the employee requested in writing.
Effective October 1, 1998, the Plan was amended to give active
employees the option to receive distributions of cash dividends on the
shares of Sempra Energy stock in their account balances or to reinvest
the dividends in Sempra Energy stock. Former employees who have
terminated or retired and elected to leave their accounts in the Plan
do not have the option to reinvest their dividends.
ADMINISTRATION - Certain administrative functions are performed by
officers or employees of the Company. No such officer or employee
receives compensation from the Plan. Administrative expenses are paid
directly by the Company; however, investment expenses are paid by the
Plan.
CONTRIBUTIONS - Contributions to the Plan can be made under the following
provisions:
PARTICIPATING EMPLOYEE CONTRIBUTIONS - Pursuant to Section 401(a) of
the Internal Revenue Code (the "IRC"), each participant may
contribute up to 14% (up to 9% pre-tax) of base pay for represented
employees and up to 15% (pre-tax, after-tax, or a combination) of
base pay for non-represented employees. Prior to June 1, 1998,
contributions by non-represented employees were limited to 14% of
base pay with a maximum of 9% on a pre-tax basis. Total individual
pre-tax contributions in calendar years 1998 and 1997 were limited by
law to $10,000 and $9,500, respectively, in each year.
- 4 -
<PAGE>
EMPLOYER NONELECTIVE MATCHING CONTRIBUTION - The Company makes
contributions to the Plan equal to 50% of each participant's
contribution, up to the first 6%. The Company's contributions are
invested in Sempra Energy (formerly Pacific Enterprises) common
stock. Beginning October 1, 1992, employer contributions have been
funded in part from the Pacific Enterprises Stock Ownership Plan and
Trust.
PARTICIPANT ACCOUNTS - Separate accounts are maintained for each
participant. Each participant employee's account is credited with the
participant's contributions the Employer's nonelective matching
contribution as well as an allocation of investment earnings of the Plan
and fees. Allocations are based on participants' contributions or account
balances, as defined.
VESTING - All participant accounts are fully vested and nonforfeitable at
all times.
INVESTMENT OPTIONS - All investments are held in a Master Trust (see Note
6). Employees elect to have their contributions invested in increments of
10% in Sempra Energy Common Stock or the following funds offered by T.
Rowe Price, trustee of the Plan:
BLENDED STABLE VALUE FUND - invests in investment contracts issued by
high quality insurance companies and banks.
PERSONAL STRATEGY BALANCED FUND - invests in a combination of stocks,
bonds, and money market securities.
PERSONAL STRATEGY INCOME FUND - invests in a combination of bonds,
money market securities, and stocks.
PERSONAL STRATEGY GROWTH FUND - invests in a combination of stocks,
bonds, and money market securities.
INTERNATIONAL STOCK FUND - invests primarily in common stocks of
established, non-U.S. companies.
NEW HORIZONS FUND - invests primarily in common stocks of small,
rapidly growing companies.
NEW INCOME FUND - invests primarily in marketable debt securities.
PRIME RESERVE FUND - invests in high-quality, U.S. dollar-denominated
money market securities with an average weighted maturity not
exceeding 90 days.
EQUITY INDEX FUND - invests in stocks of 500 U.S. companies.
PAYMENT OF BENEFITS - Provisions of the Plan include certain restrictions
on the form and timing of distributions to withdrawing participants. In
general, benefits are payable upon retirement, death, disability or
termination of service.
PLAN TERMINATION - Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions ERISA.
- 5 -
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The Plan maintains its financial statements on the
accrual basis of accounting.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of net assets
and disclosures at the date of the financial statements and the reported
changes in net assets during the reporting period. Actual results could
differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments are
stated at fair value based on quoted market prices. Loans are carried at
cost plus accrued interest which approximates fair value.
Purchases and sales of securities are recorded on the trade date. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
BENEFIT PAYMENTS - Payments are recorded when paid. Net assets available
for Plan benefits at December 31, 1998 and 1997 include $120 and $228,
respectively, for participants who have withdrawn from The Plan but have
not yet been paid their vested benefits.
3. INVESTMENTS
The Plan's investments were held by T. Rowe Price for the year ended
December 31, 1998 and 1997. Investments that represent 5% or more of the
Plan's net assets are identified below.
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1998 1997
<S> <C> <C>
Investment in Master Trust (Note 6) $469,222 $501,954
</TABLE>
4. TAX STATUS
On November 19, 1996, the Internal Revenue Service issued the Plan a
favorable determination letter stating that the Plan, as then designed was
in compliance with the applicable sections of the IRC, and the underlying
trust is therefore exempt from taxation under Section 501(a) of the IRC.
Once qualified, the Plan is required to operate in accordance with
applicable sections of the IRC and ERISA. The Plan has been amended since
receiving the determination letter. The Plan's administrator and the
Plan's tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the IRC.
5. PARTICIPANT LOANS
Participants may borrow against the balances in their individual accounts
within the Plan. A participant is limited to borrowing a maximum of 50% of
the present value of his/her account balance or $50,000, whichever is
less. The minimum amount that can be borrowed is $1,000, and the fee
charged to process each loan is paid by each participant who takes out a
loan. All loans have a maximum repayment period of five years. The loans
bear interest at 1% above the prime rate as published monthly in the Wall
Street Journal at the time the loan is made.
- 6 -
<PAGE>
6. INVESTMENTS IN THE MASTER TRUST
The Plan's assets are held in a trust account at T. Rowe Price, the
trustee of the Plan, and consist of an interest in the Sempra Energy
Savings Master Trust, formerly the Pacific Enterprises Retirement Savings
Plan and Southern California Gas Company Retirement Savings Plan Master
Trust, (the "Master Trust"). Use of the Master Trust permits the
commingling of the trust assets of two or more similar employee benefit
plans sponsored by Sempra Energy, for investment and administrative
purposes. The Plan has an approximate 81% interest in the net assets
available for plan benefits of the Master Trust at December 31, 1998.
Net earnings of the Master Trust are allocated daily by T. Rowe Price to
each participating account balance. Net earnings include interest income,
dividend income and net appreciation (depreciation) of investments.
Benefit payments, contributions and expenses are made on a
specific-identification basis.
The net assets available for plan benefits of the Master Trust at December
31, 1998 and 1997 are summarized as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Sempra Energy (formerly Pacific Enterprises) common stock $359,143 $373,038
Equity Index Fund 124,475 99,830
Personal Strategy Balance Fund 26,497 26,862
Blended Stable Value Fund 24,437 25,614
Prime Reserve Fund 12,099 9,485
New Horizons Fund 11,811 7,668
Personal Strategy Growth Fund 6,515 4,326
International Stock Fund 5,929 3,382
Personal Strategy Income Fund 2,405 1,535
New Income Fund 3,702 1,361
-------- --------
Net assets available for plan benefits $577,013 $553,101
-------- --------
-------- --------
</TABLE>
Net appreciation, dividends, and interest for the Master Trust for the
years ended December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Net appreciation of investments $43,439 $96,985
Dividends 23,384 21,080
Interest 1,372 1,207
</TABLE>
- 7 -
<PAGE>
7. BY FUND INFORMATION
Information regarding significant additions to and deductions from assets
available for benefits of the Plan by fund option for the years ended
December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
DISTRIBUTIONS
PARTICIPATING NET TO PARTICIPANTS INTERFUND
YEAR ENDED EMPLOYER EMPLOYEE INVESTMENT OR THEIR AND TRANSFERS
DECEMBER 31, 1998 CONTRIBUTIONS CONTRIBUTIONS INCOME BENEFICIARIES (TO) FROM
<S> <C> <C> <C> <C> <C>
Sempra Energy
Common Stock $ 7,248 $ 8,564 $ 22,106 $ 54,808 $ (17,958)
Blended Stable Value
Fund 1,346 1,345 3,926 (819)
Personal Strategy
Income Fund 216 184 265 566
Personal Strategy
Balanced Fund 1,548 2,867 4,232 (2,236)
Personal Strategy
Growth Fund 671 638 713 217
International Stock Fund 499 417 425 201
New Horizons Fund 904 382 898 (1,193)
New Income Fund 131 80 224 388
Prime Reserve Fund 445 485 3,189 2,606
Equity Index Fund 5,420 22,148 14,356 (6,844)
Settlement Account (27)
Participant Loans 28 (742)
------- -------- -------- -------- ---------
Total $ 7,248 $ 19,744 $ 50,652 $ 83,064 $ (25,841)
------- -------- -------- -------- ---------
------- -------- -------- -------- ---------
</TABLE>
- 8 -
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
PARTICIPATING NET TO PARTICIPANTS INTERFUND
YEAR ENDED EMPLOYER EMPLOYEE INVESTMENT OR THEIR AND TRANSFERS
DECEMBER 31, 1997 CONTRIBUTIONS CONTRIBUTIONS INCOME BENEFICIARIES (TO) FROM
<S> <C> <C> <C> <C> <C>
Pacific Enterprises
Common Stock $ 7,231 $ 8,349 $ 81,965 $ 17,110 $ (8,440)
Blended Stable Value
Fund 1,591 1,402 1,715 (1,556)
Personal Strategy
Income Fund 152 88 39 640
Personal Strategy
Balanced Fund 1,611 3,349 977 (107)
Personal Strategy
Growth Fund 417 412 93 2,036
International Stock Fund 447 6 256 904
New Horizons Fund 1,043 484 193 1,472
New Income Fund 127 95 66 575
Prime Reserve Fund 512 455 1,012 507
Equity Index Fund 5,045 20,542 4,799 3,133
Settlement Account (24)
Participant Loans 316 (72)
------- -------- -------- -------- ---------
Total $ 7,231 $ 19,294 $108,798 $ 26,576 $ (932)
------- -------- -------- -------- ---------
------- -------- -------- -------- ---------
</TABLE>
* * * * * *
- 9 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plans'
sponsors have duly caused this annual report to be signed on their behalf by the
undersigned thereunto duly authorized.
Sempra Energy Savings Plan
Date: June 24, 1999 /s/ G. Joyce Rowland, Senior Vice President
-------------------------------------------
G. Joyce Rowland, Senior Vice President
Sempra Energy Trading Retirement Savings Plan
Date: June 24, 1999 /s/ G. Joyce Rowland, Senior Vice President
-------------------------------------------
G. Joyce Rowland, Senior Vice President
Pacific Enterprises Retirement Savings Plan
Date: June 24, 1999 /s/ G. Joyce Rowland, Senior Vice President
-------------------------------------------
G. Joyce Rowland, Senior Vice President
San Diego Gas & Electric Company Savings Plan
Date: June 24, 1999 /s/ G. Joyce Rowland, Senior Vice President
-------------------------------------------
G. Joyce Rowland, Senior Vice President
Southern California Gas Company Retirement Savings Plan
Date: June 24, 1999 /s/ G. Joyce Rowland, Senior Vice President
-------------------------------------------
G. Joyce Rowland, Senior Vice President
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Number
333-56161 on Form S-8 of Sempra Energy of our reports relating to Sempra
Energy Savings Plan, Sempra Energy Trading Retirement Savings Plan, Pacific
Enterprises Retirement Savings Plan, Southern California Gas Company
Retirement Savings Plan, and San Diego Gas & Electric Company Savings Plan
dated June 11, 1999 appearing in the Annual Report on Form 11-K of Sempra
Energy for the year ended December 31, 1998.
/S/ DELOITTE & TOUCHE LLP
San Diego, California
June 24, 1999
