<PAGE>
Exhibit 99.1
SEMPRA ENERGY REPORTS
HIGHER THIRD-QUARTER EARNINGS
ON NEW BUSINESS GROWTH
SAN DIEGO, Oct. 26, 2000 - Driven by continued growth of its
energy trading, independent generation and international operations,
Sempra Energy (NYSE: SRE) today reported unaudited consolidated net
income of $110 million, or 55 cents per diluted share of common
stock, for the third quarter of 2000, compared with last year's
third-quarter net income of $108 million, or 45 cents per diluted
share, for a 22-percent increase in earnings per share. Third-quarter
2000 results reflect an after-tax charge of 15 cents per share for
San Diego Gas & Electric (SDG&E), due to recent legislative and
regulatory actions. Earnings per share also were affected favorably
by the repurchase of 36 million shares in the first quarter 2000.
Excluding the one-time charge, net income for the third quarter
2000 would have been $140 million, up 30 percent from the third
quarter 1999, and earnings per share would have been 70 cents, up 56
percent.
-more-
<PAGE>
In the third quarter 2000, net income for Sempra Energy's non-
utility and new-business operations -- including Sempra Energy
Trading, Sempra Energy International, Sempra Energy Solutions, Sempra
Energy Financial, Sempra Energy Resources, Sempra Communications and
the parent company -- rose to $42 million from $1 million in the
third quarter 1999.
Sempra Energy's third-quarter revenues were $1.8 billion, up 50
percent from revenues of $1.2 billion in the same quarter last year,
with the increase due primarily to increased sales in the company's
retail and trading operations and higher energy prices worldwide.
"We continue to see substantial growth in our newer businesses -
especially our wholesale energy trading, generation and international
operations - which contributed more than one-third of our corporate
earnings during the quarter," said Stephen L. Baum, chairman,
president and chief executive officer of Sempra Energy. "With this
growth, we are on track for record earnings of $2.05 per share this
year.
"While we are pleased by the steady progress of our long-term
growth strategies, we remain concerned about the dysfunctional
western wholesale electricity market. We have called on federal
regulators to adopt the appropriate remedies to make the market
workably competitive."
Energy Trading
Sempra Energy Trading's net income grew to $45 million in the
third quarter 2000, compared with $5 million in the year-earlier
period. The dramatic increase is primarily due to improved results in
oil, natural gas and electricity trading in the United States and
Europe amidst volatile international commodity markets. Since the
first quarter of 1999, Sempra Energy Trading has expanded its market
penetration from a North American focus on the United States and
Canada to servicing customers in more than 45 countries worldwide.
-more-
<PAGE>
Sempra Energy Trading's physical trading volumes of natural gas
increased 40 percent to 8.1 billion cubic feet per day (bcfd) during
the quarter, compared with 5.8 bcfd during the same period last year.
Trading volumes of crude oil and liquid products decreased 13 percent
to 2 million barrels per day (mbd) in third quarter 2000, compared
with 2.3 mbd in third quarter 1999.
During the quarter, Sempra Energy Trading opened new offices in
Geneva, Switzerland, and Madrid, Spain, as part of the company's
expansion in European markets. The company also acquired a majority
stake in Atlantic Electric & Gas, Ltd., an electricity and natural
gas marketing company targeting residential and small-business
customers throughout England and Wales. Sempra Energy Trading
previously secured a joint-ownership stake in Riva Energie, AG, an
electricity retailer with 41,000 residential and small-business
customers in Germany.
International Operations
Sempra Energy International's net income grew to $13 million in
the third quarter 2000 from $5 million during the same quarter last
year. The improvement was due primarily to higher gas and electricity
sales in its South American utilities amidst more severe winter
weather in the region, as well as increased ownership of the Peruvian
operations, beginning in September 1999.
Sempra Energy International recently completed its purchase of
an additional 21.5-percent interest in holding companies that control
two natural gas utilities in Argentina, raising its total stake to 43
percent.
Independent Generation
Third-quarter earnings from Sempra Energy Resources, which
develops and owns electric generation, were $16 million, compared
with $2 million last year, primarily due to operations at El Dorado
Energy, which started operations in May 2000. The 480-megawatt power
plant, jointly owned with Reliant Energy and located near Las Vegas,
currently sells electricity into the California wholesale power
market.
-more-
<PAGE>
Retail Energy Services
Revenues from Sempra Energy's retail energy services marketing
operations in the third quarter 2000 more than doubled to $162
million, compared with $71 million in the same quarter last year. For
the first nine months of the year, retail revenues totaled $372
million, compared with $180 million generated during the first nine
months of 1999. These operations are concentrated primarily in Sempra
Energy Solutions, which markets integrated energy-services solutions
to commercial, industrial and institutional customers, and Energy
America, which sells gas and electricity to residential and small-
business customers.
Sempra Energy Solutions won several significant energy-
efficiency-service contracts, including a 15-year pact with
Goodfellow Air Force Base in San Angelo, Texas, and $5.8 million in
agreements with the County of Maricopa, Arizona, and the East Campus
of Arizona State University.
During the quarter, Energy America expanded its marketing
efforts into eastern Ohio, including the cities of Cleveland and
Akron, and also acquired 50,000 customers from Titan Energy in
Georgia. The company currently has more than 400,000 customers in six
states.
Overall, Sempra Energy's retail energy services operations
recorded a net loss of $5 million in the third quarter 2000, compared
with a net loss of $4 million during the same period last year, due
to ongoing start-up costs.
Energy Delivery Services
Southern California Gas Company recorded net income of $53
million in the third quarter 2000, up from $48 million in 1999's
third quarter, primarily due to reduced operating expenses and
increased income from gas sales to large commercial, industrial and
institutional customers.
-more-
<PAGE>
Net income for SDG&E for the third quarter was $15 million, down
75 percent from $59 million from the same period in 1999. The decline
was due primarily to the $30 million after-tax effect of a charge for
a potential regulatory disallowance related to the acquisitions to
date of wholesale power in the deregulated California market and a
$10 million after-tax effect of seasonal variations in income from
sales of natural gas, which in prior years were eliminated by a
balancing account.
Recent legislation and regulatory actions require SDG&E to
refund to most of its electric customers amounts charged since June
1, 2000, for the commodity portion of their electric bills to the
extent they exceed 6.5 cents per kilowatt hour (kWh), and to limit
subsequent billings for the electric commodity to 6.5 cents per kWh
through 2002 or 2003. SDG&E estimates that, at Dec. 31, 2000, it will
have accumulated an undercollection of approximately $350 million,
which the legislation and the regulatory decision acknowledge are to
be recovered in the future to the extent that the amounts were
prudently incurred. This undercollection will continue to grow for
two or three additional years.
"Assembly Bill 265, the California law enacted this summer to
cap retail electricity rates for SDG&E customers, affirms SDG&E's
right to recover from its customers the cost of procuring power from
the wholesale market," Baum said. "The law, however, also mandates a
regulatory hindsight prudence review of SDG&E's power-procurement
practices. We strongly believe that SDG&E's practices have been both
prudent and also consistent with policies of the state. Nonetheless,
we expect them to be questioned. SDG&E followed the blueprint for
deregulation laid out by legislators and regulators, but the current
political environment effectively may require SDG&E to share in the
cost of deregulation incurred by its customers."
more-
<PAGE>
Internet Broadcast
Sempra Energy will broadcast a live discussion of its earnings
results over the Internet today at 1 p.m. Eastern Time with Baum,
Neal E. Schmale, executive vice president and chief financial officer
of Sempra Energy, and Frank H. Ault, vice president and controller of
Sempra Energy. For access, log onto the Web site at www.sempra.com.
Those unable to participate in the live Webcast, the teleconference
will be available on replay by dialing (719) 457-0820 and entering
the passcode number, 534185.
Sempra Energy (NYSE: SRE), based in San Diego, is a Fortune 500
energy services holding company with 12,000 employees and revenues of
nearly $5.5 billion. Through its eight principal subsidiaries --
Southern California Gas Company, San Diego Gas & Electric, Sempra
Energy Solutions, Sempra Energy Trading, Sempra Energy International,
Sempra Energy Resources, Sempra Communications and Sempra Energy
Financial -- Sempra Energy serves more than 9 million customers in
the United States, Europe, Canada, Mexico, South America and Asia.
# # #
This press release contains statements that are not historical
fact and constitute projections, forecasts or forward-looking
statements. When we use words like "believes," "expects,"
"anticipates," "intends," "plans," "estimates," "may," "should" or
similar expressions, or when we discuss our strategy or plans, we are
making projections, forecasts or forward-looking statements. These
statements are not guarantees of performance. They involve risks,
uncertainties and assumptions that could cause the company's future
results to differ materially from those expressed in these
statements. Many of the factors that will determine these results are
beyond the company's ability to control or predict. These statements
are necessarily based upon various assumptions involving judgments
with respect to the future. These risks and uncertainties, include,
among others: national, international, regional and local economic,
competitive and regulatory conditions and developments; capital
market conditions, inflation rates and interest rates; energy
markets, including the timing and extent of changes in commodity
prices; weather conditions; business, regulatory and legal decisions;
the pace of deregulation of retail natural gas and electricity
delivery; technological developments; the timing and success of
business development efforts; and other uncertainties, all of which
are difficult to predict and many of which are beyond the company's
control. These risks and uncertainties are further discussed in the
company's Annual Report on Form 10-K for the fiscal year ended Dec.
31, 1999, which has been filed with the Securities and Exchange
Commission and is available through the EDGAR system without charge
at its Web site, www.sec.gov.
<PAGE>
<TABLE>
SEMPRA ENERGY
TABLE A
CONSOLIDATED INCOME STATEMENT (Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------ ----------------
2000 1999 2000 1999
-----------------------------------------
<S> <C> <C> <C> <C>
In Millions of Dollars, Except Per Share Amounts
Revenues
California utilities:
Natural Gas $ 799 $ 618 $ 2,336 $ 2,022
Electric 645 437 1,467 1,443
Other Operating revenues 366 166 936 429
Other income 48 33 121 68
------------------ ----------------
Total 1,858 1,254 4,860 3,962
Expenses
Cost of natural gas distributed 382 203 1,088 769
Electric fuel and net purchased power 444 180 841 391
Operating expenses 609 440 1,637 1,313
Depreciation and decomissioning 142 140 420 749
Franchise payments and other taxes 47 40 138 126
Preferred dividends/distributions by
subsidiaries 7 3 19 9
------------------ ----------------
Total 1,631 1,006 4,143 3,357
------------------ ----------------
Income Before Interest and Income Taxes 227 248 717 605
Interest expense 67 73 216 185
------------------ ----------------
Income Before Income Taxes 160 175 501 420
Income taxes 50 67 167 131
------------------ ----------------
Net Income $ 110 $ 108 $ 334 $ 289
------------------ ----------------
Wtd. Avg. Shares Outstanding(Basic)* 201,338 237,353 210,303 237,192
Wtd. Avg. Shares Outstanding(Diluted)* 201,497 237,794 210,405 237,556
Net Income/Share of Common Stock(Basic) $ 0.55 $ 0.45 $ 1.59 $ 1.22
Net Income/Share of Common Stock(Diluted)$ 0.55 $ 0.45 $ 1.59 $ 1.22
Dividends Declared Per Common Share $ 0.25 $ 0.39 $ 0.75 $ 1.17
*In thousands of shares
</TABLE>
<TABLE>
KEY CONSOLIDATED BALANCE SHEET STATISTICS (Unaudited)
<CAPTION>
September 30
----------------------------
In Millions of Dollars, Except Per Share Amounts 2000 1999
------------- -----------
<S> <C> <C>
Short-Term Debt $ 303 $ 85
Current Portion of Long-Term Debt 118 229
Long-Term Debt 3,300 2,934
------------- -----------
Total Debt 3,721 3,248
Preferred Stock of Subsidiaries 204 204
Mandatorily Redeemable Trust Preferred Securities 200 --
Common Equity 2,478 2,895
------------- -----------
Total Capitalization $ 6,603 $ 6,347
------------- -----------
Debt to Total Capitalization 56% 51%
Book Value per Share $ 12.29 $ 12.20
Cash and Cash Equivalents $ 378 $ 474
</TABLE>
<PAGE>
<TABLE>
SEMPRA ENERGY
TABLE B
BUSINESS UNIT EARNINGS (Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
----------------- ----------------
2000 1999 Change 2000 1999 Change
------------------------ ------------------------
<S> <C> <C> <C> <C> <C> <C>
Delivery Services:
SoCal Gas $ 53 $ 48 $ 5 $ 150 $ 141 $ 9
SDG&E 15 59 (44) 107 159 (52)
------------------------ ------------------------
Subtotal 68 107 (39) 257 300 (43)
Energy Trading 45 5 40 102 9 93
International 13 5 8 24 (3) 27
Resources 16 2 14 19 4 15
Retail Services (5) (4) (1) (17) (12) (5)
Technology Ventures (3) (2) (1) (8) (5) (3)
Financial 8 6 2 23 20 3
Parent and Other (32) (11) (21) (66) (11) (55)
------------------------ ------------------------
Subtotal 42 1 41 77 2 75
Business-Combination Costs -- -- -- -- (13) 13
------------------------ ------------------------
Total Net Income $ 110 $ 108 $ 2 $ 334 $ 289 $ 45
------------------------ ------------------------
Shares Outstanding
(diluted, in millions) 201 238 210 238
----------------- ----------------
Earnings per Share $ 0.55 $ 0.45 $0.10 $ 1.59 $ 1.22 $0.37
------------------------ ------------------------
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
-----------------------------------------
2000 1999 2000 1999
-----------------------------------------
<S> <C> <C> <C> <C>
Capital Expenditures (in millions)
SoCalGas $ 44 $ 40 $ 130 $ 106
SDG&E $ 77 $ 75 $ 207 $ 165
Authorized Return on Common Equity
SoCalGas -- -- 11.60% 11.60%
SDG&E -- -- 10.60% 11.27%
Achieved Return on Common Equity
(annualized)
SoCalGas -- -- 15.17% 14.56%
SDG&E -- -- 12.21% 17.56%
Sempra -- -- 16.30% 13.27%
</TABLE>
<PAGE>
<TABLE>
SEMPRA ENERGY TABLE C
OPERATING STATISTICS (Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------
2000 1999 2000 1999
------------------- -----------------
<S> <C> <C> <C> <C>
Delivery Services (California Utilities)
Revenues ($ Millions)
SDG&E 731 520 1,776 1,720
SoCalGas (excludes
intercompany sales) 713 535 2,027 1,745
Gas Sales (BCF) 63 65 275 330
Transportation and Exchange (BCF) 247 175 550 401
------------------- -----------------
Total Deliveries (BCF) 310 240 825 731
------------------- -----------------
Total Gas Customers (Thousands) 5,770 5,691
Electric Sales (Millions of Kwhs) 4,484 4,170 11,952 11,356
Direct Access (Millions of Kwhs) 835 901 2,579 2,304
------------------- -----------------
Total Deliveries (Millions of Kwhs) 5,319 5,071 14,531 13,660
------------------- -----------------
Total Electric Customers (Thousands) 1,233 1,214
Energy Trading
Operating Margins ($ Millions)
North America 115 28 260 59
Europe/Asia 34 13 96 33
Natural Gas (Physical, BCF/Day) 8.1 5.8 8.2 5.3
Electric (Physical, Billions
of Kwhs) 23.1 6.3 42.9 15.5
Oil & Liquid Products (Physical,
Millions Bbls/Day) 2.0 2.3 2.2 2.0
International (1)
Revenues ($ Millions) 314 273 783 725
Natural Gas Sales (BCF)
Argentina 75 72 180 197
Mexico 5 3 13 8
Natural Gas Customers (Thousands)
Argentina 1,299 1,251
Mexico 41 33
Electric Sales (Millions of Kwhs)
Chile 373 345 1,146 1,052
Peru 868 852 2,660 2,537
Electric Customers (Thousands)
Chile 391 386
Peru 665 654
Retail Services
Revenues ($ Millions)
Commercial and Industrial 117 45 236 113
Mass Market 45 26 136 67
Mass Market Customers (Thousands) 400 360
Mass Market Gas Volumes (BCF) 8 8 32 21
Mass Market Electricity Volumes
(Millions of Kwhs) 130 -- 223 --
(1) Represents 100 percent of these subsidiaries, although all are less than 100 percent
owned by Sempra
</TABLE>
