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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 eight months ended August 31, 1999
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: Pacific Enterprises 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
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THE PACIFIC ENTERPRISES
RETIREMENT SAVINGS PLAN
Financial Statements for the Eight Months
Ended August 31, 1999 and the Year Ended
December 31, 1998 and Independent Auditors'
Report
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THE PACIFIC ENTERPRISES RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
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PAGE
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AUGUST 31, 1999 AND FOR THE EIGHT MONTHS THEN ENDED
AND AS OF DECEMBER 31, 1998 AND FOR THE YEAR THEN ENDED:
Statements of Assets Available for Benefits 2
Statements of Changes in Assets Available for Benefits 3
Notes to Financial Statements 4-7
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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.
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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 August 31, 1999
and December 31, 1998, and the related statements of changes in assets available
for benefits for the eight months ended August 31, 1999 and the year ended
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 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 August
31, 1999 and December 31, 1998, and the changes in assets available for benefits
for the eight months ended August 31, 1999 and the year ended December 31, 1998
in conformity with generally accepted accounting principles.
As described in Note 1, effective August 31, 1999, the Plan was merged into the
Sempra Energy Savings Plan.
/s/ DELOITTE & TOUCHE LLP
February 1, 2000
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PACIFIC ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
AUGUST 31, 1999 AND DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
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<CAPTION>
AUGUST 31, DECEMBER 31,
1999 1998
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INVESTMENTS:
At fair value:
Investment in Master Trust $ $19,839
Participant Loans 128
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Total investments 19,967
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RECEIVABLES:
Employer contributions 3
Participating employee contributions 1
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Total receivables 4
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ASSETS AVAILABLE FOR BENEFITS $ - $19,971
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The accompanying notes are an integral part of these financial statements.
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PACIFIC ENTERPRISES RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE EIGHT MONTHS ENDED AUGUST 31, 1999 AND
THE YEAR ENDED DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
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EIGHT MONTHS YEAR
ENDED ENDED
AUGUST 31, DECEMBER 31,
1999 1998
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ADDITIONS:
Net investment (loss) income:
Equity in net investment (loss) income of the Master Trust $ (43) $ 4,754
Less investment expenses 2 13
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Net investment (loss) income (45) 4,741
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Contributions:
Employer 612
Rollovers 200 2,056
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Total contributions 200 2,668
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Total additions 155 7,409
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DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries 4,020 9,801
Other 3 8
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Total deductions 4,023 9,809
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TRANSFERS TO PLANS OF RELATED ENTITIES (Note 1) (16,103) (29,615)
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NET DECREASE (19,971) (32,015)
ASSETS AVAILABLE FOR BENEFITS:
Beginning of period 19,971 51,986
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End of period $ 0 $ 19,971
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The accompanying notes are an integral part of these financial statements.
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PACIFIC ENTERPRISES RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE EIGHT MONTHS ENDED AUGUST 31, 1999 AND
THE YEAR ENDED DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
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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. The Company had no employees as of December 31, 1998.
Effective August 31, 1999, the Plan merged with the Sempra Energy Savings
Plan (the "Sempra Plan") and all Plan assets were transferred to the
Sempra Plan.
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 1999
and 1998 were limited by law to $10,000 each year. Prior to July 1,
1998, the maximum pre-tax contribution was 9% and the maximum total
employee contribution was 14% of base compensation.
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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.
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:
TRP STABLE VALUE FUND SCH E - 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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The Plan maintains its financial statements on the
accrual basis of accounting.
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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.
Dividends are recorded on the ex-dividend date.
BENEFIT PAYMENTS - Payments are recorded when paid. Assets available for
plan benefits at August 31, 1999 and December 31, 1998 include $-0- and
$256, 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
eight months ended August 31, 1999 and the year ended December 31, 1998.
Investments that represent 5% or more of the Plan's net assets are
identified below.
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AUGUST 31, DECEMBER 31,
1999 1998
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Investment in Master Trust (Note 6) $ 0 $19,839
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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, (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 0%
interest in the net assets available for plan benefits of the Master Trust
at August 31, 1999.
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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 assets available for plan benefits of the Master Trust at August 31,
1999 and December 31, 1998 are summarized as follows:
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<CAPTION>
AUGUST 31, DECEMBER 31,
1999 1998
<S> <C> <C>
Sempra Energy Common Stock $326,791 $359,143
Equity Index Fund 141,894 124,475
Personal Strategy Balance Fund 27,725 26,497
TRP Stable Value Fund Sch E 25,629 24,437
Prime Reserve Fund 13,976 12,099
New Horizons Fund 13,742 11,811
Personal Strategy Growth Fund 8,734 6,515
International Stock Fund 7,756 5,929
New Income Fund 3,443 3,702
Personal Strategy Income fund 2,974 2,405
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Total $572,664 $577,013
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Net appreciation (depreciation), dividends and interest income of the
Master Trust for the eight months ended August 31, 1999 and the year ended
December 31, 1998 are as follows:
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<CAPTION>
EIGHT MONTHS YEAR
ENDED ENDED
AUGUST 31, DECEMBER 31,
1999 1998
<S> <C> <C>
Net (depreciation) appreciation in fair value of investments $(32,249) $43,439
Dividends 17,480 23,384
Interest 924 1,372
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* * * * * *
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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.
Pacific Enterprises Retirement Savings Plan
Date: February 25, 2000 /s/ G. JOYCE ROWLAND
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G. Joyce Rowland, Senior Vice President
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Numbers
333-51309 and 333-77843 on Form S-3 and Registration Statement Number 333-56161
on Form S-8 of Sempra Energy of our report relating to Pacific Enterprises
Retirement Savings Plan dated February 1, 2000 appearing in the Annual Report on
Form 11-K of Sempra Energy for the eight months ended August 31, 1999.
/s/ DELOITTE & TOUCHE LLP
San Diego, California
February 25, 2000
