<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, 1997
Commission File Number 1-40
A. Full title of the Plans and the address of the Plans, if different from
that of the issuer named below: Pacific Enterprises and Southern
California Gas Company Retirement Savings Plans.
B. Name of issuer of the securities held pursuant to the Plans and the address
of its principal executive office: Pacific Enterprises, 555 West 5th
Street, Suite 2900, Los Angeles, California 90013-1011.
<PAGE>
[LOGO]
PACIFIC ENTERPRISES AND SOUTHERN CALIFORNIA GAS
COMPANY RETIREMENT SAVINGS PLANS
COMBINED FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT FOR THE
YEARS ENDED DECEMBER 31, 1997 AND 1996
<PAGE>
PACIFIC ENTERPRISES AND SOUTHERN CALIFORNIA GAS COMPANY RETIREMENT SAVINGS PLANS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
COMBINED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996 AND
FOR THE YEARS THEN ENDED:
Statements of Net Assets Available for Plan Benefits 2
Statements of Changes in Net Assets Available for Plan Benefits 3
Notes to Combined Financial Statements 4-11
<PAGE>
[LOGO]
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Pacific Enterprises and Southern California Gas Company Retirement Savings
Plans:
We have audited, by Plan and in total, the accompanying combined statements of
net assets available for plan benefits of the Retirement Savings Plans of
Pacific Enterprises and Southern California Gas Company (the "Plans") as of
December 31, 1997 and 1996, and the related combined statements of changes in
net assets available for plan benefits for the years then ended. These combined
financial statements are the responsibility of the Plans' management. Our
responsibility is to express an opinion on these combined 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 audits 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 combined financial statements referred to above present
fairly, by Plan and in total, in all material respects, the combined net assets
available for plan benefits of the Plans as of December 31, 1997 and 1996, and
the combined changes in net assets available for plan benefits for the years
then ended in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
June 5, 1998
<PAGE>
PACIFIC ENTERPRISES AND SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLANS
COMBINED STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1997 AND 1996 (Dollars in Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
-------------------------------------- ---------------------------------------
SOUTHERN SOUTHERN
CALIFORNIA CALIFORNIA
PACIFIC GAS PACIFIC GAS
ENTERPRISES COMPANY TOTAL ENTERPRISES COMPANY TOTAL
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS:
Investment in Master Trust $ 51,147 $ 501,954 $ 553,101 $ 38,502 $ 398,405 $ 436,907
Participant loans 831 14,219 15,050 738 9,927 10,665
Cash 8 28 36 7 52 59
--------- ---------- ---------- --------- ---------- ----------
Total investments 51,986 516,201 568,187 39,247 408,384 447,631
--------- ---------- ---------- --------- ---------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 51,986 $ 516,201 $ 568,187 $ 39,247 $ 408,384 $ 447,631
--------- ---------- ---------- --------- ---------- ----------
--------- ---------- ---------- --------- ---------- ----------
</TABLE>
See notes to combined financial statements.
-2-
<PAGE>
PACIFIC ENTERPRISES AND SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLANS
COMBINED STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1997 AND 1996 (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1996
-------------------------------------- ---------------------------------------
SOUTHERN SOUTHERN
CALIFORNIA CALIFORNIA
PACIFIC GAS PACIFIC GAS
ENTERPRISES COMPANY TOTAL ENTERPRISES COMPANY TOTAL
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Equity in net investment
income of the Master Trust $ 10,219 $ 109,054 $ 119,273 $ 5,126 $ 64,404 $ 69,530
Net (depreciation) appreciation
in fair value of investments (927) (19,779) (20,706)
Interest and dividends 286 4,128 4,414
--------- ---------- ---------- -------- --------- ---------
Total investment income 10,219 109,054 119,273 4,485 48,753 53,238
--------- ---------- ---------- -------- --------- ---------
Contributions:
Employer 955 7,231 8,186 869 7,017 7,886
Employee 2,799 19,294 22,093 2,371 18,429 20,800
--------- ---------- ---------- -------- --------- ---------
Total contributions 3,754 26,525 30,279 3,240 25,446 28,686
--------- ---------- ---------- -------- --------- ---------
Litigation settlement 2 2 4 46 5 51
--------- ---------- ---------- -------- --------- ---------
Total additions 13,975 135,581 149,556 7,771 74,204 81,975
--------- ---------- ---------- -------- --------- ---------
DEDUCTIONS:
Distributions to employees,
retirees or their beneficiaries (2,151) (26,576) (28,727) (3,401) (28,348) (31,749)
Investment fees (17) (256) (273) (12) (162) (174)
Other (66) 59 (7)
--------- ---------- ---------- -------- --------- ---------
Total deductions (2,168) (26,832) (29,000) (3,479) (28,451) (31,930)
--------- ---------- ---------- -------- --------- ---------
INTERPLAN TRANSFERS 932 (932) 2,134 (2,134)
--------- ---------- ---------- -------- --------- ---------
NET INCREASE 12,739 107,817 120,556 6,426 43,619 50,045
NET ASSETS AVAILABLE
FOR PLAN BENEFITS:
Beginning of year 39,247 408,384 447,631 32,821 364,765 397,586
--------- ---------- ---------- -------- --------- ---------
End of year $ 51,986 $ 516,201 $ 568,187 $ 39,247 $ 408,384 $ 447,631
--------- ---------- ---------- -------- --------- ---------
--------- ---------- ---------- -------- --------- ---------
</TABLE>
See notes to combined financial statements.
-3-
<PAGE>
PACIFIC ENTERPRISES AND SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLANS
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
1. PLANS DESCRIPTION AND RELATED INFORMATION
The following description of the Retirement Savings Plans of Pacific
Enterprises and Southern California Gas Company (the "Plans") is provided
for general information purposes only. Participants should refer to the
Plans' documents for a more complete description of the Plans' provisions.
GENERAL - The Plans are defined contribution plans that provide employees
of Pacific Enterprises and Southern California Gas Company or any affiliate
who has adopted these Plans (the "Companies" or "Employers") with
retirement benefits to supplement benefits provided under the Companies'
defined benefit pension plans. Employees may participate after one year in
which they complete 1,000 hours of service and may make regular savings
investments in Pacific Enterprises, parent company of Southern California
Gas Company, common stock and other optional investments permitted by the
Plans. The Plans were adopted on October 1, 1964, to allow eligible
employees to supplement their retirement needs. The Plans also permit
employees to defer part of their earnings on a pre-tax basis.
ADMINISTRATION - Certain administrative functions are performed by officers
or employees of the Companies. No such officer or employee receives
compensation from the Plans. Administrative expenses were paid directly by
the Companies for the three months ended March 31, 1996. Effective April
1, 1996, certain administrative expenses are passed through to employees by
the Plans.
CONTRIBUTIONS - Contributions to the Plans can be made under the following
provisions:
SALARY DEFERRAL (PRE-TAX AND AFTER-TAX) CONTRIBUTIONS - Pursuant to
Section 401(a) of the Internal Revenue Code (the "Code"), 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 each participant's base
pay. Total individual pre-tax contributions in calendar years 1997 and
1996 were limited by law to $9,500 in each year.
EMPLOYER NONELECTIVE MATCHING CONTRIBUTION - The Companies make
contributions to the Plans equal to 50% of each participant's
contribution, up to the first 6%. The Companies' contributions are
invested in Pacific Enterprises common stock. Beginning October 1,
1992, employer contributions have been funded in part from the Pacific
Enterprises Stock Ownership Plan and Trust ("ESOP").
PARTICIPANT ACCOUNTS - Separate accounts are maintained for each
participant. Each participant employee is credited with the participant's
contributions and an allocation of the Employers' nonelective matching
contribution, as well as an allocation of investment earnings of the Plans
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.
-4-
<PAGE>
INVESTMENT OPTIONS - Beginning April 1, 1996, all investments are held in a
Master Trust (see Note 7). Employees elect to have their contributions
invested in increments of 10% in the following funds within the Master
Trust: the Pacific Enterprises Common Stock Fund and the following funds
offered by T. Rowe Price, trustee of the Plans: the Blended Stable Value
Fund, Personal Strategy Funds (Income, Balanced, and Growth), International
Stock Fund, New Horizons Fund, New Income Fund, Prime Reserve Fund, and
Equity Index Fund. Prior to April 1, 1996, employees elected to have their
contributions invested in increments of 10% in the following funds:
Pacific Enterprises Common Stock, Guaranteed Interest Contracts, Money
Market (Fidelity Daily Income Trust), Balanced (Phoenix Balanced Fund) and
Diversified (Mellon Stock Index).
BENEFIT PAYMENTS - Payments are recorded when paid.
PLAN TERMINATION - Although they have not expressed any intent to do so,
the Companies have the right under the Plans to discontinue their
contributions at any time and to terminate the Plans subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The Plans maintain their combined financial
statements on the accrual basis of accounting.
USE OF ESTIMATES - The preparation of combined 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 combined 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 Plans' investments are
stated at fair value based on quoted market prices. Pacific Enterprises
common stock is valued at its quoted market price of $37.625 and $30.375 at
December 31, 1997 and 1996, respectively. Effective April 1, 1996, the
Plans are valued daily.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
BENEFITS PAYABLE - Net assets available for plan benefits at December 31,
1997 and 1996 include $249,597 and $194,410, respectively, for participants
who have withdrawn from the Plans but have not yet been paid their vested
benefits.
3. INVESTMENTS
The Plans' investments were held by T. Rowe Price for the year ended
December 31, 1997 and the nine months ended December 31, 1996 and by
Bankers Trust Company of California, N.A., for the three months ended March
31, 1996.
-5-
<PAGE>
Investments that represent 5% of the Plans' net assets are identified
below.
<TABLE>
<CAPTION>
December 31,
---------------------
1997 1996
(Dollars in Thousands)
<S> <C> <C>
Investment in Master Trust (Note 7) $ 553,101 $ 436,907
</TABLE>
4. TAX STATUS
On January 16, 1996 and November 19, 1996, the Internal Revenue Service
issued the Pacific Enterprises Plan and Southern California Gas Company
Plan, respectively, favorable determination letters stating that each of
the Plans is designed in accordance with the applicable sections of the
Internal Revenue Code (the "IRC"), and the underlying trust is therefore
exempt from taxation under Section 501(a) of the IRC. Once qualified, each
Plan is required to operate in accordance with applicable sections of the
IRC and ERISA. The Plans' administrator and the Plans' tax counsel believe
that each Plan is designed and currently being operated in compliance with
the applicable requirements of the IRC.
5. SHAREHOLDERS' LAWSUIT
Relative to a settlement of a shareholders' lawsuit in which the Plans were
claimants, the Plans received settlement funds in 1997 and 1996.
6. PARTICIPANT LOANS
Effective April 1, 1996, the Plans were amended to allow participants to
borrow against the balance in their individual accounts within the Plans.
A participant is limited to borrowing a maximum of 50% of the present value
of his or 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
each loan is paid by each participant who takes out a loan. All loans have
a maximum repayment period of five years. The interest rate charged is
based on 1% above the prime rate as published monthly in the Wall Street
Journal, and the rate is fixed for the life of the loan.
7. INVESTMENTS IN THE MASTER TRUST
The Plans' assets are held in a trust account at T. Rowe Price, trustee of
the Plans, and consist of an interest in the Pacific Enterprises Retirement
Savings Plan and the 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 the Companies' benefit plans for
investment and administrative purposes. The Pacific Enterprises Plan and
Southern California Gas Company Plan have an approximate 9% and 91%
interest, respectively, in the net assets available for plan benefits of
the Master Trust at December 31, 1997.
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.
-6-
<PAGE>
The net assets available for plan benefits of the Master Trust at December
31, 1997 and 1996 are summarized as follows (dollars in thousands):
<TABLE>
<CAPTION>
Investments at Fair Value: 1997 1996
-------------------------
<S> <C> <C>
Pacific Enterprises common stock $ 373,038 $ 299,346
Equity Index Fund 99,830 71,473
Personal Strategy Balance Fund 26,862 22,176
Blended Stable Value Fund 25,614 26,354
Prime Reserve Fund 9,485 9,181
New Horizons Fund 7,668 4,334
International Stock Fund 3,382 1,833
Personal Strategy Income Fund 1,535 524
Personal Strategy Growth Fund 4,326 1,122
New Income Fund 1,361 564
---------- ----------
Net assets available for plan benefits $ 553,101 $ 436,907
---------- ----------
---------- ----------
</TABLE>
-7-
<PAGE>
The changes in net assets available for plan benefits of the Master
Trust for the year ended December 31, 1997 are summarized as follows
by fund (dollars in thousands):
<TABLE>
<CAPTION>
PACIFIC BLENDED
ENTERPRISES STABLE PERSONAL PERSONAL PERSONAL
COMMON VALUE STRATEGY STRATEGY STRATEGY
TOTAL STOCK FUND INCOME BALANCED GROWTH
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Net appreciation in fair value of investments $ 96,985 $ 71,986 $ 54 $ 2,626 $ 347
Interest and dividends 22,288 15,650 $ 1,632 81 1,426 128
--------- --------- -------- ------- -------- -------
Total investment income (loss) 119,273 87,636 1,632 135 4,052 475
--------- --------- -------- ------- -------- -------
Contributions:
Employer 8,186 8,186
Employee 22,093 8,898 1,875 184 1,948 502
--------- --------- -------- ------- -------- -------
Total contributions 30,279 17,084 1,875 184 1,948 502
--------- --------- -------- ------- -------- -------
Litigation settlement 4 2
--------- --------- -------- ------- -------- -------
Total additions 149,556 104,720 3,509 319 6,000 977
--------- --------- -------- ------- -------- -------
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries (28,367) (18,108) (1,854) (43) (1,106) (123)
Investment fees (273) (242) (6) (4) (1)
Net loans to participants made during the year (4,746) (3,557) (215) (19) (236) 12
--------- --------- -------- ------- -------- -------
Total deductions (33,386) (21,907) (2,075) (62) (1,346) (112)
Interfund and interplan transfers (to) from
Southern California Gas Co. and Pacific Enterprises
Retirement Savings Plans 24 (9,121) (2,174) 754 32 2,339
--------- --------- -------- ------- -------- -------
NET INCREASE (DECREASE) 116,194 73,692 (740) 1,011 4,686 3,204
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 436,907 299,346 26,354 524 22,176 1,122
--------- --------- -------- ------- -------- -------
End of year $ 553,101 $ 373,038 $ 25,614 $ 1,535 $ 26,862 $ 4,326
--------- --------- -------- ------- -------- -------
--------- --------- -------- ------- -------- -------
<CAPTION>
INTERNATIONAL NEW NEW PRIME EQUITY
STOCK HORIZONS INCOME RESERVE INDEX
FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Net appreciation in fair value of investments $ (207) $ 321 $ 26 $ 21,832
Interest and dividends 201 228 76 $ 498 2,368
--------- -------- ------- ------- --------
Total investment income (loss) (6) 549 102 498 24,200
--------- -------- ------- ------- --------
Contributions:
Employer
Employee 607 1,219 138 594 6,128
--------- -------- ------- ------- --------
Total contributions 607 1,219 138 594 6,128
--------- -------- ------- ------- --------
Litigation settlement 2
--------- -------- ------- ------- --------
Total additions 601 1,768 240 1,094 30,328
--------- -------- ------- ------- --------
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries (282) (216) (66) (1,157) (5,412)
Investment fees (1) (1) (3) (15)
Net loans to participants made during the year 8 42 1 (113) (669)
--------- -------- ------- ------- --------
Total deductions (275) (175) (65) (1,273) (6,096)
Interfund and interplan transfers (to) from
Southern California Gas Co. and Pacific Enterprises
Retirement Savings Plans 1,223 1,741 622 483 4,125
--------- -------- ------- ------- --------
NET INCREASE (DECREASE) 1,549 3,334 797 304 28,357
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 1,833 4,334 564 9,181 71,473
--------- -------- ------- ------- --------
End of year $ 3,382 $ 7,668 $ 1,361 $ 9,485 $ 99,830
--------- -------- ------- ------- --------
--------- -------- ------- ------- --------
</TABLE>
-8-
<PAGE>
8. ADDITIONAL BY-FUND INFORMATION
The changes in net assets available for plan benefits of the Master Trust
for the nine months ended December 31, 1996 are summarized as follows by
fund (dollars in thousands):
<TABLE>
<CAPTION>
PACIFIC BLENDED PERSONAL
ENTERPRISES STABLE STRATEGY
COMMON VALUE INCOME
TOTAL STOCK FUND FUND
<S> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Net appreciation (depreciation) in fair value
of investments $ 53,094 $ 44,450 $ (3)
Interest and dividends 16,436 11,274 $ 1,224 30
--------- --------- -------- -----
Total investment income 69,530 55,724 1,224 27
--------- --------- -------- -----
Contributions:
Employer 5,834 5,834
Employee 15,498 6,327 1,742 68
--------- --------- -------- -----
Total contributions 21,332 12,161 1,742 68
--------- --------- -------- -----
Transfer from former trustee 369,477 250,222 26,593
Litigation settlement 8
--------- --------- -------- -----
Total additions 460,347 318,107 29,559 95
--------- --------- -------- -----
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries (12,549) (8,063) (976) (1)
Investment fees (174) (123) (13)
Net loans to participants made during the period (10,665) (7,299) (885) (4)
--------- --------- -------- -----
Total deductions (23,388) (15,485) (1,874) (5)
--------- --------- -------- -----
Interfund and interplan transfers (to) from
Southern California Gas Co. and Pacific Enterprises
Retirement Savings Plans (52) (3,276) (1,331) 434
--------- --------- -------- -----
NET INCREASE 436,907 299,346 26,354 524
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of period
--------- --------- -------- -----
End of period $ 436,907 $ 299,346 $ 26,354 $ 524
--------- --------- -------- -----
--------- --------- -------- -----
<CAPTION>
PERSONAL PERSONAL
STRATEGY STRATEGY INTERNATIONAL NEW
BALANCED GROWTH STOCK HORIZONS
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Net appreciation (depreciation) in fair value
of investments $ 1,162 $ (21) $ 41 $ (255)
Interest and dividends 1,089 83 51 403
------- ----- ---- ------
Total investment income 2,251 62 92 148
------- ----- ---- ------
Contributions:
Employer
Employee 1,588 150 198 515
------- ----- ---- ------
Total contributions 1,588 150 198 515
------- ----- ---- ------
Transfer from former trustee 21,144
Litigation settlement
------- ----- ---- ------
Total additions 24,983 212 290 663
------- ----- ---- ------
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries (654) (49) (57)
Investment fees (8) (1)
Net loans to participants made during the period (485) (5) (22) (43)
------- ----- ---- ------
Total deductions (1,147) (5) (71) (101)
------- ----- ---- ------
Interfund and interplan transfers (to) from
Southern California Gas Co. and Pacific Enterprises
Retirement Savings Plans (1,660) 915 1,614 3,772
------- ----- ---- ------
NET INCREASE 22,176 1,122 1,833 4,334
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of period
------- ----- ---- ------
End of period $ 22,176 $ 1,122 $ 1,833 $ 4,334
------- ----- ---- ------
------- ----- ---- ------
<CAPTION>
NEW PRIME EQUITY
INCOME RESERVE INDEX
FUND FUND FUND
<S> <C> <C> <C>
ADDITIONS:
Investment income:
Net appreciation (depreciation) in fair value
of investments $ 4 $ 7,716
Interest and dividends 13 $ 358 1,911
------- ----- -------
Total investment income 17 358 9,627
------- ----- -------
Contributions:
Employer
Employee 68 542 4,300
------- ----- -------
Total contributions 68 542 4,300
------- ----- -------
Transfer from former trustee 8,908 62,610
Litigation settlement 8
------- ----- -------
Total additions 85 9,816 76,537
------- ----- -------
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries (66) (762) (1,921)
Investment fees (5) (24)
Net loans to participants made during the period (7) (290) (1,625)
------- ----- -------
Total deductions (73) (1,057) (3,570)
------- ----- -------
Interfund and interplan transfers (to) from
Southern California Gas Co. and Pacific Enterprises
Retirement Savings Plans 552 422 (1,494)
------- ----- -------
NET INCREASE 564 9,181 71,473
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of period
------- ----- -------
End of period $ 564 $ 9,181 $ 71,473
------- ----- -------
------- ----- -------
</TABLE>
-9-
<PAGE>
The following presents by-fund information for the three months ended March
31, 1996 prior to the commingling of assets in the Master Trust (dollars in
thousands):
Changes in net assets available for plan benefits for the three months
ended March 31, 1996:
<TABLE>
<CAPTION>
PACIFIC
ENTERPRISES GUARANTEED
COMMON INTEREST GOVERNMENT
TOTAL STOCK CONTRACTS OBLIGATIONS
<S> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Net (depreciation) appreciation in fair value
of investments $ (20,706) $ (23,686)
Interest and dividends 4,414 3,409 $ 367 $ 6
--------- --------- ------ ----
Total investment (loss) income (16,292) (20,277) 367 6
--------- --------- ------ ----
Contributions:
Employer 2,052 2,052
Employee 5,302 2,297 684
--------- --------- ------
Total contributions 7,354 4,349 684
--------- --------- ------
Litigation settlement 43
--------- --------- ------ ----
Total additions (8,895) (15,928) 1,051 6
--------- --------- ------ ----
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries (19,200) (12,023) (1,782) (21)
Other (7) (1,205) (1,503) (1)
--------- --------- ------ ----
Total deductions (19,207) (13,228) (3,285) (22)
--------- --------- ------ ----
Transfer to successor trustee (369,477) (250,221) (26,593) (395)
--------- --------- ------ ----
NET (DECREASE) INCREASE (397,579) (279,377) (28,827) (411)
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of period 397,586 279,377 28,827 411
--------- --------- ------ ----
End of period $ 7 $ - $ - $ -
--------- --------- ------ ----
--------- --------- ------ ----
<CAPTION>
(P.E.O.C.)
BT
BALANCED
MONEY CASH
MARKET BALANCED DIVERSIFIED FUND
<S> <C> <C> <C> <C>
ADDITIONS:
Investment income:
Net (depreciation) appreciation in fair value
of investments $ 103 $ 2,877
Interest and dividends $ 109 173 349 $ 1
------ ----- ------- ----
Total investment (loss) income 109 276 3,226 1
------ ----- ------- ----
Contributions:
Employer
Employee 184 595 1,542
------ ----- -------
Total contributions 184 595 1,542
------ ----- -------
Litigation settlement 43
------ ----- ------- ----
Total additions 293 871 4,768 44
------ ----- ------- ----
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries (782) (1,188) (3,367) (37)
Other 425 542 1,735
------ ----- ------- ----
Total deductions (357) (646) (1,632) (37)
------ ----- ------- ----
Transfer to successor trustee (8,514) (21,144) (62,610)
------ ----- ------- ----
NET (DECREASE) INCREASE (8,578) (20,919) (59,474) 7
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of period 8,578 20,919 59,474 -
------ ----- ------- ----
End of period $ - $ - $ - $ 7
------ ----- ------- ----
------ ----- ------- ----
</TABLE>
-10-
<PAGE>
9. MERGER AGREEMENT WITH ENOVA CORPORATION
On October 14, 1996, Pacific Enterprises and Enova Corporation, the parent
company of San Diego Gas and Electric Company, announced an agreement
to a business combination in which they will each become a subsidiary of
a new holding company named Sempra Energy. The proposed merger remains
subject to approval by the Securities and Exchange Commission, which is
expected during the summer of 1998. All other regulatory approvals have
been received and the combination is expected to be effective after
receiving final approval from the Securities and Exchange Commission.
There are no changes planned with respect to the Southern California Gas
Company Retirement Savings Plan as a result of the merger.
It is expected that the Pacific Enterprises Retirement Savings Plan will
eventually be succeeded by the new Sempra Energy Retirement Savings
Plan; however, management is not able to estimate when this might occur.
******
-11-
<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.
Pacific Enterprises Retirement Savings Plan
Date: June 24, 1998 /s/ G. JOYCE ROWLAND
--------------------------------
G. Joyce Rowland, Vice President
Southern California Gas Company Retirement Savings Plan
Date: June 24, 1998 /s/ G. JOYCE ROWLAND
--------------------------------
G. Joyce Rowland, Vice President
<PAGE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements No.
2-96782 and 33-26357 on Form S-8 of our reports relating to the Pacific
Enterprises and Southern California Gas Company Retirement Savings Plans dated
June 5, 1998 appearing in this Annual Report on Form 11-K of the Pacific
Enterprises and Southern California Gas Company Retirement Savings Plans for the
year ended December 31, 1997.
/s/ Deloitte & Touche LLP
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Los Angeles, California
June 25, 1998
