Sempra Energy reports record 2005 net income

• Fourth-quarter 2005 net income increases to $355 million

• Commodities unit drives earnings growth

• Company raises 2006 earnings-per-share guidance to $3.40 to $3.60

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Financial Contact:
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Sempra Energy

Sempra Energy

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        SAN DIEGO, Feb. 22, 2006 – Based on strong results in its commodities and utility businesses, Sempra Energy (NYSE: SRE) today reported 2005 net income of $920 million, or $3.65 per diluted share, compared with $895 million, or $3.83 per diluted share, in 2004.

        Sempra Energy’s fourth-quarter 2005 net income was $355 million, or $1.38 per diluted share, compared with $346 million, or  $1.46 per diluted share, in 2004.

        In 2005, Sempra Energy incurred $311 million after tax in litigation costs related to the Western U.S. energy crisis of 2000-01, compared with $84 million in 2004.  In the fourth quarter 2005, the company took an after-tax charge of $116 million for energy-crisis-related litigation costs compared with $74 million in the prior-year quarter. 

        “We are pleased to report record net income in 2005 and a strong fourth quarter, driven by the outstanding operating results in our commodities and power generation businesses, as well as our California utilities,” said Donald E. Felsinger, chairman and chief executive officer of Sempra Energy.   “We continue to execute our strategy, expanding our competitive businesses in liquefied natural gas (LNG) and natural gas pipelines and storage, while building upon a solid foundation with our utilities, generation and commodities units.”

        Yesterday, Sempra Energy’s board of directors announced an increase in the dividend on common shares on an annualized basis to $1.20 from $1.16. 

        Revenues for Sempra Energy in 2005 increased to $11.7 billion from $9.4 billion in 2004, due primarily to higher natural gas costs and increased commodities marketing activity.  Fourth-quarter 2005 revenues were $4 billion, compared with $2.9 billion in the year-earlier period.

        SUBSIDIARY OPERATING RESULTS

        Sempra Utilities
        Net income for San Diego Gas & Electric (SDG&E) rose to $262 million in 2005 from $208 million in the previous year.  SDG&E’s fourth-quarter 2005 net income was $72 million, up from $68 million in the fourth quarter 2004, due primarily to regulatory approval of demand-side-management incentives.  In the fourth quarter 2004, SDG&E benefited from the settlement of its rate case at the California Public Utilities Commission (CPUC). 

        Net income for Southern California Gas Co. (SoCalGas) was $211 million in 2005, compared with $232 million in 2004.  Fourth-quarter 2005 net income for SoCalGas was $48 million, compared with $58 million earned in the year-earlier period.  In the fourth quarter 2005, SoCalGas received regulatory approval of demand-side-management incentives.  In the previous-year quarter, SoCalGas benefited from the settlement of its rate case at the CPUC. 

        Sempra Commodities
        Sempra Commodities had record net income of $460 million in 2005, an increase of 44 percent over 2004 net income of $320 million.  Fourth-quarter 2005 net income for Sempra Commodities rose to $244 million from $171 million in the same quarter in 2004, due primarily to increased activity in natural gas, power and oil marketing in both Europe and North America. 

        “Sempra Commodities has built an enviable track record of growth to become an industry leader, achieving 28 consecutive quarters of profitability,” Felsinger said.

        Sempra Generation
        Sempra Generation’s 2005 net income was $164 million, up from $137 million the previous year.  Fourth-quarter net income for Sempra Generation increased to $61 million in 2005 from $19 million in 2004, due primarily to improved operating results for the company’s Western U.S. power-generating fleet.

        Sempra Generation announced plans in December 2005 to sell or refinance all of its Texas-based power-generation assets.  Last month, the company entered into an agreement to sell one of its Texas power plants, the 305-megawatt coal-fired Twin Oaks Power facility, for $480 million in cash.  The sale is expected to close in the second quarter 2006 and result in an after-tax gain of approximately $215 million.

        Sempra Pipelines & Storage
        Net income for Sempra Pipelines & Storage in 2005 was $64 million, compared with $63 million in 2004.  Fourth-quarter 2005 net income for Sempra Pipelines & Storage was $16 million, compared with $28 million in the previous year’s quarter.  In the fourth quarter 2004, Sempra Pipelines & Storage benefited from the favorable resolution of foreign-tax issues.

        Sempra LNG
        Sempra LNG recorded a loss of $25 million in 2005, compared with a loss of $8 million in 2004.   For the fourth quarter, Sempra LNG’s loss was $10 million in 2005, compared with a loss of $8 million in 2004.

        “Construction of our Mexico and Louisiana LNG receipt facilities is on schedule and we expect to receive final regulatory approvals of our Texas receipt facility by the middle of this year,” said Felsinger.

        2006 Earnings Outlook
        Sempra Energy today updated its 2006 earnings-per-share guidance to $3.40 to $3.60 from previous guidance of $3.20 to $3.40.  The updated guidance for 2006 excludes any gains from asset sales. 

        Internet Broadcast
        Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. Eastern Time with senior management of the company.  Access is available by logging onto the Web site at www.sempra.com. For those unable to log onto the live Webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (706) 645-9291 and entering the passcode, 5624328.

        Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2005 revenues of $11.7 billion.  The Sempra Energy companies’ 14,000 employees serve more than 29 million consumers in the United States, Europe, Canada, Mexico, South America and Asia.

        Income-statement information by business unit is available on Sempra Energy’s Web site at http://www.sempra.com/downloads/4Q2005_Table_All.pdf.

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This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  When the company uses words like “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “may,” “would,” “should” or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements.  Forward-looking statements are not guarantees of performance.  They involve risks, uncertainties and assumptions.  Future results may differ materially from those expressed in the forward-looking statements.  Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, the California State Legislature, the California Department of Water Resources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company.  These risks and uncertainties are further discussed in the company’s reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov and on the company’s Web site, www.sempra.com.

Sempra LNG and Sempra Pipelines & Storage are not the same companies as the utilities, SDG&E or SoCalGas, and are not regulated by the California Public Utilities Commission.  Sempra Energy Trading, doing business as Sempra Commodities, and Sempra Generation are not the same companies as the utilities, SDG&E or SoCalGas, and the California Public Utilities Commission does not regulate the terms of their products and services.

Category

San Diego Gas & Electric , Sempra Energy , Sempra Generation , Sempra LNG , Southern California Gas Company