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, 2000
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 Services Savings Plan, Sempra Energy Trading 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
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999 AND
INDEPENDENT AUDITORS' REPORT
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
TABLE OF CONTENTS
--------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2000 AND 1999 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
Certain 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.
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, 2000 and 1999, 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 auditing standards generally accepted
in the United States of America. 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 present fairly, in all material
respects, the assets available for benefits of the Plan at December 31, 2000 and
1999, and the changes in assets available for benefits of the Plan for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
/s/ Deloitte & Touche LLP
San Diego, California
May 31, 2001
-1-
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------
` 2000 1999
CASH AND CASH EQUIVALENTS $ -- $ 4
-------- --------
INVESTMENT:
At fair value:
Investment in Master Trust 339,283 311,949
-------- --------
RECEIVABLES:
Dividends and interest 1,557 2,568
Employer contributions 1,469 1,030
-------- --------
Total receivables 3,026 3,598
-------- --------
ASSETS AVAILABLE FOR BENEFITS $342,309 $315,551
======== ========
See notes to financial statements.
-2-
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------
2000 1999
ADDITIONS:
Net investment income (loss):
Equity in net investment income of the Master Trust $ 43,881 $ 17,571
Net depreciation in fair value of investments -- (54,483)
Cash dividends on common stock of Plan sponsor -- 9,512
Dividends and interest -- 480
--------- ---------
Total investment income (loss) 43,881 (26,920)
Less investment expenses 99 504
--------- ---------
Net investment income (loss) 43,782 (27,424)
--------- ---------
CONTRIBUTIONS:
Employer 5,455 5,716
Participating employees 17,245 14,183
--------- ---------
Total contributions 22,700 19,899
--------- ---------
Net additions (deductions) 66,482 (7,525)
--------- ---------
DEDUCTIONS:
Distributions to participants or their beneficiaries 37,968 44,089
Transfers to plans of related entities 1,756 1,562
--------- ---------
Total deductions 39,724 45,651
--------- ---------
NET INCREASE (DECREASE) 26,758 (53,176)
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 315,551 368,727
--------- ---------
End of year $ 342,309 $ 315,551
========= =========
See notes to financial statements.
-3-
SAN DIEGO GAS & ELECTRIC COMPANY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------
1. PLAN DESCRIPTION AND RELATED INFORMATION
The following description of the San Diego Gas & Electric Company 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 San Diego Gas & Electric Company or any affiliate who has adopted this
Plan (the "Company" or "Employer") with retirement benefits. Employees may
participate immediately in the Plan and, after one year in which they
complete 1,000 hours of service, receive an employer matching
contribution. Employees make regular savings investments in common stock
of Sempra Energy, the Parent Company, 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").
Effective October 1, 1999, the Company 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 Trust Company ("T. Rowe
Price"). At that time, the Plan was amended to allow for participant
loans.
Effective December 31, 1999, the Plan was amended to allow all employees
of the Company who are employed on the last day of the Plan year to
participate in the discretionary incentive contribution.
The Plan was amended, effective June 1, 2000, to allow for automatic
deferrals for employees who neither elect a specific deferral percentage,
nor elect not to participate in the Plan. The automatic deferral is an
amount equal to 3% of eligible pay and the investment vehicle is the
Retirement Strategy Trust-Balanced Fund.
ADMINISTRATION - Certain administrative functions are performed by
officers or employees of the Company. No such officer or employee receives
compensation from the Plan. Certain administrative expenses are paid
directly by the Company, such as legal and accounting fees. All investment
expenses are paid by the Plan, including recordkeeping, trustee fees and
investment management fees.
ELIGIBILITY - Effective January 1, 1999, the Plan was amended to allow for
immediate Plan participation for salary deferrals and participation in
employer matching contributions after one year of service.
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"), participants may contribute
up to 15% of eligible pay on a pre-tax basis, an after-tax basis,
or a combination. Total individual pre-tax contributions in calendar
years 2000 and 1999 were limited by law to $10,500 and $10,000,
respectively.
-4-
EMPLOYER NONELECTIVE MATCHING CONTRIBUTIONS - The Company makes
matching contributions to the Plan equal to 50% of each
participant's contribution, up to the first 6% of eligible pay. The
Company's matching contributions are invested in Sempra Energy
common stock.
DISCRETIONARY INCENTIVE CONTRIBUTION - If established performance
goals and targets of Sempra Energy (the "Parent") are met in
accordance with the terms of the incentive match guidelines
established each year, the Company will make an additional matching
contribution as determined by the Board of Directors of Sempra
Energy. For 2000 and 1999, incentive contributions of 1% and 3/4 of
1%, respectively, of eligible compensation were made. The incentive
contributions were made on March 15, 2001 and 2000 to all employees
employed on December 31, 2000 and 1999, respectively. The
contributions were made in the form of Sempra Energy common stock.
PARTICIPANT ACCOUNTS - Separate accounts are maintained for each
participant. Each participant's account is credited with the participant's
contributions and the Employer's nonelective matching contribution,
discretionary incentive contribution, and 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.
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.
INVESTMENT FUNDS - Prior to October 1, 1999, Union Bank of California was
trustee of the Plan. Employees could elect to have their contributions
invested in increments of 1% in Sempra Energy common stock or five mutual
funds offered by Fidelity Investment Managers. Participants could transfer
their funds among investment options and change their contribution
percentage and allocation monthly.
Effective October 1, 1999, T. Rowe Price became the trustee. All
investments are held by the Sempra Energy Master Trust (the "Master
Trust") (see Note 6). Employees elect to have their contributions invested
in increments of 1% in Sempra Energy common stock or specific mutual funds
offered by T. Rowe Price and Fidelity Investment Managers. In addition,
investment choices were increased to allow participants to invest in a
broad range of funds through a brokerage window. Participants may invest a
maximum of 50% of the value of their accounts (excluding the Employer
Contribution Account) in the brokerage window.
PAYMENT OF DIVIDENDS - Active employees have the option to receive
distributions of cash dividends on the shares of Sempra Energy common
stock in their account balances or to reinvest the dividends in Sempra
Energy common stock. Dividends will automatically be passed through to
former employees who have terminated or retired and elected to leave their
accounts in the Plan.
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.
-5-
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The Plan's financial statements are prepared on the
accrual basis of accounting.
USE OF ESTIMATES - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America 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 may 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. TAX STATUS
On May 23, 1995, the Internal Revenue Service issued the Plan a
determination letter stating that the Plan, as then designed, was in
compliance 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. 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.
4. 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 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 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 in the Wall Street
Journal, at the time the loan is made.
5. INVESTMENT INFORMATION (DOLLARS IN THOUSANDS)
The Plan's investments were held by a bank-administered trust fund through
September 30, 1999. Beginning October 1, 1999, the Plan's investments were
transferred to a trust account at T. Rowe Price (see Note 6). The net
depreciation in the fair value of investments is summarized as follows for
the nine months ended September 30, 1999:
Sempra Energy common stock $ (59,648)
Mutual funds 5,165
----------
Net depreciation $ (54,483)
==========
-6-
6. INVESTMENTS IN THE MASTER TRUST (DOLLARS IN THOUSANDS)
Beginning October 1, 1999, 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 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 36% interest in the net assets available for benefits of the
Master Trust at December 31, 2000 and 1999, respectively.
Net earnings of the Master Trust are allocated daily by T. Rowe Price to
each participant 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 benefits of the Master Trust at December 31, 2000
and 1999 are summarized as follows:
2000 1999
Sempra Energy common stock $500,667 $397,997
Mutual funds 424,965 444,210
Participant loans 17,050 15,835
-------- --------
Assets available for benefits $942,682 $858,042
======== ========
Net appreciation (depreciation), dividends, and interest for the Master
Trust for the year ended December 31, 2000 and three months ended December
31, 1999 are as follows:
YEAR THREE MONTHS
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2000 1999
Net appreciation (depreciation) of investments:
Sempra Energy common stock $129,233 $(55,951)
Mutual funds (27,173) 42,675
Dividends 31,988 19,788
Interest 1,369 360
7. NONPARTICIPANT-DIRECTED INVESTMENTS (DOLLARS IN THOUSANDS)
The Company's contributions to the Plan are invested solely in Sempra
Energy common stock and are therefore classified as
nonparticipant-directed investments. The Company is unable to separate the
activity of the participant-directed and nonparticipant-directed
components of the investment in Sempra Energy common stock prior to the
transfer from Union Bank to T. Rowe Price on October 1, 1999. Union Bank
did not segregate employer and employee purchased stock activity. The
Trustee held all Sempra stock in one sub-trust account and separate
accounting is not available. As a result, all Plan investments in Sempra
Energy common stock are considered nonparticipant-directed.
-7-
Information about the Plan's net assets and the significant components of
the Plan's changes in net assets relating to the Sempra Energy common
stock for the years ended December 31, 2000 and 1999 are as follows:
2000 1999
NET ASSETS:
Sempra Energy common stock in the Master Trust $ 89,083 $137,574
========== ========
CHANGES IN NET ASSETS:
Contributions $ 5,455 $ 10,826
Net investment income (loss) 25,232 (52,274)
Distributions to participants or their beneficiaries (8,871) (41,304)
Fund transfers into Sempra Energy common stock - 13,725
Transfers (to) from plans of related entities (174) 1,057
---------- ---------
Total changes in net assets $ 21,642 $(67,970)
========== =========
* * * * * * *
-8-
SEMPRA ENERGY
SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999 AND
INDEPENDENT AUDITORS' REPORT
SEMPRA ENERGY SAVINGS PLAN
TABLE OF CONTENTS
--------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2000 AND 1999
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 4-7
Certain 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.
INDEPENDENT AUDITORS' REPORT
Sempra Energy Savings Plan:
We have audited the accompanying statements of assets available for benefits of
Sempra Energy Savings Plan (the "Plan") as of December 31, 2000 and 1999, 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 auditing standards generally accepted
in the United States of America. 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 present fairly, in all material
respects, the assets available for benefits of the Plan at December 31, 2000 and
1999, and the changes in assets available for benefits of the Plan for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
/s/ Deloitte & Touche LLP
San Diego. California
May 31, 2001
-1-
SEMPRA ENERGY SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------
2000 1999
CASH AND CASH EQUIVALENTS $ - $ 53
--------- --------
INVESTMENT:
At fair value:
Investment in Master Trust 121,172 114,802
--------- --------
RECEIVABLES:
Dividends 479 784
Employer contributions 1,044 755
Participants' contributions 6 -
--------- --------
Total receivables 1,529 1,539
--------- --------
ASSETS AVAILABLE FOR BENEFITS $122,701 $116,394
========== ========
See notes to financial statements.
-2-
SEMPRA ENERGY SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
-----------------------------------------------------------------------------------------------
2000 1999
ADDITIONS:
Net investment income:
Equity in net investment income of the Master Trust $ 11,219 $ 469
Less investment expenses 27 35
------- ------
Net investment income 11,192 434
------- ------
Contributions:
Employer 3,924 3,372
Participating employees 10,979 9,944
------- ------
Total contributions 14,903 13,316
------- ------
Transfers from plans of related entities 5,118 18,416
------- ------
Total additions 31,213 32,166
DEDUCTION:
Distributions to participants or their beneficiaries 24,906 5,914
------- -------
NET INCREASE 6,307 26,252
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 116,394 90,142
------- ------
End of year $ 122,701 $ 116,394
========== =========
See notes to financial statements.
-3-
SEMPRA ENERGY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------
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 that provides employees
of Sempra Energy or any affiliate who has adopted this Plan (the "Company"
or "Employer") with retirement benefits. Employees may participate
immediately in the Plan and, after one year in which they complete 1,000
hours of service, receive an employer matching 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").
Effective August 31, 1999, the Pacific Enterprise Retirement Savings Plan
(the "PE Plan") merged into the Plan and all PE Plan assets were
transferred into the Plan.
Effective December 31, 1999, the Plan was amended to allow all employees
of the Company who are employed on the last day of the Plan year to
participate in the discretionary incentive contribution.
The Plan was amended to allow Employer contributions to be funded, in
part, from the Sempra Energy Stock Ownership Plan and Trust, effective
January 1, 2000.
The Plan was amended effective June 1, 2000, to allow for automatic
deferrals for employees who neither elect a specific deferral percentage,
nor elect not to participate in the Plan. The automatic deferral is an
amount equal to 3% of eligible pay and the investment vehicle is the
Retirement Strategy Trust-Balanced Fund.
Effective July 1, 2000, Sempra Energy Services Savings Plan assets held in
the Sempra Energy Savings Master Trust (the "Master Trust") at T. Rowe
Price, merged with the Sempra Energy Savings Plan. All remaining assets of
the Sempra Energy Services Savings Plan are expected to be transferred
into the Plan in 2001.
ADMINISTRATION - Certain administrative functions are performed by
officers or employees of the Company. No such officer or employee receives
compensation from the Plan. Certain administrative expenses are paid
directly by the Company, such as legal and accounting fees. All investment
expenses are paid by the Plan, including recordkeeping, trustee fees and
investment management fees.
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 eligible pay on a pre-tax basis, an
after-tax basis, or a combination. Total individual pre-tax
contributions in calendar years 2000 and 1999 were limited by law
to $10,500 and $10,000, respectively.
-4-
EMPLOYER NONELECTIVE MATCHING CONTRIBUTIONS - The Company makes
matching contributions to the Plan equal to 50% of each
participant's contribution up to the first 6% of eligible pay. The
Company's matching contributions are invested in Sempra Energy
common stock. Employer contributions are funded, in part, from the
Sempra Energy Stock Ownership Plan and Trust.
DISCRETIONARY INCENTIVE CONTRIBUTION - If established performance
goals and targets of Sempra Energy are met in accordance with the
terms of the incentive match guidelines established each year, the
Company will make an additional matching contribution as
determined by the Board of Directors of Sempra Energy. For 2000
and 1999, incentive contributions of 1% and 3/4 of 1%,
respectively, of eligible compensation were made. The incentive
contributions were made on March 15, 2001 and 2000 to all
employees employed on December 31, 2000 and 1999, respectively.
The contributions were made in the form of Company stock.
PARTICIPANT ACCOUNTS - Separate accounts are maintained for each
participant. Each participant's account is credited with the participant's
contributions and the Employer's nonelective matching contribution,
discretionary incentive contribution, and 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.
INVESTMENT OPTIONS - All investments are held in the Master Trust (see
Note 5). Employees elect to have their contributions invested in
increments of 10% in Sempra Energy common stock or specific mutual funds
offered by T. Rowe Price Trust Company ("T. Rowe Price"), trustee of the
Plan.
Effective February 1, 2000, the Plan was amended to allow contributions to
be invested in increments of 1% and the investment choices were increased
to allow participants to invest in specific mutual funds offered by
Fidelity Investment Managers and a broad range of funds through a
brokerage window. Participants may invest a maximum of 50% of the value of
their accounts (excluding the Employer Contribution Account) in the
brokerage window.
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 accounting principles generally accepted in the United States of
America 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.
-5-
BENEFIT PAYMENTS - Payments are recorded when paid.
3. 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 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.
4. PARTICIPANT LOANS
The 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 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 in the Wall Street
Journal, at the time the loan is made.
5. INVESTMENTS IN THE MASTER TRUST (DOLLARS IN THOUSANDS)
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 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
interest of 13% in the net assets available for benefits of the Master
Trust at both December 31, 2000 and 1999.
Net earnings of the Master Trust are allocated daily by T. Rowe Price to
each participant 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 benefits of the Master Trust at December 31, 2000
and 1999 are summarized as follows:
2000 1999
Sempra Energy common stock $ 500,667 $ 397,997
Mutual funds 424,965 444,210
Participant loans 17,050 15,835
------- -------
Assets available for benefits $ 942,682 $ 858,042
========== =========
Net appreciation (depreciation), dividend and interest income of the
Master Trust for the year ended December 31, 2000 and 1999 is summarized
as follows:
2000 1999
Net appreciation (depreciation) of investments:
Sempra Energy common stock $129,233 $(120,700)
Mutual funds (27,173) 47,813
Dividends 31,988 38,051
Interest 1,369 1,340
-6-
6. NONPARTICIPANT-DIRECTED INVESTMENTS (DOLLARS IN THOUSANDS)
The Company's contributions to the Plan are invested solely in Sempra
Energy common stock. These contributions are classified as
nonparticipant-directed investments. Information about the Plan's net
assets and the significant components of the Plan's changes in net assets
relating to the nonparticipant-directed investments for the year ended
December 31, 2000 and 1999 are as follows:
2000 1999
NET ASSETS:
Sempra Energy common stock in the Master Trust $29,553 $21,401
========= =======
CHANGES IN NET ASSETS:
Contributions $ 3,924 $ 3,372
Net investment income (loss) 8,431 (6,430)
Distributions to participants or their beneficiaries (5,182) (1,274)
Transfers from plans of related entities 979 4,378
-------- -------
Total changes in net assets $ 8,152 $ 46
========= =======
* * * * * *
-7-
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999 AND
INDEPENDENT AUDITORS' REPORT
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
----------------------------------------------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2000 AND 1999 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 4-7
Certain 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.
INDEPENDENT AUDITORS' REPORT
Sempra Energy Trading Retirement Savings Plan:
We have audited the accompanying statements of assets available for benefits of
Sempra Energy Trading Retirement Savings Plan (the "Plan") as of December 31,
2000 and 1999, 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 auditing standards generally accepted
in the United States of America. 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 present fairly, in all material
respects, the assets available for benefits of the Plan at December 31, 2000 and
1999, and the changes in assets available for benefits for the years then ended
in conformity with accounting principles generally accepted in the United States
of America.
/s/ Deloitte & Touche LLP
San Diego, California
May 31, 2001
-1-
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------
2000 1999
INVESTMENT:
At fair value:
Investment in Master Trust $6,642 $ 4,742
-------- -------
RECEIVABLES:
Dividends 22 22
Employer contributions 189 102
-------- -------
Total receivables 211 124
-------- -------
ASSETS AVAILABLE FOR BENEFITS $6,853 $ 4,866
======== =======
See notes to financial statements.
-2-
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------------------------------------
2000 1999
ADDITIONS:
Net investment income:
Equity in net investment income of the Master Trust $ 486 $ 224
Less investment expenses 2 6
------- -----
Net investment income 484 218
------- -----
CONTRIBUTIONS:
Employer 613 516
Participating employees 1,417 1,412
------- -----
Total contributions 2,030 1,928
------- -----
Total additions 2,514 2,146
------- -----
DEDUCTIONS:
Distributions to participants or their beneficiaries 457 98
Transfers to plans of related entities 70 315
------- -----
Total deductions 527 413
------- -----
NET INCREASE 1,987 1,733
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 4,866 3,133
------- -----
End of year $6,853 $4,866
======= =====
See notes to financial statements.
-3-
SEMPRA ENERGY TRADING RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------
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 that provides employees
of Sempra Energy Trading or any affiliate who has adopted this Plan (the
"Company" or "Employer") with retirement benefits. Employees may
participate immediately in the Plan and, after one year in which they
complete 1,000 hours of service, receive an employer matching
contribution. Employees may make regular savings investments in common
stock of Sempra Energy, the Parent Company, 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").
Effective December 31, 1999, the Plan was amended to allow all employees
of the Company who are employed on the last day of the Plan year to
participate in the discretionary incentive contribution.
The Plan was amended, effective June 1, 2000, to allow for automatic
deferrals for employees who neither elect a specific deferral percentage,
nor elect not to participate in the Plan. The automatic deferral is an
amount equal to 3% of eligible pay and the investment vehicle is the
Retirement Strategy Trust-Balanced Fund.
ADMINISTRATION - Certain administrative functions are performed by
officers or employees of the Company. No such officer or employee receives
compensation from the Plan. Certain administrative expenses are paid
directly by the Company, such as legal and accounting fees. All investment
expenses are paid by the Plan, including recordkeeping, trustee fees and
investment management fees.
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 eligible pay. Additional
after-tax contributions may be made up to a total contribution (before
and after-tax) of 15% of a participant's base pay. Total individual
pre-tax contributions in calendar years 2000 and 1999 were limited by
law to $10,500 and $10,000, respectively.
EMPLOYER NONELECTIVE MATCHING CONTRIBUTION - After one year of service
in which an employee worked at least 1,000 hours of service, the
Company makes contributions to the Plan based on the participant's
contributions and years of service as follows:
Less than five years of service.... 1/3 of participant contributions
up to 6% of eligible pay
Five to ten years of service........ 2/3 of participant contributions
up to 6% of eligible pay
Ten years or more of service...... 100% of participant contributions
up to 6% of eligible pay
-4-
The Company will also provide an additional matching contribution of
15% of the participant's total pre-tax contribution, subject to
certain limitations described in the Plan document.
The Company's matching contributions are invested in Sempra Energy
common stock.
DISCRETIONARY INCENTIVE CONTRIBUTION - If established performance
goals and targets of Sempra Energy are met in accordance with the
terms of the incentive match guidelines established each year, the
Company will make an additional matching contribution as determined by
the Board of Directors of Sempra Energy. For 2000 and 1999, incentive
contributions of 1% and 3/4 of 1%, respectively, of eligible
compensation were made. The incentive contributions were made on March
15, 2001 and 2000 to all employees employed on December 31, 2000 and
1999, respectively. The contributions were made in the form of 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, allocations of the Employer's non-elective
matching contribution, discretionary incentive contribution, and
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 - All investments are held in the Sempra Energy Savings
Master Trust ("Master Trust") (See note 5). Prior to February 1, 2000,
employees can elect to have their contributions invested in increments of
10% in Sempra Energy common stock or specific mutual funds offered by T.
Rowe Price Trust Company ("T. Rowe Price"), trustee of the Plan.
Effective February 1, 2000, the Plan was amended to allow contributions to
be invested in increments of 1% and the investment choices were increased
to allow participants to invest in specific mutual funds offered by
Fidelity Investment Managers and a broad range of funds through a
brokerage window. Participants may invest a maximum of 50% of the value of
their accounts (excluding the Employer Contribution Account) in the
brokerage window.
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.
RECLASSIFICATIONS - Certain amounts in the 1999 financial statements have
been reclassified to conform to the 2000 presentation.
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 accounting principles generally accepted in the United States of
America 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-
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. 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 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.
4. PARTICIPANT LOANS
The Plan permits participants to borrow against the balances in their
individual accounts within the Master Trust. A participant is limited to
borrowing a maximum of 50% of the 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 in the Wall Street Journal, at the time the loan is made.
5. INVESTMENTS IN THE MASTER TRUST (DOLLARS IN THOUSANDS)
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 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 1%
interest in the net assets available for plan benefits of the Master Trust
at both December 31, 2000 and 1999.
Net earnings of the Master Trust are allocated daily by T. Rowe Price to
each participant 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 benefits of the Master Trust at December 31, 2000
and 1999 are summarized as follows:
2000 1999
Sempra Energy common stock $ 500,667 $ 397,997
Mutual funds 424,965 444,210
Participant loans 17,050 15,835
-------- --------
Assets available for benefits $ 942,682 $ 858,042
======== ========
-6-
Net appreciation (depreciation), dividends, and interest for the Master
Trust for the years ended December 31, 2000 and 1999 are as follows:
2000 1999
Net appreciation (depreciation) of investments:
Sempra Energy common stock $129,233 $(120,700)
Mutual funds (27,173) 47,813
Dividends 31,988 38,051
Interest 1,369 1,340
7. NONPARTICIPANT-DIRECTED INVESTMENTS (DOLLARS IN THOUSANDS)
The Company's contributions to the Plan are invested solely in Sempra
Energy common stock. These contributions are classified as
nonparticipant-directed investments. Information about the Plan's net
assets and the significant components of the Plan's changes in net assets
relating to the nonparticipant-directed investments for the years ended
December 31, 2000 and 1999 are as follows:
2000 1999
NET ASSETS:
Sempra Energy common stock in the Master Trust $ 1,886 $ 922
======= =====
CHANGES IN NET ASSETS:
Contributions $ 614 $ 516
Net investment (loss) income 470 (240)
Distributions to participants or their beneficiaries (99) (14)
Transfers to plans of related entities (21) (73)
------- -----
Total changes in net assets $ 964 $ 189
======= =====
* * * * * *
-7-
SOUTHERN CALIFORNIA GAS COMPANY RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999 AND
INDEPENDENT AUDITORS' REPORT
SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
-----------------------------------------------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2000 AND 1999 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 4-7
Certain 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.
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, 2000 and 1999, 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 auditing standards generally accepted
in the United States of America. 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 present fairly, in all material
respects, the assets available for benefits of the Plan at December 31, 2000 and
1999, and the changes in assets available for benefits of the Plan for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
/s/ Deloitte & Touche LLP
San Diego, California
May 31, 2001
-1-
SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------
2000 1999
CASH AND CASH EQUIVALENTS $ 80 $ 49
-------- -------
INVESTMENT:
At fair value:
Investment in Master Trust 475,586 425,008
-------- -------
RECEIVABLES:
Dividends 2,626 4,279
Employer contributions 827 650
-------- -------
Total receivables 3,453 4,929
-------- -------
ASSETS AVAILABLE FOR BENEFITS $479,119 $429,986
======== ========
See notes to financial statements.
-2-
SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
-----------------------------------------------------------------------------------------------------------
2000 1999
ADDITIONS:
Net investment income (loss):
Equity in net investment income (loss) of the Master Trust $ 76,783 $ (51,789)
Less investment expenses 148 186
-------- ---------
Net investment income (loss) 76,635 (51,975)
-------- ---------
Contributions:
Employer 7,566 7,108
Participating employees 19,234 18,411
-------- ------
Total contributions 26,800 25,519
-------- ---------
Net additions (deductions) 103,435 (26,456)
-------- --------
DEDUCTIONS:
Distributions to employees, retirees or their beneficiaries 53,484 26,049
Transfers to plans of related entities 818 1,391
-------- ---------
Total deductions 54,302 27,440
-------- ---------
NET INCREASE (DECREASE) 49,133 (53,896)
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 429,986 483,882
------- -------
End of year $479,119 $429,986
======== ========
See notes to financial statements.
-3-
SOUTHERN CALIFORNIA GAS COMPANY
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------
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 who
are not covered by a collective bargaining agreement may participate
immediately in the Plan and, after one year in which they complete 1,000
hours of service, receive an employer matching contribution. Employees who
are covered by a collective bargaining agreement may participate upon
completion of one year of service in which they work 1,000 hours and
immediately receive an employer matching contribution. Employees may make
regular savings investments in common stock of Sempra Energy, the Parent
Company, 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").
Effective December 31, 1999, the Plan was amended to allow all
non-represented employees of the Company who are employed on the last day
of the Plan year to participate in the discretionary incentive
contribution.
The Plan was amended effective June 1, 2000, to allow for automatic
deferrals for employees who neither elect a specific deferral percentage,
nor elect not to participate in the Plan. The automatic deferral is an
amount equal to 3% of eligible pay and the investment vehicle is the
Retirement Strategy Trust-Balanced Fund.
ADMINISTRATION - Certain administrative functions are performed by
officers or employees of the Company. No such officer or employee receives
compensation from the Plan. Certain administrative expenses are paid
directly by the Company, such as legal and accounting fees. All investment
expenses are paid by the Plan, including recordkeeping, trustee fees and
investment management fees.
CONTRIBUTIONS - Contributions to the Plan can be made under the following
provisions:
PARTICIPATING EMPLOYEE CONTRIBUTIONS: NON-REPRESENTED EMPLOYEES -
Pursuant to Section 401(a) of the Internal Revenue Code (the "IRC"),
each participant may contribute up to 15% of eligible pay on a
pre-tax basis, after-tax basis, or a combination. Total individual
pre-tax contributions in calendar years 2000 and 1999 were limited by
law to $10,500 and $10,000, respectively.
PARTICIPATING EMPLOYEE CONTRIBUTIONS: REPRESENTED EMPLOYEES -
Pursuant to Section 401(a) of the IRC, each participant may
contribute up to 14% (up to 9% pre-tax) of base pay for represented
employees. Total individual pre-tax contributions in calendar years
2000 and 1999 were limited by law to $10,500 and $10,000,
respectively.
-4-
EMPLOYER NONELECTIVE MATCHING CONTRIBUTION - The Company makes
matching contributions to the Plan equal to 50% of each participant's
contribution, up to the first 6% of eligible pay. The Company's
matching contributions are invested in Sempra Energy common stock.
Employer contributions are funded in part from the Sempra Energy
Stock Ownership Plan and Trust. Both represented and non-represented
employees are eligible for the employer nonelective matching
contribution.
DISCRETIONARY INCENTIVE CONTRIBUTION - If established performance
goals and targets of Sempra Energy are met in accordance with the
terms of the incentive match guidelines established each year, the
Company will make an additional matching contribution as determined
by the Board of Directors of Sempra Energy for non-represented
employees. For 2000 and 1999, an incentive contribution of 1% and 3/4
of 1% of eligible compensation was made on March 15, 2001 and 2000 to
all employees employed on December 31, 2000 and 1999, respectively.
The contribution was made in the form of 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, the Employer's nonelective matching
contributions, and an allocation of investment earnings 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 - All investments are held in the Sempra Energy Savings
Master Trust ("Master Trust") (see Note 5). Employees elect to have their
contributions invested in increments of 10% in Sempra Energy common stock
or specific mutual funds offered by T. Rowe Price Trust Company ("T. Rowe
Price"), trustee of the Plan.
Effective February 1, 2000, the Plan was amended to allow contributions to
be invested in increments of 1% and the investment choices were increased
to allow participants to invest in specific mutual funds offered by
Fidelity Investment Managers and a broad range of funds through a
brokerage window. Participants may invest a maximum of 50% of the value of
their accounts (excluding the Employer Contribution Account) in the
brokerage window.
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.
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 accounting principles generally accepted in the United States of
America 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-
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 that 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. 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.
4. PARTICIPANT LOANS
The Plan permits participants to borrow against the balances in their
individual accounts within the Master Trust. A participant is limited to
borrowing a maximum of 50% of the 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 in the Wall Street Journal, at the time the loan is made.
5. INVESTMENTS IN THE MASTER TRUST (DOLLARS IN THOUSANDS)
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 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
interest of 50% in the net assets available for plan benefits of the
Master Trust at both December 31, 2000 and 1999.
Net earnings of the Master Trust are allocated daily by T. Rowe Price to
each participant 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 benefits of the Master Trust at December 31, 2000
and 1999 are summarized as follows:
2000 1999
Sempra Energy common stock $500,667 $397,997
Mutual funds 424,965 444,210
Participant loans 17,050 15,835
--------- --------
Assets available for benefits $942,682 $858,042
========= ========
-6-
Net appreciation (depreciation), dividends, and interest for the Master
Trust for the years ended December 31, 2000 and 1999 are as follows:
2000 1999
Net appreciation (depreciation) of investments:
Sempra Energy common stock $ 129,233 $ (120,700)
Mutual funds (27,173) 47,813
Dividends 31,988 38,051
Interest 1,369 1,340
6. NONPARTICIPANT-DIRECTED INVESTMENTS (DOLLARS IN THOUSANDS)
The Company's contributions to the Plan are invested solely in Sempra
Energy common stock. These contributions are classified as
nonparticipant-directed investments. Information about the Plan's net
assets and the significant components of the Plan's changes in net assets
relating to the nonparticipant-directed investments for the years ended
December 31, 2000 and 1999 are as follows:
2000 1999
NET ASSETS:
Sempra Energy common stock in the Master Trust
$ 128,804 $ 96,212
========== ==========
CHANGES IN NET ASSETS:
Contributions $ 7,566 $ 7,108
Net investment income (loss) 36,833 (32,957)
Distributions to employees, retirees or their beneficiaries (11,661) (5,797)
Transfers to plans of related entities (146) (268)
---------- ----------
Total changes in net assets $ 32,592 $ (31,914)
========== ==========
******
-7-
SEMPRA ENERGY
SERVICES SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999 AND
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2000 AND
INDEPENDENT AUDITORS' REPORT
SEMPRA ENERGY SERVICES SAVINGS PLAN
TABLE OF CONTENTS
----------------------------------------------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2000 AND 1999 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 SCHEDULE AT DECEMBER 31, 2000
Schedule of Assets Held for Investment Purposes at End of Year 9
Certain 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.
INDEPENDENT AUDITORS' REPORT
Sempra Energy Services Savings Plan:
We have audited the accompanying statements of assets available for benefits of
Sempra Energy Services Savings Plan (the "Plan") as of December 31, 2000 and
1999, 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 auditing standards generally accepted
in the United States of America. 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 present fairly, in all material
respects, the assets available for benefits of the Plan at December 31, 2000 and
1999, and the changes in assets available for benefits for the years then ended
in conformity with accounting principles generally accepted in the United States
of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
Table of Contents is presented for the purpose of additional analysis and is not
a required part of the basic financial statements, but is 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 schedule is the responsibility of the Plan's management.
Such supplemental schedule has been subjected to the auditing procedures applied
in our audit of the basic 2000 financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic 2000 financial
statements taken as a whole.
/s/ Deloitte & Touche LLP
San Diego, California
May 31, 2001
-1-
SEMPRA ENERGY SERVICES SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------
2000 1999
INVESTMENTS:
At fair value:
Investment in Master Trust $ - $ 1,542
Pooled separate accounts 674 866
Guaranteed interest accounts 103 120
----- ------
Total investments 777 2,528
----- ------
RECEIVABLES:
Dividends - 10
Employer contributions - 22
Participating employee contributions - 22
----- ------
Total receivables - 54
----- ------
ASSETS AVAILABLE FOR BENEFITS $ 777 $ 2,582
===== ======
See notes to financial statements.
-2-
SEMPRA ENERGY SERVICES SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
---------------------------------------------------------------------------------------------
2000 1999
ADDITIONS:
Net investment income:
Equity in net investment income of the Master Trust $ 69 $ 71
Net appreciation in fair value of investments 13 58
Dividends and interest 9 20
Less investment expenses - 4
----- -----
Net investment income 91 145
----- -----
Contributions:
Employer 168 207
Participating employees 422 624
----- -----
Total contributions 590 831
----- -----
Total additions 681 976
----- -----
DEDUCTIONS:
Distributions to participants or their beneficiaries 280 162
Administrative expenses 3 15
----- -----
Total deductions 283 177
----- -----
TRANSFERS (TO) FROM PLANS OF RELATED ENTITIES (Note 1) (2,203) 794
----- -----
NET (DECREASE) INCREASE (1,805) 1,593
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 2,582 989
----- -----
End of year $ 777 $ 2,582
===== =====
See notes to financial statements.
-3-
SEMPRA ENERGY SERVICES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
--------------------------------------------------------------------------------
1. PLAN DESCRIPTION AND RELATED INFORMATION
The following description of the Sempra Energy Services 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, and amended and restated on January 1, 1999. The Plan provides
employees of Sempra Energy Services or any affiliate who has adopted this
Plan (the "Company" or "Employer") with retirement benefits. 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 common stock of Sempra
Energy, the Parent Company, 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").
Effective December 31, 1999, the Plan was amended to allow all employees
of the Company who are employed on the last day of the Plan year to
participate in the discretionary incentive contribution.
The Plan was amended, effective June 1, 2000, to allow for automatic
deferrals for employees who neither elect a specific deferral percentage,
nor elect not to participate in the Plan. The automatic deferral is an
amount equal to 3% of eligible pay and the investment vehicle is the
Retirement Strategy Trust-Balanced Fund.
Effective July 1, 2000, all Plan assets held in the Sempra Energy Savings
Master Trust (the "Master Trust") at T. Rowe Price Trust Company ("T. Rowe
Price") merged with the Sempra Energy Savings Plan and were transferred
within 30 days. All assets held at the Principal Group remained in the
Plan.
Effective July 1, 2000, no new contributions were made to the Plan and all
employees of the Company became eligible to participate in the Sempra
Energy Savings Plan.
ADMINISTRATION - Certain administrative functions are performed by
officers or employees of the Company. No such officer or employee receives
compensation from the Plan. Certain administrative expenses are paid
directly by the Company, such as legal and accounting fees. All investment
expenses are paid by the Plan, including record keeping, trustee fees and
investment management fees.
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 eligible pay on a pre-tax basis, an
after-tax basis, or a combination. Total individual pre-tax
contributions in calendar years 2000 and 1999 were limited by law
to $10,500 and $10,000, respectively.
EMPLOYER NONELECTIVE MATCHING CONTRIBUTIONS - The Company makes
matching contributions to the Plan equal to 50% of each
participant's contribution, up to the first 6% of eligible pay.
The Company's matching contributions are invested in Sempra Energy
common stock.
-4-
DISCRETIONARY INCENTIVE CONTRIBUTION - If established performance
goals and targets of Sempra Energy are met in accordance with the
terms of the incentive match guidelines established each year, the
Company will make an additional contribution as determined by the
Board of Directors of Sempra Energy. For 2000 and 1999, incentive
contributions of 1% and 3/4 of 1%, respectively, of eligible
compensation were made. The incentive contributions were made on
March 15, 2001 and 2000 to all employees employed on December 31,
2000 and 1999, respectively. The contributions were made in the
form of Sempra Energy common stock.
PARTICIPANT ACCOUNTS - Separate accounts are maintained for each
participant. Each participant's account is credited with the participant's
contributions, Employer contributions, and an allocation of investment
earnings of the Plan and is reduced by an allocation of 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 - Prior to January 1, 1999, participants accounts were
maintained by the Principal Group. Effective January 1, 1999 the Plan was
amended and restated. Participant account balances in the Plan at December
31, 1998 are frozen. The investments in these accounts can be directed
into guaranteed interest accounts or mutual funds in pooled separate
accounts offered by a group annuity contract held at the Principal Group.
Prior to February 1, 2000, employees elect to have their contributions
invested in increments of 10% in Sempra Energy common stock or mutual
funds offered by T. Rowe Price, trustee of the Plan.
Effective February 1, 2000, the Plan was amended to allow contributions to
be invested in increments of 1% and the investment choices were increased
to allow participants to invest in specific mutual funds offered by
Fidelity Investment Managers and a broad range of funds through a
brokerage window. Participant may invest a maximum of 50% of the value of
their accounts (excluding the Employer Contribution Account) in the
brokerage window.
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.
However, the Company intends to merge the remaining Plan assets with the
Sempra Energy Savings Plan in 2001.
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 accounting principles generally accepted in the United States of
America 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-
INVESTMENT VALUATION AND INCOME RECOGNITION - The Plan's investments in
the Master Trust and Principal Group pooled separate accounts are stated
at fair value based on quoted market prices of the underlying investments.
The Plan's investment in the Principal Group guaranteed interest accounts
are stated at fair value based on the difference between the current
average interest rates for Treasury bonds, bills, and notes and the
interest rates on the accounts as well as the remaining time until
maturity. 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.
3. 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 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.
4. PARTICIPANT LOANS
The Plan was amended effective January 1, 1999 to permit participants to
borrow against the balances in their individual accounts within the Master
Trust. A participant is limited to borrowing a maximum of 50% of the
present value of the participants' 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 in the Wall Street
Journal, at the time the loan is made.
5. INVESTMENT INFORMATION (DOLLARS IN THOUSANDS)
Investments that represent 5% or more of the Plan's net assets at
December 31, 2000 and 1999 are identified below:
2000 1999
Investment in Master Trust $ - $1,542
Pooled Separate Accounts:
Large Cap Stock Index Account 126 150
Medium Company Blend Account 89 127
Guaranteed Interest Account 103 -
Small Company Blend Account 84 -
Stock Emphasis Balanced Account 71 -
Medium Company Value Account 61 -
Large Company Blend Account 59 -
International Stock Account 54 -
Government Securities Account 45 -
-6-
The net appreciation (depreciation) in the fair value of the Principal
Group investments, dividends, and interest are summarized as follows for
the years ended December 31, 2000 and 1999:
2000 1999
Net appreciation (depreciation) in fair value of investments: $ 11 $ 60
Guaranteed interest accounts 2 (2)
Dividends 3 8
Interest 6 12
6. INVESTMENTS IN THE MASTER TRUST (DOLLARS IN THOUSANDS)
Except for the frozen account balances maintained in a group annuity
contract at the Principal Group (see Note 1), the Plan's assets, at
December 31, 1999, are held in a trust account at T. Rowe Price, and
consist of an interest in 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 had an approximate .5% interest in the
net assets available for benefits of the Master Trust at December 31,
1999. On July 31, 2000, the Plan's interest in the Master Trust was
transferred to the Sempra Energy Savings Plan.
Net earnings of the Master Trust are allocated daily by T. Rowe Price to
each participant's 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 benefits of the Master Trust at December 31, 1999
are summarized as follows:
Sempra Energy common stock $ 397,997
Mutual funds 444,210
Participant loans 15,835
--------
Assets available for benefits $ 858,042
========
Net appreciation (depreciation), dividends, and interest for the Master
Trust for the seven months ended July 31, 2000 (date of asset transfer)
and the year ended December 31, 1999 are as follows:
SEVEN MONTHS YEAR
ENDED ENDED
JULY 31, DECEMBER 31,
2000 1999
(DATE OF ASSET
TRANSFER)
Net appreciation (depreciation) of investments:
Sempra Energy common stock $ 30,550 $ (120,700)
Mutual funds (903) 47,813
Dividends 11,731 38,051
Interest 824 1,340
-7-
7. NONPARTICIPANT-DIRECTED INVESTMENTS (DOLLARS IN THOUSANDS)
The Company's contributions to the Plan are invested solely in Sempra
Energy common stock. These contributions are classified as
nonparticipant-directed investments. Information about the Plan's net
assets and the significant components of the Plan's changes in net assets
relating to the nonparticipant-directed investments for the seven months
ended July 31, 2000 (date of asset transfer) and the year ended December
31, 1999 are as follows:
SEVEN MONTHS
ENDED
JULY 31, YEAR
2000 ENDED
(DATE OF ASSET DECEMBER 31,
TRANSFER) 1999
NET ASSETS:
Sempra Energy common stock in the Master Trust $ - $ 299
====== ======
CHANGES IN NET ASSETS:
Contributions $ 168 $ 207
Net investment income (loss) 42 (39)
Distributions to participants or their beneficiaries (15) (18)
Transfers (to) from plans of related entities (494) 149
------ ------
Total changes in net assets $ (299) $ 299
======= ======
8. NONEXEMPT TRANSACTION WITH PARTY-IN-INTEREST
The Company did not remit March, May and September 1999 contributions
withheld from participants' pay within the time period required by the
DOL. Such late remittance is considered a prohibited transaction and was
reported on the Supplemental Schedule of Nonexempt Transactions
accompanying the Form 5500 for the year ended December 31, 1999. The
March, May and September 1999 participant and employer matching
contributions of $97,921, $30,408 and $33,866, respectively, were remitted
to the plan in the months following the months the contributions were
withheld. An additional $1,269, representing lost earnings due to late
remittance, was paid to the Plan by the Company and allocated to the
affected participants' accounts. The Company has complied with all
required filings related to the nonexempt transaction.
******
-8-
SEMPRA ENERGY SERVICES SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
--------------------------------------------------------------------------------
FAIR
DESCRIPTION VALUE
*PRINCIPAL FINANCIAL GROUP
GUARANTEED INTEREST ACCOUNTS
3-year, matures December 31, 2000, 5.02% to 5.29% $ 27
5-year, matures December 31, 2000, 6.05% to 6.60% 5
3-year, matures December 31, 2001, 4.75% to 5.06% 42
5-year, matures December 31, 2001, 5.74% to 5.80% 2
3-year, matures December 31, 2002, 6.30% 23
5-year, matures December 31, 2002, 5.13% 2
5-year, matures December 31, 2003, 5.15% to 5.50% 2
---
Total Guaranteed Interest Accounts $103
====
*PRINCIPAL FINANCIAL GROUP
POOLED SEPARATE ACCOUNTS
Money Market Account $ 30
Bond & Mortgage Account 17
Government Securities Account 45
Bond Emphasis Balanced Account 36
Stock Emphasis Balanced Account 71
Large Cap Stock Index Account 126
Large Company Blend Account 59
Medium Company Blend Account 89
Medium Company Value Account 61
Real Estate Account 2
International Stock Account 54
Small Company Blend Account 84
---
Total Pooled Separate Accounts $674
=====
*Party-In-Interest
Note: Assets held for investment purposes in the Sempra Energy Master Trust
are listed in the 2000 Form 5500 filed by the Master Trust.
-9-
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.
San Diego Gas & Electric Company Savings Plan
Date: June 27, 2001 /s/ G. Joyce Rowland
----------------------------------------
G. Joyce Rowland, Senior Vice President HR
Sempra Energy Savings Plan
Date: June 27, 2001 /s/ G. Joyce Rowland
----------------------------------------
G. Joyce Rowland, Senior Vice President HR
Sempra Energy Services Savings Plan
Date: June 27, 2001 /s/ G. Joyce Rowland
----------------------------------------
G. Joyce Rowland, Senior Vice President HR
Sempra Energy Trading Retirement Savings Plan
Date: June 27, 2001 /s/ G. Joyce Rowland
----------------------------------------
G. Joyce Rowland, Senior Vice President HR
Southern California Gas Company Retirement Savings Plan
Date: June 27, 2001 /s/ G. Joyce Rowland
----------------------------------------
G. Joyce Rowland, Senior Vice President HR