| SEMPRA ENERGY FINANCIAL REPORTTABLE OF CONTENTS                                                                                                  |                                 |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|
|                                                                                                                                             | Page                                 |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                      |                                 |
| Our Business                                                                                                                                     | 2                                    |
| Executive Summary                                                                                                                                | 8                                    |
| Business Strategy                                                                                                                                | 8                                    |
| Key Issues in 2011                                                                                                                               | 9                                    |
| Results of Operations                                                                                                                            | 10                                   |
| Overall Results of Operations of Sempra Energy and Factors Affecting the Results                                                                 | 10                                   |
| Business Unit Results                                                                                                                            | 12                                   |
| Changes in Revenues, Costs and Earnings                                                                                                          | 16                                   |
| Transactions with Affiliates                                                                                                                     | 32                                   |
| Book Value Per Share                                                                                                                             | 32                                   |
| Capital Resources and Liquidity                                                                                                                  | 32                                   |
| Overview                                                                                                                                         | 32                                   |
| Cash Flows from Operating Activities                                                                                                             | 35                                   |
| Cash Flows from Investing Activities                                                                                                             | 37                                   |
| Cash Flows from Financing Activities                                                                                                             | 42                                   |
| Credit Ratings                                                                                                                                   | 47                                   |
| Factors Influencing Future Performance                                                                                                           | 48                                   |
| Sempra Energy Overview                                                                                                                           | 48                                   |
| Financial Derivatives Reforms                                                                                                                    | 51                                   |
| Litigation                                                                                                                                       | 51                                   |
| Sempra Utilities – Industry Developments and Capital Projects                                                                              | 51                                   |
| Sempra Global Investments                                                                                                                        | 51                                   |
| Market Risk                                                                                                                                      | 53                                   |
| Critical Accounting Policies and Estimates, and Key Noncash Performance Indicators                                                               | 56                                   |
| New Accounting Standards                                                                                                                         | 62                                   |
| Information Regarding Forward-Looking Statements                                                                                                 | 63                                   |
| Common Stock Data                                                                                                                                | 64                                   |
| Performance Graph – Comparative Total Shareholder Returns                                                                                  | 65                                   |
| Five-Year Summaries                                                                                                                              | 66                                   |
| Controls and Procedures                                                                                                                          |                                 |
| Evaluation of Disclosure Controls and Procedures                                                                                                 | 68                                   |
| Management’s Report on Internal Control over Financial Reporting                                                                           | 68                                   |
| Changes In and Disagreements With Accountants on Accounting and Financial Disclosure                                                             | 68                                   |
| Reports of Independent Registered Public Accounting Firm                                                                                         | 69                                   |
| Consolidated Financial Statements                                                                                                                |                                 |
| Sempra Energy                                                                                                                                    | 75                                   |
| San Diego Gas & Electric Company                                                                                                             | 82                                   |
| Southern California Gas Company                                                                                                                  | 88                                   |
| Notes to Consolidated Financial Statements                                                                                                       | 93                                   |
| Glossary                                                                                                                                         | 204                                  |
|                                                                                                                                             |
| This Financial Report is a combined report for the following separate companies (each a separate Securities and Exchange Commission registrant): |
|                                                                                                                                             |                                 |
| Sempra Energy                                                                                                                                    | San Diego Gas & Electric Company | Southern California Gas Company |   |

| §   | A description of our business |
|--------------------|-------------------------------|

| §   | An executive summary |
|--------------------|----------------------|

| §   | A discussion and analysis of our operating results for 2009 through 2011 |
|--------------------|--------------------------------------------------------------------------|

| §   | Information about our capital resources and liquidity |
|--------------------|-------------------------------------------------------|

| §   | Major factors expected to influence our future operating results |
|--------------------|------------------------------------------------------------------|

| §   | A discussion of market risk affecting our businesses |
|--------------------|------------------------------------------------------|

| §   | A table of accounting policies that we consider critical to our financial condition and results of operations |
|--------------------|---------------------------------------------------------------------------------------------------------------|

----

| §   | Sempra Natural Gas |
|--------------------|--------------------|

| §   | Sempra Renewables |
|--------------------|-------------------|

| §   | Sempra Mexico |
|--------------------|---------------|

| §   | Sempra South American Utilities |
|--------------------|---------------------------------|

| §   | Sempra Energy and its consolidated entities |
|--------------------|---------------------------------------------|

| §   | SDG&E |
|--------------------|-----------|

| §   | SoCalGas |
|--------------------|----------|

| SEMPRA UTILITIES                                                                                                                                                                     |                                                                                                                                                                               |                                                                                                                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                 | MARKET                                                                                                                                                                             | SERVICE TERRITORY                                                                                                                                                                     |
| SAN DIEGO GAS & ELECTRIC COMPANY (SDG&E)A regulated public utility; infrastructure supports electric generation, transmission and distribution, and natural gas distribution | § Provides electricity to 3.4 million consumers (1.4 million meters) § Provides natural gas to 3.1 million consumers (855,000 meters)                | Serves the county of San Diego, California and an adjacent portion of southern Orange County covering 4,100 square miles                                                              |
| SOUTHERN CALIFORNIA GAS COMPANY (SOCALGAS)A regulated public utility; infrastructure supports natural gas distribution, transmission and storage                                     | § Residential, commercial, industrial, utility electric generation and wholesale customers § Covers a population of 21 million (5.8 million meters)  | Southern California and portions of central California (excluding San Diego County, the city of Long Beach and the desert area of San Bernardino County) covering 20,000 square miles |

| SEMPRA GLOBAL                                                                                                                                                                               |                                                                 |                                                                                                                     |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                        | MARKET                                                               | GEOGRAPHIC REGION                                                                                                        |
| SEMPRA GENERATIONDevelops, owns and operates, or holds interests in, electric power plants and energy projects                                                                              | § Wholesale electricity                               | § U.S.A. § Mexico                                                                          |
| SEMPRA PIPELINES & STORAGEDevelops, owns and operates, or holds interests in, natural gas and propane pipelines, natural gas storage facilities, and natural gas and electric utilities | § Natural gas § Electricity            | § U.S.A. § Mexico § Argentina § Chile § Peru  |
| SEMPRA LNGDevelops, owns and operates terminals for importation and export of liquefied natural gas (LNG) and sale of natural gas                                                           | § Liquefied natural gas § Natural gas  | § U.S.A. § Mexico § Global                                                  |

| §   | Sempra Generation |
|--------------------|-------------------|

| §   | Sempra Pipelines & Storage |
|--------------------|--------------------------------|

| §   | Sempra LNG |
|--------------------|------------|

| §   | develops, owns, operates and invests in renewable energy generation projects in the U.S. and Mexico under long-term contracts; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| §   | develops, owns and operates natural gas-fired power plants serving wholesale electricity markets in North America; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| §   | includes the operating results of Sempra Rockies Marketing, which holds firm service capacity on the Rockies Express Pipeline. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| SEMPRA GENERATION RENEWABLES FACILITIES |
|-----------------------------------------|
| Capacity in Megawatts (MW)              |
| Name                                    | Maximum Generating Capacity |   |         FirstIn Service |   | Location |
| Cedar Creek 2 Wind Farm (50% owned)     | 125 | (1) | 2011 |   | New Raymer, CO |
| Fowler Ridge 2 Wind Farm (50% owned)    | 100 | (1) | 2009 |   | Benton County, IN |
| Copper Mountain Solar 1                 | 58 | (2) | 2010 |   | Boulder City, NV |
| Mesquite Solar 1                        | 42 | (3) | 2011 |   | Arlington, AZ |
|                                    | Total MW in operation | 325 |   |   |   |   |
| (1)                                     | Sempra Generation’s share. |
| (2)                                     | Includes the 10-MW facility previously referred to as El Dorado Solar, which was first placed in service in 2008. |
| (3)                                     | Represents only the portion of the project that was completed in 2011. The entire 150-MW project is expected to be completed in early 2013. |

| §   | Mesquite Power, a 1,250-MW facility in Arlington, Arizona, which first went into service in 2003 |
|--------------------|--------------------------------------------------------------------------------------------------|

| §   | Termoeléctrica de Mexicali, a 625-MW facility in Mexicali, Baja California, Mexico, which also went into service in 2003 |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

----

| §   | investment in our utilities; and |
|--------------------|----------------------------------|

| §   | development of natural gas and renewable-energy infrastructure. |
|--------------------|-----------------------------------------------------------------|

| 1.   | cleaner fuels |
|----------------|---------------|

| §   | natural gas |
|--------------------|-------------|

| §   | renewables |
|--------------------|------------|

| 2.   | enabling infrastructure |
|----------------|-------------------------|

| §   | natural gas pipelines, storage and LNG terminals |
|--------------------|--------------------------------------------------|

| §   | electric transmission and advanced meters |
|--------------------|-------------------------------------------|

| §   | In March 2011, we completed a $500 million repurchase of our common stock under a Collared Accelerated Share Acquisition Program (44). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| §   | In April 2011, we completed the acquisition of AEI’s interests in two South American utilities, Chilquinta Energía and Luz del Sur (114). |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | SDG&E is approximately 70 percent complete on the construction of the Sunrise Powerlink electric transmission line begun in the fall of 2010 and expects the transmission line to be completed and in-service in the second half of 2012 (189). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | The Cedar Creek 2 Wind Farm, which Sempra Generation jointly owns with BP Wind Energy, went into service in June 2011 (5). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| §   | On June 30, 2011, Pacific Enterprises, the holding company for SoCalGas, redeemed all five series of its outstanding preferred stock for $80 million (177). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | In July 2011, the CPUC approved a settlement agreement filed by SDG&E in April 2011 regarding SDG&E’s request to make a tax equity investment in the holding company of a wind farm project (184). |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | In July 2011, the Sempra Utilities filed revised applications to their original 2012 General Rate Case (GRC) applications, primarily to reflect the impact of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. In February 2012, the Sempra Utilities filed amendments to update the July 2011 revision (49). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | In August 2011, the Sempra Utilities filed their Pipeline Safety Enhancement Plan to test or replace all natural gas transmission pipelines that have not been pressure tested. The first phase of the two-phase plan is expected to cost $3.1 billion ($2.5 billion for SoCalGas and $600 million for SDG&E) over the 10-year period of 2012 to 2022 (185). |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | On September 30, 2011, Sempra Generation’s 10-year contract to provide energy to the DWR ended (5). |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| §   | Sempra Generation sold the El Dorado natural gas-fired generation plant to SDG&E on October 1, 2011 (181). |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| §   | In December 2011, the CPUC approved SDG&E’s request for revenue requirement for the recovery of the incremental increase in its general liability and wildfire liability insurance premium costs for the 2010/2011 policy period (185). |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | SDG&E substantially completed the installation of approximately 1.4 million electric and 855,000 natural gas advanced meters in 2011 (184). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | In December 2011, Sempra Generation placed in service 42 MW of the 150-MW Mesquite Solar 1 photovoltaic solar installation project in Arizona (52). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | We received $623 million in distributions from RBS Sempra Commodities, reducing our remaining investment in the joint venture to $126 million (33). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | SDG&E continues to settle claims related to the 2007 California wildfire litigation; however, a substantial number of unresolved claims against SDG&E remain (187). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| §   | Overall results of our operations and factors affecting those results |
|--------------------|-----------------------------------------------------------------------|

| §   | Our business unit results |
|--------------------|---------------------------|

| §   | Significant changes in revenues, costs and earnings between periods |
|--------------------|---------------------------------------------------------------------|

| OVERALL OPERATIONS OF SEMPRA ENERGY FROM 2007 TO 2011      |
|------------------------------------------------------------|
| (Dollars and shares in millions, except per share amounts) |

| §   | before and after-tax gain of $277 million resulting from the remeasurement of our equity method investments at Sempra Pipelines & Storage related to its acquisition of additional interests in Chilquinta Energía and Luz del Sur; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | a $139 million after-tax write-down in 2010 of our investment in RBS Sempra Commodities; |
|--------------------|------------------------------------------------------------------------------------------|

| §   | $93 million after-tax litigation expense in 2010 related to an agreement to settle certain energy crisis litigation ($87 million at Sempra Generation and $6 million at Parent and Other), as we discuss in Note 15 of the Notes to Consolidated Financial Statements; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | improved results at SDG&E and Sempra LNG; and |
|--------------------|---------------------------------------------------|

| §   | higher earnings at Sempra Pipelines & Storage primarily related to the acquisition of additional interests in Chilquinta Energía and Luz del Sur; offset by |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | lower earnings at Sempra Generation (excluding the energy crisis litigation expense), primarily due to the expiration of the DWR contract; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | higher losses at Parent and Other (excluding the investment write-down and energy crisis litigation expense in 2010). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| §   | the remeasurement gain in 2011 ($1.15 per share); |
|--------------------|---------------------------------------------------|

| §   | the investment write-down in 2010 ($0.56 per share); |
|--------------------|------------------------------------------------------|

| §   | the settlement-related litigation expense in 2010 ($0.38 per share); |
|--------------------|----------------------------------------------------------------------|

| §   | higher earnings (excluding the impacts of the 2011 remeasurement gain and the investment write-down and litigation settlement charge in 2010); and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | a decrease in the number of shares outstanding primarily as a result of our $500 million share repurchase program initiated in September 2010 and completed in March 2011. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $327 million lower joint-venture earnings from RBS Sempra Commodities; |
|--------------------|------------------------------------------------------------------------|

| §   | the $139 million after-tax write-down of our investment in RBS Sempra Commodities; and |
|--------------------|----------------------------------------------------------------------------------------|

| §   | $93 million after-tax litigation expense in 2010 related to the agreement to settle certain energy crisis litigation; offset by |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| §   | improved results at Sempra Pipelines & Storage, Sempra LNG, and the Sempra Utilities. |
|--------------------|-------------------------------------------------------------------------------------------|

| §   | lower joint-venture earnings from RBS Sempra Commodities ($1.32 per share); |
|--------------------|-----------------------------------------------------------------------------|

| §   | the investment write-down in 2010 ($0.56 per share); and |
|--------------------|----------------------------------------------------------|

| §   | the settlement-related litigation expense in 2010 ($0.38 per share); offset by |
|--------------------|--------------------------------------------------------------------------------|

| §   | higher earnings (excluding the impacts of the lower joint-venture earnings and the investment write-down and litigation settlement charge in 2010, and the write-off of Liberty assets in 2009); and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | the write-off of assets at Liberty in 2009 ($0.26 per share). |
|--------------------|---------------------------------------------------------------|

| SEMPRA ENERGY EARNINGS (LOSSES) BY BUSINESS UNIT 2009-2011 |
|------------------------------------------------------------|
| (Dollars in millions)                                      |
|                                                       |   | Years ended December 31, |
|                                                       |   | 2011  | 2010  | 2009  |
| Sempra Utilities:                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|     SDG&E(1)                       | $ |  431  |  32  | % | $ |  369  |  50  | % | $ |  344  |  31  | % |
|     SoCalGas(1)                        |   |  287  |  21  |   |   |  286  |  39  |   |   |  273  |  25  |   |
| Sempra Global:                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|     Sempra Generation                  |   |  137  |  10  |   |   |  103  |  14  |   |   |  169  |  15  |   |
|     Sempra Pipelines & Storage     |   |  527  |  39  |   |   |  159  |  21  |   |   |  101  |  9  |   |
|     Sempra LNG                         |   |  99  |  7  |   |   |  68  |  9  |   |   |  16  |  1  |   |
| Parent and other(2)                                        |   |  (124) |  (9) |   |   |  (246) |  (33) |   |   |  216  |  19  |   |
| Earnings                                                   | $ |  1,357  |  100  | % | $ |  739  |  100  | % | $ |  1,119  |  100  | % |
| (1)                                                        | After preferred dividends. |
| (2)                                                        | Includes after-tax corporate interest expense ($137 million in 2011, $148 million in 2010 and $141 million in 2009), results from our former Sempra Commodities segment (losses of $16 million and $155 million in 2011 and 2010, respectively, and earnings of $338 million in 2009), intercompany eliminations recorded in consolidation and certain corporate costs incurred at Sempra Global. |

| EARNINGS BY BUSINESS UNIT – SEMPRA UTILITIES |
|----------------------------------------------------|
| (Dollars in millions)                              |

| §   | $431 million in 2011 ($436 million before preferred dividends) |
|--------------------|----------------------------------------------------------------|

| §   | $369 million in 2010 ($374 million before preferred dividends) |
|--------------------|----------------------------------------------------------------|

| §   | $344 million in 2009 ($349 million before preferred dividends) |
|--------------------|----------------------------------------------------------------|

| §   | $31 million increase in allowance for funds used during construction (AFUDC) related to equity, net of higher interest expense; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| §   | $28 million favorable earnings impact due to revenues for incremental wildfire insurance premiums exceeding premium expense in 2011 compared to the incremental expense for wildfire insurance premiums exceeding revenues for the incremental premiums in 2010. Revenues for the incremental premiums in 2011 were for the policy period July 2010 through December 2011 compared to revenues for the incremental premiums in 2010 for the period July 2009 through June 2010; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $13 million higher authorized margin for CPUC-regulated operations, net of higher depreciation and operation and maintenance expenses (excluding insurance premiums for wildfire coverage and litigation); |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $7 million lower expenses associated with the settlement of 2007 wildfire claims; and |
|--------------------|---------------------------------------------------------------------------------------|

| §   | $5 million higher regulatory incentive awards; offset by |
|--------------------|----------------------------------------------------------|

| §   | $10 million primarily from the favorable resolution of prior year’s tax matters in 2010; and |
|--------------------|----------------------------------------------------------------------------------------------------|

| §   | $8 million lower favorable resolution of litigation matters in 2011. |
|--------------------|----------------------------------------------------------------------|

| §   | $28 million higher authorized margin for CPUC-regulated operations and lower operation and maintenance expenses (excluding insurance premiums for wildfire coverage and litigation related expenses), net of higher depreciation expense; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $16 million from the CPUC decision in 2010 authorizing recovery of a portion of the incremental wildfire insurance premiums for the policy year July 2009 through June 2010; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $8 million higher electric transmission margin; offset by |
|--------------------|-----------------------------------------------------------|

| §   | $20 million higher liability insurance premiums for wildfire coverage; and |
|--------------------|----------------------------------------------------------------------------|

| §   | $13 million net unfavorable impact from an increase in litigation reserves in 2010, including $20 million in 2010 for settlement of 2007 wildfire claims, offset by $7 million higher favorable resolution of litigation matters in 2010 compared to 2009. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $287 million in 2011 ($288 million before preferred dividends) |
|--------------------|----------------------------------------------------------------|

| §   | $286 million in 2010 ($287 million before preferred dividends) |
|--------------------|----------------------------------------------------------------|

| §   | $273 million in 2009 ($274 million before preferred dividends) |
|--------------------|----------------------------------------------------------------|

| §   | $13 million due to the write-off of deferred tax assets in 2010 as a result of the change in U.S. tax law regarding the Medicare Part D subsidy; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $9 million higher authorized margin for CPUC-regulated operations, net of higher depreciation and operation and maintenance expenses; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $3 million higher equity-related AFUDC, net of higher interest expense; offset by |
|--------------------|-----------------------------------------------------------------------------------|

| §   | $7 million lower regulatory incentive awards; |
|--------------------|-----------------------------------------------|

| §   | $7 million due to the favorable resolution of a legal matter in 2010; and |
|--------------------|---------------------------------------------------------------------------|

| §   | $6 million lower non-core natural gas storage revenue. |
|--------------------|--------------------------------------------------------|

| §   | $11 million higher authorized margin for CPUC-regulated operations in excess of higher depreciation and operation and maintenance expenses; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $8 million higher regulatory incentive awards; and |
|--------------------|----------------------------------------------------|

| §   | $8 million net favorable impact from a favorable resolution of litigation matters in 2010 compared to litigation expense in 2009; offset by |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $13 million due to the write-off of deferred tax assets as a result of the change in U.S. tax law regarding the Medicare Part D subsidy. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| EARNINGS (LOSSES) BY BUSINESS UNIT – SEMPRA GLOBAL |
|----------------------------------------------------------|
| (Dollars in millions)                                    |

| §   | $137 million in 2011 |
|--------------------|----------------------|

| §   | $103 million in 2010 |
|--------------------|----------------------|

| §   | $169 million in 2009 |
|--------------------|----------------------|

| §   | $85 million decreased litigation expense primarily related to a 2010 agreement to settle energy crisis litigation, as we discuss in Note 15 of the Notes to Consolidated Financial Statements; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $16 million decreased gas plant operation and maintenance expense primarily as a result of 2010 major maintenance at the Mexicali and Mesquite power plants, and from the sale of El Dorado to SDG&E as of October 1, 2011; offset by |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $57 million lower earnings from operations primarily due to the end of the DWR contract as of September 30, 2011, and less favorable pricing in 2011; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $15 million higher mark-to-market losses on forward contracts in 2011. |
|--------------------|------------------------------------------------------------------------|

| §   | $87 million in litigation expense related to an agreement to settle energy crisis litigation associated with the DWR contract; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| §   | $31 million lower earnings from operations, primarily from increased scheduled plant maintenance and associated down time in 2010, and expenses and associated down time from earthquake damage to our Mexicali power plant in the second quarter of 2010; offset by |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $48 million increased tax incentives from renewable energy investments in 2010. |
|--------------------|---------------------------------------------------------------------------------|

| §   | $527 million in 2011 |
|--------------------|----------------------|

| §   | $159 million in 2010 |
|--------------------|----------------------|

| §   | $101 million in 2009 |
|--------------------|----------------------|

| §   | a $277 million gain related to the remeasurement of the Chilquinta Energía and Luz del Sur equity method investments; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| §   | $55 million higher earnings primarily related to the acquisition of additional interests in Chilquinta Energía and Luz del Sur in April 2011; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $44 million (pretax) write-down of our investment in Argentina in 2010, less a related income tax benefit of $15 million; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| §   | $13 million higher earnings from pipeline assets in Mexico acquired in April 2010; |
|--------------------|------------------------------------------------------------------------------------|

| §   | $10 million higher earnings from foreign currency rate effect primarily for previously held net U.S. dollar monetary position in Chile; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| §   | $8 million higher earnings primarily related to natural gas optimization activities at Midstream Services; and |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| §   | a $6 million release of a tax valuation allowance in Mexico; offset by |
|--------------------|------------------------------------------------------------------------|

| §   | $48 million (pretax) in proceeds received from a legal settlement in 2010, less a related income tax effect of $17 million. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| §   | $64 million lower earnings in 2009 from a write-off of assets at Liberty; |
|--------------------|---------------------------------------------------------------------------|

| §   | $48 million (pretax) in proceeds received from a legal settlement in 2010, less a related income tax effect of $17 million; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| §   | $20 million higher earnings related to a Mexican pipeline acquisition in April 2010; and |
|--------------------|------------------------------------------------------------------------------------------|

| §   | $7 million higher operating results from its investments in Chile and Peru; offset by |
|--------------------|---------------------------------------------------------------------------------------|

| §   | a $44 million (pretax) write-down of our investment in Argentina, less a related income tax benefit of $15 million; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| §   | $13 million from the resolution of prior years’ income tax issues which favorably impacted 2009 earnings; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| §   | $10 million lower earnings attributable to natural gas optimization activities at Midstream Services; and |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| §   | $7 million lower earnings in Mexico primarily due to the favorable impact of the adoption of regulatory accounting in 2009 and the expiration of a transportation service contract at the end of 2009. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $99 million in 2011 |
|--------------------|---------------------|

| §   | $68 million in 2010 |
|--------------------|---------------------|

| §   | $16 million in 2009 |
|--------------------|---------------------|

| §   | $(124) million in 2011 |
|--------------------|------------------------|

| §   | $(246) million in 2010 |
|--------------------|------------------------|

| §   | $216 million in 2009 |
|--------------------|----------------------|

| §   | a $10 million write-down of our investment in the RBS Sempra Commodities joint venture in 2011 compared to $139 million in 2010; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| §   | other joint venture related expenses in 2010, including transaction costs related to the sales within RBS Sempra Commodities and litigation expense; offset by |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $5 million equity loss in 2011 from our former commodities-marketing businesses compared to equity earnings of $25 million in 2010. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| §   | $327 million lower equity earnings from RBS Sempra Commodities, which were adversely impacted by the sale on July 1, 2010 of the global metals and oil businesses and the European natural gas and power business; lower volatility in the U.S. natural gas and power business; and the disruptions caused by the process to sell the partnership’s businesses; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | a $139 million write-down in 2010 of our investment in the RBS Sempra Commodities joint venture; and |
|--------------------|------------------------------------------------------------------------------------------------------|

| §   | other joint venture related expenses in 2010, including transaction costs related to the sales within RBS Sempra Commodities and litigation expense; offset by |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | lower general and administrative expenses and higher income tax benefits, partially offset by higher net interest expense, excluding results related to our former Sempra Commodities segment. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | SDG&E |
|--------------------|-----------|

| §   | SoCalGas |
|--------------------|----------|

| §   | Mobile Gas |
|--------------------|------------|

| §   | Ecogas |
|--------------------|--------|

| §   | SDG&E |
|--------------------|-----------|

| §   | Chilquinta Energía |
|--------------------|-------------------------|

| §   | Luz del Sur |
|--------------------|-------------|

| UTILITIES REVENUES AND COST OF SALES 2009-2011 |
|------------------------------------------------|
| (Dollars in millions)                          |
|                                           |   | Years ended December 31, |
|                                           |   | 2011  | 2010  | 2009  |
| Electric revenues:                             |   |   |   |   |   |   |
| SDG&E                                      | $ |  2,830  | $ |  2,535  | $ |  2,426  |
| Sempra Pipelines & Storage                 |   |  1,009  |   |  ―  |   |  ―  |
| Eliminations and adjustments                   |   |  (6) |   |  (7) |   |  (7) |
|                                           |   |   |  3,833  |   |  2,528  |   |  2,419  |
| Natural gas revenues:                          |   |   |   |   |   |   |
| SoCalGas                                       |   |  3,816  |   |  3,822  |   |  3,355  |
| SDG&E                                      |   |  543  |   |  514  |   |  490  |
| Sempra Pipelines & Storage                 |   |  184  |   |  200  |   |  201  |
| Eliminations and adjustments                   |   |  (54) |   |  (45) |   |  (44) |
|                                           |   |   |  4,489  |   |  4,491  |   |  4,002  |
|                                           | Total | $ |  8,322  | $ |  7,019  | $ |  6,421  |
| Cost of natural gas:                           |   |   |   |   |   |   |
| SoCalGas                                       | $ |  1,568  | $ |  1,699  | $ |  1,343  |
| SDG&E                                      |   |  226  |   |  217  |   |  206  |
| Sempra Pipelines & Storage                 |   |  90  |   |  111  |   |  115  |
| Eliminations and adjustments                   |   |  (18) |   |  (15) |   |  (19) |
|                                           | Total | $ |  1,866  | $ |  2,012  | $ |  1,645  |
| Cost of electric fuel and purchased power:     |   |   |   |   |   |   |
| SDG&E                                      | $ |  715  | $ |  637  | $ |  672  |
| Sempra Pipelines & Storage                 |   |  682  |   |  ―  |   |  ―  |
|                                           | Total | $ |  1,397  | $ |  637  | $ |  672  |

| §   | $1.0 billion from the consolidation of electric revenues of Chilquinta Energía and Luz del Sur acquired in April 2011; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| §   | $295 million at SDG&E, which we discuss below. |
|--------------------|----------------------------------------------------|

| §   | $682 million from the consolidation of Chilquinta Energía and Luz del Sur acquired in April 2011; and |
|--------------------|------------------------------------------------------------------------------------------------------------|

| §   | $78 million at SDG&E, which we discuss below. |
|--------------------|---------------------------------------------------|

| §   | $131 million decrease in cost of natural gas sold at SoCalGas, which was caused primarily by lower natural gas prices, partially offset by higher volumes sold; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $16 million lower revenues at Sempra Pipelines & Storage’s two natural gas utilities, Mobile Gas and Ecogas; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| §   | $12 million lower regulatory awards in 2011 at SoCalGas; offset by |
|--------------------|--------------------------------------------------------------------|

| §   | $105 million higher recovery of Sempra Utilities’ CPUC-authorized costs, which revenues are fully offset in operation and maintenance expenses; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $62 million higher authorized base margin at the Sempra Utilities. |
|--------------------|--------------------------------------------------------------------|

| §   | an increase in cost of natural gas, which was caused primarily by higher natural gas prices; |
|--------------------|----------------------------------------------------------------------------------------------|

| §   | $58 million higher authorized base margin in accordance with the CPUC’s 2008 GRC decision; |
|--------------------|--------------------------------------------------------------------------------------------------|

| §   | $47 million higher recovery of CPUC-authorized costs, which revenues are fully offset in operation and maintenance expenses; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| §   | $13 million higher regulatory awards in 2010 at SoCalGas. |
|--------------------|-----------------------------------------------------------|

| SDG&E: ELECTRIC DISTRIBUTION AND TRANSMISSION 2009-2011                                   |
|-----------------------------------------------------------------------------------------------|
| (Volumes in millions of kilowatt-hours, dollars in millions)                                  |
|                                                                                          | 2011  | 2010  | 2009  |
| Customer class                                                                                | Volumes | Revenue | Volumes | Revenue | Volumes | Revenue |
| Residential                                                                                   |  7,374  | $ |  1,215  |  7,304  | $ |  1,039  |  7,536  | $ |  1,041  |
| Commercial                                                                                    |  6,736  |   |  1,000  |  6,738  |   |  884  |  7,061  |   |  890  |
| Industrial                                                                                    |  2,037  |   |  247  |  2,131  |   |  229  |  2,285  |   |  238  |
| Direct access                                                                                 |  3,265  |   |  148  |  3,202  |   |  124  |  3,119  |   |  106  |
| Street and highway lighting                                                                   |  100  |   |  14  |  108  |   |  13  |  110  |   |  12  |
|                                                                                          |  19,512  |   |  2,624  |  19,483  |   |  2,289  |  20,111  |   |  2,287  |
| Other revenues                                                                                |   |   |  117  |   |   |  108  |   |   |  137  |
| Balancing accounts                                                                            |   |   |  89  |   |   |  138  |   |   |  2  |
|     Total(1)                                                              |   | $ |  2,830  |   | $ |  2,535  |   | $ |  2,426  |
| (1) Includes sales to affiliates of $6 million in 2011, and $7 million in both 2010 and 2009. |

| §   | $81 million higher authorized base margin on electric generation and distribution, including $26 million due to the acquisition of the Desert Star generation facility on October 1, 2011; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $78 million increase in the cost of electric fuel and purchased power due to higher prices; |
|--------------------|---------------------------------------------------------------------------------------------|

| §   | $57 million higher revenues associated with incremental wildfire insurance premiums; |
|--------------------|--------------------------------------------------------------------------------------|

| §   | $29 million higher recoverable expenses that are fully offset in operation and maintenance expenses; |
|--------------------|------------------------------------------------------------------------------------------------------|

| §   | $9 million higher authorized transmission margin; and |
|--------------------|-------------------------------------------------------|

| §   | $7 million higher regulatory awards. |
|--------------------|--------------------------------------|

| §   | $57 million higher authorized base margin on electric generation and distribution; |
|--------------------|------------------------------------------------------------------------------------|

| §   | $28 million increase due to tolling payments and natural gas supply costs in 2010 associated with the power generated by Otay Mesa VIE in excess of purchased power costs in 2009 for the equivalent amount of power; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $28 million from the recovery of a portion of the incremental wildfire insurance premiums for the policy year July 2009 through June 2010; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $18 million higher authorized transmission margin; offset by |
|--------------------|--------------------------------------------------------------|

| §   | $31 million lower recoverable expenses that are fully offset in operation and maintenance expenses; and |
|--------------------|---------------------------------------------------------------------------------------------------------|

| §   | $3 million decrease in the cost of electric fuel and purchased power excluding Otay Mesa VIE. |
|--------------------|-----------------------------------------------------------------------------------------------|

| SDG&E: NATURAL GAS SALES AND TRANSPORTATION 2009-2011                      |
|--------------------------------------------------------------------------------|
| (Volumes in billion cubic feet, dollars in millions)                           |
|                                                                           |   |   |   |   |   |   |   |
|                                                                           | Natural Gas Sales | Transportation | Total |
| Customer class                                                                 | Volumes | Revenue | Volumes | Revenue | Volumes | Revenue |
| 2011:                                                                          |   |   |   |   |   |   |   |   |   |
|     Residential                                            |  32  | $ |  341  |  ―  | $ |  1  |  32  | $ |  342  |
|     Commercial and industrial                              |  15  |   |  103  |  8  |   |  10  |  23  |   |  113  |
|     Electric generation plants                             |  ―  |   |  ―  |  25  |   |  8  |  25  |   |  8  |
|                                                                           |  47  | $ |  444  |  33  | $ |  19  |  80  |   |  463  |
|     Other revenues                                         |   |   |   |   |   |   |   |   |  36  |
|     Balancing accounts                                     |   |   |   |   |   |   |   |   |  44  |
|         Total(1)                       |   |   |   |   |   |   |   | $ |  543  |
| 2010:                                                                          |   |   |   |   |   |   |   |   |   |
|     Residential                                            |  31  | $ |  340  |  ―  | $ |  ―  |  31  | $ |  340  |
|     Commercial and industrial                              |  14  |   |  106  |  8  |   |  12  |  22  |   |  118  |
|     Electric generation plants                             |  ―  |   |  ―  |  28  |   |  7  |  28  |   |  7  |
|                                                                           |  45  | $ |  446  |  36  | $ |  19  |  81  |   |  465  |
|     Other revenues                                         |   |   |   |   |   |   |   |   |  36  |
|     Balancing accounts                                     |   |   |   |   |   |   |   |   |  13  |
|         Total(1)                       |   |   |   |   |   |   |   | $ |  514  |
| 2009:                                                                          |   |   |   |   |   |   |   |   |   |
|     Residential                                            |  30  | $ |  304  |  ―  | $ |  ―  |  30  | $ |  304  |
|     Commercial and industrial                              |  15  |   |  100  |  7  |   |  10  |  22  |   |  110  |
|     Electric generation plants                             |  ―  |   |  ―  |  65  |   |  19  |  65  |   |  19  |
|                                                                           |  45  | $ |  404  |  72  | $ |  29  |  117  |   |  433  |
|     Other revenues                                         |   |   |   |   |   |   |   |   |  33  |
|     Balancing accounts                                     |   |   |   |   |   |   |   |   |  24  |
|         Total(1)                       |   |   |   |   |   |   |   | $ |  490  |
| (1) Includes sales to affiliates of $1 million in each of 2011, 2010 and 2009. |

| §   | $9 million higher recovery of CPUC-authorized costs, which revenues are fully offset in operation and maintenance expenses; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| §   | an increase in cost of natural gas, which was caused primarily by higher volumes sold and higher natural gas prices, as we discuss below; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $8 million higher authorized base margin. |
|--------------------|-------------------------------------------|

| §   | $15 million higher recovery of CPUC-authorized costs, which revenues are fully offset in operation and maintenance expenses; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| §   | the increase in cost of natural gas, which was caused primarily by higher natural gas prices, as we discuss below; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| §   | $6 million higher authorized base margin. |
|--------------------|-------------------------------------------|

| SOCALGAS: NATURAL GAS SALES AND TRANSPORTATION 2009-2011                                               |
|--------------------------------------------------------------------------------------------------------|
| (Volumes in billion cubic feet, dollars in millions)                                                   |
|                                                                                                   |   |   |   |   |   |   |   |
|                                                                                                   | Natural Gas Sales | Transportation | Total |
| Customer class                                                                                         | Volumes | Revenue | Volumes | Revenue | Volumes | Revenue |
| 2011:                                                                                                  |   |   |   |   |   |   |   |   |   |
|     Residential                                                                    |  253  | $ |  2,358  |  1  | $ |  4  |  254  | $ |  2,362  |
|     Commercial and industrial                                                      |  103  |   |  759  |  272  |   |  219  |  375  |   |  978  |
|     Electric generation plants                                                     |  ―  |   |  ―  |  166  |   |  42  |  166  |   |  42  |
|     Wholesale                                                                      |  ―  |   |  ―  |  148  |   |  19  |  148  |   |  19  |
|                                                                                                   |  356  | $ |  3,117  |  587  | $ |  284  |  943  |   |  3,401  |
|     Other revenues                                                                 |   |   |   |   |   |   |   |   |  99  |
|     Balancing accounts                                                             |   |   |   |   |   |   |   |   |  316  |
|         Total(1)                                               |   |   |   |   |   |   |   | $ |  3,816  |
| 2010:                                                                                                  |   |   |   |   |   |   |   |   |   |
|     Residential                                                                    |  245  | $ |  2,302  |  1  | $ |  4  |  246  | $ |  2,306  |
|     Commercial and industrial                                                      |  102  |   |  763  |  268  |   |  228  |  370  |   |  991  |
|     Electric generation plants                                                     |  ―  |   |  ―  |  187  |   |  44  |  187  |   |  44  |
|     Wholesale                                                                      |  ―  |   |  ―  |  149  |   |  15  |  149  |   |  15  |
|                                                                                                   |  347  | $ |  3,065  |  605  | $ |  291  |  952  |   |  3,356  |
|     Other revenues                                                                 |   |   |   |   |   |   |   |   |  92  |
|     Balancing accounts                                                             |   |   |   |   |   |   |   |   |  374  |
|         Total(1)                                               |   |   |   |   |   |   |   | $ |  3,822  |
| 2009:                                                                                                  |   |   |   |   |   |   |   |   |   |
|     Residential                                                                    |  234  | $ |  2,032  |  1  | $ |  3  |  235  | $ |  2,035  |
|     Commercial and industrial                                                      |  101  |   |  674  |  264  |   |  219  |  365  |   |  893  |
|     Electric generation plants                                                     |  ―  |   |  ―  |  200  |   |  48  |  200  |   |  48  |
|     Wholesale                                                                      |  ―  |   |  ―  |  141  |   |  13  |  141  |   |  13  |
|                                                                                                   |  335  | $ |  2,706  |  606  | $ |  283  |  941  |   |  2,989  |
|     Other revenues                                                                 |   |   |   |   |   |   |   |   |  105  |
|     Balancing accounts                                                             |   |   |   |   |   |   |   |   |  261  |
|         Total(1)                                               |   |   |   |   |   |   |   | $ |  3,355  |
| (1) Includes sales to affiliates of $53 million in 2011, $44 million in 2010, and $43 million in 2009. |

| §   | the decrease in cost of natural gas sold, which was caused primarily by lower natural gas prices, as we discuss below, offset by higher volumes sold; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $12 million lower regulatory awards in 2011; offset by |
|--------------------|--------------------------------------------------------|

| §   | $96 million higher recovery of CPUC-authorized costs, which revenues are fully offset in operation and maintenance expenses; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| §   | $54 million higher authorized base margin. |
|--------------------|--------------------------------------------|

| §   | the increase in cost of natural gas, which was caused primarily by higher natural gas prices, as we discuss below, and higher volumes due to colder weather in late 2010; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $52 million higher authorized base margin; |
|--------------------|--------------------------------------------|

| §   | $32 million higher recovery of CPUC-authorized costs, which revenues are fully offset in operation and maintenance expenses; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| §   | $13 million higher regulatory awards in 2010. |
|--------------------|-----------------------------------------------|

| SEMPRA PIPELINES & STORAGE UTILITIES: NATURAL GAS AND ELECTRIC REVENUE 2009-2011                                                                                                                       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                                                                                                                                      |
|                                                                                                                                                                                                       | 2011  | 2010  | 2009  |
| Customer class                                                                                                                                                                                             | Volumes | Revenue | Volumes | Revenue | Volumes | Revenue |
| Natural Gas Sales (billion cubic feet):                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |
| Mobile Gas                                                                                                                                                                                                 |  40  | $ |  93  |  37  | $ |  106  |  32  | $ |  112  |
| Ecogas                                                                                                                                                                                                     |  22  |   |  91  |  21  |   |  94  |  19  |   |  89  |
|     Total                                                                                                                                                                              |  62  | $ |  184  |  58  | $ |  200  |  51  | $ |  201  |
|                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |
| Electric Sales (million kilowatt hours)(1):                                                                                                                                                                |   |   |   |   |   |   |   |   |   |
| Luz del Sur                                                                                                                                                                                                |  4,715  | $ |  487  |  ―  | $ |  ―  |  ―  | $ |  ―  |
| Chilquinta Energía                                                                                                                                                                                    |  1,859  |   |  481  |  ―  |   |  ―  |  ―  |   |  ―  |
|                                                                                                                                                                                                       |  6,574  |   |  968  |  ―  |   |  ―  |  ―  |   |  ―  |
| Other service revenues                                                                                                                                                                                     |   |   |  41  |   |   |  ―  |   |   |  ―  |
|     Total                                                                                                                                                                              |   | $ |  1,009  |   | $ |  ―  |   | $ |  ―  |
| (1) Luz del Sur and Chilquinta Energía were accounted for under the equity method until April 6, 2011, when they became consolidated entities upon our acquisition of additional ownership interests. |

| ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES 2009-2011                             |
|---------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                       |
|                                                                                        |   | Years ended December 31, |
|                                                                                        |   | 2011  | 2010  | 2009  |
| REVENUES                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|     Sempra Generation                                                   | $ |  886  |  52  | % | $ |  1,172  |  59  | % | $ |  1,179  |  70  | % |
|     Sempra Pipelines & Storage                                      |   |  250  |  14  |   |   |  150  |  8  |   |   |  264  |  16  |   |
|     Sempra LNG                                                          |   |  714  |  42  |   |   |  711  |  36  |   |   |  278  |  16  |   |
|     Parent and other(1)                                                 |   |  (136) |  (8) |   |   |  (49) |  (3) |   |   |  (36) |  (2) |   |
|         Total revenues                              | $ |  1,714  |  100  | % | $ |  1,984  |  100  | % | $ |  1,685  |  100  | % |
| COST OF SALES(2)                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
|     Sempra Generation                                                   | $ |  478  |  64  | % | $ |  656  |  63  | % | $ |  668  |  77  | % |
|     Sempra Pipelines & Storage                                      |   |  17  |  2  |   |   |  14  |  1  |   |   |  131  |  15  |   |
|     Sempra LNG                                                          |   |  386  |  52  |   |   |  426  |  41  |   |   |  108  |  13  |   |
|     Parent and other(1)                                                 |   |  (135) |  (18) |   |   |  (50) |  (5) |   |   |  (43) |  (5) |   |
|         Total cost of natural gas, electric fuel    |   |   |   |   |   |   |   |   |   |   |   |   |
|             and purchased power | $ |  746  |  100  | % | $ |  1,046  |  100  | % | $ |  864  |  100  | % |
|     Sempra Generation                                                   | $ |  79  |  58  | % | $ |  78  |  89  | % | $ |  62  |  80  | % |
|     Sempra Pipelines & Storage                                      |   |  45  |  33  |   |   |  ―  |  ―  |   |   |  ―  |  ―  |   |
|     Sempra LNG                                                          |   |  13  |  9  |   |   |  11  |  12  |   |   |  16  |  21  |   |
|     Parent and other(1)                                                 |   |  ―  |  ―  |   |   |  (1) |  (1) |   |   |  (1) |  (1) |   |
|         Total other cost of sales                   | $ |  137  |  100  | % | $ |  88  |  100  | % | $ |  77  |  100  | % |
| (1)                                                                                         | Includes eliminations of intercompany activity. |
| (2)                                                                                         | Excludes depreciation and amortization, which are shown separately on the Consolidated Statements of Operations. |

| §   | $286 million lower revenues at Sempra Generation due to decreased power sales primarily from the end of the DWR contract as of September 30, 2011, and less favorable pricing; offset by |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $100 million higher revenues at Sempra Pipelines & Storage, including $70 million from the consolidation of revenues of Tecnored and Tecsur, two energy-services companies we acquired in April 2011, and $34 million from natural gas storage and marketing operations; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | higher revenues at Sempra LNG from contractual counterparty obligations for non-delivery of cargoes, offset by lower natural gas revenues in 2011. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $433 million higher revenues at Sempra LNG, primarily due to increased marketing operations and the start up of operations at its Cameron LNG terminal and the nitrogen-injection facility at the Energía Costa Azul terminal; offset by |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $123 million lower revenues at Sempra Pipelines & Storage due to the expiration of the CFE natural gas supply contract in 2009. At the expiration of the contract, Sempra LNG began supplying the CFE under a separate contract ending December 2022. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| OPERATION AND MAINTENANCE(1) 2009-2011                 |
|--------------------------------------------------------|
| (Dollars in millions)                                  |
|                                                   |   | Years ended December 31, |
|                                                   |   | 2011  | 2010  | 2009  |
| Sempra Utilities:                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|     SDG&E                      | $ |  1,072  |  38  | % | $ |  987  |  37  | % | $ |  960  |  39  | % |
|     SoCalGas                       |   |  1,305  |  46  |   |   |  1,174  |  44  |   |   |  1,138  |  46  |   |
| Sempra Global:                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|     Sempra Generation              |   |  106  |  4  |   |   |  268  |  10  |   |   |  108  |  4  |   |
|     Sempra Pipelines & Storage |   |  227  |  8  |   |   |  105  |  4  |   |   |  83  |  3  |   |
|     Sempra LNG                     |   |  86  |  3  |   |   |  83  |  3  |   |   |  94  |  4  |   |
| Parent and other(2)                                    |   |  29  |  1  |   |   |  51  |  2  |   |   |  88  |  4  |   |
| Total operation and maintenance                        | $ |  2,825  |  100  | % | $ |  2,668  |  100  | % | $ |  2,471  |  100  | % |
| (1)                                                    | Includes Litigation Expense and Other Operation and Maintenance for Sempra Energy Consolidated. |
| (2)                                                    | Includes intercompany eliminations recorded in consolidation. |

| §   | higher operation and maintenance expenses at the Sempra Utilities, as we discuss below; and |
|--------------------|---------------------------------------------------------------------------------------------|

| §   | $122 million at Sempra Pipelines & Storage, including $106 million from the consolidation of expenses of entities in Chile and Peru in 2011; offset by |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $162 million lower operation and maintenance expenses at Sempra Generation, including $145 million litigation expense in 2010 related to an agreement to settle certain energy crisis litigation, major scheduled plant maintenance in 2010 at the Mexicali and Mesquite power plants, and from the sale of El Dorado as of October 1, 2011; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $22 million lower operation and maintenance expenses at Parent and Other, which included $9 million litigation expense in 2010 related to an agreement to settle certain energy crisis litigation and lower other operation and maintenance expenses associated with our former commodities-marketing businesses, including transaction costs in 2010 related to the sales within RBS Sempra Commodities. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $160 million from Sempra Generation, primarily due to $145 million of litigation expense in 2010 related to an agreement to settle certain energy crisis litigation; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | higher operation and maintenance expenses at the Sempra Utilities, as we discuss below; offset by |
|--------------------|---------------------------------------------------------------------------------------------------|

| §   | $37 million lower operation and maintenance expenses at Parent and Other, primarily due to a reorganization in early 2010 that eliminated some central functions and moved other functions to the business units. This resulted in a reduction in general and administrative costs and also moved costs previously recognized by Parent and Other to the business units. The decrease was offset by higher operation and maintenance expenses at our former commodities-marketing businesses, including transaction costs related to the sales within RBS Sempra Commodities and $9 million litigation expense in 2010. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $46 million higher other operational and maintenance costs, including a $15 million increase in liability insurance premiums for wildfire coverage; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $38 million higher recoverable expenses, primarily from expenses associated with customer distributed generation incentive programs and transmission expenses. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $19 million higher other operational and maintenance costs, including: |
|--------------------|------------------------------------------------------------------------|

| ·   | $29 million higher liability insurance premiums for wildfire coverage and |
|--------------------|---------------------------------------------------------------------------|

| ·   | $13 million at Otay Mesa VIE, offset by |
|--------------------|-----------------------------------------|

| ·   | $15 million from the unfavorable resolution of a regulatory matter in 2009; and |
|--------------------|---------------------------------------------------------------------------------|

| §   | $23 million net unfavorable impact from an increase in litigation reserves in 2010 compared to the favorable resolution of litigation in 2009; offset by |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $16 million lower recoverable expenses. |
|--------------------|-----------------------------------------|

| §   | $96 million higher recoverable expenses, primarily from expenses associated with energy efficiency and employee benefit programs; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| §   | $20 million higher other operational and maintenance costs; and |
|--------------------|-----------------------------------------------------------------|

| §   | $5 million litigation expense in 2011 compared to a $10 million favorable impact from the resolution of a litigation matter in 2010. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| §   | $32 million higher recoverable expenses, primarily from expenses associated with energy efficiency programs; and |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| §   | $17 million higher other operational and maintenance costs; offset by |
|--------------------|-----------------------------------------------------------------------|

| §   | $13 million net favorable impact from a favorable resolution of litigation reserves in 2010 compared to litigation expense in 2009. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| §   | $978 million in 2011 |
|--------------------|----------------------|

| §   | $867 million in 2010 |
|--------------------|----------------------|

| §   | $775 million in 2009 |
|--------------------|----------------------|

| §   | $48 million at Sempra Pipelines & Storage, including $40 million from the consolidation of entities in Chile and Peru in 2011; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| §   | $41 million at SDG&E, primarily from higher electric plant depreciation; and |
|--------------------|----------------------------------------------------------------------------------|

| §   | $22 million at SoCalGas from an increase in net utility plant base. |
|--------------------|---------------------------------------------------------------------|

| §   | $52 million at SDG&E, primarily from higher electric plant depreciation, including a full year of operations at Otay Mesa VIE; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| §   | $16 million at SoCalGas from an increase in net utility plant base; and |
|--------------------|-------------------------------------------------------------------------|

| §   | $16 million at Sempra LNG due to the start up of the Cameron LNG terminal and Energía Costa Azul LNG nitrogen injection facility in the second half of 2009. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $(24) million in 2011 |
|--------------------|-----------------------|

| §   | $(314) million in 2010 |
|--------------------|------------------------|

| §   | $463 million in 2009 |
|--------------------|----------------------|

| §   | $33 million in 2011 |
|--------------------|---------------------|

| §   | $22 million in 2010 |
|--------------------|---------------------|

| §   | $36 million in 2009 |
|--------------------|---------------------|

| §   | $13 million of losses in 2010 from Sempra Generation’s investment in Elk Hills, including a $10 million loss on the sale of the investment in December 2010; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $5 million decreased losses from our investments in housing partnerships; offset by |
|--------------------|-------------------------------------------------------------------------------------|

| §   | $6 million of equity losses in 2011 from renewables projects at Sempra Generation compared to $1 million of equity earnings in 2010. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| §   | $130 million in 2011 |
|--------------------|----------------------|

| §   | $140 million in 2010 |
|--------------------|----------------------|

| §   | $149 million in 2009 |
|--------------------|----------------------|

| §   | proceeds of $48 million from a legal settlement at Sempra Pipelines & Storage in 2010; offset by |
|--------------------|------------------------------------------------------------------------------------------------------|

| §   | $37 million increase in equity-related AFUDC in 2011 attributable to SDG&E primarily associated with the construction of the Sunrise Powerlink electric transmission line; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $10 million lower losses on interest rate and foreign exchange instruments, including $34 million of losses on interest rate instruments in 2010 related to Otay Mesa VIE (discussed below), offset by a $15 million Mexican peso exchange loss in 2011 (discussed in “Income Taxes – Mexican Currency Exchange Rate and Inflation Impact on Income Taxes and Related Economic Hedging Activity” below) and a $10 million gain recognized on an interest rate instrument in 2010 at Parent and Other. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $34 million in losses on interest rate instruments in 2010 at Otay Mesa VIE compared to $27 million in gains in 2009; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| §   | a $20 million decrease in gains from investment activity related to our executive retirement and deferred compensation plans in 2010; offset by |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | proceeds of $48 million from a legal settlement in 2010 at Sempra Pipelines & Storage; |
|--------------------|--------------------------------------------------------------------------------------------|

| §   | $18 million increase in AFUDC, including $14 million at SDG&E primarily due to construction on the Sunrise Powerlink project; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| §   | a $10 million gain recognized on an interest rate instrument in 2010 at Parent and Other. |
|--------------------|-------------------------------------------------------------------------------------------|

| §   | $79 million in 2011 |
|--------------------|---------------------|

| §   | $10 million in 2010 |
|--------------------|---------------------|

| §   | $64 million in 2009 |
|--------------------|---------------------|

| §   | $37 million increase in AFUDC primarily due to construction on the Sunrise Powerlink project; and |
|--------------------|---------------------------------------------------------------------------------------------------|

| §   | $34 million of losses on interest rate instruments at Otay Mesa VIE in 2010. Otay Mesa VIE’s interest rate instrument’s activity was designated as a cash flow hedge as of April 1, 2011. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $34 million in losses on interest rate instruments in 2010 at Otay Mesa VIE compared to $27 million in gains in 2009; offset by |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| §   | $14 million increase in AFUDC primarily due to construction on the Sunrise Powerlink project. |
|--------------------|-----------------------------------------------------------------------------------------------|

| INTEREST EXPENSE 2009-2011 |
|----------------------------|
| (Dollars in millions)      |
|                       | Years ended December 31, |
|                       | 2011  | 2010  | 2009  |
| Sempra Energy Consolidated | $ |  465  | $ |  436  | $ |  367  |
| SDG&E                  |   |  142  |   |  136  |   |  104  |
| SoCalGas                   |   |  69  |   |  66  |   |  68  |

| §   | $41 million at Sempra Pipelines & Storage, primarily from the consolidation of Chile and Peru in April 2011, and from lower capitalized interest in 2011 due to natural gas storage caverns at Bay Gas Storage, LLC (Bay Gas) and Mississippi Hub, LLC (Mississippi Hub) going into service; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $6 million at SDG&E, which we discuss below; offset by |
|--------------------|------------------------------------------------------------|

| §   | $6 million lower interest expense related to energy crisis litigation reserves at Parent and Other; and |
|--------------------|---------------------------------------------------------------------------------------------------------|

| §   | $5 million higher capitalized interest associated with renewables projects at Sempra Generation. |
|--------------------|--------------------------------------------------------------------------------------------------|

| §   | $80 million higher interest expense, primarily from long-term debt issued in 2009 and 2010 at Parent and Other and SDG&E; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| §   | $27 million lower capitalized interest, primarily at Sempra LNG due to completion of construction projects; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| §   | $14 million in interest expense at Otay Mesa VIE in 2010; offset by |
|--------------------|---------------------------------------------------------------------|

| §   | $30 million lower interest expense from maturities of debt at Parent and Other; and |
|--------------------|-------------------------------------------------------------------------------------|

| §   | $16 million lower short-term debt interest expense, primarily from lower average commercial paper borrowings and interest rates, and reduced interest expense related to energy crisis litigation reserves at Parent and Other. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES 2009-2011 |
|-------------------------------------------------------------|
| (Dollars in millions)                                       |
|                                                        | Years ended December 31, |
|                                                        |   |   | 2011  |   | 2010  |   | 2009  |
|                                                        |   |   | Income Tax |   | Effective Income |   |   | Income Tax |   | Effective Income |   |   | Income Tax |   | Effective Income |   |
|                                                        |   |   | Expense |   | Tax Rate |   |   | Expense |   | Tax Rate |   |   | Expense |   | Tax Rate |   |
| Sempra Energy Consolidated                                  | $ |  366  |   |  21  | % | $ |  102  |   |  13  | % | $ |  422  |   |  29  | % |
| SDG&E                                                   |   |  237  |   |  34  |   |   |  173  |   |  33  |   |   |  177  |   |  32  |   |
| SoCalGas                                                    |   |  143  |   |  33  |   |   |  176  |   |  38  |   |   |  144  |   |  34  |   |
|                                                        |   |

| §   | a lower percentage of pretax income in 2011 compared to 2010 in countries with lower statutory rates. The activity in each year related primarily to: |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | in 2011, a $277 million non-taxable gain related to the remeasurement of our equity method investments in South America, as we discuss in Note 3 of the Notes to Consolidated Financial Statements |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | in 2010, activity related to RBS Sempra Commodities, including a large non-taxable gain related to our share of the RBS Sempra Commodities sale to J.P. Morgan Ventures, as we discuss below |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | lower renewable energy income tax credits; |
|--------------------|--------------------------------------------|

| §   | favorable adjustments in 2010 related to prior years’ income tax issues; |
|--------------------|--------------------------------------------------------------------------------|

| §   | higher state income taxes; and |
|--------------------|--------------------------------|

| §   | lower favorable impact from deductions for self-developed software costs at the Sempra Utilities; offset by |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| §   | tax benefit in 2011 versus tax expense in 2010 due to Mexican currency translation and inflation adjustments; |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| §   | higher book depreciation over income tax depreciation related to a certain portion of utility plant fixed assets; |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| §   | a $16 million write-down in 2010 of the deferred tax assets related to other postretirement benefits, as a result of a change in U.S. tax law that eliminates a future deduction, starting in 2013, for retiree healthcare funded by the Medicare Part D subsidy; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | the impact of Otay Mesa VIE, as we discuss below. |
|--------------------|---------------------------------------------------|

| §   | approximately $150 million of a total $175 million non-U.S. gain on sale of the businesses and assets within the joint venture was non-taxable; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | approximately $40 million non-U.S. earnings from the operations of the joint venture and approximately $25 million of the non-U.S. gain on sale of the businesses and assets within the joint venture were net of income tax paid by the partnership. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | higher renewable energy income tax credits; |
|--------------------|---------------------------------------------|

| §   | higher exclusions from taxable income of the equity portion of AFUDC; and |
|--------------------|---------------------------------------------------------------------------|

| §   | higher favorable adjustments related to prior years’ income tax issues; offset by |
|--------------------|-----------------------------------------------------------------------------------------|

| §   | a $16 million write-down of the deferred tax assets related to other postretirement benefits, as a result of a change in U.S. tax law that eliminates a future deduction, starting in 2013, for retiree healthcare funded by the Medicare Part D subsidy; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | higher impact from tax expense in 2010 due to Mexican currency translation and inflation adjustments; |
|--------------------|-------------------------------------------------------------------------------------------------------|

| §   | the impact of Otay Mesa VIE, as we discuss below; |
|--------------------|---------------------------------------------------|

| §   | $11 million state income tax expense related to our exit from the RBS Sempra Commodities business; and |
|--------------------|--------------------------------------------------------------------------------------------------------|

| §   | higher book depreciation over income tax depreciation related to a certain portion of utility plant fixed assets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| §   | favorable adjustments in 2010 related to prior years’ income tax issues; offset by |
|--------------------|------------------------------------------------------------------------------------------|

| §   | higher exclusions from taxable income of the equity portion of AFUDC; |
|--------------------|-----------------------------------------------------------------------|

| §   | the impact of Otay Mesa VIE, as we discuss above; |
|--------------------|---------------------------------------------------|

| §   | higher deductions for self-developed software costs; |
|--------------------|------------------------------------------------------|

| §   | lower impact from higher book depreciation over income tax depreciation related to a certain portion of utility plant fixed assets; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| §   | a $3 million write-down in 2010 of the deferred tax assets related to other postretirement benefits as a result of a change in U.S. tax law, as we discuss above. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | the impact of Otay Mesa VIE, as we discuss above; |
|--------------------|---------------------------------------------------|

| §   | a $3 million write-down of the deferred tax assets related to other postretirement benefits as a result of a change in U.S. tax law, as we discuss above; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | higher book depreciation over income tax depreciation related to a certain portion of utility plant fixed assets; offset by |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| §   | higher exclusions from taxable income of the equity portion of AFUDC; and |
|--------------------|---------------------------------------------------------------------------|

| §   | higher favorable adjustments related to prior years’ income tax issues. |
|--------------------|-------------------------------------------------------------------------------|

| §   | a $13 million write-down in 2010 of the deferred tax assets related to other postretirement benefits as a result of a change in U.S. tax law, as we discuss above; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | higher deductions for self-developed software costs; and |
|--------------------|----------------------------------------------------------|

| §   | higher exclusions from taxable income of the equity portion of AFUDC; offset by |
|--------------------|---------------------------------------------------------------------------------|

| §   | higher book depreciation over income tax depreciation related to a certain portion of utility plant fixed assets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| §   | the equity portion of AFUDC |
|--------------------|-----------------------------|

| §   | self-developed software costs |
|--------------------|-------------------------------|

| §   | depreciation on a certain portion of utility plant assets |
|--------------------|-----------------------------------------------------------|

| MEXICAN CURRENCY IMPACT ON INCOME TAXES AND RELATED ECONOMIC HEDGING ACTIVITY |
|-------------------------------------------------------------------------------|
| (Dollars in millions)                                                         |
|                                                                          |   | Years ended December 31, |
|                                                                          |   | 2011  | 2010  | 2009  |
| Income tax benefit (expense) on currency exchange                             |   |   |   |   |   |   |
|                                                                          | rate movement of monetary assets and liabilities | $ |  11  | $ |  (10) | $ |  (12) |
| Translation of non-U.S. deferred income tax balances                          |   |  11  |   |  (2) |   |  4  |
| Income tax expense on inflation                                               |   |  (4) |   |  (7) |   |  (8) |
|                                                                          | Total impact on income taxes |   |  18  |   |  (19) |   |  (16) |
| After-tax losses on Mexican peso exchange rate                                |   |   |   |   |   |   |
|                                                                          | instruments (included in Other Income, Net) |   |  (9) |   |  ―  |   |  ―  |
| Net impacts on Sempra Energy Consolidated                                     |   |   |   |   |   |   |
|                                                                          | Statements of Operations | $ |  9  | $ |  (19) | $ |  (16) |

| §   | $52 million in 2011 |
|--------------------|---------------------|

| §   | $49 million in 2010 |
|--------------------|---------------------|

| §   | $68 million in 2009 |
|--------------------|---------------------|

| §   | a $44 million pretax write-down of Sempra Pipelines & Storage’s investment in Argentina in 2010; and |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| §   | $10 million higher earnings related to the joint-venture interest acquired from El Paso Corporation in April 2010; offset by |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| §   | $50 million lower earnings related to equity method investments in Chile and Peru, for entities that are now consolidated. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| §   | the $44 million pretax write-down in Argentina in 2010; offset by |
|--------------------|-------------------------------------------------------------------|

| §   | $19 million earnings related to the joint-venture interest acquired from El Paso Corporation; and |
|--------------------|---------------------------------------------------------------------------------------------------|

| §   | $13 million higher earnings from investments in Chile and Peru. |
|--------------------|-----------------------------------------------------------------|

| §   | $19 million earnings attributable to noncontrolling interest in 2011 compared to losses of $16 million in 2010 at Otay Mesa VIE, which we discuss below; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $22 million earnings primarily from noncontrolling interests at Luz del Sur in 2011. |
|--------------------|--------------------------------------------------------------------------------------|

| §   | losses attributable to Otay Mesa VIE of $16 million in 2010 compared to earnings of $24 million in 2009, which we discuss below; offset by |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $33 million associated with the write-off of assets at Liberty in 2009. |
|--------------------|-------------------------------------------------------------------------|

| §   | $34 million in losses on interest rate instruments in 2010 compared to $27 million in gains in 2009; and |
|--------------------|----------------------------------------------------------------------------------------------------------|

| §   | $14 million in interest expense in 2010; offset by |
|--------------------|----------------------------------------------------|

| §   | $34 million increase in operating income in 2010. |
|--------------------|---------------------------------------------------|

| §   | $41.00 in 2011 |
|--------------------|----------------|

| §   | $37.54 in 2010 |
|--------------------|----------------|

| §   | $36.54 in 2009 |
|--------------------|----------------|

----

| §   | long-term debt issuances at Sempra Energy ($800 million) and SDG&E ($600 million) |
|--------------------|---------------------------------------------------------------------------------------|

| §   |  $623 million in distributions received from RBS Sempra Commodities related to the sale of joint venture businesses and assets |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| §   | Sempra Pipelines & Storage’s acquisition of additional interests in South American utilities for $611 million, net of cash acquired |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $2.8 billion in expenditures for property, plant and equipment, including $789 million for SDG&E’s Sunrise Powerlink project |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| §   | $482 million of Sempra Energy debt retirements |
|--------------------|------------------------------------------------|

| §   | a cash payment of $130 million in January 2011 related to a 2010 settlement to resolve certain energy crisis litigation |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| AVAILABLE FUNDS AT DECEMBER 31, 2011   |
|----------------------------------------|
| (Dollars in millions)                  |
|                                   |   | Sempra Energy |   |   |
|                                   |   | Consolidated | SDG&E | SoCalGas |
| Unrestricted cash and cash equivalents | $ |  252  | $ |  29  | $ |  36  |
| Available unused credit(1)             |   |  2,734  |   |  363  |   |  563  |
| (1)                                    | Borrowings on the shared line of credit at SDG&E and SoCalGas, discussed in Note 5, are limited to $600 million for each utility and $800 million in total. SDG&E’s available funds reflect variable-rate demand notes of $237 million supported by the line. SoCalGas’ availability reflects the impact of SDG&E’s use of the combined credit available on the line. |

| §   | finance capital expenditures |
|--------------------|------------------------------|

| §   | meet liquidity requirements |
|--------------------|-----------------------------|

| §   | fund shareholder dividends |
|--------------------|----------------------------|

| §   | fund new business acquisitions or start-ups |
|--------------------|---------------------------------------------|

| §   | repay maturing long-term debt |
|--------------------|-------------------------------|

| COMMERCIAL PAPER STATISTICS |                                                                                                                      |   |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------|--------|
| (Dollars in millions)       |                                                                                                                      |   |
|                        | Commercial Paper                                                                                                          |
| Sempra Energy Consolidated  |                                                                                                                      |   |
|                        | Amount outstanding at December 31, 2011(1)                                                                                | $      |  821  |
|                        | Weighted average interest rate at December 31, 2011                                                                       |   | 0.74% |
|                        |                                                                                                                      |   |   |
|                        | Maximum month-end amount outstanding during 2011(2)                                                                       | $      |  1,016  |
|                        |                                                                                                                      |   |   |
|                        | Monthly weighted average amount outstanding during 2011                                                                   | $      |  699  |
|                        | Monthly weighted average interest rate during 2011                                                                        |   | 0.58% |
| (1)                         | Includes $400 million classified as long-term, as we discuss in Note 5 of the Notes to Consolidated Financial Statements. |
| (2)                         | The largest amount outstanding at the end of the last day of any month during 2011.                                       |

| CASH PROVIDED BY OPERATING ACTIVITIES |
|---------------------------------------|
| (Dollars in millions)                 |
|                                  | 2011  | 2011 Change | 2010  | 2010 Change | 2009  |
| Sempra Energy Consolidated            | $ |  1,867  | $ |  (287) |  (13) | % | $ |  2,154  | $ |  279  |  15  | % | $ |  1,875  |
| SDG&E                             |   |  882  |   |  153  |  21  |   |   |  729  |   |  88  |  14  |   |   |  641  |
| SoCalGas                              |   |  554  |   |  (182) |  (25) |   |   |  736  |   |  296  |  67  |   |   |  440  |

| §   | $402 million in settlement payments for the 2007 wildfires in 2011 (using $381 million of restricted cash), compared to $43 million net settlement payments for the 2007 wildfires in 2010; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $130 million settlement payment related to energy crisis litigation in 2011, which was an increase to other current liabilities when accrued in 2010; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $145 million lower distributions from RBS Sempra Commodities in 2011; and |
|--------------------|---------------------------------------------------------------------------|

| §   | a $32 million increase in accounts receivable in 2011 compared to an $89 million decrease in accounts receivable in 2010; offset by |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| §   | $268 million decrease in income taxes receivable in 2011 compared to a $30 million increase in income taxes receivable in 2010; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| §   | $161 million higher net income, adjusted for noncash items included in earnings, in 2011 compared to 2010; and |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| §   | $300 million of funds received in 2011 from a wildfire litigation settlement compared to $144 million of funds received in 2010, which is offset by an increase in restricted cash in cash flows from investing activities. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $170 million higher net income, adjusted for noncash items included in earnings, in 2010 compared to 2009; |
|--------------------|------------------------------------------------------------------------------------------------------------|

| §   | an increase in accounts payable in 2010 compared to a decrease in 2009 due to higher natural gas prices in 2010; |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| §   | an accounts receivable decrease in 2010 compared to an increase in 2009; and |
|--------------------|------------------------------------------------------------------------------|

| §   | $144 million of restricted funds received from Cox Communications from a wildfire litigation settlement that we describe in Note 15 of the Notes to Consolidated Financial Statements, which is offset by an increase in restricted cash in cash flows from investing activities; offset by |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | a decrease in overcollected regulatory balancing accounts in 2010 compared to an increase in 2009, which we discuss for SDG&E and SoCalGas below; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | an increase in inventory in 2010 compared to a decrease in 2009, primarily at Sempra Pipelines & Storage as a result of natural gas optimization activities; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $209 million lower distributions of joint venture earnings received from RBS Sempra Commodities in 2010. |
|--------------------|----------------------------------------------------------------------------------------------------------|

| §   | $305 million higher net income, adjusted for noncash items included in earnings, in 2011 compared to 2010; |
|--------------------|------------------------------------------------------------------------------------------------------------|

| §   | a higher increase in accounts payable in 2011 compared to 2010; and |
|--------------------|---------------------------------------------------------------------|

| §   | $300 million of funds received in 2011 from a wildfire litigation settlement compared to $144 million of funds received in 2010; which is offset by an increase in restricted cash in cash flows from investing activities; offset by |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $111 million increase in income taxes receivable in 2011 compared to a $12 million decrease in income taxes receivable in 2010; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| §   | $402 million in settlement payments for the 2007 wildfires in 2011 (using $381 million of restricted cash), compared to $43 million net settlement payments for the 2007 wildfires in 2010. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $68 million higher net income, adjusted for noncash items included in earnings, in 2010; |
|--------------------|------------------------------------------------------------------------------------------|

| §   | lower income tax payments in 2010; and |
|--------------------|----------------------------------------|

| §   | $144 million of restricted funds received from a wildfire litigation settlement, which is offset by an increase in restricted cash in cash flows from investing activities; offset by |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $43 million net settlement payments in 2010 (using $34 million of restricted cash) compared to $10 million net receipts from our liability insurance carriers in 2009 related to the 2007 wildfire litigation (as we discuss above under “Sempra Energy Consolidated”); and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | a decrease in overcollected regulatory balancing accounts in 2010 compared to an increase in 2009. Over- and undercollected regulatory balancing accounts reflect the difference between customer billings and recorded or CPUC-authorized costs. These differences are required to be balanced over time. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | an increase in accounts receivable in 2011 compared to a decrease in 2010; |
|--------------------|----------------------------------------------------------------------------|

| §   | an decrease in accounts payable in 2011 compared to an increase in 2010 primarily due to lower natural gas prices in 2011; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| §   | a higher increase in inventory in 2011 compared to 2010; offset by |
|--------------------|--------------------------------------------------------------------|

| §   | $40 million higher net income, adjusted for noncash items included in earnings, in 2011 compared to 2010. |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| §   | $58 million higher net income, adjusted for noncash items included in earnings, in 2010 compared to 2009; |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| §   | an increase in accounts payable in 2010 compared to a decrease in 2009 primarily due to higher natural gas prices in 2010; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| §   | a decrease in accounts receivable in 2010 compared to an increase in 2009 due to lower other accounts receivable in 2010 related to natural gas storage transactions; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | decreases in other liabilities of $137 million in 2009, including a $55 million prepayment of remaining installments due under a litigation settlement in 2009; offset by |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | a decrease in inventory of $74 million in 2009 due to higher withdrawals from inventory in the fourth quarter of 2009 to supply core customers; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | a decrease in overcollected regulatory balancing accounts in 2010 compared to an increase in 2009. |
|--------------------|----------------------------------------------------------------------------------------------------|

| CONTRIBUTIONS TO PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS 2009-2011 |
|---------------------------------------------------------------------------|
| (Dollars in millions)                                                     |
|                                                                      | Pension Benefits |   | Other Postretirement Benefits |
|                                                                      | 2011  | 2010  | 2009  |   | 2011  | 2010  | 2009  |
| Sempra Energy Consolidated                                                | $ |  212  | $ |  159  | $ |  185  |   | $ |  72  | $ |  52  | $ |  45  |
| SDG&E                                                                 |   |  69  |   |  61  |   |  58  |   |   |  15  |   |  15  |   |  16  |
| SoCalGas                                                                  |   |  95  |   |  71  |   |  76  |   |   |  55  |   |  35  |   |  28  |

| CASH USED IN INVESTING ACTIVITIES |
|-----------------------------------|
| (Dollars in millions)             |
|                              | 2011  | 2011 Change | 2010  | 2010 Change | 2009  |
| Sempra Energy Consolidated        | $ |  (3,070) | $ |  1,787  |  139  | % | $ |  (1,283) | $ |  (1,389) |  (52) | % | $ |  (2,672) |
| SDG&E                         |   |  (1,764) |   |  450  |  34  |   |   |  (1,314) |   |  389  |  42  |   |   |  (925) |
| SoCalGas                          |   |  (634) |   |  68  |  12  |   |   |  (566) |   |  70  |  14  |   |   |  (496) |

| §   | a $782 million increase in capital expenditures; |
|--------------------|--------------------------------------------------|

| §   | $611 million in cash used to fund Sempra Pipelines & Storage’s purchase of South American entities; |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| §   | $279 million lower distributions received from RBS Sempra Commodities related to the sale of joint venture businesses and assets, as we discuss in Note 4 of the Notes to Consolidated Financial Statements; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | a $300 million increase in SDG&E’s restricted cash due to funds received from a wildfire litigation settlement compared to $144 million of funds received in 2010; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $180 million of distributions from Fowler Ridge 2 Wind Farm at Sempra Generation in 2010; and |
|--------------------|-----------------------------------------------------------------------------------------------|

| §   | $175 million of proceeds received from Sempra Generation’s 2010 sale of its investment in Elk Hills; offset by |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

| §   |  $381 million in payments for claims related to wildfire litigation using restricted funds received from a wildfire litigation settlement; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Sempra Pipelines & Storage’s $292 million acquisition (net of cash acquired) resulting in the purchase of Mexican pipeline and natural gas infrastructure assets in 2010. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $849 million of distributions received from RBS Sempra Commodities LLP in 2010 related to the sale of joint venture businesses and assets, as we discuss in Note 4 of the Notes to Consolidated Financial Statements; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $560 million lower contributions to Rockies Express, as the $65 million contribution in the first quarter of 2010 was the last required for the construction phase of the project; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $235 million for Sempra Generation’s 2009 investment in Fowler Ridge 2; and |
|--------------------|-----------------------------------------------------------------------------------|

| §   | $175 million of proceeds received from Sempra Generation’s 2010 sale of its investment in Elk Hills; offset by |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

| §   | $144 million increase in restricted cash from funds received from a wildfire litigation settlement; and |
|--------------------|---------------------------------------------------------------------------------------------------------|

| §   | Sempra Pipelines & Storage’s acquisition of Mexican pipeline and natural gas infrastructure assets. |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| §   | a $621 million increase in capital expenditures; and |
|--------------------|------------------------------------------------------|

| §   | a $300 million increase in restricted cash due to funds received from a wildfire litigation settlement compared to $144 million of funds received in 2010; offset by |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   |  $381 million in payments for claims related to wildfire litigation using restricted funds received from a wildfire litigation settlement. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | a $255 million net increase in capital expenditures (a $369 million increase at SDG&E, offset by a decrease of $114 million at Otay Mesa VIE); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $144 million increase in restricted cash due to funds received from a wildfire litigation settlement; and |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| §   | net proceeds of $24 million related to industrial development bonds in 2009; offset by |
|--------------------|----------------------------------------------------------------------------------------|

| §   | $34 million in payments of claims related to wildfire litigation using restricted funds received from a wildfire litigation settlement. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| §   | a $180 million increase in capital expenditures; offset by |
|--------------------|------------------------------------------------------------|

| §   | a $49 million decrease in advances to Sempra Energy in 2011 compared a $63 million increase in advances to Sempra Energy in 2010. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| SEMPRA ENERGY CONSOLIDATED                        |
|---------------------------------------------------|
| CAPITAL EXPENDITURES AND INVESTMENTS/ACQUISITIONS |
| (Dollars in millions)                             |
|                                              | Property, plant and equipment |   | Investments and acquisition of businesses |
| 2011                                         | $ |  2,844  |   | $ |  941  |
| 2010                                         |   |  2,062  |   |   |  611  |
| 2009                                         |   |  1,912  |   |   |  939  |
| 2008                                         |   |  2,061  |   |   |  2,675  |
| 2007                                         |   |  2,011  |   |   |  121  |

| Natural gas storage:              | Pipelines:                            |
|----------------------------------------|---------------------------------------|
| § $122 million in 2011  | § None in 2011         |
| § $170 million in 2010  | § None in 2010         |
| § $127 million in 2009  | § $10 million in 2009  |

| §   | $611 million in cash used to fund Sempra Pipelines & Storage’s purchase of South American entities |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| §   | $146 million for the initial investment in Flat Ridge 2 Wind Farm |
|--------------------|-------------------------------------------------------------------|

| §   | $88 million for the initial investment in Mehoopany Wind Farm |
|--------------------|---------------------------------------------------------------|

| §   | the purchase of $84 million in industrial development bonds |
|--------------------|-------------------------------------------------------------|

| §   | acquisition of Mexican pipelines and infrastructure assets for approximately $300 million |
|--------------------|-------------------------------------------------------------------------------------------|

| §   | $209 million for the initial investment in Cedar Creek 2 Wind Farm |
|--------------------|--------------------------------------------------------------------|

| §   | $65 million invested in Rockies Express |
|--------------------|-----------------------------------------|

| §   | $625 million for Rockies Express and $235 million for Fowler Ridge 2 Wind Farm |
|--------------------|--------------------------------------------------------------------------------|

| §   | the purchase of $75 million in industrial development bonds |
|--------------------|-------------------------------------------------------------|

| (Dollars in millions)          | 2011       | 2010      | 2009           |
|--------------------------------|-----------------|----------------|---------------------|
| Sempra Generation              |            |           |                |   |   |   |
|                           | Fowler Ridge 2  | $              |  2        | $ |  180  | $ |  ―  |
|                           | Cedar Creek 2   |           |  5        |   |  96  |   |  ―  |
|                           | Elk Hills       |           |  ―  |   |  9  |   |  ―  |
|                           |            |           |                |   |   |   |   |
| Sempra Pipelines & Storage |            |           |                |   |   |   |
|                           | Rockies Express |           |  57       |   |  55  |   |  23  |
|                           | South America   |           |  ―  |   |  31  |   |  ―  |
| Total                          | $               |  64  | $                   |  371  | $ |  23  |

| (Dollars in millions) | 2011  | 2010         | 2009  |
|-----------------------|------------|-------------------|------------|
| SDG&E             | $          |  1,831  | $          |  1,210  | $ |  955  |
| SoCalGas              |       |  683    |       |  503  |   |  480  |

| §   | $593 million of improvements to natural gas and electric distribution systems |
|--------------------|-------------------------------------------------------------------------------|

| §   | $789 million for the Sunrise Powerlink transmission line |
|--------------------|----------------------------------------------------------|

| §   | $173 million of improvements to electric transmission systems |
|--------------------|---------------------------------------------------------------|

| §   | $276 million for electric generation plants and equipment |
|--------------------|-----------------------------------------------------------|

| §   | $683 million of improvements to natural gas infrastructure |
|--------------------|------------------------------------------------------------|

| §   | $2.1 billion at the Sempra Utilities for capital projects and plant improvements ($1.4 billion at SDG&E and $710 million at SoCalGas) |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $1.0 billion at our other subsidiaries for development of natural gas storage facilities and pipelines, capital projects in South America and renewable generation projects |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $630 million for improvements to SDG&E’s natural gas and electric distribution systems |
|--------------------|--------------------------------------------------------------------------------------------------|

| §   | $170 million at SDG&E for the Sunrise Powerlink transmission line |
|--------------------|-----------------------------------------------------------------------|

| §   | $200 million for improvements to SDG&E’s electric transmission systems |
|--------------------|----------------------------------------------------------------------------------|

| §   | $90 million for SDG&E’s electric generation plants and equipment |
|--------------------|----------------------------------------------------------------------------|

| §   | $285 million for SDG&E’s renewable projects |
|--------------------|-------------------------------------------------------|

| §   | $710 million at SoCalGas for improvements to distribution and transmission systems and storage facilities, and for advanced metering infrastructure |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $5.8 billion at SDG&E |
|--------------------|---------------------------|

| §   | $5.0 billion at SoCalGas |
|--------------------|--------------------------|

| §   | approximately $100 million to $200 million for capital projects in South America, including approximately $70 million for the Santa Teresa hydroelectric power at Luz del Sur |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | approximately $50 million to $100 million for development of natural gas storage projects at Bay Gas and Mississippi Hub |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| §   | approximately $400 million for investment in the first phase (150 MW) of Mesquite Solar, a solar project at our Mesquite Power plant near Arlington, Arizona |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | approximately $100 million for investment in the second phase (approximately 150 MW) of Copper Mountain Solar, a solar project located near Boulder City, Nevada |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | approximately $200 million for investment in other renewable projects |
|--------------------|-----------------------------------------------------------------------|

| CASH FLOWS FROM FINANCING ACTIVITIES |
|--------------------------------------|
| (Dollars in millions)                |
|                                 | 2011  | 2011 Change | 2010  | 2010 Change | 2009  |
| Sempra Energy Consolidated           | $ |  534  | $ |  603  |   |   | $ |  (69) | $ |  (645) |   |   | $ |  576  |
| SDG&E                            |   |  784  |   |  85  |   |   |   |  699  |   |  421  |   |   |   |  278  |
| SoCalGas                             |   |  (301) |   |  (499) |   |   |   |  198  |   |  299  |   |   |   |  (101) |

| §   | $973 million higher issuances of long-term debt; |
|--------------------|--------------------------------------------------|

| §   | $500 million common stock repurchase program in 2010; and |
|--------------------|-----------------------------------------------------------|

| §   | $423 million lower long-term debt payments; offset by |
|--------------------|-------------------------------------------------------|

| §   | $498 million decrease in short-term debt in 2011 compared to a $568 million increase in 2010; |
|--------------------|-----------------------------------------------------------------------------------------------|

| §   | $80 million for the redemption of subsidiary preferred stock; |
|--------------------|---------------------------------------------------------------|

| §   | $76 million increase in common dividends paid; and |
|--------------------|----------------------------------------------------|

| §   | $43 million related to Sempra Pipelines & Storage’s September 2011 tender offer discussed in Note 3 of the Notes to Consolidated Financial Statements. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $500 million common stock repurchase program in 2010; |
|--------------------|-------------------------------------------------------|

| §   | $1 billion lower issuances of debt; and |
|--------------------|-----------------------------------------|

| §   | $470 million higher debt payments; offset by |
|--------------------|----------------------------------------------|

| §   | $94 million for the purchase of the remaining 40-percent ownership interest in Mississippi Hub in 2009 (as we discuss in Note 3 of the Notes to Consolidated Financial Statements); and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | $568 million increase in short-term debt in 2010 compared to a $659 million decrease in 2009. |
|--------------------|-----------------------------------------------------------------------------------------------|

| §   | a $200 million capital contribution from Sempra Energy in 2011; offset by |
|--------------------|---------------------------------------------------------------------------|

| §   | $146 million lower issuances of long-term debt. |
|--------------------|-------------------------------------------------|

| §   | $305 million higher issuances of long-term debt; and |
|--------------------|------------------------------------------------------|

| §   | $150 million common dividends paid to Sempra Energy in 2009. |
|--------------------|--------------------------------------------------------------|

| §   | a $250 million long-term debt payment in 2011; and |
|--------------------|----------------------------------------------------|

| §   | $300 million issuance of long-term in 2010; offset by |
|--------------------|-------------------------------------------------------|

| §   | $50 million lower common dividends paid. |
|--------------------|------------------------------------------|

| §   | $300 million issuance of long-term debt in 2010; and |
|--------------------|------------------------------------------------------|

| §   | $100 million long-term debt payment in 2009; offset by |
|--------------------|--------------------------------------------------------|

| §   | $100 million in common dividends paid in 2010. |
|--------------------|------------------------------------------------|

| (Dollars in millions)      | 2011  | 2010          | 2009  |
|----------------------------|------------|--------------------|------------|
| Sempra Energy Consolidated | $          |  10,414  | $          |  9,329  | $ |  8,033  |
| SDG&E                  |       |  4,077   |       |  3,498  |   |  2,668  |
| SoCalGas                   |       |  1,321   |       |  1,582  |   |  1,294  |

|                                        | Sempra Energy    |      |             |   |             |
|---------------------------------------------|------------------|-----------|------------------|--------|------------------|
| (Dollars in millions)                       | Consolidated     | SDG&E | SoCalGas         |
| Weighted average life to maturity, in years |  13.2  |      |  18.3  |   |  13.0  |   |
| Weighted average interest rate              |  5.23  | %         |  4.80  | %      |  5.32  | % |

| (Dollars in millions) |                                              | Amount |            | Rate   |              | Maturing |
|-----------------------|---------------------------------------------------|--------|-----------------|--------|-------------------|----------|
|                  |                                              |   |            |   |              |     |   |
| Sempra Energy         |                                              |   |            |   |              |     |
|                  | Variable rate notes (1.22% at December 31, 2011), |   |            |   |              |     |   |
|                  |     March 2011                | $      |  300  |   |  1.22   | %        | 2014  |
|                  | Notes, March 2011                                 |   |  500  |   |  2.00   |     | 2014  |
|                  | Notes, October 2009                               |   |  750  |   |  6.00   |     | 2039  |
|                  | Notes, May 2009                                   |   |  750  |   |  6.50   |     | 2016  |
|                  |                                              |   |            |   |              |     |   |
| SDG&E             |                                              |   |            |   |              |     |
|                  | First mortgage bonds, November 2011               |   |  250  |   |  3.95   |     | 2041  |
|                  | First mortgage bonds, August 2011                 |   |  350  |   |  3.00   |     | 2021  |
|                  | First mortgage bonds, August 2010                 |   |  500  |   |  4.50   |     | 2040  |
|                  | First mortgage bonds, May 2010                    |   |  250  |   |  5.35   |     | 2040  |
|                  | First mortgage bonds, May 2009                    |   |  300  |   |  6.00   |     | 2039  |
|                  |                                              |   |            |   |              |     |   |
| SoCalGas              |                                              |   |            |   |              |     |
|                  | First mortgage bonds, November 2010               |   |  300  |   |  5.125  |     | 2040  |

| §   | for general working capital purposes; |
|--------------------|---------------------------------------|

| §   | to support their electric (at SDG&E) and natural gas (SDG&E and SoCalGas) capital expenditure programs; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| §   | to replenish amounts expended and fund future expenditures for the expansion and improvement of their utility plants; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| §   | to repay commercial paper at SDG&E. |
|--------------------|-----------------------------------------|

| §   | $100 million of SoCalGas 4.375-percent first mortgage bonds at maturity in January 2011 |
|--------------------|-----------------------------------------------------------------------------------------|

| §   | $150 million of SoCalGas variable rate first mortgage bonds at maturity in January 2011 |
|--------------------|-----------------------------------------------------------------------------------------|

| §   | $500 million of Sempra Energy notes payable at maturity in March 2010 |
|--------------------|-----------------------------------------------------------------------|

| §   | retirement of $128 million of industrial development bonds related to Sempra Pipelines & Storage’s Liberty project |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| §   | $300 million of Sempra Energy 4.75-percent notes payable at maturity in May 2009 |
|--------------------|----------------------------------------------------------------------------------|

| §   | $100 million of SoCalGas variable rate first mortgage bonds at maturity in December 2009 |
|--------------------|------------------------------------------------------------------------------------------|

| §   | $28 million in 2011 |
|--------------------|---------------------|

| §   | $40 million in 2010 |
|--------------------|---------------------|

| §   | $73 million in 2009 |
|--------------------|---------------------|

| §   | $440 million in 2011 |
|--------------------|----------------------|

| §   | $364 million in 2010 |
|--------------------|----------------------|

| §   | $341 million in 2009 |
|--------------------|----------------------|

| §   | $50 million in 2011 |
|--------------------|---------------------|

| §   | $100 million in 2010 |
|--------------------|----------------------|

| TOTAL CAPITALIZATION AND DEBT-TO-CAPITALIZATION RATIOS |
|--------------------------------------------------------|
| (Dollars in millions)                                  |
|                                                   |   | As of December 31, 2011 |
|                                                   |   | Sempra Energy |   |   |   |   |   |   |   |
|                                                   |   | Consolidated(1) |   | SDG&E(1) |   | SoCalGas |   |
| Total capitalization                                   | $ |  21,183  |   | $ |  7,997  |   | $ |  3,514  |   |
| Debt-to-capitalization ratio                           |   |  51  | % |   |  51  | % |   |  38  | % |
| (1)                                                    | Includes noncontrolling interests and debt of Otay Mesa Energy Center LLC for Sempra Energy and SDG&E with no significant impact. |

| §   | Sempra Energy Consolidated: comprehensive income exceeding dividends and net increases in long-term debt (including commercial paper classified as long-term) |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | SDG&E: comprehensive income, a capital contribution from Sempra Energy and a net increase in long-term debt |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| §   | SoCalGas: comprehensive income exceeding dividends, partially offset by a net decrease in long-term debt |
|--------------------|----------------------------------------------------------------------------------------------------------|

| PRINCIPAL CONTRACTUAL COMMITMENTS OF SEMPRA ENERGY CONSOLIDATED |
|-----------------------------------------------------------------|
| (Dollars in millions)                                           |
|                                                            |   | 2012  | 2013 and 2014 | 2015 and 2016 | Thereafter | Total |
| Long-term debt(1)                                               | $ |  320  | $ |  1,987  | $ |  1,102  | $ |  6,401  | $ |  9,810  |
| Interest on long-term debt(2)                                   |   |  511  |   |  910  |   |  806  |   |  4,688  |   |  6,915  |
| Operating leases                                                |   |  73  |   |  140  |   |  125  |   |  538  |   |  876  |
| Capital leases                                                  |   |  15  |   |  16  |   |  6  |   |  167  |   |  204  |
| Purchased-power contracts                                       |   |  1,049  |   |  2,230  |   |  2,363  |   |  9,555  |   |  15,197  |
| Natural gas contracts                                           |   |  558  |   |  431  |   |  121  |   |  257  |   |  1,367  |
| LNG contracts(3)                                                |   |  517  |   |  1,314  |   |  1,507  |   |  12,131  |   |  15,469  |
| Construction commitments                                        |   |  995  |   |  499  |   |  112  |   |  193  |   |  1,799  |
| SONGS decommissioning                                           |   |  ―  |   |  ―  |   |  ―  |   |  524  |   |  524  |
| Other asset retirement obligations                              |   |  19  |   |  39  |   |  38  |   |  1,305  |   |  1,401  |
| Pension and other postretirement benefit                        |   |   |   |   |   |   |   |   |   |   |
|     obligations(4)                          |   |  274  |   |  607  |   |  556  |   |  756  |   |  2,193  |
| Environmental commitments                                       |   |  12  |   |  18  |   |  3  |   |  13  |   |  46  |
| Other                                                           |   |  30  |   |  31  |   |  25  |   |  73  |   |  159  |
| Totals                                                          | $ |  4,373  | $ |  8,222  | $ |  6,764  | $ |  36,601  | $ |  55,960  |
| (1)                                                             | Excludes $400 million commercial paper classified as long-term, as we discuss in Note 5 of the Notes to Consolidated Financial Statements. |
| (2)                                                             | We calculate expected interest payments using the stated interest rate for fixed-rate obligations, including floating-to-fixed interest rate swaps. We calculate expected interest payments for variable-rate obligations, including fixed-to-floating interest rate swaps, based on forward rates in effect at December 31, 2011. |
| (3)                                                             | Sempra LNG has various LNG purchase agreements with major international companies for the supply of LNG to Sempra LNG’s Energía Costa Azul and Cameron terminals. The agreements range from short-term to multi-year periods and are priced using a predetermined formula based on U.S. market indices. The expected payments under the contracts are based on forward prices of the applicable market index from 2012 to 2021 and an estimated one percent escalation per year after 2021. We provide more information about these contracts in Note 15 of the Notes to Consolidated Financial Statements. |
| (4)                                                             | Amounts represent expected company contributions to the plans for the next 10 years. |

| PRINCIPAL CONTRACTUAL COMMITMENTS OF SDG&E |
|------------------------------------------------|
| (Dollars in millions)                          |
|                                           |   | 2012  | 2013 and 2014 | 2015 and 2016 | Thereafter | Total |
| Long-term debt                                 | $ |  10  | $ |  150  | $ |  284  | $ |  3,451  | $ |  3,895  |
| Interest on long-term debt(1)                  |   |  187  |   |  371  |   |  351  |   |  2,637  |   |  3,546  |
| Operating leases                               |   |  19  |   |  36  |   |  34  |   |  46  |   |  135  |
| Capital leases                                 |   |  9  |   |  11  |   |  6  |   |  167  |   |  193  |
| Purchased-power contracts                      |   |  319  |   |  581  |   |  460  |   |  1,948  |   |  3,308  |
| Construction commitments                       |   |  229  |   |  55  |   |  41  |   |  83  |   |  408  |
| SONGS decommissioning                          |   |  ―  |   |  ―  |   |  ―  |   |  524  |   |  524  |
| Other asset retirement obligations             |   |  5  |   |  9  |   |  8  |   |  152  |   |  174  |
| Pension and other postretirement benefit       |   |   |   |   |   |   |   |   |   |   |
|     obligations(2)         |   |  81  |   |  185  |   |  148  |   |  160  |   |  574  |
| Environmental commitments                      |   |  2  |   |  3  |   |  2  |   |  11  |   |  18  |
| Totals                                         | $ |  861  | $ |  1,401  | $ |  1,334  | $ |  9,179  | $ |  12,775  |
| (1)                                            | SDG&E calculates expected interest payments using the stated interest rate for fixed-rate obligations, including floating-to-fixed interest rate swaps. SDG&E calculates expected interest payments for variable-rate obligations based on forward rates in effect at December 31, 2011. |
| (2)                                            | Amounts represent expected company contributions to the plans for the next 10 years. |

| PRINCIPAL CONTRACTUAL COMMITMENTS OF SOCALGAS |
|-----------------------------------------------|
| (Dollars in millions)                         |
|                                          |   | 2012  | 2013 and 2014 | 2015 and 2016 | Thereafter | Total |
| Long-term debt                                | $ |  250  | $ |  250  | $ |  8  | $ |  805  | $ |  1,313  |
| Interest on long-term debt(1)                 |   |  67  |   |  104  |   |  88  |   |  659  |   |  918  |
| Natural gas contracts                         |   |  400  |   |  157  |   |  81  |   |  145  |   |  783  |
| Operating leases                              |   |  28  |   |  56  |   |  54  |   |  240  |   |  378  |
| Capital leases                                |   |  6  |   |  5  |   |  ―  |   |  ―  |   |  11  |
| Construction commitments                      |   |  60  |   |  137  |   |  71  |   |  110  |   |  378  |
| Environmental commitments                     |   |  9  |   |  12  |   |  1  |   |  1  |   |  23  |
| Pension and other postretirement benefit      |   |   |   |   |   |   |   |   |   |   |
|     obligations(2)        |   |  153  |   |  348  |   |  332  |   |  474  |   |  1,307  |
| Asset retirement obligations                  |   |  14  |   |  30  |   |  29  |   |  1,102  |   |  1,175  |
| Totals                                        | $ |  987  | $ |  1,099  | $ |  664  | $ |  3,536  | $ |  6,286  |
| (1)                                           | SoCalGas calculates interest payments using the stated interest rate for fixed-rate obligations. |
| (2)                                           | Amounts represent expected company contributions to the plans for the next 10 years. |

| §   | contracts between consolidated affiliates |
|--------------------|-------------------------------------------|

| §   | intercompany debt |
|--------------------|-------------------|

| §   | individual contracts that have annual cash requirements less than $1 million |
|--------------------|------------------------------------------------------------------------------|

| §   | employment contracts |
|--------------------|----------------------|

| §   | $34 million for Sempra Energy Consolidated |
|--------------------|--------------------------------------------|

| §   | $7 million for SDG&E |
|--------------------|--------------------------|

----

----

| §   | Bay Gas, a facility located 40 miles north of Mobile, Alabama, that provides underground storage and delivery of natural gas. Sempra Pipelines & Storage owns 91 percent of the project. It is the easternmost salt dome storage facility on the Gulf Coast, with direct service to the Florida market and markets across the Southeast, Mid-Atlantic and Northeast regions. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Mississippi Hub, located 45 miles southeast of Jackson, Mississippi, an underground salt dome natural gas storage project with access to shale basins of East Texas and Louisiana, traditional gulf supplies and LNG, with multiple interconnections to serve the Southeast and Northeast regions. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Liberty natural gas storage expansion, a salt cavern development project in Cameron Parish, Louisiana. Sempra Pipelines & Storage owns 75 percent of the project and ProLiance Transportation LLC owns the remaining 25 percent. The project’s location provides access to several LNG facilities in the area. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                            | Sempra Energy |              |      |            |     |   |                |
|-----------------------------------------------------------------|---------------|-------------------|-----------|-----------------|----------|--------|---------------------|
|                                                            | Consolidated  |              | SDG&E |            | SoCalGas |
|                                                            | Nominal       | One-Year          |      | Nominal         | One-Year |   | Nominal             | One-Year |
| (Dollars in millions)                                           | Debt          | VaR(1)            |      | Debt            | VaR(1)   |   | Debt                | VaR(1) |
| At December 31, 2011                                            |          |              |      |            |     |   |                |   |   |   |   |   |   |   |
|     Sempra Utility fixed-rate               | $             |  4,617  | $         |  782  |     | $      |  3,304    | $ |  623  |   | $ |  1,313  | $ |  159  |
|     Sempra Utility variable-rate            |          |  591    |      |  25   |     |   |  591      |   |  25  |   |   |  ―  |   |  ―  |
|     All other, fixed-rate and variable-rate |          |  4,602  |      |  377  |     |   |  ―  |   |  ―  |   |   |  ―  |   |  ―  |
| At December 31, 2010                                            |          |              |      |            |     |   |                |   |   |   |   |   |   |   |
|     Sempra Utility fixed-rate               | $             |  4,117  | $         |  787  |     | $      |  2,704    | $ |  587  |   | $ |  1,413  | $ |  200  |
|     Sempra Utility variable-rate            |          |  751    |      |  59   |     |   |  601      |   |  59  |   |   |  150  |   |  ―  |
|     All other, fixed-rate and variable-rate |          |  3,459  |      |  509  |     |   |  ―  |   |  ―  |   |   |  ―  |   |  ―  |
| (1) After the effects of interest rate swaps.                   |

| §   | prospective counterparties’ financial condition (including credit ratings) |
|--------------------|----------------------------------------------------------------------------------|

| §   | collateral requirements |
|--------------------|-------------------------|

| §   | the use of standardized agreements that allow for the netting of positive and negative exposures associated with a single counterparty |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| §   | downgrade triggers |
|--------------------|--------------------|

| (Dollars in millions) |                                                                                  | Hypothetical Effects |
|-----------------------|---------------------------------------------------------------------------------------|----------------------|
|                  | Translation of 2011 earnings to U.S. dollars                                          | $                    |  (2) |
|                  | Transactional exposures                                                               |                 |  -  |
|                  | Translation of net assets of foreign subsidiaries and investments in foreign entities |                 |  (17) |

----

| CRITICAL ACCOUNTING POLICIES          |
|---------------------------------------|
| SEMPRA ENERGY, SDG&E AND SOCALGAS |
| CONTINGENCIES                         |
| Assumptions & Approach Used       |   | We accrue losses for the estimated impacts of various conditions, situations or circumstances involving uncertain outcomes. For loss contingencies, we accrue the loss if an event has occurred on or before the balance sheet date and: § information available through the date we file our financial statements indicates it is probable that a loss has been incurred, given the likelihood of uncertain future events, and § the amount of the loss can be reasonably estimated.  We do not accrue contingencies that might result in gains. We continuously assess contingencies for litigation claims, environmental remediation and other events. |
| Effect if DifferentAssumptions Used   |   | Details of our issues in this area are discussed in Note 15 of the Notes to Consolidated Financial Statements. |
|  REGULATORY ACCOUNTING           |
| Assumptions & Approach Used       |   | The Sempra Utilities record a regulatory asset if it is probable that, through the ratemaking process, the utility will recover that asset from customers. Similarly, regulatory liabilities are recorded for amounts recovered in rates in advance of the expenditure. The Sempra Utilities review probabilities associated with regulatory balances whenever new events occur, such as: § changes in the regulatory environment or the utility’s competitive position § issuance of a regulatory commission order § passage of new legislation  To the extent that circumstances associated with regulatory balances change, the regulatory balances are adjusted accordingly. |
| Effect if DifferentAssumptions Used   |   | Details of the Sempra Utilities’ regulatory assets and liabilities are discussed in Notes 1 and 15 of the Notes to Consolidated Financial Statements. |

| SEMPRA ENERGY, SDG&E AND SOCALGAS (CONTINUED) |
|---------------------------------------------------|
| INCOME TAXES                                      |
| Assumptions & Approach Used                   |   | Our income tax expense and related balance sheet amounts involve significant management estimates and judgments. Amounts of deferred income tax assets and liabilities, as well as current and noncurrent accruals, involve judgments and estimates of the timing and probability of recognition of income and deductions by taxing authorities. When we evaluate the anticipated resolution of income tax issues, we consider § past resolutions of the same or similar issue § the status of any income tax examination in progress § positions taken by taxing authorities with other taxpayers with similar issues  The likelihood of deferred tax recovery is based on analyses of the deferred tax assets and our expectation of future taxable income, based on our strategic planning. |
| Effect if DifferentAssumptions Used               |   | Actual income taxes could vary from estimated amounts because of: § future impacts of various items, including changes in tax laws § our financial condition in future periods § the resolution of various income tax issues between us and taxing authorities  We discuss details of our issues in this area in Note 7 of the Notes to Consolidated Financial Statements. |
| Assumptions & Approach Used                   |   | For an uncertain position to qualify for benefit recognition, the position must have at least a “more likely than not” chance of being sustained (based on the position’s technical merits) upon challenge by the respective authorities. The term “more likely than not” means a likelihood of more than 50 percent. If we do not have a more likely than not position with respect to a tax position, then we do not recognize any of the potential tax benefit associated with the position. A tax position that meets the “more likely than not” recognition is measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon the effective resolution of the tax position. |
| Effect if DifferentAssumptions Used               |   | Unrecognized tax benefits involve management’s judgment regarding the likelihood of the benefit being sustained. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect our results of operations, financial position and cash flows. We discuss additional information related to accounting for uncertainty in income taxes in Note 7 of the Notes to Consolidated Financial Statements. |

| SEMPRA ENERGY, SDG&E AND SOCALGAS (CONTINUED) |
|---------------------------------------------------|
| DERIVATIVES                                       |
| Assumptions & Approach Used                   |   | We value derivative instruments at fair value on the balance sheet. Depending on the purpose for the contract and the applicability of hedge accounting, the impact of instruments may be offset in earnings, on the balance sheet, or in other comprehensive income. We also use normal purchase or sale accounting for certain contracts. As discussed elsewhere in this report, whenever possible, we use exchange quotations or other third-party pricing to estimate fair values; if no such data is available, we use internally developed models and other techniques. The assumed collectability of derivative assets and receivables considers § events specific to a given counterparty § the tenor of the transaction § the credit-worthiness of the counterparty  |
| Effect if DifferentAssumptions Used               |   | The application of hedge accounting to certain derivatives and the normal purchase or sale accounting election is made on a contract-by-contract basis. Using hedge accounting or the normal purchase or sale election in a different manner could materially impact Sempra Energy’s results of operations. However, such alternatives would not have a significant impact on the Sempra Utilities’ results of operations because of regulatory accounting principles. We provide details of our financial instruments in Note 10 of the Notes to Consolidated Financial Statements. |
|  DEFINED BENEFIT PLANS                       |
| Assumptions & Approach Used                   |   | To measure our pension and postretirement obligations, costs and liabilities, we rely on several assumptions. We consider current market conditions, including interest rates, in making these assumptions.  We annually review these assumptions prior to the beginning of each year and update when appropriate. The critical assumptions used to develop the required estimates include the following key factors: § discount rate § expected return on plan assets § health-care cost trend rates § mortality rates § rate of compensation increases § payout elections (lump sum or annuity)  |

| SEMPRA ENERGY, SDG&E AND SOCALGAS (CONTINUED) |
|---------------------------------------------------|
| DEFINED BENEFIT PLANS (CONTINUED)                 |
| Effect if DifferentAssumptions Used               |   | The actuarial assumptions we use may differ materially from actual results due to: § return on plan assets § changing market and economic conditions § higher or lower withdrawal rates § longer or shorter participant life spans § more or fewer lump sum versus annuity payout elections made by plan participants § retirement rates  These differences, other than those related to the Sempra Utilities plans, where rate recovery offsets any effects of the assumptions on earnings, may result in a significant impact to the amount of pension and postretirement benefit expense we record. For the remaining plans, the approximate annual effect on earnings of a 25 basis point increase or decrease in the assumed discount rate would be less than $1 million and the effect of a 25 basis point increase or decrease in the assumed rate of return on plan assets would be less than $1 million. We provide additional information, including the impact of increases and decreases in the health-care cost trend rate, in Note 8 of the Notes to Consolidated Financial Statements. |

| SEMPRA ENERGY AND SDG&E         |
|-------------------------------------|
| ASSET RETIREMENT OBLIGATIONS        |
| Assumptions & Approach Used     |   | SDG&E’s legal asset retirement obligations (AROs) related to the decommissioning of SONGS are recorded at fair value based on a site specific study performed every three years. The fair value of the obligations includes § estimated decommissioning costs, including labor, equipment, material and other disposal costs § inflation adjustment applied to estimated cash flows § discount rate based on a credit-adjusted risk-free rate § expected date of decommissioning  |
| Effect if DifferentAssumptions Used |   | Changes in the estimated decommissioning costs, or in the assumptions and judgments by management underlying these estimates, could cause revisions to the estimated total cost associated with retiring the assets. Due to regulatory recovery of SDG&E’s nuclear decommissioning expense, rate-making accounting treatment is applied to SDG&E’s nuclear decommissioning activities, so they have no impact on SDG&E’s reported earnings. We provide additional detail in Note 6 of the Notes to the Consolidated Financial Statements. |

| SEMPRA ENERGY                           |
|-----------------------------------------|
| IMPAIRMENT TESTING OF LONG-LIVED ASSETS |
| Assumptions & Approach Used         |   | Whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable, we consider if the estimated future undiscounted cash flows are less than the carrying amount of the assets.  If so, we estimate the fair value of these assets to determine the extent to which cost exceeds fair value.  For these estimates, we may consider data from multiple valuation methods, including data from market participants. We exercise judgment to estimate the future cash flows and the useful lives of long-lived assets and to determine our intent to use the assets. Our intent to use or dispose of assets is subject to re-evaluation and can change over time. |
| Effect if DifferentAssumptions Used     |   | If an impairment test is required, the fair value of long-lived assets can vary if differing estimates and assumptions are used in the valuation techniques applied as indicated by changing market or other conditions. We discuss impairment of long-lived assets in Note 1 of the Notes to Consolidated Financial Statements. |
|  IMPAIRMENT TESTING OF GOODWILL    |
| Assumptions & Approach Used         |   | On an annual basis or whenever events or changes in circumstances necessitate an evaluation, we consider whether goodwill may be impaired. We exercise judgment to develop estimates of the fair value of the reporting unit and the corresponding goodwill.  Our fair value estimates are developed from the perspective of a knowledgeable market participant. In the absence of observable transactions in the marketplace for similar investments, we consider an income-based approach such as discounted cash flow analysis. A discounted cash flow analysis may be based directly on anticipated future revenues and expenses and may be performed based on free cash flows generated within the reporting unit. Critical assumptions that affect our estimates of fair value may include § consideration of market transactions § future cash flows § the appropriate risk-adjusted discount rate § country risk § entity risk  |
| Effect if DifferentAssumptions Used     |   | Testing goodwill for impairment requires an entity to first determine if the carrying value of a reporting unit exceeds its fair value and if so, to measure the amount of goodwill impairment, if any. When determining if goodwill is impaired, the fair value of the reporting unit and goodwill can vary if differing estimates and assumptions are used in the valuation techniques applied as indicated by changing market or other conditions.  As a result, recognizing a goodwill impairment may or may not be required. Sempra Energy added $975 million in goodwill to its Consolidated Balance Sheet in 2011.  We discuss goodwill in Notes 1, 2 and 3 of the Notes to Consolidated Financial Statements. |

| CARRYING VALUE OF EQUITY METHOD INVESTMENTS |
|---------------------------------------------|
| Assumptions & Approach Used             |   | We generally account for investments under the equity method when we have an ownership interest of 20 to 50 percent. The premium, or excess cost over the underlying carrying value of net assets, is referred to as equity method goodwill, which is included in the impairment testing of the equity method investment. We consider whether the fair value of each equity investment as a whole, not the underlying net assets, has declined and whether that decline is other than temporary. To help evaluate whether a decline in fair value below cost has occurred and if the decline is other than temporary, we may develop fair value estimates for the investment. Our fair value estimates are developed from the perspective of a knowledgeable market participant. In the absence of observable transactions in the marketplace for similar investments, we consider an income-based approach such as discounted cash flow analysis or, with less weighting, the replacement cost of the underlying net assets. A discounted cash flow analysis may be based directly on anticipated future distributions from the investment, or may be performed based on free cash flows generated within the entity and adjusted for our ownership share total. When calculating estimates of fair or realizable values, we also consider whether we intend to hold or sell the investment. For certain held investments, critical assumptions include § the appropriate risk-adjusted discount rate § the availability and costs of natural gas § competing fuels (primarily propane) and electricity  For investments that we hold for sale, such as our Argentine investments, or investments that are substantially sold, such as RBS Sempra Commodities, we consider comparable sales values, executed sales transactions or indications of value determined by cash and affiliate receivables within the entity when determining our estimates of fair value. |
| Effect if DifferentAssumptions Used         |   | The risk assumptions applied by other market participants to value the investments could vary significantly or the appropriate approaches could be weighted differently. These differences could impact whether or not the fair value of the investment is less than its cost, and if so, whether that condition is other than temporary.  This could result in an impairment charge or a different amount of impairment charge, and, in cases where an impairment charge has been recorded, additional loss or gain upon sale. We provide additional details in Note 4 of the Notes to Consolidated Financial Statements. |

----

| §   | local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| §   | actions by the California Public Utilities Commission, California State Legislature, Federal Energy Regulatory Commission, Nuclear Regulatory Commission, California Energy Commission, California Air Resources Board, and other regulatory, governmental and environmental bodies in the United States and other countries in which we operate; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | capital markets conditions, including the availability of credit and the liquidity of our investments; |
|--------------------|--------------------------------------------------------------------------------------------------------|

| §   | inflation, interest and exchange rates; |
|--------------------|-----------------------------------------|

| §   | the impact of benchmark interest rates, generally U.S. Treasury bond and Moody’s A-rated utility bond yields, on our Sempra Utilities’ cost of capital; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | energy markets, including the timing and extent of changes and volatility in commodity prices; |
|--------------------|------------------------------------------------------------------------------------------------|

| §   | the availability of electric power, natural gas and liquefied natural gas, including disruptions caused by failures in the North American transmission grid, pipeline explosions and equipment failures; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | weather conditions, natural disasters, catastrophic accidents, and conservation efforts; |
|--------------------|------------------------------------------------------------------------------------------|

| §   | risks inherent in nuclear power generation and radioactive materials storage, including the catastrophic release of such materials; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| §   | wars, terrorist attacks and cybersecurity threats; |
|--------------------|----------------------------------------------------|

| §   | business, regulatory, environmental and legal decisions and requirements; |
|--------------------|---------------------------------------------------------------------------|

| §   | expropriation of assets by foreign governments and title and other property disputes; |
|--------------------|---------------------------------------------------------------------------------------|

| §   | the status of deregulation of retail natural gas and electricity delivery; |
|--------------------|----------------------------------------------------------------------------|

| §   | the timing and success of business development efforts and construction, maintenance and capital projects; |
|--------------------|------------------------------------------------------------------------------------------------------------|

| §   | the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| §   | the resolution of litigation; and |
|--------------------|-----------------------------------|

| §   | other uncertainties, all of which are difficult to predict and many of which are beyond our control. |
|--------------------|------------------------------------------------------------------------------------------------------|

----

|                         | First   | Second            | Third   | Fourth            |
|------------------------------|---------|-------------------|---------|-------------------|
|                         | Quarter | Quarter           | Quarter | Quarter           |
| 2011                    |    |              |    |              |   |   |   |   |
| Market price                 |    |              |    |              |   |   |   |   |
|     High | $       |  54.44  | $       |  55.97  | $ |  53.76  | $ |  55.61  |
|     Low  | $       |  50.32  | $       |  51.53  | $ |  44.78  | $ |  48.38  |
|                         |    |              |    |              |   |   |   |   |
| 2010                    |    |              |    |              |   |   |   |   |
| Market price                 |    |              |    |              |   |   |   |   |
|     High | $       |  56.61  | $       |  51.43  | $ |  54.32  | $ |  54.45  |
|     Low  | $       |  47.55  | $       |  43.91  | $ |  46.25  | $ |  49.49  |

----

----

| FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA FOR SEMPRA ENERGY |
|----------------------------------------------------------------|
| (In millions, except for per share amounts)                    |
|                                                           | At December 31 or for the years then ended |
|                                                           | 2011  | 2010  | 2009  | 2008  | 2007  |
| Sempra Energy Consolidated                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utilities:                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Natural gas                            | $ |  4,489  |   | $ |  4,491  |   | $ |  4,002  |   | $ |  5,573  |   | $ |  4,968  |   |
|     Electric                               |   |  3,833  |   |   |  2,528  |   |   |  2,419  |   |   |  2,553  |   |   |  2,184  |   |
| Energy-related businesses                                      |   |  1,714  |   |   |  1,984  |   |   |  1,685  |   |   |  2,632  |   |   |  4,286  |   |
|     Total revenues                         | $ |  10,036  |   | $ |  9,003  |   | $ |  8,106  |   | $ |  10,758  |   | $ |  11,438  |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations                              | $ |  1,407  |   | $ |  733  |   | $ |  1,122  |   | $ |  1,068  |   | $ |  1,118  |   |
| (Earnings) losses from continuing operations attributable      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     to noncontrolling interests            |   |  (42) |   |   |  16  |   |   |  7  |   |   |  55  |   |   |  17  |   |
| Preferred dividends of subsidiaries                            |   |  (8) |   |   |  (10) |   |   |  (10) |   |   |  (10) |   |   |  (10) |   |
| Income from continuing operations attributable                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     to common shares                       | $ |  1,357  |   | $ |  739  |   | $ |  1,119  |   | $ |  1,113  |   | $ |  1,125  |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                     | $ |  1,407  |   | $ |  733  |   | $ |  1,122  |   | $ |  1,068  |   | $ |  1,092  |   |
| Earnings attributable to common shares                         | $ |  1,357  |   | $ |  739  |   | $ |  1,119  |   | $ |  1,113  |   | $ |  1,099  |   |
| Attributable to common shares:                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Income from continuing operations      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Basic          | $ |  5.66  |   | $ |  3.02  |   | $ |  4.60  |   | $ |  4.50  |   | $ |  4.34  |   |
|         Diluted        | $ |  5.62  |   | $ |  2.98  |   | $ |  4.52  |   | $ |  4.43  |   | $ |  4.26  |   |
|     Earnings                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Basic          | $ |  5.66  |   | $ |  3.02  |   | $ |  4.60  |   | $ |  4.50  |   | $ |  4.24  |   |
|         Diluted        | $ |  5.62  |   | $ |  2.98  |   | $ |  4.52  |   | $ |  4.43  |   | $ |  4.16  |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends declared per common share                            | $ |  1.92  |   | $ |  1.56  |   | $ |  1.56  |   | $ |  1.37  |   | $ |  1.24  |   |
| Return on common equity                                        |   |  14.4  | % |   |  8.2  | % |   |  13.2  | % |   |  13.6  | % |   |  13.9  | % |
| Effective income tax rate                                      |   |  21  | % |   |  13  | % |   |  29  | % |   |  30  | % |   |  34  | % |
| Price range of common shares:                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     High                                   | $ |  55.97  |   | $ |  56.61  |   | $ |  57.18  |   | $ |  63.00  |   | $ |  66.38  |   |
|     Low                                    | $ |  44.78  |   | $ |  43.91  |   | $ |  36.43  |   | $ |  34.29  |   | $ |  50.95  |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average rate base:                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     SoCalGas                               | $ |  2,948  |   | $ |  2,860  |   | $ |  2,758  |   | $ |  2,702  |   | $ |  2,642  |   |
|     SDG&E                              | $ |  5,071  |   | $ |  4,697  |   | $ |  4,362  |   | $ |  4,050  |   | $ |  3,846  |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| AT DECEMBER 31                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current assets                                                 | $ |  2,332  |   | $ |  3,353  |   | $ |  2,295  |   | $ |  2,476  |   | $ |  9,964  |   |
| Total assets                                                   | $ |  33,356  |   | $ |  30,283  |   | $ |  28,512  |   | $ |  26,400  |   | $ |  28,717  |   |
| Current liabilities                                            | $ |  4,163  |   | $ |  3,786  |   | $ |  3,888  |   | $ |  3,612  |   | $ |  9,020  |   |
| Long-term debt (excludes current portion)                      | $ |  10,078  |   | $ |  8,980  |   | $ |  7,460  |   | $ |  6,544  |   | $ |  4,553  |   |
| Short-term debt(1)                                             | $ |  785  |   | $ |  507  |   | $ |  1,191  |   | $ |  913  |   | $ |  1,071  |   |
| Contingently redeemable preferred stock of subsidiary          | $ |  79  |   | $ |  79  |   | $ |  79  |   | $ |  79  |   | $ |  79  |   |
| Sempra Energy shareholders’ equity                       | $ |  9,838  |   | $ |  9,027  |   | $ |  9,007  |   | $ |  7,969  |   | $ |  8,339  |   |
| Common shares outstanding                                      |   |  239.9  |   |   |  240.4  |   |   |  246.5  |   |   |  243.3  |   |   |  261.2  |   |
| Book value per share                                           | $ |  41.00  |   | $ |  37.54  |   | $ |  36.54  |   | $ |  32.75  |   | $ |  31.93  |   |
| (1) Includes long-term debt due within one year.               |

| FIVE-YEAR SUMMARIES OF SELECTED FINANCIAL DATA FOR SDG&E AND SOCALGAS |
|---------------------------------------------------------------------------|
| (Dollars in millions)                                                     |
|                                                                      | At December 31 or for the years then ended |
|                                                                      | 2011  | 2010  | 2009  | 2008  | 2007  |
| SDG&E                                                                 |   |   |   |   |   |   |   |   |   |   |
| Statement of Operations Data:                                             |   |   |   |   |   |   |   |   |   |   |
|     Operating revenues                                | $ |  3,373  | $ |  3,049  | $ |  2,916  | $ |  3,251  | $ |  2,852  |
|     Operating income                                  |   |  755  |   |  657  |   |  589  |   |  570  |   |  500  |
|     Dividends on preferred stock                      |   |  5  |   |  5  |   |  5  |   |  5  |   |  5  |
|     Earnings attributable to common shares            |   |  431  |   |  369  |   |  344  |   |  339  |   |  283  |
|                                                                      |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data:                                                       |   |   |   |   |   |   |   |   |   |   |
|     Total assets                                      | $ |  13,555  | $ |  12,077  | $ |  10,229  | $ |  9,079  | $ |  8,499  |
|     Long-term debt (excludes current portion)         |   |  4,058  |   |  3,479  |   |  2,623  |   |  2,142  |   |  1,958  |
|     Short-term debt(1)                                |   |  19  |   |  19  |   |  78  |   |  2  |   |  ―  |
|     Preferred stock subject to mandatory redemption   |   |  ―  |   |  ―  |   |  ―  |   |  ―  |   |  14  |
|     Contingently redeemable preferred stock           |   |  79  |   |  79  |   |  79  |   |  79  |   |  79  |
|     SDG&E shareholders’ equity              |   |  3,739  |   |  3,108  |   |  2,739  |   |  2,542  |   |  2,200  |
| SoCalGas                                                                  |   |   |   |   |   |   |   |   |   |   |
| Statement of Operations Data:                                             |   |   |   |   |   |   |   |   |   |   |
|     Operating revenues                                | $ |  3,816  | $ |  3,822  | $ |  3,355  | $ |  4,768  | $ |  4,282  |
|     Operating income                                  |   |  486  |   |  516  |   |  476  |   |  434  |   |  437  |
|     Dividends on preferred stock                      |   |  1  |   |  1  |   |  1  |   |  1  |   |  1  |
|     Earnings attributable to common shares            |   |  287  |   |  286  |   |  273  |   |  244  |   |  230  |
|                                                                      |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data:                                                       |   |   |   |   |   |   |   |   |   |   |
|     Total assets                                      | $ |  8,475  | $ |  7,986  | $ |  7,287  | $ |  7,351  | $ |  6,406  |
|     Long-term debt (excludes current portion)         |   |  1,064  |   |  1,320  |   |  1,283  |   |  1,270  |   |  1,113  |
|     Short-term debt(1)                                |   |  257  |   |  262  |   |  11  |   |  100  |   |  ―  |
|     SoCalGas shareholders’ equity               |   |  2,193  |   |  1,955  |   |  1,766  |   |  1,490  |   |  1,470  |
| (1) Includes long-term debt due within one year.                          |

----

----

----

----

----

| SEMPRA ENERGY                                                                  |
|--------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF OPERATIONS                                          |
| (Dollars in millions, except per share amounts)                                |
|                                                                           | Years ended December 31, |
|                                                                           | 2011  | 2010 | 2009 |
|                                                                           |   |
| REVENUES                                                                       |   |   |   |   |   |   |
| Utilities                                                                      | $ |  8,322  | $ |  7,019  | $ |  6,421  |
| Energy-related businesses                                                      |   |  1,714  |   |  1,984  |   |  1,685  |
|     Total revenues                                         |   |  10,036  |   |  9,003  |   |  8,106  |
| EXPENSES AND OTHER INCOME                                                      |   |   |   |   |   |   |
| Utilities:                                                                     |   |   |   |   |   |   |
|     Cost of natural gas                                    |   |  (1,866) |   |  (2,012) |   |  (1,645) |
|     Cost of electric fuel and purchased power              |   |  (1,397) |   |  (637) |   |  (672) |
| Energy-related businesses:                                                     |   |   |   |   |   |   |
|     Cost of natural gas, electric fuel and purchased power |   |  (746) |   |  (1,046) |   |  (864) |
|     Other cost of sales                                    |   |  (137) |   |  (88) |   |  (77) |
| Litigation expense                                                             |   |  (37) |   |  (169) |   |  (4) |
| Other operation and maintenance                                                |   |  (2,788) |   |  (2,499) |   |  (2,467) |
| Depreciation and amortization                                                  |   |  (978) |   |  (867) |   |  (775) |
| Franchise fees and other taxes                                                 |   |  (343) |   |  (327) |   |  (296) |
| Write-off of long-lived assets                                                 |   |  ―  |   |  ―  |   |  (132) |
| Equity earnings (losses), before income tax:                                   |   |   |   |   |   |   |
|     RBS Sempra Commodities LLP                             |   |  (24) |   |  (314) |   |  463  |
|     Other                                                  |   |  33  |   |  22  |   |  36  |
| Remeasurement of equity method investments                                     |   |  277  |   |  ―  |   |  ―  |
| Other income, net                                                              |   |  130  |   |  140  |   |  149  |
| Interest income                                                                |   |  26  |   |  16  |   |  21  |
| Interest expense                                                               |   |  (465) |   |  (436) |   |  (367) |
| Income before income taxes and equity earnings                                 |   |   |   |   |   |   |
|     of certain unconsolidated subsidiaries                 |   |  1,721  |   |  786  |   |  1,476  |
| Income tax expense                                                             |   |  (366) |   |  (102) |   |  (422) |
| Equity earnings, net of income tax                                             |   |  52  |   |  49  |   |  68  |
| Net income                                                                     |   |  1,407  |   |  733  |   |  1,122  |
| (Earnings) losses attributable to noncontrolling interests                     |   |  (42) |   |  16  |   |  7  |
| Preferred dividends of subsidiaries                                            |   |  (8) |   |  (10) |   |  (10) |
| Earnings                                                                       | $ |  1,357  | $ |  739  | $ |  1,119  |
|                                                                           |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |
| Basic earnings per common share                                                | $ |  5.66  | $ |  3.02  | $ |  4.60  |
| Weighted-average number of shares outstanding, basic (thousands)               |   |  239,720  |   |  244,736  |   |  243,339  |
|                                                                           |   |   |   |   |   |   |
| Diluted earnings per common share                                              | $ |  5.62  | $ |  2.98  | $ |  4.52  |
| Weighted-average number of shares outstanding, diluted (thousands)             |   |  241,523  |   |  247,942  |   |  247,384  |
|                                                                           |   |   |   |   |   |   |
| Dividends declared per share of common stock                                   | $ |  1.92  | $ |  1.56  | $ |  1.56  |
| See Notes to Consolidated Financial Statements.                                |

| SEMPRA ENERGY                                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                                                                                |
| (Dollars in millions)                                                                                                      |
|                                                                                                                       | December 31, | December 31, |
|                                                                                                                       | 2011  | 2010  |
| ASSETS                                                                                                                     |   |   |   |   |
| Current assets:                                                                                                            |   |   |   |   |
|     Cash and cash equivalents                                                                          | $ |  252  | $ |  912  |
|     Restricted cash                                                                                    |   |  24  |   |  131  |
|     Trade accounts receivable, net                                                                     |   |  1,198  |   |  891  |
|     Other accounts and notes receivable, net                                                           |   |  147  |   |  141  |
|     Due from unconsolidated affiliates                                                                 |   |  ―  |   |  34  |
|     Income taxes receivable                                                                            |   |  ―  |   |  248  |
|     Deferred income taxes                                                                              |   |  ―  |   |  75  |
|     Inventories                                                                                        |   |  346  |   |  258  |
|     Regulatory balancing accounts – undercollected                                               |   |  38  |   |  ―  |
|     Regulatory assets                                                                                  |   |  89  |   |  90  |
|     Fixed-price contracts and other derivatives                                                        |   |  85  |   |  81  |
|     Settlements receivable related to wildfire litigation                                              |   |  10  |   |  300  |
|     Other                                                                                              |   |  143  |   |  192  |
|         Total current assets                                                       |   |  2,332  |   |  3,353  |
|                                                                                                                       |   |   |   |   |
| Investments and other assets:                                                                                              |   |   |   |   |
|     Restricted cash                                                                                    |   |  22  |   |  27  |
|     Regulatory assets arising from pension and other postretirement                                    |   |   |   |   |
|         benefit obligations                                                        |   |  1,126  |   |  869  |
|     Regulatory assets arising from wildfire litigation costs                                           |   |  594  |   |  364  |
|     Other regulatory assets                                                                            |   |  1,060  |   |  934  |
|     Nuclear decommissioning trusts                                                                     |   |  804  |   |  769  |
|     Investment in RBS Sempra Commodities LLP                                                           |   |  126  |   |  787  |
|     Other investments                                                                                  |   |  1,545  |   |  2,164  |
|     Goodwill                                                                                           |   |  1,036  |   |  87  |
|     Other intangible assets                                                                            |   |  448  |   |  453  |
|     Sundry                                                                                             |   |  691  |   |  600  |
|         Total investments and other assets                                         |   |  7,452  |   |  7,054  |
|                                                                                                                       |   |   |   |   |
| Property, plant and equipment:                                                                                             |   |   |   |   |
|     Property, plant and equipment                                                                      |   |  31,303  |   |  27,087  |
|     Less accumulated depreciation and amortization                                                     |   |  (7,731) |   |  (7,211) |
|         Property, plant and equipment, net ($494 and $516 at December 31, 2011 and |   |   |   |   |
|             2010, respectively, related to VIE)                |   |  23,572  |   |  19,876  |
| Total assets                                                                                                               | $ |  33,356  | $ |  30,283  |
| See Notes to Consolidated Financial Statements.                                                                            |

| SEMPRA ENERGY                                                                                                   |
|-----------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                                                                     |
| (Dollars in millions)                                                                                           |
|                                                                                                            | December 31, | December 31, |
|                                                                                                            | 2011  | 2010 |
| LIABILITIES AND EQUITY                                                                                          |   |   |   |   |
| Current liabilities:                                                                                            |   |   |   |   |
|     Short-term debt                                                                         | $ |  449  | $ |  158  |
|     Accounts payable – trade                                                          |   |  983  |   |  755  |
|     Accounts payable – other                                                          |   |  124  |   |  109  |
|     Due to unconsolidated affiliates                                                        |   |  ―  |   |  36  |
|     Income taxes payable                                                                    |   |  16  |   |  ―  |
|     Deferred income taxes                                                                   |   |  173  |   |  ―  |
|     Dividends and interest payable                                                          |   |  219  |   |  188  |
|     Accrued compensation and benefits                                                       |   |  323  |   |  311  |
|     Regulatory balancing accounts – overcollected                                     |   |  105  |   |  241  |
|     Current portion of long-term debt                                                       |   |  336  |   |  349  |
|     Fixed-price contracts and other derivatives                                             |   |  92  |   |  106  |
|     Customer deposits                                                                       |   |  142  |   |  129  |
|     Reserve for wildfire litigation                                                         |   |  586  |   |  639  |
|     Other                                                                                   |   |  615  |   |  765  |
|         Total current liabilities                                       |   |  4,163  |   |  3,786  |
| Long-term debt ($345 and $355 at December 31, 2011 and 2010, respectively,                                      |   |   |   |   |
|       related to VIE)                                                             |   |  10,078  |   |  8,980  |
|                                                                                                            |   |   |   |   |
| Deferred credits and other liabilities:                                                                         |   |   |   |   |
|     Customer advances for construction                                                      |   |  142  |   |  154  |
|     Pension and other postretirement benefit obligations, net of plan assets                |   |  1,423  |   |  1,105  |
|     Deferred income taxes                                                                   |   |  1,554  |   |  1,561  |
|     Deferred investment tax credits                                                         |   |  49  |   |  50  |
|     Regulatory liabilities arising from removal obligations                                 |   |  2,551  |   |  2,630  |
|     Asset retirement obligations                                                            |   |  1,905  |   |  1,449  |
|     Other regulatory liabilities                                                            |   |  87  |   |  138  |
|     Fixed-price contracts and other derivatives                                             |   |  301  |   |  290  |
|     Deferred credits and other                                                              |   |  783  |   |  823  |
|         Total deferred credits and other liabilities                    |   |  8,795  |   |  8,200  |
| Contingently redeemable preferred stock of subsidiary                                                           |   |  79  |   |  79  |
|                                                                                                            |   |   |   |   |
| Commitments and contingencies (Note 15)                                                                         |   |   |   |   |
|                                                                                                            |   |   |   |   |
| Equity:                                                                                                         |   |   |   |   |
|     Preferred stock (50 million shares authorized; none issued)                             |   |  ―  |   |  ―  |
|     Common stock (750 million shares authorized; 240 million                                |   |   |   |   |
|         shares outstanding at December 31, 2011 and 2010; no par value) |   |  2,104  |   |  2,036  |
|     Retained earnings                                                                       |   |  8,225  |   |  7,329  |
|     Deferred compensation                                                                   |   |  (2) |   |  (8) |
|     Accumulated other comprehensive income (loss)                                           |   |  (489) |   |  (330) |
|         Total Sempra Energy shareholders’ equity                  |   |  9,838  |   |  9,027  |
|     Preferred stock of subsidiaries                                                         |   |  20  |   |  100  |
|     Other noncontrolling interests                                                          |   |  383  |   |  111  |
|         Total equity                                                    |   |  10,241  |   |  9,238  |
| Total liabilities and equity                                                                                    | $ |  33,356  | $ |  30,283  |
| See Notes to Consolidated Financial Statements.                                                                 |
|                                                                                                            |   |   |   |   |

| SEMPRA ENERGY                                                                                                            |
|--------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                    |
| (Dollars in millions)                                                                                                    |
|                                                                                                                     | Years ended December 31, |
|                                                                                                                     | 2011  | 2010  | 2009  |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                     |   |   |   |   |   |   |
|     Net income                                                                                       | $ |  1,407  | $ |  733  | $ |  1,122  |
|     Adjustments to reconcile net income to net cash provided                                         |   |   |   |   |   |   |
|         by operating activities:                                                 |   |   |   |   |   |   |
|             Depreciation and amortization                    |   |  978  |   |  867  |   |  775  |
|             Deferred income taxes and investment tax credits |   |  (24) |   |  48  |   |  295  |
|             Equity (earnings) losses                         |   |  (61) |   |  243  |   |  (567) |
|             Remeasurement of equity method investments       |   |  (277) |   |  ―  |   |  ―  |
|             Write-off of long-lived assets                   |   |  ―  |   |  ―  |   |  132  |
|             Fixed-price contracts and other derivatives      |   |  2  |   |  13  |   |  (30) |
|             Other                                            |   |  (15) |   |  (55) |   |  (48) |
|     Net change in other working capital components                                                   |   |  (225) |   |  58  |   |  (256) |
|     Distributions from RBS Sempra Commodities LLP                                                    |   |  53  |   |  198  |   |  407  |
|     Changes in other assets                                                                          |   |  34  |   |  54  |   |  139  |
|     Changes in other liabilities                                                                     |   |  (5) |   |  (5) |   |  (94) |
|         Net cash provided by operating activities                                |   |  1,867  |   |  2,154  |   |  1,875  |
|                                                                                                                     |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                                                     |   |   |   |   |   |   |
|     Expenditures for property, plant and equipment                                                   |   |  (2,844) |   |  (2,062) |   |  (1,912) |
|     Proceeds from sale of assets                                                                     |   |  2  |   |  303  |   |  179  |
|     Expenditures for investments and acquisition of businesses,                                      |   |   |   |   |   |   |
|         net of cash acquired                                                     |   |  (941) |   |  (611) |   |  (939) |
|     Distributions from RBS Sempra Commodities LLP                                                    |   |  570  |   |  849  |   |  ―  |
|     Distributions from other investments                                                             |   |  64  |   |  371  |   |  23  |
|     Purchases of nuclear decommissioning and other trust assets                                      |   |  (755) |   |  (371) |   |  (267) |
|     Proceeds from sales by nuclear decommissioning and other trusts                                  |   |  753  |   |  372  |   |  230  |
|     Decrease in restricted cash                                                                      |   |  653  |   |  195  |   |  37  |
|     Increase in restricted cash                                                                      |   |  (541) |   |  (318) |   |  (45) |
|     Decrease in notes receivable from unconsolidated affiliate                                       |   |  ―  |   |  ―  |   |  100  |
|     Purchase of bonds issued by unconsolidated affiliate                                             |   |  ―  |   |  ―  |   |  (50) |
|     Other                                                                                            |   |  (31) |   |  (11) |   |  (28) |
|         Net cash used in investing activities                                    |   |  (3,070) |   |  (1,283) |   |  (2,672) |
|                                                                                                                     |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                                     |   |   |   |   |   |   |
|     Common dividends paid                                                                            |   |  (440) |   |  (364) |   |  (341) |
|     Redemption of subsidiary preferred stock                                                         |   |  (80) |   |  ―  |   |  ―  |
|     Preferred dividends paid by subsidiaries                                                         |   |  (8) |   |  (10) |   |  (10) |
|     Issuances of common stock                                                                        |   |  28  |   |  40  |   |  73  |
|     Repurchases of common stock                                                                      |   |  (18) |   |  (502) |   |  (22) |
|     Issuances of debt (maturities greater than 90 days)                                              |   |  2,098  |   |  1,125  |   |  2,151  |
|     Payments on debt (maturities greater than 90 days)                                               |   |  (482) |   |  (905) |   |  (435) |
|     (Decrease) increase in short-term debt, net                                                      |   |  (498) |   |  568  |   |  (659) |
|     Payments on notes payable to unconsolidated affiliate                                            |   |  ―  |   |  ―  |   |  (100) |
|     Purchase of noncontrolling interests                                                             |   |  (43) |   |  ―  |   |  (94) |
|     Other                                                                                            |   |  (23) |   |  (21) |   |  13  |
|         Net cash provided by (used in) financing activities                      |   |  534  |   |  (69) |   |  576  |
|                                                                                                                     |   |   |   |   |   |   |
| Effect of exchange rate changes on cash and cash equivalents                                                             |   |  9  |   |  ―  |   |  ―  |
|                                                                                                                     |   |   |   |   |   |   |
| (Decrease) increase in cash and cash equivalents                                                                         |   |  (660) |   |  802  |   |  (221) |
| Cash and cash equivalents, January 1                                                                                     |   |  912  |   |  110  |   |  331  |
| Cash and cash equivalents, December 31                                                                                   | $ |  252  | $ |  912  | $ |  110  |
| See Notes to Consolidated Financial Statements.                                                                          |

| SEMPRA ENERGY                                                                                                                |
|------------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)                                                                            |
| (Dollars in millions)                                                                                                        |
|                                                                                                                         | Years ended December 31, |
|                                                                                                                         | 2011  | 2010  | 2009  |
| CHANGES IN OTHER WORKING CAPITAL COMPONENTS                                                                                  |   |   |   |   |   |   |
| (Excluding cash and cash equivalents, and debt due within one year)                                                          |   |   |   |   |   |   |
|     Accounts and notes receivable                                                                        | $ |  (32) | $ |  89  | $ |  (190) |
|     Income taxes, net                                                                                    |   |  268  |   |  (30) |   |  (17) |
|     Inventories                                                                                          |   |  (84) |   |  (62) |   |  124  |
|     Regulatory balancing accounts                                                                        |   |  (150) |   |  (155) |   |  42  |
|     Regulatory assets and liabilities                                                                    |   |  (2) |   |  6  |   |  (1) |
|     Other current assets                                                                                 |   |  295  |   |  310  |   |  685  |
|     Accounts and notes payable                                                                           |   |  60  |   |  79  |   |  (109) |
|     Other current liabilities                                                                            |   |  (580) |   |  (179) |   |  (790) |
|         Net change in other working capital components                               | $ |  (225) | $ |  58  | $ |  (256) |
|                                                                                                                         |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                                             |   |   |   |   |   |   |
|     Interest payments, net of amounts capitalized                                                        | $ |  440  | $ |  415  | $ |  326  |
|     Income tax payments, net of refunds                                                                  |   |  144  |   |  68  |   |  112  |
|                                                                                                                         |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES                                                                      |   |   |   |   |   |   |
|     Acquisition of businesses:                                                                           |   |   |   |   |   |   |
|         Assets acquired                                                              | $ |  2,833  | $ |  303  | $ |  ―  |
|         Cash paid, net of cash acquired                                              |   |  (611) |   |  (292) |   |  ―  |
|         Fair value of equity method investments immediately prior to the acquisition |   |  (882) |   |  ―  |   |  ―  |
|         Fair value of noncontrolling interests                                       |   |  (279) |   |  ―  |   |  ―  |
|         Additional consideration accrued                                             |   |  (32) |   |  ―  |   |  ―  |
|         Liabilities assumed                                                          | $ |  1,029  | $ |  11  | $ |  ―  |
|                                                                                                                         |   |   |   |   |   |   |
|     Increase in capital lease obligations for investments in property, plant and equipment               | $ |  ―  | $ |  192  | $ |  50  |
|     Accrued capital expenditures                                                                         |   |  368  |   |  341  |   |  247  |
|     Return of investment (industrial development bonds)                                                  |   |  180  |   |  ―  |   |  ―  |
|                                                                                                                         |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES                                                                      |   |   |   |   |   |   |
|     Dividends declared but not paid                                                                      | $ |  120  | $ |  96  | $ |  99  |
|     Cancellation of debt (industrial development bonds)                                                  |   |  180  |   |  ―  |   |  ―  |
|     Conversion of debt into equity                                                                       |   |  30  |   |  ―  |   |  ―  |
| See Notes to Consolidated Financial Statements.                                                                              |

| SEMPRA ENERGY                                                         |
|-----------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND CHANGES IN EQUITY |
| (Dollars in millions)                                                 |
|                                                                  | Years ended December 31, 2011, 2010 and 2009 |
|                                                                  |   |   |   |   | Deferred |   |   |   |   |
|                                                                  |   |   |   |   | Compen- | Accumulated |   |   |   |
|                                                                  |   |   |   |   | sation | Other | Sempra |   |   |
|                                                                  |   |   |   |   | Relating | Compre- | Energy | Non- |   |
|                                                                  | Common | Retained | to | hensive | Shareholders’ | controlling | Total |
|                                                                  | Stock | Earnings | ESOP | Income (Loss) | Equity | Interests | Equity |
| Balance at December 31, 2008                                          | $ |  2,265  | $ |  6,235  | $ |  (18) | $ |  (513) | $ |  7,969  | $ |  340  | $ |  8,309  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                     |   |   |   |  1,129  |   |   |   |   |   |  1,129  |   |  (7) |   |  1,122  |
| Comprehensive income adjustments:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Foreign currency translation adjustments      |   |   |   |   |   |   |   |  102  |   |  102  |   |   |   |  102  |
|     Available-for-sale securities                 |   |   |   |   |   |   |   |  7  |   |  7  |   |   |   |  7  |
|     Pension and other postretirement benefits     |   |   |   |   |   |   |   |  (3) |   |  (3) |   |   |   |  (3) |
|     Financial instruments                         |   |   |   |   |   |   |   |  38  |   |  38  |   |  (3) |   |  35  |
| Comprehensive income (loss)                                           |   |   |   |   |   |   |   |  144  |   |  1,273  |   |  (10) |   |  1,263  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share-based compensation expense                                      |   |  38  |   |   |   |   |   |   |   |  38  |   |   |   |  38  |
| Common stock dividends declared                                       |   |   |   |  (383) |   |   |   |   |   |  (383) |   |   |   |  (383) |
| Preferred dividends of subsidiaries                                   |   |   |   |  (10) |   |   |   |   |   |  (10) |   |   |   |  (10) |
| Issuance of common stock                                              |   |  114  |   |   |   |   |   |   |   |  114  |   |   |   |  114  |
| Tax benefit related to share-based                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     compensation                                  |   |  23  |   |   |   |   |   |   |   |  23  |   |   |   |  23  |
| Repurchases of common stock                                           |   |  (22) |   |   |   |   |   |   |   |  (22) |   |   |   |  (22) |
| Common stock released from ESOP                                       |   |  10  |   |   |   |  5  |   |   |   |  15  |   |   |   |  15  |
| Equity contributed by noncontrolling interests                        |   |   |   |   |   |   |   |   |   |   |   |  7  |   |  7  |
| Distributions to noncontrolling interests                             |   |   |   |   |   |   |   |   |   |   |   |  (9) |   |  (9) |
| Purchase of noncontrolling interest in                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     subsidiary                                    |   |  (10) |   |   |   |   |   |   |   |  (10) |   |  (84) |   |  (94) |
| Balance at December 31, 2009                                          |   |  2,418  |   |  6,971  |   |  (13) |   |  (369) |   |  9,007  |   |  244  |   |  9,251  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                     |   |   |   |  749  |   |   |   |   |   |  749  |   |  (16) |   |  733  |
| Comprehensive income adjustments:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Foreign currency translation adjustments      |   |   |   |   |   |   |   |  47  |   |  47  |   |   |   |  47  |
|     Available-for-sale securities                 |   |   |   |   |   |   |   |  (8) |   |  (8) |   |   |   |  (8) |
|     Pension and other postretirement benefits     |   |   |   |   |   |   |   |  13  |   |  13  |   |   |   |  13  |
|     Financial instruments                         |   |   |   |   |   |   |   |  (13) |   |  (13) |   |  7  |   |  (6) |
| Comprehensive income (loss)                                           |   |   |   |   |   |   |   |  39  |   |  788  |   |  (9) |   |  779  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share-based compensation expense                                      |   |  38  |   |   |   |   |   |   |   |  38  |   |   |   |  38  |
| Common stock dividends declared                                       |   |   |   |  (381) |   |   |   |   |   |  (381) |   |   |   |  (381) |
| Preferred dividends of subsidiaries                                   |   |   |   |  (10) |   |   |   |   |   |  (10) |   |   |   |  (10) |
| Issuance of common stock                                              |   |  64  |   |   |   |   |   |   |   |  64  |   |   |   |  64  |
| Tax benefit related to share-based                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     compensation                                  |   |  5  |   |   |   |   |   |   |   |  5  |   |   |   |  5  |
| Repurchases of common stock                                           |   |  (502) |   |   |   |   |   |   |   |  (502) |   |   |   |  (502) |
| Common stock released from ESOP                                       |   |  13  |   |   |   |  5  |   |   |   |  18  |   |   |   |  18  |
| Distributions to noncontrolling interests                             |   |   |   |   |   |   |   |   |   |   |   |  (24) |   |  (24) |
| Balance at December 31, 2010                                          | $ |  2,036  | $ |  7,329  | $ |  (8) | $ |  (330) | $ |  9,027  | $ |  211  | $ |  9,238  |
| See Notes to Consolidated Financial Statements.                       |

| SEMPRA ENERGY                                                                           |
|-----------------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND CHANGES IN EQUITY (CONTINUED)       |
| (Dollars in millions)                                                                   |
|                                                                                    | Years ended December 31, 2011, 2010 and 2009 |
|                                                                                    |   |   |   |   | Deferred |   |   |   |   |   |
|                                                                                    |   |   |   |   | Compen- | Accumulated |   |   |   |
|                                                                                    |   |   |   |   | sation | Other | Sempra |   |   |
|                                                                                    |   |   |   |   | Relating | Compre- | Energy | Non- |   |
|                                                                                    | Common | Retained | to | hensive | Shareholders’ | controlling | Total |
|                                                                                    | Stock | Earnings | ESOP | Income (Loss) | Equity | Interests | Equity |
| Balance at December 31, 2010                                                            | $ |  2,036  | $ |  7,329  | $ |  (8) | $ |  (330) | $ |  9,027  | $ |  211  | $ |  9,238  |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                              |   |   |   |  1,365  |   |   |   |   |   |  1,365  |   |  42  |   |  1,407  |
| Comprehensive income adjustments:                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Foreign currency translation adjustments                        |   |   |   |   |   |   |   |  (76) |   |  (76) |   |  6  |   |  (70) |
|     Reclassification to net income of foreign                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         currency translation adjustment related |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         to remeasurement of equity method       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         investments                             |   |   |   |   |   |   |   |  (54) |   |  (54) |   |   |   |  (54) |
|     Available-for-sale securities                                   |   |   |   |   |   |   |   |  (1) |   |  (1) |   |   |   |  (1) |
|     Pension and other postretirement benefits                       |   |   |   |   |   |   |   |  (12) |   |  (12) |   |   |   |  (12) |
|     Financial instruments                                           |   |   |   |   |   |   |   |  (16) |   |  (16) |   |  (36) |   |  (52) |
| Comprehensive income (loss)                                                             |   |   |   |   |   |   |   |  (159) |   |  1,206  |   |  12  |   |  1,218  |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share-based compensation expense                                                        |   |  48  |   |   |   |   |   |   |   |  48  |   |   |   |  48  |
| Common stock dividends declared                                                         |   |   |   |  (461) |   |   |   |   |   |  (461) |   |   |   |  (461) |
| Preferred dividends of subsidiaries                                                     |   |   |   |  (8) |   |   |   |   |   |  (8) |   |   |   |  (8) |
| Issuance of common stock                                                                |   |  28  |   |   |   |   |   |   |   |  28  |   |   |   |  28  |
| Repurchases of common stock                                                             |   |  (18) |   |   |   |   |   |   |   |  (18) |   |   |   |  (18) |
| Common stock released from ESOP                                                         |   |  14  |   |   |   |  6  |   |   |   |  20  |   |   |   |  20  |
| Distributions to noncontrolling interests                                               |   |   |   |   |   |   |   |   |   |   |   |  (16) |   |  (16) |
| Equity contributed by noncontrolling interests                                          |   |   |   |   |   |   |   |   |   |   |   |  36  |   |  36  |
| Acquisition of South American entities                                                  |   |   |   |   |   |   |   |   |   |   |   |  279  |   |  279  |
| Purchase of noncontrolling interests in                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     subsidiary                                                      |   |  (4) |   |   |   |   |   |   |   |  (4) |   |  (39) |   |  (43) |
| Redemption of preferred stock of subsidiary                                             |   |   |   |   |   |   |   |   |   |   |   |  (80) |   |  (80) |
| Balance at December 31, 2011                                                            | $ |  2,104  | $ |  8,225  | $ |  (2) | $ |  (489) | $ |  9,838  | $ |  403  | $ |  10,241  |
| See Notes to Consolidated Financial Statements.                                         |

| SAN DIEGO GAS & ELECTRIC COMPANY                                     |
|--------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF OPERATIONS                                    |
| (Dollars in millions)                                                    |
|                                                                     | Years ended December 31, |
|                                                                     | 2011  | 2010 | 2009 |
| Operating revenues                                                       |   |   |   |   |   |   |
|     Electric                                         | $ |  2,830  | $ |  2,535  | $ |  2,426  |
|     Natural gas                                      |   |  543  |   |  514  |   |  490  |
|         Total operating revenues |   |  3,373  |   |  3,049  |   |  2,916  |
| Operating expenses                                                       |   |   |   |   |   |   |
|     Cost of electric fuel and purchased power        |   |  715  |   |  637  |   |  672  |
|     Cost of natural gas                              |   |  226  |   |  217  |   |  206  |
|     Operation and maintenance                        |   |  1,072  |   |  987  |   |  960  |
|     Depreciation and amortization                    |   |  422  |   |  381  |   |  329  |
|     Franchise fees and other taxes                   |   |  183  |   |  170  |   |  160  |
|         Total operating expenses |   |  2,618  |   |  2,392  |   |  2,327  |
| Operating income                                                         |   |  755  |   |  657  |   |  589  |
| Other income, net                                                        |   |  79  |   |  10  |   |  64  |
| Interest income                                                          |   |  ―  |   |  ―  |   |  1  |
| Interest expense                                                         |   |  (142) |   |  (136) |   |  (104) |
| Income before income taxes                                               |   |  692  |   |  531  |   |  550  |
| Income tax expense                                                       |   |  (237) |   |  (173) |   |  (177) |
| Net income                                                               |   |  455  |   |  358  |   |  373  |
| (Earnings) losses attributable to noncontrolling interest                |   |  (19) |   |  16  |   |  (24) |
| Earnings                                                                 |   |  436  |   |  374  |   |  349  |
| Preferred dividend requirements                                          |   |  (5) |   |  (5) |   |  (5) |
| Earnings attributable to common shares                                   | $ |  431  | $ |  369  | $ |  344  |
| See Notes to Consolidated Financial Statements.                          |

| SAN DIEGO GAS & ELECTRIC COMPANY                                                                                        |
|-----------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                                                                                 |
| (Dollars in millions)                                                                                                       |
|                                                                                                                        | December 31, | December 31, |
|                                                                                                                        | 2011  | 2010  |
| ASSETS                                                                                                                      |   |   |   |   |
| Current assets:                                                                                                             |   |   |   |   |
|     Cash and cash equivalents                                                                           | $ |  29  | $ |  127  |
|     Restricted cash                                                                                     |   |  21  |   |  116  |
|     Accounts receivable – trade, net                                                              |   |  267  |   |  248  |
|     Accounts receivable – other, net                                                              |   |  23  |   |  59  |
|     Due from unconsolidated affiliates                                                                  |   |  67  |   |  12  |
|     Income taxes receivable                                                                             |   |  102  |   |  37  |
|     Deferred income taxes                                                                               |   |  ―  |   |  129  |
|     Inventories                                                                                         |   |  82  |   |  71  |
|     Regulatory balancing accounts, net                                                                  |   |  38  |   |  ―  |
|     Regulatory assets arising from fixed-price contracts and other derivatives                          |   |  67  |   |  66  |
|     Other regulatory assets                                                                             |   |  11  |   |  5  |
|     Fixed-price contracts and other derivatives                                                         |   |  27  |   |  28  |
|     Settlements receivable related to wildfire litigation                                               |   |  10  |   |  300  |
|     Other                                                                                               |   |  51  |   |  50  |
|         Total current assets                                                        |   |  795  |   |  1,248  |
|                                                                                                                        |   |   |   |   |
| Other assets:                                                                                                               |   |   |   |   |
|     Restricted cash                                                                                     |   |  22  |   |  ―  |
|     Deferred taxes recoverable in rates                                                                 |   |  570  |   |  502  |
|     Regulatory assets arising from fixed-price contracts and other derivatives                          |   |  191  |   |  233  |
|     Regulatory assets arising from pension and other postretirement                                     |   |   |   |   |
|         benefit obligations                                                         |   |  309  |   |  279  |
|     Regulatory assets arising from wildfire litigation costs                                            |   |  594  |   |  364  |
|     Other regulatory assets                                                                             |   |  160  |   |  73  |
|     Nuclear decommissioning trusts                                                                      |   |  804  |   |  769  |
|     Sundry                                                                                              |   |  70  |   |  56  |
|         Total other assets                                                          |   |  2,720  |   |  2,276  |
|                                                                                                                        |   |   |   |   |
| Property, plant and equipment:                                                                                              |   |   |   |   |
|     Property, plant and equipment                                                                       |   |  13,003  |   |  11,247  |
|     Less accumulated depreciation and amortization                                                      |   |  (2,963) |   |  (2,694) |
|         Property, plant and equipment, net ($494 and $516 at December 31, 2011      |   |   |   |   |
|               and 2010, respectively, related to VIE) |   |  10,040  |   |  8,553  |
| Total assets                                                                                                                | $ |  13,555  | $ |  12,077  |
| See Notes to Consolidated Financial Statements.                                                                             |

| SAN DIEGO GAS & ELECTRIC COMPANY                                                                 |
|------------------------------------------------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                                                          |
| (Dollars in millions)                                                                                |
|                                                                                                 | December 31, | December 31, |
|                                                                                                 | 2011  | 2010 |
| LIABILITIES AND EQUITY                                                                               |   |   |   |   |
| Current liabilities:                                                                                 |   |   |   |   |
|     Accounts payable                                                             | $ |  375  | $ |  292  |
|     Due to unconsolidated affiliate                                              |   |  14  |   |  16  |
|     Deferred income taxes                                                        |   |  62  |   |  ―  |
|     Accrued compensation and benefits                                            |   |  124  |   |  115  |
|     Regulatory balancing accounts, net                                           |   |  ―  |   |  61  |
|     Current portion of long-term debt                                            |   |  19  |   |  19  |
|     Fixed-price contracts and other derivatives                                  |   |  55  |   |  51  |
|     Customer deposits                                                            |   |  62  |   |  54  |
|     Reserve for wildfire litigation                                              |   |  586  |   |  639  |
|     Other                                                                        |   |  139  |   |  136  |
|         Total current liabilities                            |   |  1,436  |   |  1,383  |
| Long-term debt ($345 and $355 at December 31, 2011 and 2010, respectively,                           |   |   |   |   |
|     related to VIE)                                                              |   |  4,058  |   |  3,479  |
|                                                                                                 |   |   |   |   |
| Deferred credits and other liabilities:                                                              |   |   |   |   |
|     Customer advances for construction                                           |   |  20  |   |  21  |
|     Pension and other postretirement benefit obligations, net of plan assets     |   |  342  |   |  309  |
|     Deferred income taxes                                                        |   |  1,167  |   |  1,001  |
|     Deferred investment tax credits                                              |   |  26  |   |  25  |
|     Regulatory liabilities arising from removal obligations                      |   |  1,462  |   |  1,409  |
|     Asset retirement obligations                                                 |   |  693  |   |  619  |
|     Fixed-price contracts and other derivatives                                  |   |  243  |   |  248  |
|     Deferred credits and other                                                   |   |  188  |   |  283  |
|         Total deferred credits and other liabilities         |   |  4,141  |   |  3,915  |
| Contingently redeemable preferred stock                                                              |   |  79  |   |  79  |
|                                                                                                 |   |   |   |   |
| Commitments and contingencies (Note 15)                                                              |   |   |   |   |
|                                                                                                 |   |   |   |   |
| Equity:                                                                                              |   |   |   |   |
|     Common stock (255 million shares authorized; 117 million shares outstanding; |   |   |   |   |
|         no par value)                                        |   |  1,338  |   |  1,138  |
|     Retained earnings                                                            |   |  2,411  |   |  1,980  |
|     Accumulated other comprehensive income (loss)                                |   |  (10) |   |  (10) |
|         Total SDG&E shareholder’s equity           |   |  3,739  |   |  3,108  |
|     Noncontrolling interest                                                      |   |  102  |   |  113  |
|         Total equity                                         |   |  3,841  |   |  3,221  |
| Total liabilities and equity                                                                         | $ |  13,555  | $ |  12,077  |
| See Notes to Consolidated Financial Statements.                                                      |

| SAN DIEGO GAS & ELECTRIC COMPANY                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                    |
| (Dollars in millions)                                                                                                    |
|                                                                                                                     | Years ended December 31, |
|                                                                                                                     | 2011  | 2010 | 2009 |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                     |   |   |   |   |   |   |
|     Net income                                                                                       | $ |  455  | $ |  358  | $ |  373  |
|     Adjustments to reconcile net income to net cash provided by                                      |   |   |   |   |   |   |
|         operating activities:                                                    |   |   |   |   |   |   |
|             Depreciation and amortization                    |   |  422  |   |  381  |   |  329  |
|             Deferred income taxes and investment tax credits |   |  290  |   |  52  |   |  73  |
|             Fixed-price contracts and other derivatives      |   |  (13) |   |  22  |   |  (41) |
|             Other                                            |   |  (68) |   |  (32) |   |  (21) |
|     Changes in other assets                                                                          |   |  33  |   |  14  |   |  23  |
|     Changes in other liabilities                                                                     |   |  7  |   |  (3) |   |  (53) |
|     Changes in working capital components:                                                           |   |   |   |   |   |   |
|         Accounts receivable                                                      |   |  6  |   |  ―  |   |  (53) |
|         Due to/from affiliates, net                                              |   |  6  |   |  (2) |   |  ―  |
|         Inventories                                                              |   |  (11) |   |  (10) |   |  1  |
|         Other current assets                                                     |   |  309  |   |  343  |   |  660  |
|         Income taxes                                                             |   |  (111) |   |  12  |   |  (44) |
|         Accounts payable                                                         |   |  68  |   |  23  |   |  1  |
|         Regulatory balancing accounts                                            |   |  (87) |   |  (99) |   |  32  |
|         Interest payable                                                         |   |  6  |   |  10  |   |  ―  |
|         Other current liabilities                                                |   |  (430) |   |  (340) |   |  (639) |
|             Net cash provided by operating activities        |   |  882  |   |  729  |   |  641  |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                                                     |   |   |   |   |   |   |
|     Expenditures for property, plant and equipment                                                   |   |  (1,831) |   |  (1,210) |   |  (955) |
|     Expenditures for short-term investments                                                          |   |  ―  |   |  ―  |   |  (152) |
|     Proceeds from sale of short-term investments                                                     |   |  ―  |   |  ―  |   |  176  |
|     Purchases of nuclear decommissioning trust assets                                                |   |  (748) |   |  (362) |   |  (237) |
|     Proceeds from sales by nuclear decommissioning trusts                                            |   |  741  |   |  352  |   |  230  |
|     Decrease in loans to affiliates, net                                                             |   |  ―  |   |  14  |   |  20  |
|     Proceeds from sale of assets                                                                     |   |  1  |   |  ―  |   |  1  |
|     Decrease in restricted cash                                                                      |   |  520  |   |  152  |   |  37  |
|     Increase in restricted cash                                                                      |   |  (447) |   |  (260) |   |  (45) |
|             Net cash used in investing activities            |   |  (1,764) |   |  (1,314) |   |  (925) |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                                     |   |   |   |   |   |   |
|     Capital contribution                                                                             |   |  200  |   |  ―  |   |  ―  |
|     Common dividends paid                                                                            |   |  ―  |   |  ―  |   |  (150) |
|     Preferred dividends paid                                                                         |   |  (5) |   |  (5) |   |  (5) |
|     Issuances of long-term debt                                                                      |   |  598  |   |  744  |   |  439  |
|     Payments on long-term debt                                                                       |   |  (10) |   |  (10) |   |  (2) |
|     Increase in short-term debt, net                                                                 |   |  ―  |   |  ―  |   |  4  |
|     Capital contribution received by Otay Mesa VIE                                                   |   |  5  |   |  ―  |   |  4  |
|     Capital distributions made by Otay Mesa VIE                                                      |   |  ―  |   |  (24) |   |  (9) |
|     Other                                                                                            |   |  (4) |   |  (6) |   |  (3) |
|           Net cash provided by financing activities                    |   |  784  |   |  699  |   |  278  |
| (Decrease) increase in cash and cash equivalents                                                                         |   |  (98) |   |  114  |   |  (6) |
| Cash and cash equivalents, January 1                                                                                     |   |  127  |   |  13  |   |  19  |
| Cash and cash equivalents, December 31                                                                                   | $ |  29  | $ |  127  | $ |  13  |
| See Notes to Consolidated Financial Statements.                                                                          |

| SAN DIEGO GAS & ELECTRIC COMPANY                                                             |
|--------------------------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)                                                |
| (Dollars in millions)                                                                            |
|                                                                                             | Years ended December 31, |
|                                                                                             | 2011  | 2010  | 2009  |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                 |   |   |   |   |   |   |
|     Interest payments, net of amounts capitalized                            | $ |  131  | $ |  120  | $ |  99  |
|     Income tax payments, net of refunds                                      |   |  59  |   |  108  |   |  148  |
|                                                                                             |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES                                                    |   |   |   |   |   |   |
|     Increase in capital lease obligations for investments in property, plant |   |   |   |   |   |   |
|         and equipment                                    | $ |  ―  | $ |  188  | $ |  21  |
|     Accrued capital expenditures                                             |   |  187  |   |  173  |   |  157  |
|     Dividends declared but not paid                                          |   |  1  |   |  1  |   |  1  |
| See Notes to Consolidated Financial Statements.                                                  |

| SAN DIEGO GAS & ELECTRIC COMPANY                                  |
|-----------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND CHANGES IN EQUITY |
| (Dollars in millions)                                                 |
|                                                                  | Years ended December 2011, 2010 and 2009 |
|                                                                  |   |   |   | Accumulated |   |   |   |
|                                                                  |   |   |   | Other | SDG&E |   |   |
|                                                                  | Common | Retained | Comprehensive | Shareholder’s | Noncontrolling | Total |
|                                                                  | Stock | Earnings | Income (Loss) | Equity | Interests | Equity |
| Balance at December 31, 2008                                          | $ |  1,138  | $ |  1,417  | $ |  (13) | $ |  2,542  | $ |  128  | $ |  2,670  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                            |   |   |   |  349  |   |   |   |  349  |   |  24  |   |  373  |
| Comprehensive income adjustments:                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|     Pension and other postretirement benefits     |   |   |   |   |   |  2  |   |  2  |   |   |   |  2  |
|     Financial instruments                         |   |   |   |   |   |  1  |   |  1  |   |  (3) |   |  (2) |
| Comprehensive income                                                  |   |   |   |   |   |  3  |   |  352  |   |  21  |   |  373  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends declared                                    |   |   |   |  (5) |   |   |   |  (5) |   |   |   |  (5) |
| Common stock dividends declared                                       |   |   |   |  (150) |   |   |   |  (150) |   |   |   |  (150) |
| Distributions to noncontrolling interest                              |   |   |   |   |   |   |   |   |   |  (9) |   |  (9) |
| Equity contributed by noncontrolling interest                         |   |   |   |   |   |   |   |   |   |  6  |   |  6  |
| Balance at December 31, 2009                                          |   |  1,138  |   |  1,611  |   |  (10) |   |  2,739  |   |  146  |   |  2,885  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                     |   |   |   |  374  |   |   |   |  374  |   |  (16) |   |  358  |
| Comprehensive income adjustments:                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|     Financial instruments                         |   |   |   |   |   |   |   |   |   |  7  |   |  7  |
| Comprehensive income (loss)                                           |   |   |   |   |   |  ―  |   |  374  |   |  (9) |   |  365  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends declared                                    |   |   |   |  (5) |   |   |   |  (5) |   |   |   |  (5) |
| Distributions to noncontrolling interest                              |   |   |   |   |   |   |   |   |   |  (24) |   |  (24) |
| Balance at December 31, 2010                                          |   |  1,138  |   |  1,980  |   |  (10) |   |  3,108  |   |  113  |   |  3,221  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                            |   |   |   |  436  |   |   |   |  436  |   |  19  |   |  455  |
| Comprehensive income adjustments:                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|     Financial instruments                         |   |   |   |   |   |   |   |   |   |  (36) |   |  (36) |
| Comprehensive income (loss)                                           |   |   |   |   |   |  ―  |   |  436  |   |  (17) |   |  419  |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends declared                                    |   |   |   |  (5) |   |   |   |  (5) |   |   |   |  (5) |
| Capital contribution                                                  |   |  200  |   |   |   |   |   |  200  |   |   |   |  200  |
| Equity contributed by noncontrolling interest                         |   |   |   |   |   |   |   |   |   |  6  |   |  6  |
| Balance at December 31, 2011                                          | $ |  1,338  | $ |  2,411  | $ |  (10) | $ |  3,739  | $ |  102  | $ |  3,841  |
| See Notes to Consolidated Financial Statements.                       |

| SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES                         |
|--------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF OPERATIONS                                    |
| (Dollars in millions)                                                    |
|                                                                     | Years ended December 31, |
|                                                                     | 2011  | 2010  | 2009  |
|                                                                     |   |   |   |   |   |   |
| Operating revenues                                                       | $ |  3,816  | $ |  3,822  | $ |  3,355  |
| Operating expenses                                                       |   |   |   |   |   |   |
|     Cost of natural gas                              |   |  1,568  |   |  1,699  |   |  1,343  |
|     Operation and maintenance                        |   |  1,305  |   |  1,174  |   |  1,138  |
|     Depreciation                                     |   |  331  |   |  309  |   |  293  |
|     Franchise fees and other taxes                   |   |  126  |   |  124  |   |  105  |
|         Total operating expenses |   |  3,330  |   |  3,306  |   |  2,879  |
| Operating income                                                         |   |  486  |   |  516  |   |  476  |
| Other income, net                                                        |   |  13  |   |  12  |   |  7  |
| Interest income                                                          |   |  1  |   |  1  |   |  3  |
| Interest expense                                                         |   |  (69) |   |  (66) |   |  (68) |
| Income before income taxes                                               |   |  431  |   |  463  |   |  418  |
| Income tax expense                                                       |   |  (143) |   |  (176) |   |  (144) |
| Net income                                                               |   |  288  |   |  287  |   |  274  |
| Preferred dividend requirements                                          |   |  (1) |   |  (1) |   |  (1) |
| Earnings attributable to common shares                                   | $ |  287  | $ |  286  | $ |  273  |
| See Notes to Consolidated Financial Statements.                          |

| SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES                                        |
|-----------------------------------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                                             |
| (Dollars in millions)                                                                   |
|                                                                                    | December 31, | December 31, |
|                                                                                    | 2011  | 2010  |
| ASSETS                                                                                  |   |   |   |   |
| Current assets:                                                                         |   |   |   |   |
|     Cash and cash equivalents                                       | $ |  36  | $ |  417  |
|     Accounts receivable – trade, net                          |   |  578  |   |  534  |
|     Accounts receivable – other, net                          |   |  63  |   |  49  |
|     Due from unconsolidated affiliates                              |   |  40  |   |  63  |
|     Income taxes receivable                                         |   |  17  |   |  28  |
|     Inventories                                                     |   |  151  |   |  105  |
|     Regulatory assets                                               |   |  9  |   |  12  |
|     Other                                                           |   |  28  |   |  39  |
|         Total current assets                    |   |  922  |   |  1,247  |
|                                                                                    |   |   |   |   |
| Other assets:                                                                           |   |   |   |   |
|     Regulatory assets arising from pension and other postretirement |   |   |   |   |
|         benefit obligations                     |   |  808  |   |  586  |
|     Other regulatory assets                                         |   |  137  |   |  123  |
|     Sundry                                                          |   |  8  |   |  8  |
|         Total other assets                      |   |  953  |   |  717  |
|                                                                                    |   |   |   |   |
| Property, plant and equipment:                                                          |   |   |   |   |
|     Property, plant and equipment                                   |   |  10,565  |   |  9,824  |
|     Less accumulated depreciation and amortization                  |   |  (3,965) |   |  (3,802) |
|         Property, plant and equipment, net      |   |  6,600  |   |  6,022  |
| Total assets                                                                            | $ |  8,475  | $ |  7,986  |
| See Notes to Consolidated Financial Statements.                                         |

| SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES                                                    |
|-----------------------------------------------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                                                         |
| (Dollars in millions)                                                                               |
|                                                                                                | December 31, | December 31, |
|                                                                                                | 2011  | 2010  |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                          |   |   |   |   |
| Current liabilities:                                                                                |   |   |   |   |
|     Accounts payable – trade                                              | $ |  315  | $ |  327  |
|     Accounts payable – other                                              |   |  78  |   |  79  |
|     Due to unconsolidated affiliate                                             |   |  2  |   |  11  |
|     Deferred income taxes                                                       |   |  44  |   |  17  |
|     Accrued compensation and benefits                                           |   |  99  |   |  98  |
|     Regulatory balancing accounts, net                                          |   |  105  |   |  180  |
|     Current portion of long-term debt                                           |   |  257  |   |  262  |
|     Customer deposits                                                           |   |  75  |   |  73  |
|     Other                                                                       |   |  172  |   |  163  |
|         Total current liabilities                           |   |  1,147  |   |  1,210  |
| Long-term debt                                                                                      |   |  1,064  |   |  1,320  |
| Deferred credits and other liabilities:                                                             |   |   |   |   |
|     Customer advances for construction                                          |   |  110  |   |  133  |
|     Pension and other postretirement benefit obligations, net of plan assets    |   |  833  |   |  613  |
|     Deferred income taxes                                                       |   |  576  |   |  418  |
|     Deferred investment tax credits                                             |   |  23  |   |  25  |
|     Regulatory liabilities arising from removal obligations                     |   |  1,075  |   |  1,208  |
|     Asset retirement obligations                                                |   |  1,161  |   |  788  |
|     Deferred taxes refundable in rates                                          |   |  87  |   |  138  |
|     Deferred credits and other                                                  |   |  206  |   |  178  |
|         Total deferred credits and other liabilities        |   |  4,071  |   |  3,501  |
|                                                                                                |   |   |   |   |
| Commitments and contingencies (Note 15)                                                             |   |   |   |   |
|                                                                                                |   |   |   |   |
| Shareholders’ equity:                                                                         |   |   |   |   |
|     Preferred stock                                                             |   |  22  |   |  22  |
|     Common stock (100 million shares authorized; 91 million shares outstanding; |   |   |   |   |
|         no par value)                                       |   |  866  |   |  866  |
|     Retained earnings                                                           |   |  1,326  |   |  1,089  |
|     Accumulated other comprehensive income (loss)                               |   |  (21) |   |  (22) |
|         Total shareholders’ equity                    |   |  2,193  |   |  1,955  |
| Total liabilities and shareholders’ equity                                                    | $ |  8,475  | $ |  7,986  |
| See Notes to Consolidated Financial Statements.                                                     |

| SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES                                                                            |
|-----------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                       |
| (Dollars in millions)                                                                                                       |
|                                                                                                                        | Years ended December 31, |
|                                                                                                                        | 2011  | 2010  | 2009  |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                        |   |   |   |   |   |   |
|     Net income                                                                                          | $ |  288  | $ |  287  | $ |  274  |
|     Adjustments to reconcile net income to net cash provided by                                         |   |   |   |   |   |   |
|         operating activities:                                                       |   |   |   |   |   |   |
|             Depreciation                                        |   |  331  |   |  309  |   |  293  |
|             Deferred income taxes and investment tax credits    |   |  130  |   |  107  |   |  70  |
|             Other                                               |   |  (6) |   |  ―  |   |  8  |
|     Changes in other assets                                                                             |   |  19  |   |  (7) |   |  7  |
|     Changes in other liabilities                                                                        |   |  (7) |   |  8  |   |  (68) |
|     Changes in working capital components:                                                              |   |   |   |   |   |   |
|         Accounts receivable                                                         |   |  (57) |   |  18  |   |  (30) |
|         Inventories                                                                 |   |  (46) |   |  (12) |   |  74  |
|         Other current assets                                                        |   |  5  |   |  (2) |   |  10  |
|         Accounts payable                                                            |   |  (7) |   |  52  |   |  (99) |
|         Income taxes                                                                |   |  (12) |   |  5  |   |  (2) |
|         Due to/from affiliates, net                                                 |   |  (18) |   |  11  |   |  (10) |
|         Regulatory balancing accounts                                               |   |  (63) |   |  (56) |   |  10  |
|         Customer deposits                                                           |   |  2  |   |  (13) |   |  (28) |
|         Other current liabilities                                                   |   |  (5) |   |  29  |   |  (69) |
|             Net cash provided by operating activities           |   |  554  |   |  736  |   |  440  |
|                                                                                                                        |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                                                        |   |   |   |   |   |   |
|     Expenditures for property, plant and equipment                                                      |   |  (683) |   |  (503) |   |  (480) |
|     Decrease (increase) in loans to affiliates, net                                                     |   |  49  |   |  (63) |   |  (16) |
|             Net cash used in investing activities               |   |  (634) |   |  (566) |   |  (496) |
|                                                                                                                        |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                                        |   |   |   |   |   |   |
|     Common dividends paid                                                                               |   |  (50) |   |  (100) |   |  ―  |
|     Preferred dividends paid                                                                            |   |  (1) |   |  (1) |   |  (1) |
|     Issuance of long-term debt                                                                          |   |  ―  |   |  299  |   |  ―  |
|     Payment of long-term debt                                                                           |   |  (250) |   |  ―  |   |  (100) |
|             Net cash (used in) provided by financing activities |   |  (301) |   |  198  |   |  (101) |
|                                                                                                                        |   |   |   |   |   |   |
| (Decrease) increase in cash and cash equivalents                                                                            |   |  (381) |   |  368  |   |  (157) |
| Cash and cash equivalents, January 1                                                                                        |   |  417  |   |  49  |   |  206  |
| Cash and cash equivalents, December 31                                                                                      | $ |  36  | $ |  417  | $ |  49  |
|                                                                                                                        |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                                            |   |   |   |   |   |   |
|     Interest payments, net of amounts capitalized                                                       | $ |  65  | $ |  54  | $ |  59  |
|     Income tax payments, net of refunds                                                                 |   |  25  |   |  64  |   |  76  |
|                                                                                                                        |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES                                                                               |   |   |   |   |   |   |
|     Accrued capital expenditures                                                                        | $ |  97  | $ |  103  | $ |  75  |
|     Increase in capital lease obligations for investments in property, plant and                        |   |   |   |   |   |   |
|         equipment                                                                   |   |  ―  |   |  4  |   |  29  |
| See Notes to Consolidated Financial Statements.                                                                             |

| SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES                                          |
|-------------------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND CHANGES IN SHAREHOLDERS’ EQUITY |
| (Dollars in millions)                                                                     |
|                                                                                      | Years ended December 31, 2011, 2010 and 2009 |
|                                                                                      |   |   |   |   |   | Accumulated |   |
|                                                                                      |   |   |   |   |   | Other | Total |
|                                                                                      | Preferred | Common | Retained | Comprehensive | Shareholders’ |
|                                                                                      | Stock | Stock | Earnings | Income (Loss) | Equity |
| Balance at December 31, 2008                                                              | $ |  22  | $ |  866  | $ |  630  | $ |  (28) | $ |  1,490  |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                |   |   |   |   |   |  274  |   |   |   |  274  |
| Comprehensive income adjustments:                                                         |   |   |   |   |   |   |   |   |   |   |
|     Financial instruments                                             |   |   |   |   |   |   |   |  3  |   |  3  |
| Comprehensive income                                                                      |   |   |   |   |   |   |   |  3  |   |  277  |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends declared                                                        |   |   |   |   |   |  (1) |   |   |   |  (1) |
| Balance at December 31, 2009                                                              |   |  22  |   |  866  |   |  903  |   |  (25) |   |  1,766  |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                |   |   |   |   |   |  287  |   |   |   |  287  |
| Comprehensive income adjustments:                                                         |   |   |   |   |   |   |   |   |   |   |
|     Financial instruments                                             |   |   |   |   |   |   |   |  3  |   |  3  |
| Comprehensive income                                                                      |   |   |   |   |   |   |   |  3  |   |  290  |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends declared                                                        |   |   |   |   |   |  (1) |   |   |   |  (1) |
| Common stock dividends declared                                                           |   |   |   |   |   |  (100) |   |   |   |  (100) |
| Balance at December 31, 2010                                                              |   |  22  |   |  866  |   |  1,089  |   |  (22) |   |  1,955  |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                |   |   |   |   |   |  288  |   |   |   |  288  |
| Comprehensive income adjustments:                                                         |   |   |   |   |   |   |   |   |   |   |
|     Pension and other postretirement benefits                         |   |   |   |   |   |   |   |  (1) |   |  (1) |
|     Financial instruments                                             |   |   |   |   |   |   |   |  2  |   |  2  |
| Comprehensive income                                                                      |   |   |   |   |   |   |   |  1  |   |  289  |
|                                                                                      |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends declared                                                        |   |   |   |   |   |  (1) |   |   |   |  (1) |
| Common stock dividends declared                                                           |   |   |   |   |   |  (50) |   |   |   |  (50) |
| Balance at December 31, 2011                                                              | $ |  22  | $ |  866  | $ |  1,326  | $ |  (21) | $ |  2,193  |
| See Notes to Consolidated Financial Statements.                                           |

----

| §   | San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas); and |
|--------------------|------------------------------------------------------------------------------------------------------|

| §   | Sempra Global, the holding company for our energy-related businesses, which are Sempra Generation, Sempra Pipelines & Storage, Sempra LNG and, prior to 2011, Sempra Commodities. Sempra Pipelines & Storage also owns utilities in the U.S., Mexico, and South America. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Mobile Gas |
|--------------------|------------|

| §   | Ecogas |
|--------------------|--------|

|                                                    |                                                                                                       |            |       |            |       |            |       |            |   |            |   |            |   |
|---------------------------------------------------------|------------------------------------------------------------------------------------------------------------|-----------------|------------|-----------------|------------|-----------------|------------|-----------------|--------|-----------------|--------|-----------------|--------|
| SUMMARY OF REGULATORY BALANCING ACCOUNTS AT DECEMBER 31 |
| (Dollars in millions)                                   |
|                                                    |                                                                                                       | Sempra Energy   |       |            |
|                                                    |                                                                                                       | Consolidated    | SDG&E  | SoCalGas        |
|                                                    |                                                                                                       | 2011       | 2010  | 2011       | 2010  | 2011       | 2010  |
| Overcollected                                           | $                                                                                                          |  709  | $          |  733  | $          |  419  | $          |  443  | $      |  290  | $      |  290  |
| Undercollected                                          |                                                                                                       |  (642)     |       |  (492)     |       |  (457)     |       |  (382)     |   |  (185)     |   |  (110)     |
| Net payable (receivable)(1)                             | $                                                                                                          |  67   | $          |  241  | $          |  (38)      | $          |  61   | $      |  105  | $      |  180  |
| (1)                                                     | At December 31, 2011, the net receivable at SDG&E and the net payable at SoCalGas are shown separately |
|                                                    | on Sempra Energy’s Consolidated Balance Sheet.                                                       |
|                                                    |                                                                                                       |            |       |            |       |            |       |            |   |            |   |            |   |

| REGULATORY ASSETS (LIABILITIES) AT DECEMBER 31       |
|------------------------------------------------------|
| (Dollars in millions)                                |
|                                                 |   | 2011  | 2010  |
| SDG&E                                            |   |   |   |   |
| Fixed-price contracts and other derivatives          | $ |  258  | $ |  299  |
| Costs related to wildfire litigation                 |   |  594  |   |  364  |
| Deferred taxes recoverable in rates                  |   |  570  |   |  502  |
| Pension and other postretirement benefit obligations |   |  309  |   |  279  |
| Removal obligations(1)                               |   |  (1,462) |   |  (1,409) |
| Unamortized loss on reacquired debt, net             |   |  20  |   |  23  |
| Environmental costs                                  |   |  17  |   |  17  |
| Legacy meters                                        |   |  91  |   |  ―  |
| Other                                                |   |  43  |   |  38  |
|     Total SDG&E              |   |  440  |   |  113  |
| SoCalGas                                             |   |   |   |   |
| Pension and other postretirement benefit obligations |   |  808  |   |  586  |
| Employee benefit costs                               |   |  66  |   |  59  |
| Removal obligations(1)                               |   |  (1,075) |   |  (1,208) |
| Deferred taxes refundable in rates                   |   |  (87) |   |  (138) |
| Unamortized loss on reacquired debt, net             |   |  20  |   |  23  |
| Environmental costs                                  |   |  21  |   |  18  |
| Workers’ compensation                          |   |  44  |   |  41  |
| Other                                                |   |  (5) |   |  (6) |
|     Total SoCalGas               |   |  (208) |   |  (625) |
| Other Sempra Energy                                  |   |   |   |   |
| Mobile Gas                                           |   |  (5) |   |  (16) |
| Ecogas                                               |   |  3  |   |  9  |
|     Total Other Sempra Energy    |   |  (2) |   |  (7) |
| Total Sempra Energy Consolidated                     | $ |  230  | $ |  (519) |
| (1)                                                  | Related to obligations discussed below in “Asset Retirement Obligations.” |

| NET REGULATORY ASSETS (LIABILITIES) AS PRESENTED ON THE CONSOLIDATED BALANCE SHEETS AT DECEMBER 31 |
|----------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                              |
|                                                                                               |   | 2011  |   | 2010  |
|                                                                                               |   | Sempra |   |   |   | Sempra |   |   |
|                                                                                               |   | Energy |   |   |   | Energy |   |   |
|                                                                                               |   | Consolidated | SDG&E | SoCalGas |   | Consolidated | SDG&E | SoCalGas |
| Current regulatory assets                                                                          | $ |  89  | $ |  78  | $ |  9  |   | $ |  90  | $ |  71  | $ |  12  |
| Noncurrent regulatory assets                                                                       |   |  2,780  |   |  1,824  |   |  945  |   |   |  2,167  |   |  1,451  |   |  709  |
| Current regulatory liabilities(1)                                                                  |   |  (1) |   |  ―  |   |  ―  |   |   |  (8) |   |  ―  |   |  ―  |
| Noncurrent regulatory liabilities                                                                  |   |  (2,638) |   |  (1,462) |   |  (1,162) |   |   |  (2,768) |   |  (1,409) |   |  (1,346) |
| Total                                                                                              | $ |  230  | $ |  440  | $ |  (208) |   | $ |  (519) | $ |  113  | $ |  (625) |
| (1)                                                                                                | Included in Other Current Liabilities. |

| §   | Regulatory assets arising from fixed-price contracts and other derivatives are offset by corresponding liabilities arising from purchased power and natural gas commodity and transportation contracts. The regulatory asset is increased/decreased based on changes in the fair market value of the contracts. It is also reduced as payments are made for commodities and services under these contracts. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Deferred taxes recoverable/refundable in rates are based on current regulatory ratemaking and income tax laws. SDG&E and SoCalGas expect to recover/refund net regulatory assets/liabilities related to deferred income taxes over the lives of the assets that give rise to the accumulated deferred income tax liabilities/assets. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Regulatory assets related to unamortized losses on reacquired debt are recovered over the remaining original amortization periods of the losses on reacquired debt. These periods range from 9 months to 16 years for SDG&E and from 2 years to 15 years for SoCalGas. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Regulatory assets related to environmental costs represent the portion of our environmental liability recognized at the end of the period in excess of the amount that has been recovered through rates charged to customers. We expect this amount to be recovered in future rates as expenditures are made. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Regulatory assets related to pension and other postretirement benefit obligations are offset by corresponding liabilities and are being recovered in rates as the plans are funded. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Regulatory assets arising from costs related to wildfire litigation are costs in excess of liability insurance coverage and amounts recovered, and to be recovered, from other potentially responsible parties, as we discuss in Note 15 under “SDG&E—2007 Wildfire Litigation.” |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | The regulatory asset related to the legacy meters removed from service and replaced under the Smart Meter Program is their undepreciated value. SDG&E expects to recover this asset over a remaining life of 28 years. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | quoted forward prices for commodities |
|--------------------|---------------------------------------|

| §   | time value |
|--------------------|------------|

| §   | current market and contractual prices for the underlying instruments |
|--------------------|----------------------------------------------------------------------|

| §   | volatility factors |
|--------------------|--------------------|

| §   | other relevant economic measures |
|--------------------|----------------------------------|

| COLLECTION ALLOWANCES                                   |
|---------------------------------------------------------|
| (Dollars in millions)                                   |
|                                                    | Years ended December 31, |
|                                                    | 2011  | 2010  | 2009  |
| Sempra Energy Consolidated                              |   |   |   |   |   |   |
| Allowances for collection of receivables at January 1   | $ |  29  | $ |  27  | $ |  29  |
| Provisions for uncollectible accounts                   |   |  20  |   |  22  |   |  25  |
| Write-offs of uncollectible accounts                    |   |  (20) |   |  (20) |   |  (27) |
| Allowances for collection of receivables at December 31 | $ |  29  | $ |  29  | $ |  27  |
| SDG&E                                               |   |   |   |   |   |   |
| Allowances for collection of receivables at January 1   | $ |  5  | $ |  4  | $ |  6  |
| Provisions for uncollectible accounts                   |   |  8  |   |  7  |   |  8  |
| Write-offs of uncollectible accounts                    |   |  (7) |   |  (6) |   |  (10) |
| Allowances for collection of receivables at December 31 | $ |  6  | $ |  5  | $ |  4  |
| SoCalGas                                                |   |   |   |   |   |   |
| Allowances for collection of receivables at January 1   | $ |  14  | $ |  16  | $ |  18  |
| Provisions for uncollectible accounts                   |   |  8  |   |  8  |   |  12  |
| Write-offs of uncollectible accounts                    |   |  (10) |   |  (10) |   |  (14) |
| Allowances for collection of receivables at December 31 | $ |  12  | $ |  14  | $ |  16  |

| INVENTORY BALANCES AT DECEMBER 31 |
|-----------------------------------|
| (Dollars in millions)             |
|                              |   | Sempra Energy |   |   |
|                              |   | Consolidated | SDG&E | SoCalGas |
|                              |   | 2011  | 2010  | 2011  | 2010  | 2011  | 2010  |
| Natural gas                       | $ |  195  | $ |  152  | $ |  6  | $ |  5  | $ |  128  | $ |  86  |
| Materials and supplies            |   |  151  |   |  106  |   |  76  |   |  66  |   |  23  |   |  19  |
| Total                             | $ |  346  | $ |  258  | $ |  82  | $ |  71  | $ |  151  | $ |  105  |

| §   | regulatory assets to offset deferred tax liabilities if it is probable that the amounts will be recovered from customers; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| §   | regulatory liabilities to offset deferred tax assets if it is probable that the amounts will be returned to customers. |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| §   | labor |
|--------------------|-------|

| §   | materials and contract services |
|--------------------|---------------------------------|

| §   | expenditures for replacement parts incurred during a major maintenance outage of a generating plant |
|--------------------|-----------------------------------------------------------------------------------------------------|

| PROPERTY, PLANT AND EQUIPMENT BY MAJOR FUNCTIONAL CATEGORY                               |
|------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                    |
|                                                                                     |   | Property, Plant |   | Depreciation rates for |
|                                                                                     |   | and Equipment at |   | years ended |
|                                                                                     |   | December 31, |   | December 31, |
|                                                                                     |   | 2011  | 2010  |   | 2011  | 2010  | 2009  |
| SDG&E:                                                                               |   |   |   |   |   |   |   |   |   |   |   |
|     Natural gas operations                                           | $ |  1,349  | $ |  1,280  |   |  3.15  | % |  3.00  | % |  2.84  | % |
|     Electric distribution                                            |   |  4,894  |   |  4,700  |   |  4.13  |   |  4.06  |   |  3.97  |   |
|     Electric transmission                                            |   |  1,938  |   |  1,795  |   |  2.74  |   |  2.70  |   |  2.67  |   |
|     Electric generation(1)                                           |   |  2,166  |   |  1,737  |   |  4.92  |   |  4.30  |   |  3.84  |   |
|     Other electric(2)                                                |   |  604  |   |  666  |   |  8.26  |   |  8.19  |   |  8.50  |   |
|     Construction work in progress                                    |   |  2,052  |   |  1,069  |   | NA |   | NA |   | NA |   |
|         Total SDG&E                          |   |  13,003  |   |  11,247  |   |   |   |   |   |   |   |
| SoCalGas:                                                                                |   |   |   |   |   |   |   |   |   |   |   |
|     Natural gas operations(3)                                        |   |  10,055  |   |  9,376  |   |  3.62  |   |  3.54  |   |  3.50  |   |
|     Other non-utility                                                |   |  129  |   |  126  |   |  1.62  |   |  1.74  |   |  1.41  |   |
|     Construction work in progress                                    |   |  381  |   |  322  |   | NA |   | NA |   | NA |   |
|         Total SoCalGas                           |   |  10,565  |   |  9,824  |   |   |   |   |   |   |   |
|                                                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Sempra Global and parent(4):                                                             |   |   |   |   |   | Estimated Useful Lives |
|     Land and land rights                                             |   |  292  |   |  194  |   | 25 to 50 years(5) |
|     Machinery and equipment:                                         |   |   |   |   |   |   |   |   |   |   |   |
|         Utility electric distribution operations |   |  1,267  |   |  ―  |   | 10 to 50 years |
|         Generating plants                        |   |  1,389  |   |  1,668  |   | 4 to 35 years |
|         LNG terminals                            |   |  2,059  |   |  2,049  |   | 3 to 50 years |
|         Pipelines and storage                    |   |  1,510  |   |  1,375  |   | 10 to 50 years |
|         Other                                    |   |  168  |   |  97  |   | 2 to 50 years |
|     Construction work in progress                                    |   |  849  |   |  428  |   |   |   | N/A |   |   |   |
|     Other                                                            |   |  201  |   |  205  |   | 3 to 50 years |
|                                                                                     |   |  7,735  |   |  6,016  |   |   |   |   |   |   |   |
|         Total Sempra Energy Consolidated         | $ |  31,303  | $ |  27,087  |   |   |   |   |   |   |   |
| (1)                                                                                      | Includes capital lease assets of $183 million and $182 million at December 31, 2011 and 2010, respectively. |
| (2)                                                                                      | Includes capital lease assets of $26 million at both December 31, 2011 and 2010. |
| (3)                                                                                      | Includes capital lease assets of $33 million at both December 31, 2011 and 2010. |
| (4)                                                                                      | December 31, 2011 balances include $163 million and $126 million of utility plant, primarily pipelines and other distribution assets, at Mobile Gas and Ecogas, respectively. December 31, 2010 balances include $156 million and $137 million of utility plant, primarily pipelines and other distribution assets, at Mobile Gas and Ecogas, respectively. |
| (5)                                                                                      | Estimated useful lives are for land rights. |

| ACCUMULATED DEPRECIATION AND DECOMMISSIONING AMOUNTS                                              |
|---------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                             |
|                                                                                              |   | December 31, |
|                                                                                              |   | 2011  | 2010  |
| SDG&E:                                                                                        |   |   |   |   |
|     Accumulated depreciation and decommissioning of utility plant in service: |   |   |   |   |
|         Electric(1)                                       | $ |  2,387  | $ |  2,152  |
|         Natural gas                                       |   |  576  |   |  542  |
|             Total SDG&E           |   |  2,963  |   |  2,694  |
| SoCalGas:                                                                                         |   |   |   |   |
|     Accumulated depreciation of natural gas utility plant in service(2)       |   |  3,863  |   |  3,702  |
|     Accumulated depreciation – other non-utility                        |   |  102  |   |  100  |
|             Total SoCalGas            |   |  3,965  |   |  3,802  |
| Sempra Global and parent:                                                                         |   |   |   |   |
|     Accumulated depreciation – other non-utility(3)                     |   |  759  |   |  715  |
|     Accumulated depreciation of utility electric distribution operations      |   |  44  |   |  ―  |
|                                                                                              |   |   |  803  |   |  715  |
| Total Sempra Energy Consolidated                                                                  | $ |  7,731  | $ |  7,211  |
| (1)                                                                                               | Includes accumulated depreciation for assets under capital lease of $16 million and $7 million at December 31, 2011 and 2010, respectively. |
| (2)                                                                                               | Includes accumulated depreciation for assets under capital lease of $22 million and $14 million at December 31, 2011 and 2010, respectively. |
| (3)                                                                                               | December 31, 2011 balances include $15 million and $28 million of accumulated depreciation for utility plant at Mobile Gas and Ecogas, respectively. December 31, 2010 balances include $9 million and $29 million of accumulated depreciation for utility plant at Mobile Gas and Ecogas, respectively. |

| CAPITALIZED FINANCING COSTS                                                      |
|----------------------------------------------------------------------------------|
| (Dollars in millions)                                                            |
|                                                                             | Years ended December 31, |
|                                                                             | 2011  | 2010  | 2009  |
| Sempra Energy Consolidated:                                                      |   |   |   |   |   |   |
|     AFUDC related to debt                                    | $ |  40  | $ |  24  | $ |  15  |
|     AFUDC related to equity                                  |   |  99  |   |  57  |   |  39  |
|     Other capitalized financing costs                        |   |  26  |   |  33  |   |  73  |
|         Total Sempra Energy Consolidated | $ |  165  | $ |  114  | $ |  127  |
| SDG&E:                                                                       |   |   |   |   |   |   |
|     AFUDC related to debt                                    | $ |  33  | $ |  18  | $ |  10  |
|     AFUDC related to equity                                  |   |  80  |   |  43  |   |  29  |
|     Other capitalized financing costs                        |   |  ―  |   |  ―  |   |  4  |
|         Total SDG&E                  | $ |  113  | $ |  61  | $ |  43  |
| SoCalGas:                                                                        |   |   |   |   |   |   |
|     AFUDC related to debt                                    | $ |  7  | $ |  6  | $ |  5  |
|     AFUDC related to equity                                  |   |  19  |   |  14  |   |  10  |
|     Other capitalized financing costs                        |   |  ―  |   |  ―  |   |  1  |
|         Total SoCalGas                   | $ |  26  | $ |  20  | $ |  16  |

| GOODWILL                                                                        |                                                                    |              |            |                |      |              |
|---------------------------------------------------------------------------------|-------------------------------------------------------------------------|-------------------|-----------------|---------------------|-----------|-------------------|
| (Dollars in millions)                                                           |                                                                    |              |            |                |      |              |
|                                                                            |                                                                    |              | Sempra          |                |      |              |   |
|                                                                            |                                                                    |              | Pipelines & |                | Parent    |              |   |
|                                                                            |                                                                    |              | Storage         |                | and Other |              | Total |
| Balance as of December 31, 2009                                                 | $                                                                       |  62     | $               |  6        | $         |  68     |
| Acquisition of Mexican pipeline and natural gas infrastructure assets and other |                                                                    |  19     |            |  ―  |      |  19     |
| Balance as of December 31, 2010                                                 |                                                                    |  81     |            |  6        |      |  87     |
| Acquisition of Chilquinta Energía and Luz del Sur                          |                                                                    |  975    |            |  ―  |      |  975    |
| Foreign currency translation(1)                                                 |                                                                    |  (26)        |            |  ―  |      |  (26)        |
| Balance at December 31, 2011                                                    | $                                                                       |  1,030  | $               |  6        | $         |  1,036  |
| (1)                                                                             | We record the offset of this fluctuation to other comprehensive income. |              |            |                |      |              |   |
|                                                                            |                                                                    |              |            |                |      |              |   |

| OTHER INTANGIBLE ASSETS        |                   |         |            |   |            |
|--------------------------------|------------------------|--------------|-----------------|--------|-----------------|
| (Dollars in millions)          |                   |         |            |   |            |
|                           | Amortization period    | December 31, | December 31,    |
|                           | (years)                | 2011    | 2010       |
| Storage rights                 | 46                | $            |  138  | $      |  138  |
| Development rights             | 50                |         |  322  |   |  322  |
| Other                          | 11 years to indefinite |         |  21   |   |  16   |
|                           |                   |         |  481  |   |  476  |
| Less accumulated amortization: |                   |         |            |   |            |
| Storage rights                 |                   |         |  (21)      |   |  (14)      |
| Development rights             |                   |         |  (10)      |   |  (7)       |
| Other                          |                   |         |  (2)       |   |  (2)       |
|                           |                   |         |  (33)      |   |  (23)      |
| Total                          |                   |  $      |  448  | $      |  453  |

| §   | the purpose and design of the VIE; |
|--------------------|------------------------------------|

| §   | the nature of the VIE’s risks and the risks we absorb; |
|--------------------|--------------------------------------------------------------|

| §   | the power to direct activities that most significantly impact the economic performance of the VIE; and |
|--------------------|--------------------------------------------------------------------------------------------------------|

| §   | the obligation to absorb losses or right to receive benefits that could be significant to the VIE. |
|--------------------|----------------------------------------------------------------------------------------------------|

| AMOUNTS ASSOCIATED WITH OTAY MESA VIE                                    |
|--------------------------------------------------------------------------|
| (Dollars in millions)                                                    |
|                                                                     |   |   | December 31, |
|                                                                     |   |   | 2011  | 2010 |
| Cash and cash equivalents                                                | $ |  12  | $ |  10  |
| Restricted cash                                                          |   |   |   |   |   |  7  |   |  6  |
| Accounts receivable - trade                                              |   |   |   |   |   |  7  |   |  ―  |
| Accounts receivable - other                                              |   |   |   |   |   |  ―  |   |  (1) |
| Inventories                                                              |   |  2  |   |  2  |
| Other                                                                    |   |  1  |   |  1  |
|     Total current assets                             |   |  29  |   |  18  |
| Restricted cash                                                          |   |   |   |   |   |  22  |   |  ―  |
| Sundry                                                                   |   |  6  |   |  6  |
| Property, plant and equipment, net                                       |   |  494  |   |  516  |
|     Total assets                                     | $ |  551  | $ |  540  |
|                                                                     |   |   |   |   |
| Current portion of long-term debt                                        | $ |  10  | $ |  10  |
| Fixed-price contracts and other derivatives                              |   |  16  |   |  17  |
| Other                                                                    |   |  9  |   |  1  |
|     Total current liabilities                        |   |  35  |   |  28  |
| Long-term debt                                                           |   |  345  |   |  355  |
| Fixed-price contracts and other derivatives                              |   |  65  |   |  41  |
| Deferred credits and other                                               |   |  4  |   |  3  |
| Other noncontrolling interest                                            |   |  102  |   |  113  |
|     Total liabilities and equity                     | $ |  551  | $ |  540  |
|                                                                     |   |   |   |   |   |   |   |   |   |
|                                                                     |   |   |   | Years ended December 31, |
|                                                                     |   |   | 2011  | 2010  | 2009 |
|                                                                     |   |   |   |   |   |   |
| Operating revenues                                                       |   |   |   |   |   |   |
|     Electric                                         |   |   | $ |  ―  | $ |  (1) | $ |  (1) |
|     Natural gas                                      |   |   |   |  ―  |   |  (3) |   |  ―  |
|         Total operating revenues |   |   |   |  ―  |   |  (4) |   |  (1) |
| Operating expenses                                                       |   |   |   |   |   |   |
|     Cost of electric fuel and purchased power        |   |  (72) |   |  (82) |   |  (13) |
|     Operation and maintenance                        |  19  |   |  20  |   |  7  |
|     Depreciation and amortization                    |   |   |   |  22  |   |  26  |   |  7  |
|         Total operating expenses |   |   |   |  (31) |   |  (36) |   |  1  |
| Operating income (loss)                                                  |   |   |   |  31  |   |  32  |   |  (2) |
| Other (expense) income, net                                              |   |   |   |  (1) |   |  (34) |   |  27  |
| Interest expense                                                         |   |   |   |  (11) |   |  (14) |   |  (1) |
| Income (loss) before income taxes/Net income (loss)                      |   |  19  |   |  (16) |   |  24  |
| (Earnings) losses attributable to noncontrolling interest                |   |  (19) |   |  16  |   |  (24) |
|     Earnings                                         | $ |  ―  | $ |  ―  | $ |  ―  |

| §   | fuel and storage tanks |
|--------------------|------------------------|

| §   | natural gas distribution system |
|--------------------|---------------------------------|

| §   | hazardous waste storage facilities |
|--------------------|------------------------------------|

| §   | asbestos-containing construction materials |
|--------------------|--------------------------------------------|

| §   | decommissioning of nuclear power facilities |
|--------------------|---------------------------------------------|

| §   | electric distribution and transmission systems |
|--------------------|------------------------------------------------|

| §   | site restoration of a former power plant |
|--------------------|------------------------------------------|

| §   | power generation plant (natural gas) |
|--------------------|--------------------------------------|

| §   | natural gas transmission pipelines |
|--------------------|------------------------------------|

| §   | underground natural gas storage facilities and wells |
|--------------------|------------------------------------------------------|

| §   | certain power generation plants (natural gas and solar) |
|--------------------|---------------------------------------------------------|

| §   | natural gas distribution and transportation systems |
|--------------------|-----------------------------------------------------|

| §   | LNG terminal |
|--------------------|--------------|

| CHANGES IN ASSET RETIREMENT OBLIGATIONS |
|-----------------------------------------|
| (Dollars in millions)                   |
|                                    |   | Sempra Energy |   |   |   |   |   |   |
|                                    |   | Consolidated |   | SDG&E |   | SoCalGas |
|                                    |   | 2011  | 2010  |   | 2011  | 2010  |   | 2011  | 2010  |
| Balance as of January 1(1)              | $ |  1,468  | $ |  1,313  |   | $ |  623  | $ |  590  |   | $ |  803  | $ |  676  |
| Accretion expense                       |   |  82  |   |  77  |   |   |  38  |   |  37  |   |   |  41  |   |  38  |
| Liabilities incurred                    |   |  12  |   |  10  |   |   |  3  |   |  ―  |   |   |  ―  |   |  ―  |
| Payments                                |   |  (1) |   |  (17) |   |   |  ―  |   |  ―  |   |   |  ―  |   |  (2) |
| Revisions(2,3)                          |   |  364  |   |  85  |   |   |  34  |   |  (4) |   |   |  331  |   |  91  |
| Balance as of December 31(1)            | $ |  1,925  | $ |  1,468  |   | $ |  698  | $ |  623  |   | $ |  1,175  | $ |  803  |
| (1)                                     | The current portions of the obligations are included in Other Current Liabilities on the Consolidated Balance Sheets. |
| (2)                                     | The increase in obligations at SDG&E and SoCalGas for revisions in 2011 resulted from changes in assets in service and a decrease in the discount rate from 5.13 percent in 2010 to 4.00 percent in 2011, based on the risk-free rate plus an estimated credit spread. |
| (3)                                     | The increase in obligations at SoCalGas for revisions in 2010 resulted from changes in assets in service and a decrease in the discount rate from 5.54 percent in 2009 to 5.13 percent in 2010, based on the risk-free rate plus an estimated credit spread. |

| §   | information available through the date we file our financial statements indicates it is probable that a loss has been incurred, given the likelihood of uncertain future events; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | the amounts of the loss can be reasonably estimated. |
|--------------------|------------------------------------------------------|

| §   | foreign-currency translation adjustments |
|--------------------|------------------------------------------|

| §   | changes in unamortized net actuarial gain or loss and prior service cost related to pension and other postretirement benefits plans |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| §   | unrealized gains or losses on available-for-sale securities |
|--------------------|-------------------------------------------------------------|

| §   | certain hedging activities |
|--------------------|----------------------------|

| ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) AND |
|---------------------------------------------------|
| ASSOCIATED INCOME TAX EXPENSE (BENEFIT)           |
| (Dollars in millions)                             |
|                                              | Accumulated OtherComprehensiveIncome (Loss) | Income TaxExpense (Benefit) |
|                                              | 2011  | 2010  | 2011  | 2010  |
| Sempra Energy Consolidated                        |   |   |   |   |   |   |   |   |
| Foreign currency translation loss                 | $ |  (359) | $ |  (229) | $ |  (3) | $ |  ―  |
| Financial instruments                             |   |  (31) |   |  (15) |   |  (22) |   |  (12) |
| Unrealized gains on available-for-sale securities |   |  ―  |   |  1  |   |  ―  |   |  1  |
| Unamortized net actuarial loss                    |   |  (100) |   |  (88) |   |  (68) |   |  (60) |
| Unamortized prior service credit                  |   |  1  |   |  1  |   |  1  |   |  1  |
| Balance as of December 31                         | $ |  (489) | $ |  (330) | $ |  (92) | $ |  (70) |
| SDG&E                                         |   |   |   |   |   |   |   |   |
| Unamortized net actuarial loss                    | $ |  (11) | $ |  (11) | $ |  (8) | $ |  (8) |
| Unamortized prior service credit                  |   |  1  |   |  1  |   |  1  |   |  1  |
| Balance as of December 31                         | $ |  (10) | $ |  (10) | $ |  (7) | $ |  (7) |
| SoCalGas                                          |   |   |   |   |   |   |   |   |
| Unamortized net actuarial loss                    | $ |  (6) | $ |  (5) | $ |  (4) | $ |  (4) |
| Unamortized prior service credit                  |   |  1  |   |  1  |   |  ―  |   |  1  |
| Financial instruments                             |   |  (16) |   |  (18) |   |  (11) |   |  (12) |
| Balance as of December 31                         | $ |  (21) | $ |  (22) | $ |  (15) | $ |  (15) |

| OWNERSHIP INTERESTS HELD BY OTHERS AS OF DECEMBER 31    |                                                                      |                             |
|---------------------------------------------------------|---------------------------------------------------------------------------|----------------------------------|
| (Dollars in millions)                                   |                                                                      |                             |
|                                                    |                                                                      | Percent Ownership Held by Others |   |   | 2011  |   | 2010  |
| Bay Gas(1)                                              | 9                                                                    | %                                | $ |  17  | $ |  15  |
| Southern Gas Transmission(1)                            | 49                                                                   |                             |   |  1  |   |  1  |
| Liberty                                                 | 25                                                                   |                             |   |  9  |   |  (18) |
| Tecsur(2)                                               | 10                                                                   |                             |   |  4  |   |  -  |
| Luz del Sur(2)                                          | 20                                                                   |                             |   |  216  |   |  -  |
| Chilquinta Energía(2)                              | 15 - 43                                                                   |                             |   |  34  |   |  -  |
| Otay Mesa VIE (at SDG&E)                            | 100                                                                  |                             |   |  102  |   |  113  |
|       Total Sempra Energy |                                                                      |                             | $ |  383  | $ |  111  |
|  (1)                                               | Part of Sempra Pipelines & Storage’s Sempra Midstream business. |
|  (2)                                               | Controlling interest acquired in 2011.                                    |

| TOTAL UTILITIES REVENUES AT SEMPRA ENERGY CONSOLIDATED(1) |
|-----------------------------------------------------------|
| (Dollars in millions)                                     |
|                                                      |   | Years ended December 31, |
|                                                      |   | 2011  | 2010  | 2009  |
| Natural gas revenues                                      | $ |  4,489  | $ |  4,491  | $ |  4,002  |
| Electric revenues                                         |   |  3,833  |   |  2,528  |   |  2,419  |
| Total                                                     | $ |  8,322  | $ |  7,019  | $ |  6,421  |
| (1)                                                       | Excludes intercompany revenues. |   |   |   |   |   |   |

|                    |                                                                                                                                                                                                                                                                                                                                                                          |    | Upward (downward)adjustment to investments |
|-------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|--------------------------------------------|
| Investment              | Currency                                                                                                                                                                                                                                                                                                                                                                      | 2011(1) | 2010                                  | 2009  |
| Chilquinta Energía | Chilean Peso                                                                                                                                                                                                                                                                                                                                                                  | $       |  (10)                                 | $ |  34  | $ |  85  |
| Luz del Sur             | Peruvian Nuevo Sol                                                                                                                                                                                                                                                                                                                                                            |    |  ―                         |   |  5  |   |  13  |
| (1)                     | As discussed in Note 3, the cumulative foreign currency translation adjustment balances totaling $54 million in Accumulated Other Comprehensive Income (Loss) as of April 6, 2011 were reclassified to net income as a result of the gain on the remeasurement of our equity method investments in Chilquinta Energía and Luz del Sur during the second quarter of 2011. |

|                      | Years ended December 31, |
|---------------------------|--------------------------|
| (Dollars in millions)     | 2011                | 2010  | 2009  |
| Currency transaction gain | $                        |  11  | $ |  4  | $ |  3  |

| AMOUNTS DUE TO AND FROM AFFILIATES AT SDG&E AND SOCALGAS        |
|---------------------------------------------------------------------|
| (Dollars in millions)                                               |
|                                                                |   | December 31, |
|                                                                | 2011  | 2010  |
| SDG&E                                                           |   |   |   |   |
| Current:                                                            |   |   |   |   |
|     Due from SoCalGas                           | $ |  2  | $ |  11  |
|     Due from various affiliates                 |   |  65  |   |  1  |
|                                                                | $ |  67  | $ |  12  |
|                                                                |   |   |   |   |
|     Due to Sempra Energy                        | $ |  14  | $ |  16  |
|                                                                |   |   |   |   |
|     Income taxes due from Sempra Energy(1)      | $ |  97  | $ |  25  |
|                                                                |   |   |   |   |
| SoCalGas                                                            |   |   |   |   |
| Current:                                                            |   |   |   |   |
|     Due from Sempra Energy                      | $ |  23  | $ |  60  |
|     Due from various affiliates                 |   |  17  |   |  ―  |
|     Due from RBS Sempra Commodities             |   |  ―  |   |  3  |
|                                                                |   | $ |  40  | $ |  63  |
|                                                                |   |   |   |   |   |
|     Due to SDG&E                            | $ |  2  | $ |  11  |
|                                                                |   |   |   |   |
|     Income taxes due from (to) Sempra Energy(1) | $ |  17  | $ |  (3) |
| (1)                                                                 | SDG&E and SoCalGas are included in the consolidated income tax return of Sempra Energy and are allocated income tax expense from Sempra Energy in an amount equal to that which would result from the companies’ having always filed a separate return. |

| REVENUES FROM UNCONSOLIDATED AFFILIATES AT UTILITY BUSINESSES |
|---------------------------------------------------------------|
| (Dollars in millions)                                         |
|                                                          | Years ended December 31, |
|                                                          | 2011  | 2010  | 2009  |
| SDG&E                                                     | $ |  7  | $ |  8  | $ |  8  |
| SoCalGas                                                      |   |  53  |   |  44  |   |  43  |

| AMOUNTS RECORDED FOR TRANSACTIONS WITH RBS SEMPRA COMMODITIES        |                                                                                                                                                                                                                                                                                                                |                |
|----------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|
| (Dollars in millions)                                                |                                                                                                                                                                                                                                                                                                                |                |
|                                                                 |                                                                                                                                                                                                                                                                                                                |                | Years ended December 31, |
|                                                                 |                                                                                                                                                                                                                                                                                                                |                | 2011(1) | 2010 |   | 2009  |
| Revenues:                                                            |                                                                                                                                                                                                                                                                                                                |                |   |   |   |   |
|     SoCalGas                                     | $                                                                                                                                                                                                                                                                                                                   |  ―  | $ |  14  | $ |  13  |
|     Sempra Generation                            |                                                                                                                                                                                                                                                                                                                |  4        |   |  19  |   |  11  |
|     Sempra Pipelines & Storage               |                                                                                                                                                                                                                                                                                                                |  ―  |   |  ―  |   |  3  |
|     Sempra LNG                                   |                                                                                                                                                                                                                                                                                                                |  40       |   |  247  |   |  60  |
|                                                                 |                                                                                                                                                                                                                                                                                                                |                |   |   |   |   |
| Cost of natural gas:                                                 |                                                                                                                                                                                                                                                                                                                |                |   |   |   |   |
|     SDG&E                                    | $                                                                                                                                                                                                                                                                                                                   |  ―  | $ |  3  | $ |  4  |
|     SoCalGas                                     |                                                                                                                                                                                                                                                                                                                |  ―  |   |  36  |   |  19  |
|     Sempra Generation                            |                                                                                                                                                                                                                                                                                                                |  30       |   |  87  |   |  1  |
|     Sempra Pipelines & Storage               |                                                                                                                                                                                                                                                                                                                |  17       |   |  28  |   |  25  |
|     Sempra LNG                                   |                                                                                                                                                                                                                                                                                                                |  30       |   |  255  |   |  61  |
| (1)                                                                  | With the exception of Sempra Pipelines & Storage, whose contract with RBS Sempra Commodities expired in July 2011, amounts only include activities prior to May 1, 2011, the date by which substantially all the contracts with RBS Sempra Commodities were assigned to buyers of the joint venture businesses. |
|                                                                 |                                                                                                                                                                                                                                                                                                                |                | December 31, |   |   |   |   |
|                                                                 |                                                                                                                                                                                                                                                                                                                |                | 2010  |   |   |   |   |
| Fixed-price contracts and other derivatives - Net Asset (Liability): |                                                                                                                                                                                                                                                                                                                |                |   |   |   |   |
|     Sempra Generation                            | $                                                                                                                                                                                                                                                                                                                   |  17       |   |   |   |   |
|     Sempra LNG                                   |                                                                                                                                                                                                                                                                                                                |  (35)          |   |   |   |   |
|         Total                | $                                                                                                                                                                                                                                                                                                                   |  (18)          |   |   |   |   |
|                                                                 |                                                                                                                                                                                                                                                                                                                |                |   |   |   |   |
| Due to unconsolidated affiliates:                                    |                                                                                                                                                                                                                                                                                                                |                |   |   |   |   |
|     Sempra Generation                            | $                                                                                                                                                                                                                                                                                                                   |  11       |   |   |   |   |
|     Sempra LNG                                   |                                                                                                                                                                                                                                                                                                                |  13       |   |   |   |   |
|     Sempra Commodities                           |                                                                                                                                                                                                                                                                                                                |                |  11  |   |   |   |   |
|         Total                | $                                                                                                                                                                                                                                                                                                                   |  35       |   |   |   |   |
|                                                                 |                                                                                                                                                                                                                                                                                                                |                |   |   |   |   |
| Due from unconsolidated affiliates:                                  |                                                                                                                                                                                                                                                                                                                |                |   |   |   |   |
|     SoCalGas                                     |                                                                                                                                                                                                                                                                                                                | $                   |  3  |   |   |   |   |
|     Sempra Generation                            |                                                                                                                                                                                                                                                                                                                |  13       |   |   |   |   |
|     Sempra LNG                                   |                                                                                                                                                                                                                                                                                                                |  13       |   |   |   |   |
|     Parent and other                             |                                                                                                                                                                                                                                                                                                                |  5        |   |   |   |   |
|         Total                | $                                                                                                                                                                                                                                                                                                                   |  34       |   |   |   |   |
|                                                                 |                                                                                                                                                                                                                                                                                                                |                |   |

| §   | Wholly owned Mobile Gas has long-term debt instruments containing restrictions relating to the payment of dividends and other distributions with respect to capital stock.  Under these restrictions, net assets of approximately $116 million are restricted at December 31, 2011. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | 91-percent owned Bay Gas has long-term debt instruments containing restrictions relating to the payment of dividends and other distributions if Bay Gas does not maintain a specified debt service coverage ratio.  Bay Gas had no restricted net assets at December 31, 2011. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | 50-percent owned Fowler Ridge 2 Wind Farm (Fowler Ridge 2) and Cedar Creek 2 Wind Farm (Cedar Creek 2) have debt agreements which require each joint venture to maintain reserve accounts in order to pay the projects’ debt service and operation and maintenance requirements. As a result of these requirements, total joint venture net assets of approximately $23 million at Fowler Ridge 2 and $18 million at Cedar Creek 2, respectively, are restricted at December 31, 2011. We discuss Sempra Energy guarantees associated with these requirements in Note 5. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Peru and Mexico require domestic corporations to maintain minimum reserves for future litigation expense as a percentage of capital stock, resulting in restricted net assets of $35 million at Luz del Sur and $22 million at Sempra Energy’s Mexican subsidiaries as of December 31, 2011. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | The CPUC requires that SDG&E’s and SoCalGas’ common equity ratios be no lower than one percentage point below the CPUC authorized percentage of each entity’s authorized capital structure, which is currently: |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | 49 percent at SDG&E |
|--------------------|-------------------------|

| §   | 48 percent at SoCalGas |
|--------------------|------------------------|

| §   | The FERC requires SDG&E to maintain a common equity ratio of 30 percent or above |
|--------------------|--------------------------------------------------------------------------------------|

| §   | The Sempra Utilities have a combined revolving credit line that requires each utility to maintain a ratio of consolidated indebtedness to consolidated capitalization (as defined in the agreement) of no more than 65 percent, as we discuss in Note 5 |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| OTHER INCOME, NET                                                   |
|---------------------------------------------------------------------|
| (Dollars in millions)                                               |
|                                                                |   | Years ended December 31, |
|                                                                |   | 2011  | 2010 | 2009 |
| Sempra Energy Consolidated:                                         |   |   |   |   |   |   |
| Allowance for equity funds used during construction                 | $ |  99  | $ |  57  | $ |  39  |
| Investment gains(1)                                                 |   |  22  |   |  35  |   |  55  |
| (Losses) gains on interest rate and foreign exchange instruments(2) |   |  (14) |   |  (24) |   |  33  |
| Regulatory interest income, net(3)                                  |   |  2  |   |  1  |   |  4  |
| Sundry, net(4)                                                      |   |  21  |   |  71  |   |  18  |
|                                                                | Total | $ |  130  | $ |  140  | $ |  149  |
| SDG&E:                                                          |   |   |   |   |   |   |
| Allowance for equity funds used during construction                 | $ |  80  | $ |  43  | $ |  29  |
| Regulatory interest income, net(3)                                  |   |  2  |   |  ―  |   |  5  |
| (Losses) gains on interest rate instruments(5)                      |   |  (1) |   |  (34) |   |  27  |
| Sundry, net                                                         |   |  (2) |   |  1  |   |  3  |
|                                                                | Total | $ |  79  | $ |  10  | $ |  64  |
| SoCalGas:                                                           |   |   |   |   |   |   |
| Allowance for equity funds used during construction                 | $ |  19  | $ |  14  | $ |  10  |
| Regulatory interest income (expense), net(3)                        |   |  ―  |   |  1  |   |  (1) |
| Sundry, net                                                         |   |  (6) |   |  (3) |   |  (2) |
|                                                                | Total | $ |  13  | $ |  12  | $ |  7  |
| (1)                                                                 | Represents investment gains on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are partially offset by corresponding changes in compensation expense related to the plans. |
| (2)                                                                 | Sempra Energy Consolidated includes Otay Mesa VIE and additional instruments. |   |   |
| (3)                                                                 | Interest on regulatory balancing accounts. |
| (4)                                                                 | Amount in 2010 includes proceeds of $48 million from a legal settlement. |
| (5)                                                                 | Related to Otay Mesa VIE. |   |   |   |   |   |   |

----

| §   | quantitative information about the unobservable inputs |
|--------------------|--------------------------------------------------------|

| §   | a description of the valuation process |
|--------------------|----------------------------------------|

| §   | a qualitative discussion about the sensitivity of the measurements |
|--------------------|--------------------------------------------------------------------|

----

| PURCHASE PRICE ALLOCATION                    |
|----------------------------------------------|
| (Dollars in millions)                        |
|                                         |   |   | At April 6, 2011 |
|                                         |   |   |   |   |   |   |   | Other |   |   |   |   |   |   |
|                                         |   |   |   | Chilean |   | Peruvian |   | holding |   | Preliminary |   | Adjust- |   | Adjusted |
|                                         |   |  entities |   | entities |   | companies |   | Allocation |   | ments |   | Allocation |
| Fair value of businesses acquired:           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         | Cash consideration (fair value of total |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |     consideration) | $ |  495  | $ |  385  | $ |  8  | $ |  888  | $ |  ―  | $ |  888  |
|                                         | Fair value of equity method |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |     investments immediately prior to |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |     the acquisition |   |  495  |   |  385  |   |  2  |   |  882  |   |  ―  |   |  882  |
|                                         | Fair value of noncontrolling interests |   |  37  |   |  242  |   |  ―  |   |  279  |   |  ―  |   |  279  |
| Total fair value of businesses acquired      |   |  1,027  |   |  1,012  |   |  10  |   |  2,049  |   |  ―  |   |  2,049  |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recognized amounts of identifiable assets    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         | acquired and liabilities assumed: |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |   | Cash |   |  219  |   |  22  |   |  4  |   |  245  |   |  ―  |   |  245  |
|                                         |   | Accounts receivable(1) |   |  159  |   |  101  |   |  6  |   |  266  |   |  (2) |   |  264  |
|                                         |   | Other current assets |   |  20  |   |  19  |   |  ―  |   |  39  |   |  2  |   |  41  |
|                                         |   | Property, plant and equipment |   |  554  |   |  931  |   |  ―  |   |  1,485  |   |  1  |   |  1,486  |
|                                         |   | Other noncurrent assets |   |  66  |   |  ―  |   |  ―  |   |  66  |   |  1  |   |  67  |
|                                         |   | Accounts payable |   |  (79) |   |  (59) |   |  ―  |   |  (138) |   |  6  |   |  (132) |
|                                         |   | Short-term debt and current portion |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |   |     of long-term debt |   |  ―  |   |  (47) |   |  ―  |   |  (47) |   |  ―  |   |  (47) |
|                                         |   | Other current liabilities |   |  (29) |   |  (56) |   |  ―  |   |  (85) |   |  (4) |   |  (89) |
|                                         |   | Long-term debt |   |  (294) |   |  (179) |   |  ―  |   |  (473) |   |  (11) |   |  (484) |
|                                         |   | Other noncurrent liabilities |   |  (90) |   |  (178) |   |  ―  |   |  (268) |   |  (9) |   |  (277) |
| Total identifiable net assets                |   |  526  |   |  554  |   |  10  |   |  1,090  |   |  (16) |   |  1,074  |
| Goodwill                                     | $ |  501  | $ |  458  | $ |  ―  | $ |  959  | $ |  16  | $ |  975  |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition-related costs (included in Other |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         | Operation and Maintenance expense on |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         | the Consolidated Statement of |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         | Operations for the year ended |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         | December 31, 2011) | $ |  1  | $ |  1  | $ |  ―  | $ |  2  | $ |  ―  | $ |  2  |
| (1)                                          | We expect acquired accounts receivable to be substantially realizable in cash. Accounts receivable are net of collection allowances of $6 million for Chile and $1 million for Peru. |

| §   | the replacement cost approach for property, plant and equipment; and |
|--------------------|----------------------------------------------------------------------|

| §   | goodwill associated primarily with the value of residual future cash flows that we believe these businesses will generate, to be tested annually for impairment.  For income tax purposes, none of the goodwill recorded is deductible in Chile, Peru or the United States. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  |                                                                                                                                                                                | Years ended December 31, |
|-----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|
| (Dollars in millions) | 2011                                                                                                                                                                           | 2010                |
| Revenues              | $                                                                                                                                                                                   |  10,379        | $ |  10,277  |
| Earnings(1)           |                                                                                                                                                                                |  1,105         |   |  1,092  |
| (1)                   | Pro forma earnings for 2010 include the $277 million gain related to the remeasurement of equity method investments, and accordingly, pro forma earnings for 2011 exclude the gain. |

| (Dollars in millions)                                                          | At April 30, 2010                                                                                                                                                                                                                                                                                                        |
|--------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Cash consideration (fair value of total consideration)                         | $                                                                                                                                                                                                                                                                                                                        |  307  |
| Recognized amounts of identifiable assets acquired and liabilities assumed:    |                                                                                                                                                                                                                                                                                                                     |   |
|                                                                           | Cash                                                                                                                                                                                                                                                                                                                     |   |  15  |
|                                                                           | Accounts receivable                                                                                                                                                                                                                                                                                                      |   |  4  |
|                                                                           | Investment in equity method investee                                                                                                                                                                                                                                                                                     |   |  256  |
|                                                                           | Property, plant & equipment                                                                                                                                                                                                                                                                                          |   |  25  |
|                                                                           | Other liabilities                                                                                                                                                                                                                                                                                                        |   |  (11) |
| Total identifiable net assets                                                  |                                                                                                                                                                                                                                                                                                                     |  289  |
| Goodwill(1)                                                                    | $                                                                                                                                                                                                                                                                                                                        |  18  |
|                                                                           |                                                                                                                                                                                                                                                                                                                     |   |   |   |
| Acquisition-related costs (included in Other Operation and Maintenance expense |                                                                                                                                                                                                                                                                                                                     |   |
|                                                                           | on the Consolidated Statement of Operations for the year ended                                                                                                                                                                                                                                                           |   |   |
|                                                                           | December 31, 2010)                                                                                                                                                                                                                                                                                                       | $ |  1  |
| (1)                                                                            | The goodwill, which represents the residual of the consideration paid over the identifiable net assets, is assigned to the Sempra Pipelines & Storage segment and is attributed to the strategic value of the transaction.  None of the goodwill recorded is deductible in Mexico for income tax purposes. |

----

| EQUITY METHOD AND OTHER INVESTMENTS ON THE CONSOLIDATED BALANCE SHEETS     |
|----------------------------------------------------------------------------|
| (Dollars in millions)                                                      |
|                                                                       |   | Investment at December 31, |
|                                                                       |   | 2011  | 2010  |
| Parent and other:                                                          |   |   |   |   |
|     Investment in RBS Sempra Commodities LLP           | $ |  126  | $ |  787  |
| Other equity method investments:                                           |   |   |   |   |
|     Sempra Generation:                                 |   |   |   |   |
|         Auwahi Wind                | $ |  11  | $ |  ―  |
|         Cedar Creek 2 Wind Farm    |   |  95  |   |  113  |
|         Fowler Ridge 2 Wind Farm   |   |  50  |   |  72  |
|         Flat Ridge 2 Wind Farm     |   |  146  |   |  ―  |
|         Mehoopany Wind Farm        |   |  88  |   |  ―  |
|     Sempra Pipelines & Storage:                    |   |   |   |   |
|         Rockies Express            |   |  800  |   |  854  |
|         Gasoductos de Chihuahua    |   |  302  |   |  275  |
|         Chilquinta Energía(1) |   |  ―  |   |  432  |
|         Luz del Sur(1)             |   |  ―  |   |  216  |
|     Parent and other:                                  |   |   |   |   |
|         Housing partnerships       |   |  11  |   |  16  |
| Total other equity method investments                                      |   |  1,503  |   |  1,978  |
| Cost method investments - housing partnerships                             |   |  10  |   |  12  |
| Other(2)                                                                   |   |  32  |   |  174  |
| Total                                                                      | $ |  1,545  | $ |  2,164  |
| (1)                                                                        | Sempra Pipelines & Storage’s interests in Chilquinta Energía and Luz del Sur are no longer recorded as equity method investments, but are consolidated effective April 6, 2011 (discussed below and in Note 3). |
| (2)                                                                        | Other includes Sempra Pipelines & Storage’s investments in bonds, which include $57 million in Chilquinta Energía bonds at December 31, 2010 (discussed in Note 5); $21 million and $117 million in industrial development bonds at Mississippi Hub at December 31, 2011 and 2010, respectively (discussed in Note 5); and $11 million in real estate investments held by Sempra Pipelines & Storage at December 31, 2011. |

| EQUITY METHOD INVESTMENTS ON THE CONSOLIDATED STATEMENTS OF OPERATIONS |
|------------------------------------------------------------------------|
| (Dollars in millions)                                                  |
|                                                                   |   | Years ended December 31, |
|                                                                   |   | 2011  | 2010  | 2009  |
| Earnings (losses) recorded before income tax:                          |   |   |   |   |   |   |
| Sempra Generation:                                                     |   |   |   |   |   |   |
|     Fowler Ridge 2 Wind Farm                       | $ |  (4) | $ |  1  | $ |  1  |
|     Cedar Creek 2 Wind Farm                        |   |  (2) |   |  ―  |   |  ―  |
|     Elk Hills Power                                |   |  ―  |   |  (13) |   |  (3) |
| Sempra Pipelines & Storage:                                        |   |   |   |   |   |   |
|     Rockies Express                                |   |  43  |   |  43  |   |  50  |
| Parent and other:                                                      |   |   |   |   |   |   |
|     RBS Sempra Commodities LLP                     |   |  (24) |   |  (314) |   |  463  |
| All other:                                                             |   |   |   |   |   |   |
|     Housing partnerships                           |   |  (4) |   |  (9) |   |  (12) |
|                                                                   |   | $ |  9  | $ |  (292) | $ |  499  |
|                                                                   |   |   |   |   |   |   |   |
| Earnings (losses) recorded net of income tax:                          |   |   |   |   |   |   |
| Sempra Pipelines & Storage:                                        |   |   |   |   |   |   |
|     Sodigas Pampeana and Sodigas Sur               | $ |  (1) | $ |  (44) | $ |  7  |
|     Gasoductos de Chihuahua                        |   |  29  |   |  19  |   |  ―  |
|     Chilquinta Energía(1)                     |   |  12  |   |  33  |   |  23  |
|     Luz del Sur(1)                                 |   |  12  |   |  41  |   |  38  |
|                                                                   |   | $ |  52  | $ |  49  | $ |  68  |
| (1)                                                                    | These investments were accounted for under the equity method until April 6, 2011, when they became consolidated entities upon our acquisition of additional ownership interests. |

| §   | $64 million at December 31, 2011 |
|--------------------|----------------------------------|

| §   | $333 million at December 31, 2010 |
|--------------------|-----------------------------------|

| §   | First, we received a preferred 15-percent return on our adjusted equity capital. |
|--------------------|----------------------------------------------------------------------------------|

| §   | Next, RBS received a preferred 15-percent return on any capital in excess of capital attributable to us that was required by the U.K. Financial Services Authority to be maintained by RBS in respect of the operations of the partnership. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Next, we received 70 percent of the next $500 million in pretax income; RBS received the remaining 30 percent. |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| §   | Then, we received 30 percent and RBS received 70 percent of any remaining pretax income. |
|--------------------|------------------------------------------------------------------------------------------|

| §   | Any losses of the partnership were shared equally between us and RBS. |
|--------------------|-----------------------------------------------------------------------|

| RBS SEMPRA COMMODITIES SUMMARIZED FINANCIAL INFORMATION |                     |            |
|---------------------------------------------------------|--------------------------|-----------------|
| (Dollars in millions)                                   |                     |            |
|                                                    | Years ended December 31, |
|                                                    |                     | 2011       |   | 2010  |   | 2009  |
| Gross revenues and fee income                           | $                        |  59   | $ |  1,028  | $ |  2,179  |
| Gross profit                                            |                     |  8    |   |  553  |   |  1,461  |
| Partnership net (loss) income                           |                     |  (14)      |   |  (169) |   |  639  |
|                                                    |                     |            |   |   |   |   |
|                                                    | At December 31,          |            |   |
|                                                    | 2011                | 2010       |   |
| Current assets                                          | $                        |  389  | $ |  4,522  |   |   |
| Noncurrent assets                                       |                     |  2    |   |  27  |   |   |
| Current liabilities                                     |                     |  152  |   |  2,898  |   |   |
| Members’ capital                                  |                     |  239  |   |  1,651  |   |   |

| §   | Chilquinta Energía (prior to acquisition in April 2011) |
|--------------------|--------------------------------------------------------------|

| §   | Luz del Sur (prior to acquisition in April 2011) |
|--------------------|--------------------------------------------------|

| §   | Auwahi Wind |
|--------------------|-------------|

| §   | Cedar Creek 2 |
|--------------------|---------------|

| §   | Fowler Ridge 2 |
|--------------------|----------------|

| §   | Flat Ridge 2 Wind Farm |
|--------------------|------------------------|

| §   | Mehoopany Wind Farm |
|--------------------|---------------------|

| §   | Elk Hills Power (through December 31, 2010) |
|--------------------|---------------------------------------------|

| §   | Gasoductos de Chihuahua |
|--------------------|-------------------------|

| §   | Rockies Express |
|--------------------|-----------------|

| §   | Sodigas Pampeana and Sodigas Sur |
|--------------------|----------------------------------|

| §   | Sempra Energy’s housing partnerships (accounted for under the equity method) |
|--------------------|------------------------------------------------------------------------------------|

| OTHER EQUITY METHOD INFORMATION |
|---------------------------------|
| (Dollars in millions)           |
|                            |   | Years ended December 31, |
|                            |   | 2011  | 2010  | 2009  |
| Gross revenues                  | $ |  798  | $ |  1,829  | $ |  1,433  |
| Gross profit                    |   |  391  |   |  728  |   |  529  |
| Income from operations          |   |  189  |   |  332  |   |  224  |
| Gain on sale of assets          |   |  4  |   |  2  |   |  1  |
| Net income                      |   |  155  |   |  256  |   |  192  |
|                            |   |   |   |   |   |   |   |
|                            |   |   |   | At December 31, |
|                            |   |   |   | 2011  | 2010  |
| Current assets                  | $ |  506  | $ |  1,372  |
| Noncurrent assets               |   |  2,750  |   |  4,264  |
| Current liabilities             |   |  234  |   |  503  |
| Noncurrent liabilities          |   |  750  |   |  1,458  |

----

| LONG-TERM DEBT                                                                  |
|---------------------------------------------------------------------------------|
| (Dollars in millions)                                                           |
|                                                                            |   | December 31, |
|                                                                            |   | 2011  | 2010  |
| SDG&E                                                                       |   |   |   |   |
| First mortgage bonds:                                                           |   |   |   |   |
|                                                                            | 6.8% June 1, 2015 | $ |  14  | $ |  14  |
|                                                                            | 5.3% November 15, 2015 |   |  250  |   |  250  |
|                                                                            | Variable rate (0.08% at December 31, 2011) July 1, 2018(1) |   |  161  |   |  161  |
|                                                                            | 5.85% June 1, 2021(1) |   |  60  |   |  60  |
|                                                                            | 3% August 15, 2021 |   |  350  |   |  ―  |
|                                                                            | 6% June 1, 2026 |   |  250  |   |  250  |
|                                                                            | 5% to 5.25% December 1, 2027(1) |   |  150  |   |  150  |
|                                                                            | 5.875% January and February 2034(1) |   |  176  |   |  176  |
|                                                                            | 5.35% May 15, 2035 |   |  250  |   |  250  |
|                                                                            | 6.125% September 15, 2037 |   |  250  |   |  250  |
|                                                                            | Variable rate (0.90% at December 31, 2011) May 1, 2039(1) |   |  75  |   |  75  |
|                                                                            | 6% June 1, 2039 |   |  300  |   |  300  |
|                                                                            | 5.35% May 15, 2040 |   |  250  |   |  250  |
|                                                                            | 4.5% August 15, 2040 |   |  500  |   |  500  |
|                                                                            | 3.95% November 15, 2041 |   |  250  |   |  ―  |
|                                                                            |   |   |  3,286  |   |  2,686  |
| Other long-term debt (unsecured unless otherwise noted):                        |   |   |   |   |
|                                                                            | 5.9% Notes June 1, 2014 |   |  130  |   |  130  |
|                                                                            | 5.3% Notes July 1, 2021(1) |   |  39  |   |  39  |
|                                                                            | 5.5% Notes December 1, 2021(1) |   |  60  |   |  60  |
|                                                                            | 4.9% Notes March 1, 2023(1) |   |  25  |   |  25  |
|                                                                            | OMEC LLC loan at variable rates (5.2925% at December 31, 2011) |   |   |   |   |
|                                                                            |     payable 2012 through April 2019 (secured by plant assets) |   |  355  |   |  365  |
| Capital lease obligations:                                                      |   |   |   |   |
|                                                                            | Purchased-power agreements |   |  180  |   |  182  |
|                                                                            | Other |   |  13  |   |  20  |
|                                                                            |   |   |  802  |   |  821  |
|                                                                            |   |   |  4,088  |   |  3,507  |
| Current portion of long-term debt                                               |   |  (19) |   |  (19) |
| Unamortized discount on long-term debt                                          |   |  (11) |   |  (9) |
| Total SDG&E                                                                 |   |  4,058  |   |  3,479  |
|                                                                            |   |   |   |   |   |
| SoCalGas                                                                        |   |   |   |   |
| First mortgage bonds:                                                           |   |   |   |   |
|                                                                            | 4.375% January 15, 2011, including $150 at variable rates after |   |   |   |   |
|                                                                            |     fixed-to-floating rate swaps |   |  ―  |   |  250  |
|                                                                            | 4.8% October 1, 2012 |   |  250  |   |  250  |
|                                                                            | 5.5% March 15, 2014 |   |  250  |   |  250  |
|                                                                            | 5.45% April 15, 2018 |   |  250  |   |  250  |
|                                                                            | 5.75% November 15, 2035 |   |  250  |   |  250  |
|                                                                            | 5.125% November 15, 2040 |   |  300  |   |  300  |
|                                                                            |   |   |  1,300  |   |  1,550  |
| Other long-term debt (unsecured):                                               |   |   |   |   |
|                                                                            | 4.75% Notes May 14, 2016(1) |   |  8  |   |  8  |
|                                                                            | 5.67% Notes January 18, 2028 |   |  5  |   |  5  |
| Capital lease obligations                                                       |   |  11  |   |  19  |
| Market value adjustments for interest rate swap, net (expired January 18, 2011) |   |  ―  |   |  3  |
|                                                                            |   |   |  24  |   |  35  |
|                                                                            |   |   |  1,324  |   |  1,585  |
| Current portion of long-term debt                                               |   |  (257) |   |  (262) |
| Unamortized discount on long-term debt                                          |   |  (3) |   |  (3) |
| Total SoCalGas                                                                  |   |  1,064  |   |  1,320  |

| LONG-TERM DEBT (Continued)                                                                 |
|--------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                      |
|                                                                                       |   | December 31, |
|                                                                                       |   | 2011  | 2010  |
| Sempra Energy                                                                              |   |   |   |   |
| Other long-term debt (unsecured):                                                          |   |   |   |   |
|                                                                                       | 6% Notes February 1, 2013 |   |  400  |   |  400  |
|                                                                                       | 8.9% Notes November 15, 2013, including $200 at variable rates after fixed-to-floating |   |   |   |   |
|                                                                                       |     rate swaps effective January 2011 (8.19% at December 31, 2011) |   |  250  |   |  250  |
|                                                                                       | 2% Notes March 15, 2014 |   |  500  |   |  ―  |
|                                                                                       | Notes at variable rates (1.22% at December 31, 2011) March 15, 2014 |   |  300  |   |  ―  |
|                                                                                       | 6.5% Notes June 1, 2016, including $300 at variable rates after fixed-to-floating |   |   |   |   |
|                                                                                       |     rate swaps effective January 2011 (4.86% at December 31, 2011) |   |  750  |   |  750  |
|                                                                                       | 6.15% Notes June 15, 2018 |   |  500  |   |  500  |
|                                                                                       | 9.8% Notes February 15, 2019 |   |  500  |   |  500  |
|                                                                                       | 6% Notes October 15, 2039 |   |  750  |   |  750  |
|                                                                                       | Employee Stock Ownership Plan Bonds at variable rates payable on demand |   |   |   |   |
|                                                                                       |     (0.40% at December 31, 2011) November 1, 2014(1) |   |  8  |   |  32  |
| Market value adjustments for interest rate swaps, net (expire November 2013 and June 2016) |   |  16  |   |  ―  |
|                                                                                       |   |   |   |   |   |
| Sempra Global                                                                              |   |   |   |   |
| Other long-term debt (unsecured):                                                          |   |   |   |   |
|                                                                                       | Commercial paper borrowings at variable rates, classified as long-term debt |   |   |   |   |
|                                                                                       |     (0.74% weighted average at December 31, 2011) |   |  400  |   |  800  |
|                                                                                       |   |   |   |   |   |
| Sempra Pipelines & Storage                                                             |   |   |   |   |
| Other long-term debt (unsecured unless otherwise noted):                                   |   |   |   |   |
|     Chilquinta Energía                                            |   |   |   |   |
|                                                                                       | 2.75% Series A Bonds October 30, 2014(1) |   |  24  |   |  ―  |
|                                                                                       | 4.25% Series B Bonds October 30, 2030(1) |   |  202  |   |  ―  |
|     Luz del Sur                                                        |   |   |   |   |
|                                                                                       | Notes at 5.72% to 7.91% payable 2012 through 2021 |   |  185  |   |  ―  |
|                                                                                       | Bank loans 5.45% to 6.75% payable 2012 through 2016 |   |  41  |   |  ―  |
|     Other                                                              |   |   |   |   |
|                                                                                       | Notes at 2.87% to 5.05% payable 2012 through 2013(1) |   |  24  |   |  52  |
|                                                                                       | 9% Notes May 13, 2013 |   |  1  |   |  1  |
|                                                                                       | 8.45% Notes payable 2012 through 2017, secured |   |  29  |   |  32  |
|                                                                                       | 4.5% Notes July 1, 2024, secured(1) |   |  21  |   |  117  |
|                                                                                       | Industrial development bonds at variable rates (0.08% at December 31, 2011) |   |   |   |   |
|                                                                                       |     August 1, 2037, secured(1) |   |  55  |   |  55  |
| First mortgage bonds (Mobile Gas):                                                         |   |   |   |   |
|                                                                                       | 6.9% payable 2011 through 2017 |   |  ―  |   |  7  |
|                                                                                       | 8.75% payable 2011 through 2022 |   |  ―  |   |  8  |
|                                                                                       | 7.48% payable 2011 through 2023 |   |  ―  |   |  5  |
|                                                                                       | 4.14% September 30, 2021 |   |  20  |   |  ―  |
|                                                                                       | 5% September 30, 2031 |   |  42  |   |  ―  |
|                                                                                       |   |   |  5,018  |   |  4,259  |
| Current portion of long-term debt                                                          |   |  (60) |   |  (68) |
| Unamortized discount on long-term debt                                                     |   |  (9) |   |  (10) |
| Unamortized premium on long-term debt                                                      |   |  7  |   |  ―  |
| Total other Sempra Energy                                                                  |   |  4,956  |   |  4,181  |
| Total Sempra Energy Consolidated                                                           | $ |  10,078  | $ |  8,980  |
| (1)                                                                                        | Callable long-term debt. |

| MATURITIES OF LONG-TERM DEBT(1) |
|---------------------------------|
| (Dollars in millions)           |
|                            |   |   |   |   | Total |
|                            |   |   |   | Other | Sempra |
|                            |   |   |   | Sempra | Energy |
|                            |   | SDG&E | SoCalGas | Energy | Consolidated |
| 2012                       | $ |  10  | $ |  250  | $ |  60  | $ |  320  |
| 2013                       |   |  10  |   |  ―  |   |  706  |   |  716  |
| 2014                       |   |  140  |   |  250  |   |  881  |   |  1,271  |
| 2015                       |   |  274  |   |  ―  |   |  42  |   |  316  |
| 2016                       |   |  10  |   |  8  |   |  768  |   |  786  |
| Thereafter                      |   |  3,451  |   |  805  |   |  2,545  |   |  6,801  |
| Total                           | $ |  3,895  | $ |  1,313  | $ |  5,002  | $ |  10,210  |
| (1)                             | Excludes capital lease obligations and market value adjustments for interest rate swaps. |

| CALLABLE LONG-TERM DEBT                         |
|-------------------------------------------------|
| (Dollars in millions)                           |
|                                            |   |   |   | Total |
|                                            |   |   | Other | Sempra |
|                                            |   |   | Sempra | Energy |
|                                            | SDG&E | SoCalGas | Energy | Consolidated |
| 2012                                       | $ |  221  | $ |  ―  | $ |  132  | $ |  353  |
| 2013                                       |   |  45  |   |  ―  |   |  ―  |   |  45  |
| 2014                                       |   |  124  |   |  ―  |   |  202  |   |  326  |
| 2015                                       |   |  105  |   |  ―  |   |  ―  |   |  105  |
| 2016                                       |   |  ―  |   |  8  |   |  ―  |   |  8  |
| after 2016                                      |   |  251  |   |  ―  |   |  ―  |   |  251  |
| Total                                           | $ |  746  | $ |  8  | $ |  334  | $ |  1,088  |
| Callable bonds subject to make-whole provisions | $ |  2,650  | $ |  1,300  | $ |  3,741  | $ |  7,691  |

----

|                                      |   | Southwest       |
|-------------------------------------------|--------|-----------------|
| (Dollars in millions)                     | SONGS  | Powerlink       |
| Percentage ownership                      |   |  20   | % |   |  91  | % |
| Utility plant in service                  | $      |  308  |   | $ |  323  |   |
| Accumulated depreciation and amortization |   |  59   |   |   |  191  |   |
| Construction work in progress             |   |  129  |   |   |  22  |   |

| §   | Movement of all Unit 1 spent fuel to the ISFSI was completed in 2005. |
|--------------------|-----------------------------------------------------------------------|

| §   | Spent fuel for Unit 2 is being stored in both the Unit 2 spent fuel pool and the ISFSI. |
|--------------------|-----------------------------------------------------------------------------------------|

| §   | Spent fuel for Unit 3 is being stored in both the Unit 3 spent fuel pool and the ISFSI. |
|--------------------|-----------------------------------------------------------------------------------------|

| NUCLEAR DECOMMISSIONING TRUSTS                                                                     |
|----------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                              |
|                                                                                               |   |   | Gross | Gross | Estimated |
|                                                                                               |   |   | Unrealized | Unrealized | Fair |
|                                                                                               |   | Cost | Gains | Losses | Value |
| As of December 31, 2011:                                                                           |   |   |   |   |   |   |   |   |
| Debt securities:                                                                                   |   |   |   |   |   |   |   |   |
|     Debt securities issued by the U.S. Treasury and other                      |   |   |   |   |   |   |   |   |
|          U.S. government corporations and agencies(1) | $ |  157  | $ |  13  | $ |  ―  | $ |  170  |
|     Municipal bonds(2)                                                         |   |  72  |   |  5  |   |  ―  |   |  77  |
|     Other securities(3)                                                        |   |  76  |   |  3  |   |  (1) |   |  78  |
| Total debt securities                                                                              |   |  305  |   |  21  |   |  (1) |   |  325  |
| Equity securities                                                                                  |   |  246  |   |  227  |   |  (5) |   |  468  |
| Cash and cash equivalents                                                                          |   |  11  |   |  ―  |   |  ―  |   |  11  |
| Total                                                                                              | $ |  562  | $ |  248  | $ |  (6) | $ |  804  |
|                                                                                               |   |   |   |   |   |   |   |   |   |
| As of December 31, 2010:                                                                           |   |   |   |   |   |   |   |   |
| Debt securities:                                                                                   |   |   |   |   |   |   |   |   |
|     Debt securities issued by the U.S. Treasury and other                      |   |   |   |   |   |   |   |   |
|          U.S. government corporations and agencies    | $ |  162  | $ |  14  | $ |  (2) | $ |  174  |
|     Municipal bonds                                                            |   |  101  |   |  2  |   |  (3) |   |  100  |
|     Other securities                                                           |   |  22  |   |  3  |   |  ―  |   |  25  |
| Total debt securities                                                                              |   |  285  |   |  19  |   |  (5) |   |  299  |
| Equity securities                                                                                  |   |  219  |   |  242  |   |  (1) |   |  460  |
| Cash and cash equivalents                                                                          |   |  10  |   |  ―  |   |  ―  |   |  10  |
| Total                                                                                              | $ |  514  | $ |  261  | $ |  (6) | $ |  769  |
| (1)                                                                                                | Maturity dates are 2012-2042 |   |   |   |   |   |   |   |   |
| (2)                                                                                                | Maturity dates are 2012-2057 |   |   |   |   |   |   |   |   |
| (3)                                                                                                | Maturity dates are 2012-2051 |   |   |   |   |   |   |   |   |

| SALES OF SECURITIES    |
|------------------------|
| (Dollars in millions)  |
|                   |   | Years ended December 31, |
|                   |   | 2011  | 2010  | 2009  |
| Proceeds from sales(1) | $ |  715  | $ |  351  | $ |  224  |
| Gross realized gains   |   |  75  |   |  11  |   |  6  |
| Gross realized losses  |   |  (52) |   |  (11) |   |  (33) |
| (1)                    | Excludes securities that are held to maturity. |

----

| RECONCILIATION OF FEDERAL INCOME TAX RATES TO EFFECTIVE INCOME TAX RATES |
|--------------------------------------------------------------------------|
|                                                                     |
|                                                                     | Years ended December 31, |
|                                                                     | 2011  | 2010 | 2009 |
| Sempra Energy Consolidated                                               |   |   |   |   |   |   |
| U.S. federal statutory income tax rate                                   |  35  | % |  35  | % |  35  | % |
| Utility depreciation                                                     |  3  |   |  6  |   |  3  |   |
| State income taxes, net of federal income tax benefit                    |  2  |   |  ―  |   |  3  |   |
| Tax credits                                                              |  (3) |   |  (7) |   |  (1) |   |
| Allowance for equity funds used during construction                      |  (2) |   |  (3) |   |  (1) |   |
| Non-U.S. earnings taxed at lower statutory income tax rates              |  (8) |   |  (12) |   |  (5) |   |
| Adjustments to prior years’ tax issues                             |  ―  |   |  (3) |   |  (2) |   |
| Utility repair allowance                                                 |  (1) |   |  (2) |   |  (1) |   |
| Self-developed software expenditures                                     |  (3) |   |  (5) |   |  (3) |   |
| Mexican foreign exchange and inflation effects                           |  (1) |   |  2  |   |  1  |   |
| Variable interest entities                                               |  ―  |   |  1  |   |  (1) |   |
| Noncontrolling interests                                                 |  ―  |   |  ―  |   |  1  |   |
| Impact of change in income tax law                                       |  ―  |   |  2  |   |  ―  |   |
| Impact of impairment of an equity method investment                      |  ―  |   |  (2) |   |  ―  |   |
| Other, net                                                               |  (1) |   |  1  |   |  ―  |   |
|     Effective income tax rate                        |  21  | % |  13  | % |  29  | % |
| SDG&E                                                                |   |   |   |   |   |   |
| U.S. federal statutory income tax rate                                   |  35  | % |  35  | % |  35  | % |
| Depreciation                                                             |  4  |   |  5  |   |  4  |   |
| State income taxes, net of federal income tax benefit                    |  5  |   |  4  |   |  4  |   |
| Allowance for equity funds used during construction                      |  (4) |   |  (3) |   |  (2) |   |
| Adjustments to prior years’ tax issues                             |  ―  |   |  (3) |   |  (1) |   |
| Utility repair allowance                                                 |  (1) |   |  (2) |   |  (1) |   |
| Self-developed software expenditures                                     |  (3) |   |  (2) |   |  (2) |   |
| Variable interest entity                                                 |  (1) |   |  1  |   |  (2) |   |
| Impact of change in income tax law                                       |  ―  |   |  1  |   |  ―  |   |
| Other, net                                                               |  (1) |   |  (3) |   |  (3) |   |
|     Effective income tax rate                        |  34  | % |  33  | % |  32  | % |
| SoCalGas                                                                 |   |   |   |   |   |   |
| U.S. federal statutory income tax rate                                   |  35  | % |  35  | % |  35  | % |
| Depreciation                                                             |  6  |   |  5  |   |  6  |   |
| State income taxes, net of federal income tax benefit                    |  4  |   |  4  |   |  4  |   |
| Self-developed software expenditures                                     |  (7) |   |  (6) |   |  (6) |   |
| Allowance for equity funds used during construction                      |  (2) |   |  (1) |   |  (1) |   |
| Impact of change in income tax law                                       |  ―  |   |  3  |   |  ―  |   |
| Other, net                                                               |  (3) |   |  (2) |   |  (4) |   |
|     Effective income tax rate                        |  33  | % |  38  | % |  34  | % |

| §   | the equity portion of AFUDC |
|--------------------|-----------------------------|

| §   | cost of removal of utility plant assets |
|--------------------|-----------------------------------------|

| §   | self-developed software costs |
|--------------------|-------------------------------|

| §   | depreciation on a certain portion of utility plant assets |
|--------------------|-----------------------------------------------------------|

|                  | Years ended December 31, |
|-----------------------|--------------------------|
| (Dollars in millions) | 2011                | 2010 | 2009 |
| U.S.                  | $                        |  1,009  | $ |  447  | $ |  1,007  |
| Non-U.S.              |                     |  712  |   |  339  |   |  469  |
| Total                 | $                        |  1,721  | $ |  786  | $ |  1,476  |

| INCOME TAX EXPENSE                                                       |
|--------------------------------------------------------------------------|
| (Dollars in millions)                                                    |
|                                                                     | Years ended December 31, |
|                                                                     | 2011  | 2010  | 2009  |
| Sempra Energy Consolidated                                               |   |   |   |   |   |   |
| Current:                                                                 |   |   |   |   |   |   |
|     U.S. Federal                                     | $ | 75  | $ |  27  | $ |  39  |
|     U.S. State                                       |   |  (3) |   |  (3) |   |  40  |
|     Non-U.S.                                         |   |  149  |   |  30  |   |  48  |
|         Total                    |   |  221  |   |  54  |   |  127  |
| Deferred:                                                                |   |   |   |   |   |   |
|     U.S. Federal                                     |   |  146  |   |  (11) |   |  216  |
|     U.S. State                                       |   | 46  |   |  36  |   |  24  |
|     Non-U.S.                                         |   |  (45) |   |  27  |   |  58  |
|         Total                    |   |  147  |   |  52  |   |  298  |
| Deferred investment tax credits                                          |   |  (2) |   |  (4) |   |  (3) |
|         Total income tax expense | $ |  366  | $ |  102  | $ |  422  |
| SDG&E                                                                |   |   |   |   |   |   |
| Current:                                                                 |   |   |   |   |   |   |
|     U.S. Federal                                     | $ |  (59) | $ |  69  | $ |  70  |
|     U.S. State                                       |   |  6  |   |  52  |   |  34  |
|         Total                    |   |  (53) |   |  121  |   |  104  |
| Deferred:                                                                |   |   |   |   |   |   |
|     U.S. Federal                                     |   |  253  |   |  75  |   |  75  |
|     U.S. State                                       |   |  36  |   |  (21) |   |  (2) |
|         Total                    |   |  289  |   |  54  |   |  73  |
| Deferred investment tax credits                                          |   |  1  |   |  (2) |   |  ―  |
|         Total income tax expense | $ |  237  | $ |  173  | $ |  177  |
| SoCalGas                                                                 |   |   |   |   |   |   |
| Current:                                                                 |   |   |   |   |   |   |
|     U.S. Federal                                     | $ |  (6) | $ |  43  | $ |  52  |
|     U.S. State                                       |   |  19  |   |  26  |   |  22  |
|         Total                    |   |  13  |   |  69  |   |  74  |
| Deferred:                                                                |   |   |   |   |   |   |
|     U.S. Federal                                     |   |  128  |   |  108  |   |  67  |
|     U.S. State                                       |   |  5  |   |  2  |   |  6  |
|         Total                    |   |  133  |   |  110  |   |  73  |
| Deferred investment tax credits                                          |   |  (3) |   |  (3) |   |  (3) |
|         Total income tax expense | $ |  143  | $ |  176  | $ |  144  |

| DEFERRED INCOME TAXES FOR SEMPRA ENERGY CONSOLIDATED                                                                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                                                                                                                                 |
|                                                                                                                                                                                                  | December 31, |
|                                                                                                                                                                                                  | 2011  | 2010  |
| Deferred income tax liabilities:                                                                                                                                                                      |   |   |   |   |
|     Differences in financial and tax bases of depreciable and amortizable assets                                                                                                  | $ |  2,394  | $ |  1,965  |
|     Regulatory balancing accounts                                                                                                                                                 |   |  456  |   |  535  |
|     Unrealized revenue                                                                                                                                                            |   |  13  |   |  23  |
|     Loss on reacquired debt                                                                                                                                                       |   |  12  |   |  15  |
|     Property taxes                                                                                                                                                                |   |  43  |   |  38  |
|     Difference in financial and tax bases of partnership interests                                                                                                                |   |  152  |   |  ―  |
|     Other deferred income tax liabilities                                                                                                                                         |   |  30  |   |  72  |
|         Total deferred income tax liabilities                                                                                                                 |   |  3,100  |   |  2,648  |
| Deferred income tax assets:                                                                                                                                                                           |   |   |   |   |
|     Investment tax credits                                                                                                                                                        |   |  22  |   |  34  |
|     Equity losses                                                                                                                                                                 |   |  16  |   |  3  |
|     Net operating losses                                                                                                                                                          |   |  811  |   |  40  |
|     Compensation-related items                                                                                                                                                    |   |  140  |   |  158  |
|     Postretirement benefits                                                                                                                                                       |   |  361  |   |  467  |
|     Difference in financial and tax bases of partnership interests                                                                                                                |   |  ―  |   |  83  |
|     Other deferred income tax assets                                                                                                                                              |   |  34  |   |  52  |
|     State income taxes                                                                                                                                                            |   |  58  |   |  73  |
|     Bad debt allowance                                                                                                                                                            |   |  8  |   |  10  |
|     Litigation and other accruals not yet deductible                                                                                                                              |   |  5  |   |  304  |
|         Deferred income tax assets before valuation allowances                                                                                                |   |  1,455  |   |  1,224  |
|         Less: valuation allowances                                                                                                                            |   |  82  |   |  62  |
|             Total deferred income tax assets                                                                                              |   |  1,373  |   |  1,162  |
| Net deferred income tax liability                                                                                                                                                                     | $ |  1,727  | $ |  1,486  |
| Our policy is to show deferred taxes of VIEs on a net basis, including valuation allowances. See table “Amounts Associated with Otay Mesa VIE” in Note 1 for further information on VIEs. |

| DEFERRED INCOME TAXES FOR SDG&E AND SOCALGAS                                                                                                                                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                                                                                                                                 |
|                                                                                                                                                                                                  | SDG&E | SoCalGas |
|                                                                                                                                                                                                  | December 31, | December 31, |
|                                                                                                                                                                                                  | 2011  | 2010  | 2011  | 2010  |
| Deferred income tax liabilities:                                                                                                                                                                      |   |   |   |   |   |   |   |   |
|     Differences in financial and tax bases of                                                                                                                                     |   |   |   |   |   |   |   |   |
|         utility plant and other assets                                                                                                                        | $ |  1,152  | $ |  982  | $ |  632  | $ |  483  |
|     Regulatory balancing accounts                                                                                                                                                 |   |  230  |   |  230  |   |  236  |   |  316  |
|     Loss on reacquired debt                                                                                                                                                       |   |  5  |   |  7  |   |  8  |   |  10  |
|     Property taxes                                                                                                                                                                |   |  30  |   |  25  |   |  14  |   |  14  |
|     Other                                                                                                                                                                         |   |  19  |   |  17  |   |  1  |   |  (1) |
|         Total deferred income tax liabilities                                                                                                                 |   |  1,436  |   |  1,261  |   |  891  |   |  822  |
| Deferred income tax assets:                                                                                                                                                                           |   |   |   |   |   |   |   |   |
|     Postretirement benefits                                                                                                                                                       |   |  115  |   |  126  |   |  161  |   |  272  |
|     Investment tax credits                                                                                                                                                        |   |  17  |   |  17  |   |  16  |   |  17  |
|     Compensation-related items                                                                                                                                                    |   |  15  |   |  14  |   |  39  |   |  41  |
|     State income taxes                                                                                                                                                            |   |  24  |   |  33  |   |  18  |   |  18  |
|     Litigation and other accruals not yet deductible                                                                                                                              |   |  33  |   |  192  |   |  22  |   |  20  |
|     Hedging transaction                                                                                                                                                           |   |  ―  |   |  ―  |   |  7  |   |  9  |
|     Other                                                                                                                                                                         |   |  3  |   |  7  |   |  8  |   |  10  |
|         Total deferred income tax assets                                                                                                                      |   |  207  |   |  389  |   |  271  |   |  387  |
| Net deferred income tax liability                                                                                                                                                                     | $ |  1,229  | $ |  872  | $ |  620  | $ |  435  |
| Our policy is to show deferred taxes of VIEs on a net basis, including valuation allowances. See table “Amounts Associated with Otay Mesa VIE” in Note 1 for further information on VIEs. |

| NET DEFERRED INCOME TAX LIABILITY |
|-----------------------------------|
| (Dollars in millions)             |
|                              | Sempra Energy |   |   |   |   |
|                              | Consolidated | SDG&E | SoCalGas |
|                              | 2011  | 2010  | 2011  | 2010  | 2011  | 2010  |
| Current (asset) liability         | $ |  173  | $ |  (75) | $ |  62  | $ |  (129) | $ |  44  | $ |  17  |
| Noncurrent liability              |   |  1,554  |   |  1,561  |   |  1,167  |   |  1,001  |   |  576  |   |  418  |
| Total                             | $ |  1,727  | $ |  1,486  | $ |  1,229  | $ |  872  | $ |  620  | $ |  435  |

| SUMMARY OF UNRECOGNIZED INCOME TAX BENEFITS                               |
|---------------------------------------------------------------------------|
| (Dollars in millions)                                                     |
|                                                                      | Sempra Energy |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      | Consolidated | SDG&E | SoCalGas |
|                                                                      | 2011  | 2010  | 2009  | 2011  | 2010  | 2009  | 2011  | 2010  | 2009  |
| Total                                                                     | $ |  72  | $ |  97  | $ |  94  | $ |  7  | $ |  5  | $ |  14  | $ |  ―  | $ |  8  | $ |  11  |
| Of the total, amounts related to tax                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    positions that, if recognized, in                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    future years, would:                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        decrease the effective tax rate | $ |  (72) | $ |  (76) | $ |  (76) | $ |  (7) | $ |  (5) | $ |  (13) | $ |  ―  | $ |  (1) | $ |  (1) |
|        increase the effective tax rate |   |  7  |   |  5  |   |  13  |   |  7  |   |  5  |   |  13  |   |  ―  |   |  ―  |   |  ―  |

| RECONCILIATION OF UNRECOGNIZED INCOME TAX BENEFITS               |
|------------------------------------------------------------------|
| (Dollars in millions)                                            |
|                                                             | 2011  | 2010  | 2009  |
| Sempra Energy Consolidated:                                      |   |   |   |   |   |   |
| Balance as of January 1                                          | $ |  97  | $ |  94  | $ |  104  |
|     Increase in prior period tax positions   |   |  7  |   |  29  |   |  44  |
|     Decrease in prior period tax positions   |   |  (26) |   |  (4) |   |  (3) |
|     Increase in current period tax positions |   |  3  |   |  5  |   |  15  |
|     Settlements with taxing authorities      |   |  (9) |   |  (9) |   |  (54) |
|     Expirations of statutes of limitations   |   |  ―  |   |  (18) |   |  (12) |
| Balance as of December 31                                        | $ |  72  | $ |  97  | $ |  94  |
| SDG&E:                                                       |   |   |   |   |   |   |
| Balance as of January 1                                          | $ |  5  | $ |  14  | $ |  18  |
|     Increase in prior period tax positions   |   |  ―  |   |  ―  |   |  1  |
|     Decrease in prior period tax positions   |   |  ―  |   |  (3) |   |  ―  |
|     Increase in current period tax positions |   |  2  |   |  3  |   |  3  |
|     Settlements with taxing authorities      |   |  ―  |   |  (9) |   |  (8) |
| Balance as of December 31                                        | $ |  7  | $ |  5  | $ |  14  |
| SoCalGas:                                                        |   |   |   |   |   |   |
| Balance as of January 1                                          | $ |  8  | $ |  11  | $ |  19  |
|     Increase in prior period tax positions   |   |  2  |   |  5  |   |  1  |
|     Settlements with taxing authorities      |   |  (10) |   |  ―  |   |  (1) |
|     Expirations of statutes of limitations   |   |  ―  |   |  (8) |   |  (8) |
| Balance as of December 31                                        | $ |  ―  | $ |  8  | $ |  11  |

| POSSIBLE DECREASES IN UNRECOGNIZED INCOME TAX BENEFITS WITHIN 12 MONTHS                     |
|---------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                       |
|                                                                                        | At December 31, |
|                                                                                        | 2011  | 2010  | 2009  |
| Sempra Energy Consolidated:                                                                 |   |   |   |   |   |   |
| Expiration of statutes of limitations on tax assessments                                    | $ |  (7) | $ |  (6) | $ |  (7) |
| Potential resolution of audit issues with various                                           |   |   |   |   |   |   |
|      U.S. federal, state and local and non-U.S. taxing authorities |   |  ―  |   |  (35) |   |  (24) |
|                                                                                        | $ |  (7) | $ |  (41) | $ |  (31) |
| SDG&E                                                                                   | $ |  ―  | $ |  ―  | $ |  ―  |
| SoCalGas:                                                                                   |   |   |   |   |   |   |
| Expiration of statutes of limitations on tax assessments                                    | $ |  ―  | $ |  (5) | $ |  (6) |
| Potential resolution of audit issues with various                                           |   |   |   |   |   |   |
|      U.S. federal, state and local taxing authorities              |   |  ―  |   |  ―  |   |  (1) |
|                                                                                        | $ |  ―  | $ |  (5) | $ |  (7) |

| INTEREST EXPENSE AND PENALTIES ASSOCIATED WITH UNRECOGNIZED INCOME TAX BENEFITS |
|---------------------------------------------------------------------------------|
| (Dollars in millions)                                                           |
|                                                                            | Sempra Energy |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                            | Consolidated |   | SDG&E |   | SoCalGas |
|                                                                            | 2011  | 2010  | 2009  |   | 2011  | 2010  | 2009  |   | 2011  | 2010  | 2009  |
| Interest expense (benefit)                                                      | $ |  (3) | $ |  4  | $ |  (16) |   | $ |  ―  | $ |  3  | $ |  (4) |   | $ |  (1) | $ |  1  | $ |  (3) |
| Penalties                                                                       |   |  (1) |   |  ―  |   |  3  |   |   |  ―  |   |  ―  |   |  ―  |   |   |  ―  |   |  ―  |   |  1  |

| ACCRUED INTEREST EXPENSE AND PENALTIES ASSOCIATED WITH UNRECOGNIZED INCOME TAX BENEFITS |
|-----------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                   |
|                                                                                    | Sempra Energy |   |   |   |   |   |   |   |   |   |
|                                                                                    | Consolidated |   | SDG&E |   | SoCalGas |
|                                                                                    | 2011  | 2010  |   | 2011  | 2010  |   | 2011  | 2010  |
| Interest expense (benefit)                                                              | $ |  3  | $ |  6  |   | $ |  1  | $ |  1  |   | $ |  1  | $ |  2  |
| Penalties                                                                               |   |  3  |   |  4  |   |   |  ―  |   |  ―  |   |   |  ―  |   |  ―  |

----

| §   | recognize an asset for a plan’s overfunded status or a liability for a plan’s underfunded status in the statement of financial position; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | measure a plan’s assets and its obligations that determine its funded status as of the end of the fiscal year (with limited exceptions); and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Generally, those changes are reported in other comprehensive income and as a separate component of shareholders’ equity. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | discount rates |
|--------------------|----------------|

| §   | expected return on plan assets |
|--------------------|--------------------------------|

| §   | health-care cost trend rates |
|--------------------|------------------------------|

| §   | mortality rates |
|--------------------|-----------------|

| §   | compensation increase rates |
|--------------------|-----------------------------|

| §   | payout elections (lump sum or annuity) |
|--------------------|----------------------------------------|

| PROJECTED BENEFIT OBLIGATION, FAIR VALUE OF ASSETS AND FUNDED STATUS |
|----------------------------------------------------------------------|
| (Dollars in millions)                                                |
|                                                                 |   | Pension Benefits |   | Other PostretirementBenefits |
| Sempra Energy Consolidated                                           | 2011  | 2010  |   | 2011  | 2010  |
| CHANGE IN PROJECTED BENEFIT OBLIGATION:                              |   |   |   |   |   |   |   |   |   |
| Net obligation at January 1                                          | $ |  3,124  | $ |  3,083  |   | $ |  1,139  | $ |  985  |
| Service cost                                                         |   |  83  |   |  83  |   |   |  31  |   |  26  |
| Interest cost                                                        |   |  168  |   |  167  |   |   |  65  |   |  57  |
| Plan amendments                                                      |   |  ―  |   |  1  |   |   |  4  |   |  ―  |
| Impact of PPACA excise tax                                           |   |  ―  |   |  ―  |   |   |  ―  |   |  31  |
| Actuarial loss (gain)                                                |   |  224  |   |  ―  |   |   |  (42) |   |  81  |
| Contributions from plan participants                                 |   |  ―  |   |  ―  |   |   |  15  |   |  13  |
| Benefit payments                                                     |   |  (177) |   |  (210) |   |   |  (59) |   |  (56) |
| Acquisitions                                                         |   |  20  |   |  ―  |   |   |  5  |   |  ―  |
| Foreign currency adjustments                                         |   |  (2) |   |  ―  |   |   |  ―  |   |  ―  |
| Settlements                                                          |   |  (34) |   |  ―  |   |   |  ―  |   |  ―  |
| Federal subsidy (Medicare Part D)                                    |   |  ―  |   |  ―  |   |   |  2  |   |  2  |
| Net obligation at December 31                                        |   |  3,406  |   |  3,124  |   |   |  1,160  |   |  1,139  |
|                                                                 |   |   |   |   |   |   |   |   |   |
| CHANGE IN PLAN ASSETS:                                               |   |   |   |   |   |   |   |   |   |
| Fair value of plan assets at January 1                               |   |  2,354  |   |  2,130  |   |   |  746  |   |  658  |
| Actual return on plan assets                                         |   |  (23) |   |  275  |   |   |  4  |   |  79  |
| Employer contributions                                               |   |  212  |   |  159  |   |   |  72  |   |  52  |
| Contributions from plan participants                                 |   |  ―  |   |  ―  |   |   |  15  |   |  13  |
| Benefit payments                                                     |   |  (177) |   |  (210) |   |   |  (59) |   |  (56) |
| Settlements                                                          |   |  (34) |   |  ―  |   |   |  ―  |   |  ―  |
| Fair value of plan assets at December 31                             |   |  2,332  |   |  2,354  |   |   |  778  |   |  746  |
| Funded status at December 31                                         | $ |  (1,074) | $ |  (770) |   | $ |  (382) | $ |  (393) |
| Net recorded liability at December 31                                | $ |  (1,074) | $ |  (770) |   | $ |  (382) | $ |  (393) |
|                                                                 |   |

| PROJECTED BENEFIT OBLIGATION, FAIR VALUE OF ASSETS AND FUNDED STATUS |
|----------------------------------------------------------------------|
| (Dollars in millions)                                                |
|                                                                 | Pension Benefits |   | Other PostretirementBenefits |
| SDG&E                                                            | 2011  | 2010  |   | 2011  | 2010  |
| CHANGE IN PROJECTED BENEFIT OBLIGATION:                              |   |   |   |   |   |   |   |   |   |
| Net obligation at January 1                                          | $ |  949  | $ |  908  |   | $ |  175  | $ |  160  |
| Service cost                                                         |   |  28  |   |  27  |   |   |  7  |   |  6  |
| Interest cost                                                        |   |  49  |   |  47  |   |   |  10  |   |  9  |
| Plan amendments                                                      |   |  ―  |   |  ―  |   |   |  2  |   |  ―  |
| Actuarial loss (gain)                                                |   |  27  |   |  1  |   |   |  (5) |   |  3  |
| Settlements                                                          |   |  (1) |   |  ―  |   |   |  ―  |   |  ―  |
| Transfer of liability (to) from other plans                          |   |  (19) |   |  17  |   |   |  (2) |   |  2  |
| Contributions from plan participants                                 |   |  ―  |   |  ―  |   |   |  7  |   |  6  |
| Benefit payments                                                     |   |  (52) |   |  (51) |   |   |  (12) |   |  (11) |
| Net obligation at December 31                                        |   |  981  |   |  949  |   |   |  182  |   |  175  |
|                                                                 |   |   |   |   |   |   |   |   |   |
| CHANGE IN PLAN ASSETS:                                               |   |   |   |   |   |   |   |   |   |
| Fair value of plan assets at January 1                               |   |  713  |   |  615  |   |   |  99  |   |  81  |
| Actual return on plan assets                                         |   |  (7) |   |  79  |   |   |  (1) |   |  7  |
| Employer contributions                                               |   |  69  |   |  61  |   |   |  15  |   |  15  |
| Transfer of assets (to) from other plans                             |   |  (10) |   |  9  |   |   |  (2) |   |  1  |
| Settlements                                                          |   |  (1) |   |  ―  |   |   |  ―  |   |  ―  |
| Contributions from plan participants                                 |   |  ―  |   |  ―  |   |   |  7  |   |  6  |
| Benefit payments                                                     |   |  (52) |   |  (51) |   |   |  (12) |   |  (11) |
| Fair value of plan assets at December 31                             |   |  712  |   |  713  |   |   |  106  |   |  99  |
| Funded status at December 31                                         | $ |  (269) | $ |  (236) |   | $ |  (76) | $ |  (76) |
| Net recorded liability at December 31                                | $ |  (269) | $ |  (236) |   | $ |  (76) | $ |  (76) |

| PROJECTED BENEFIT OBLIGATION, FAIR VALUE OF ASSETS AND FUNDED STATUS |
|----------------------------------------------------------------------|
| (Dollars in millions)                                                |
|                                                                 |   | Pension Benefits |   | Other PostretirementBenefits |
| SoCalGas                                                             | 2011  | 2010  |   | 2011  | 2010  |
| CHANGE IN PROJECTED BENEFIT OBLIGATION:                              |   |   |   |   |   |   |   |   |   |
| Net obligation at January 1                                          | $ |  1,786  | $ |  1,764  |   | $ |  920  | $ |  780  |
| Service cost                                                         |   |  46  |   |  46  |   |   |  22  |   |  18  |
| Interest cost                                                        |   |  99  |   |  98  |   |   |  53  |   |  46  |
| Plan amendments                                                      |   |  ―  |   |  ―  |   |   |  1  |   |  ―  |
| Impact of PPACA excise tax                                           |   |  ―  |   |  ―  |   |   |  ―  |   |  31  |
| Actuarial loss (gain)                                                |   |  171  |   |  (3) |   |   |  (46) |   |  77  |
| Contributions from plan participants                                 |   |  ―  |   |  ―  |   |   |  9  |   |  8  |
| Benefit payments                                                     |   |  (107) |   |  (126) |   |   |  (45) |   |  (43) |
| Settlements                                                          |   |  (4) |   |  ―  |   |   |  ―  |   |  ―  |
| Transfer of liability from other plans                               |   |  26  |   |  7  |   |   |  5  |   |  1  |
| Federal subsidy (Medicare Part D)                                    |   |  ―  |   |  ―  |   |   |  2  |   |  2  |
| Net obligation at December 31                                        |   |  2,017  |   |  1,786  |   |   |  921  |   |  920  |
|                                                                 |   |   |   |   |   |   |   |   |   |
| CHANGE IN PLAN ASSETS:                                               |   |   |   |   |   |   |   |   |   |
| Fair value of plan assets at January 1                               |   |  1,456  |   |  1,332  |   |   |  632  |   |  562  |
| Actual return on plan assets                                         |   |  (12) |   |  171  |   |   |  4  |   |  70  |
| Employer contributions                                               |   |  95  |   |  71  |   |   |  55  |   |  35  |
| Transfer of assets from other plans                                  |   |  15  |   |  7  |   |   |  3  |   |  ―  |
| Settlements                                                          |   |  (4) |   |  ―  |   |   |  ―  |   |  ―  |
| Contributions from plan participants                                 |   |  ―  |   |  ―  |   |   |  9  |   |  8  |
| Benefit payments                                                     |   |  (107) |   |  (125) |   |   |  (45) |   |  (43) |
| Fair value of plan assets at December 31                             |   |  1,443  |   |  1,456  |   |   |  658  |   |  632  |
| Funded status at December 31                                         | $ |  (574) | $ |  (330) |   | $ |  (263) | $ |  (288) |
| Net recorded liability at December 31                                | $ |  (574) | $ |  (330) |   | $ |  (263) | $ |  (288) |
|                                                                 |   |

|                       | Pension Benefits |          | Other PostretirementBenefits |
|----------------------------|------------------|---------------|------------------------------|
| (Dollars in millions)      | 2011        | 2010     |                         | 2011  | 2010  |
| Sempra Energy Consolidated |             |          |                         |   |   |   |   |   |   |
| Current liabilities        | $                |  (31)    | $                            |  (57) |   | $ |  (2) | $ |  (1) |
| Noncurrent liabilities     |             |  (1,043) |                         |  (713) |   |   |  (380) |   |  (392) |
| Net recorded liability     | $                |  (1,074) | $                            |  (770) |   | $ |  (382) | $ |  (393) |
| SDG&E                  |             |          |                         |   |   |   |   |   |   |
| Current liabilities        | $                |  (3)     | $                            |  (3) |   | $ |  ―  | $ |  ―  |
| Noncurrent liabilities     |             |  (266)   |                         |  (233) |   |   |  (76) |   |  (76) |
| Net recorded liability     | $                |  (269)   | $                            |  (236) |   | $ |  (76) | $ |  (76) |
| SoCalGas                   |             |          |                         |   |   |   |   |   |   |
| Current liabilities        | $                |  (4)     | $                            |  (5) |   | $ |  ―  | $ |  ―  |
| Noncurrent liabilities     |             |  (570)   |                         |  (325) |   |   |  (263) |   |  (288) |
| Net recorded liability     | $                |  (574)   | $                            |  (330) |   | $ |  (263) | $ |  (288) |

| AMOUNTS IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
|----------------------------------------------------------|
| (Dollars in millions)                                    |
|                                                     | Pension Benefits |   | Other PostretirementBenefits |
|                                                     | 2011  | 2010  |   | 2011  | 2010  |
| Sempra Energy Consolidated                               |   |   |   |   |   |   |   |   |   |
| Net actuarial loss                                       | $ |  (92) | $ |  (85) |   | $ |  (8) | $ |  (3) |
| Prior service credit                                     |   |  1  |   |  1  |   |   |  ―  |   |  ―  |
| Total                                                    | $ |  (91) | $ |  (84) |   | $ |  (8) | $ |  (3) |
| SDG&E                                                |   |   |   |   |   |   |   |   |   |
| Net actuarial loss                                       | $ |  (11) | $ |  (11) |   |   |   |   |   |
| Prior service credit                                     |   |  1  |   |  1  |   |   |   |   |   |
| Total                                                    | $ |  (10) | $ |  (10) |   |   |   |   |   |
| SoCalGas                                                 |   |   |   |   |   |   |   |   |   |
| Net actuarial loss                                       | $ |  (6) | $ |  (5) |   |   |   |   |   |
| Prior service credit                                     |   |  1  |   |  1  |   |   |   |   |   |
| Total                                                    | $ |  (5) | $ |  (4) |   |   |   |   |   |

|                           | Sempra Energy Consolidated |              | SDG&E |              | SoCalGas   |
|--------------------------------|----------------------------|-------------------|-----------|-------------------|------------|
| (Dollars in millions)          | 2011                  | 2010         |      | 2011         | 2010  |   | 2011  | 2010  |
| Accumulated benefit obligation | $                          |  3,176  | $         |  2,933  |       | $ |  962  | $ |  935  |   | $ |  1,845  | $ |  1,623  |

| (Dollars in millions)          | 2011  | 2010         |
|--------------------------------|------------|-------------------|
| Sempra Energy Consolidated     |       |              |   |   |
| Projected benefit obligation   | $          |  3,150  | $ |  2,880  |
| Accumulated benefit obligation |       |  2,958  |   |  2,702  |
| Fair value of plan assets      |       |  2,332  |   |  2,354  |
| SDG&E                      |       |              |   |   |
| Projected benefit obligation   | $          |  944    | $ |  917  |
| Accumulated benefit obligation |       |  928    |   |  906  |
| Fair value of plan assets      |       |  712    |   |  713  |
| SoCalGas                       |       |              |   |   |
| Projected benefit obligation   | $          |  1,987  | $ |  1,755  |
| Accumulated benefit obligation |       |  1,818  |   |  1,594  |
| Fair value of plan assets      |       |  1,443  |   |  1,456  |

| NET PERIODIC BENEFIT COST AND AMOUNTS RECOGNIZED IN OTHER COMPREHENSIVE INCOME                                                                      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                                                                               |
|                                                                                                                                                | Pension Benefits |   | Other Postretirement Benefits |
| Sempra Energy Consolidated                                                                                                                          | 2011  | 2010  | 2009  |   | 2011  | 2010  | 2009  |
| Net Periodic Benefit Cost                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                                                                                                                        | $ |  83  | $ |  83  | $ |  74  |   | $ |  31  | $ |  26  | $ |  26  |
| Interest cost                                                                                                                                       |   |  168  |   |  167  |   |  170  |   |   |  65  |   |  57  |   |  56  |
| Expected return on assets                                                                                                                           |   |  (144) |   |  (143) |   |  (139) |   |   |  (48) |   |  (46) |   |  (45) |
| Amortization of:                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Prior service cost (credit)                                                                                                 |   |  4  |   |  4  |   |  7  |   |   |  ― |   |  (1) |   |  (1) |
|     Actuarial loss                                                                                                              |   |  34  |   |  30  |   |  23  |   |   | 17  |   |  8  |   |  3  |
| Regulatory adjustment                                                                                                                               |   |  43  |   |  19  |   |  28  |   |   |  7  |   |  7  |   |  7  |
| Settlement charge                                                                                                                                   |   |  13  |   |  ―  |   |  14  |   |   |  ―  |   |  ―  |   |  ―  |
| Total net periodic benefit cost                                                                                                                     |   |  201  |   |  160  |   |  177  |   |   |  72  |   |  51  |   |  46  |
|                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Changes in Plan Assets and Benefit Obligations                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Recognized in Other Comprehensive Income                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss (gain)                                                                                                                                     |   |  23  |   |  (12) |   |  9  |   |   |  7  |   |  (1) |   |  3  |
| Amortization of prior service credit                                                                                                                |   |  ―  |   |  ―  |   |  ―  |   |   |  ―  |   |  1  |   |  1  |
| Amortization of actuarial loss                                                                                                                      |   |  (10) |   |  (10) |   |  (8) |   |   |  ―  |   |  ―  |   |  ―  |
|     Total recognized in other comprehensive income                                                                              |   |  13  |   |  (22) |   |  1  |   |   |  7  |   |  ―  |   |  4  |
|     Total recognized in net periodic benefit cost and other        comprehensive income | $ |  214  | $ |  138  | $ |  178  |   | $ |  79  | $ |  51  | $ |  50  |

| NET PERIODIC BENEFIT COST AND AMOUNTS RECOGNIZED IN OTHER COMPREHENSIVE INCOME                                                                      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                                                                               |
|                                                                                                                                                | Pension Benefits |   | Other Postretirement Benefits |
| SDG&E                                                                                                                                           | 2011  | 2010  | 2009  |   | 2011  | 2010  | 2009  |
| Net Periodic Benefit Cost                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                                                                                                                        | $ |  28  | $ |  27  | $ |  23  |   | $ |  7  | $ |  6  | $ |  5  |
| Interest cost                                                                                                                                       |   |  49  |   |  47  |   |  48  |   |   |  10  |   |  9  |   |  9  |
| Expected return on assets                                                                                                                           |   |  (46) |   |  (40) |   |  (32) |   |   |  (8) |   |  (5) |   |  (3) |
| Amortization of:                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Prior service cost                                                                                                          |   |  1  |   |  1  |   |  4  |   |   |  4  |   |  4  |   |  4  |
|     Actuarial loss                                                                                                              |   |  9  |   |  12  |   |  16  |   |   |  ―  |   |  ―  |   |  ―  |
| Regulatory adjustment                                                                                                                               |   |  31  |   |  13  |   |  2  |   |   |  2  |   |  2  |   |  2  |
| Settlement charge                                                                                                                                   |   |  1  |   |  ―  |   |  2  |   |   |  ―  |   |  ―  |   |  ―  |
| Total net periodic benefit cost                                                                                                                     |   |  73  |   |  60  |   |  63  |   |   |  15  |   |  16  |   |  17  |
|                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Changes in Plan Assets and Benefit Obligations                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Recognized in Other Comprehensive Income                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss (gain)                                                                                                                                     |   |  1  |   |  2  |   |  (1) |   |   |  ―  |   |  ―  |   |  ―  |
| Amortization of actuarial loss                                                                                                                      |   |  (1) |   |  (1) |   |  (2) |   |   |  ―  |   |  ―  |   |  ―  |
|     Total recognized in other comprehensive income                                                                              |   |  ―  |   |  1  |   |  (3) |   |   |  ―  |   |  ―  |   |  ―  |
|     Total recognized in net periodic benefit cost and other        comprehensive income | $ |  73  | $ |  61  | $ |  60  |   | $ |  15  | $ |  16  | $ |  17  |

| NET PERIODIC BENEFIT COST AND AMOUNTS RECOGNIZED IN OTHER COMPREHENSIVE INCOME                                                                      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                                                                               |
|                                                                                                                                                | Pension Benefits |   | Other Postretirement Benefits |
| SoCalGas                                                                                                                                            | 2011  | 2010  | 2009  |   | 2011  | 2010  | 2009  |
| Net Periodic Benefit Cost                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                                                                                                                        | $ |  46  | $ |  46  | $ |  42  |   | $ |  22  | $ |  18  | $ |  18  |
| Interest cost                                                                                                                                       |   |  99  |   |  98  |   |  98  |   |   |  53  |   |  46  |   |  45  |
| Expected return on assets                                                                                                                           |   |  (85) |   |  (90) |   |  (94) |   |   |  (40) |   |  (40) |   |  (41) |
| Amortization of:                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Prior service cost (credit)                                                                                                 |   |  2  |   |  2  |   |  2  |   |   |  (4) |   |  (4) |   |  (4) |
|     Actuarial loss                                                                                                              |   |  17  |   |  10  |   |  1  |   |   |  17  |   |  7  |   |  3  |
| Settlement charge                                                                                                                                   |   |  1  |   |  ―  |   |  1  |   |   |  ―  |   |  ―  |   |  ―  |
| Regulatory adjustment                                                                                                                               |   |  12  |   |  6  |   |  28  |   |   |  5  |   |  5  |   |  6  |
| Total net periodic benefit cost                                                                                                                     |   |  92  |   |  72  |   |  78  |   |   |  53  |   |  32  |   |  27  |
|                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Changes in Plan Assets and Benefit Obligations                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Recognized in Other Comprehensive Income                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                                                            |   |  2  |   |  ―  |   |  1  |   |   |  ―  |   |  ―  |   |  ―  |
| Amortization of actuarial loss                                                                                                                      |   |  (1) |   |  (1) |   |  (1) |   |   |  ―  |   |  ―  |   |  ―  |
|     Total recognized in other comprehensive income                                                                              |   |  1  |   |  (1) |   |  ―  |   |   |  ―  |   |  ―  |   |  ―  |
|     Total recognized in net periodic benefit cost and other        comprehensive income | $ |  93  | $ |  71  | $ |  78  |   | $ |  53  | $ |  32  | $ |  27  |
|                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |

| §   | Availability of subsidies from the Early Retiree Reinsurance Program (ERRP) |
|--------------------|-----------------------------------------------------------------------------|

| §   | Mandatory coverage for adult children until age 26 beginning in 2011 |
|--------------------|----------------------------------------------------------------------|

| §   | Changes to the Prescription Drug Plan and Medicare Advantage programs beginning in 2011 and extending through 2020 |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| §   | Loss of the tax free status of the Retiree Drug Subsidy (RDS) beginning in 2013 |
|--------------------|---------------------------------------------------------------------------------|

| §   | Availability of coverage through health care exchanges beginning in 2014 |
|--------------------|--------------------------------------------------------------------------|

| §   | Excise tax on high-cost plans, as defined in the legislation, beginning in 2018 |
|--------------------|---------------------------------------------------------------------------------|

|                                | Sempra Energy |          |     |
|-------------------------------------|---------------|---------------|----------|
| (Dollars in millions)               | Consolidated  | SDG&E     | SoCalGas |
| Net periodic benefit cost reduction | $             |  4  | $        |  ―  | $ |  4  |

| §   | have an outstanding issue of at least $50 million; |
|--------------------|----------------------------------------------------|

| §   | are non-callable (or callable with make whole provisions); |
|--------------------|------------------------------------------------------------|

| §   | exclude collateralized bonds; and |
|--------------------|-----------------------------------|

| §   | exclude the top and bottom 10 percent of yields to avoid relying on bonds which might be mispriced or misgraded. |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| §   | The issuer is on review for downgrade by a major rating agency if the downgrade would eliminate the issuer from the portfolio. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| §   | Recent events have caused significant price volatility to which rating agencies have not reacted. |
|--------------------|---------------------------------------------------------------------------------------------------|

| §   | Lack of liquidity is causing price quotes to vary significantly from broker to broker. |
|--------------------|----------------------------------------------------------------------------------------|

| WEIGHTED-AVERAGE ASSUMPTIONS                                               |
|----------------------------------------------------------------------------|
|                                                                       |
|                                                                       |   | Pension Benefits |   | Other PostretirementBenefits |
|                                                                       |   | 2011  | 2010  |   | 2011  | 2010  |
| WEIGHTED-AVERAGE ASSUMPTIONS USED TO DETERMINE                             |   |   |   |   |   |   |   |   |   |
|     BENEFIT OBLIGATION AS OF DECEMBER 31:              |   |   |   |   |   |   |   |   |   |
| Discount rate                                                              |  4.95  | % |  5.61  | % |   |  5.11  | % |  5.77  | % |
| Rate of compensation increase                                              |  4.50  | % |  4.50  | % |   |  (1) |   |  (1) |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED-AVERAGE ASSUMPTIONS USED TO DETERMINE NET                         |   |   |   |   |   |   |   |   |   |
|     PERIODIC BENEFIT COST FOR YEARS ENDED DECEMBER 31: |   |   |   |   |   |   |   |   |   |
| Sempra Energy Consolidated                                                 |   |   |   |   |   |   |   |   |   |
| Discount rate                                                              |  (2) |   |  (3) |   |   |  (4) |   |  (5) |   |
| Expected return on plan assets                                             |  7.00  | % |  7.00  | % |   |  6.25  | % |  6.22  | % |
| Rate of compensation increase                                              |  (6) |   |  (6) |   |   |  (1) |   |  (1) |   |
| SDG&E                                                                  |   |   |   |   |   |   |   |   |   |
| Discount rate                                                              |  (7) |   |  5.40  | % |   |  5.05  | % |  5.75  | % |
| Expected return on plan assets                                             |  7.00  | % |  7.00  | % |   |  6.69  | % |  6.49  | % |
| Rate of compensation increase                                              |  (8) |   |  (8) |   |   | N/A |   | N/A |   |
| SoCalGas                                                                   |   |   |   |   |   |   |   |   |   |
| Discount rate                                                              | (9) |   |  5.75  | % |   |  5.15  | % |  5.90  | % |
| Expected return on plan assets                                             |  7.00  | % |  7.00  | % |   |  7.00  | % |  7.00  | % |
| Rate of compensation increase                                              |  (6) |   |  (6) |   |   |  (1) |   |  (1) |   |
| (1)                                                                        | 4.50% and 4.00% as of December 31, 2011 and 2010, respectively, for the life insurance and Health Reimbursement Arrangement benefits for SoCalGas’ represented employees. No other PBOP benefits are compensation-based. |
| (2)                                                                        | In addition to rates for SDG&E and SoCalGas plans, 5.14% for Mobile Gas pension plan, 4.40% for Directors’ plan, 4.70% for other unfunded plans, and 4.90% for Sempra Energy funded plan. |
| (3)                                                                        | In addition to rates for SDG&E and SoCalGas plans, 5.95% for Mobile Gas pension plans, 4.85% for Directors’ plan, 5.45% for other unfunded plans, and 5.55% for Sempra Energy funded plan. |
| (4)                                                                        | In addition to rates for SDG&E and SoCalGas plans, 4.10% for the Executive Life Plan, 4.80% for Mobile Gas, and 4.65% for Sempra Energy. |
| (5)                                                                        | In addition to rates for SDG&E and SoCalGas plans, 4.60% for the Executive Life Plan, 5.70% for Mobile Gas, and 5.40% for Sempra Energy. |
| (6)                                                                        | 4.50% for the unfunded pension plans. 3.50% to 5.00% for the funded pension plan for SoCalGas’ represented participants and 3.50% to 8.50% for all the other funded pension plans’ participants using an age-based formula. |
| (7)                                                                        | 4.70% for the unfunded pension plan. 4.80% for the funded pension plan. |
| (8)                                                                        | 4.50% for the unfunded pension plan. 3.50% to 8.50% for the funded pension plan using an age-based formula. |
| (9)                                                                        | 4.70% for the unfunded pension plan. 5.05% for the funded pension plan. |

|                                                                         |              | 2011  | 2010        |
|------------------------------------------------------------------------------|-------------------|------------|------------------|
| ASSUMED HEALTH CARE COST TREND RATES AT DECEMBER 31:                         |              |       |             |   |
| Health-care cost trend rate                                                  |  10.00  | %          |  8.50  | % |
| Rate to which the cost trend rate is assumed to decline (the ultimate trend) |  5.00   | %          |  5.50  | % |
| Year that the rate reaches the ultimate trend                                | 2019         |       | 2016        |   |
|                                                                         |              |

|                                                            | Sempra Energy |            |      |       |     |
|-----------------------------------------------------------------|---------------|-----------------|-----------|------------|----------|
|                                                            | Consolidated  |            | SDG&E |       | SoCalGas |
|                                                            | 1%            | 1%              |      | 1%         | 1%       |   | 1% | 1% |
| (Dollars in millions)                                           | Increase      | Decrease        |      | Increase   | Decrease |   | Increase | Decrease |
| Effect on total of service and interest                         |          |            |      |       |     |   |   |   |   |   |   |   |   |   |
|     cost components of net periodic         |          |            |      |       |     |   |   |   |   |   |   |   |   |   |
|     postretirement health care benefit cost | $             |  13   | $         |  (10) |     | $ |  1  | $ |  (1) |   | $ |  12  | $ |  (9) |
| Effect on the health care component of the                      |          |            |      |       |     |   |   |   |   |   |   |   |   |   |
|     accumulated other postretirement        |          |            |      |       |     |   |   |   |   |   |   |   |   |   |
|     benefit obligations                     | $             |  116  | $         |  (95) |     | $ |  9  | $ |  (8) |   | $ |  105  | $ |  (85) |

| §   | long-term cost |
|--------------------|----------------|

| §   | variability and level of contributions |
|--------------------|----------------------------------------|

| §   | funded status |
|--------------------|---------------|

| §   | a range of expected outcomes over varying confidence levels |
|--------------------|-------------------------------------------------------------|

| §   | Level 1, for securities valued using quoted prices from active markets for identical assets; |
|--------------------|----------------------------------------------------------------------------------------------|

| §   | Level 2, for securities not traded on an active market but for which observable market inputs are readily available; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| §   | Level 3, for securities and investments valued based on significant inputs that are generally less observable from objective sources. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| FAIR VALUE MEASUREMENTS — SEMPRA ENERGY CONSOLIDATED            |
|-----------------------------------------------------------------------|
| (Dollars in millions)                                                 |
|                                                                  |   | At fair value as of December 31, 2011 |
| PENSION PLANS - INVESTMENT ASSETS                                     |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| SDG&E (see table below)                                           | $ |  466  | $ |  244  | $ |  7  | $ |  717  |
| SoCalGas (see table below)                                            |   |  919  |   |  484  |   |  15  |   |  1,418  |
| Other Sempra Energy                                                   |   |   |   |   |   |   |   |   |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               |   |  50  |   |  ―  |   |  ―  |   |  50  |
|    Domestic mid-cap(1)                                 |   |  10  |   |  ―  |   |  ―  |   |  10  |
|    Domestic small-cap(1)                               |   |  12  |   |  ―  |   |  ―  |   |  12  |
|    Foreign large-cap                                   |   |  32  |   |  ―  |   |  ―  |   |  32  |
|    Foreign mid-cap                                     |   |  7  |   |  ―  |   |  ―  |   |  7  |
|    Foreign small-cap                                   |   |  6  |   |  ―  |   |  ―  |   |  6  |
|    Foreign preferred small-cap                         |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Registered investment companies                     |   |  1  |   |  ―  |   |  ―  |   |  1  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    Domestic municipal bonds                            |   |  ―  |   |  2  |   |  ―  |   |  2  |
|    Foreign government bonds                            |   |  ―  |   |  5  |   |  ―  |   |  5  |
|    Domestic corporate bonds(2)                         |   |  ―  |   |  36  |   |  ―  |   |  36  |
|    Foreign corporate bonds                             |   |  ―  |   |  12  |   |  ―  |   |  12  |
|    Common/collective trusts(3)                         |   |  ―  |   |  6  |   |  ―  |   |  6  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(4) (stated at net asset value) |   |  1  |   |  ―  |   |  2  |   |  3  |
| Total other Sempra Energy(5)                                          |   |  120  |   |  61  |   |  2  |   |  183  |
| Total Sempra Energy Consolidated(6)                                   | $ |  1,505  | $ |  789  | $ |  24  | $ |  2,318  |
|                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                  |   | At fair value as of December 31, 2010 |
| PENSION PLANS - INVESTMENT ASSETS                                     |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| SDG&E (see table below)                                           | $ |  450  | $ |  245  | $ |  8  | $ |  703  |
| SoCalGas (see table below)                                            |   |  924  |   |  501  |   |  17  |   |  1,442  |
| Other Sempra Energy                                                   |   |   |   |   |   |   |   |   |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               |   |  54  |   |  ―  |   |  ―  |   |  54  |
|    Domestic mid-cap(1)                                 |   |  11  |   |  ―  |   |  ―  |   |  11  |
|    Domestic small-cap(1)                               |   |  12  |   |  ―  |   |  ―  |   |  12  |
|    Foreign emerging market funds                       |   |  ―  |   |  13  |   |  ―  |   |  13  |
|    Foreign large-cap                                   |   |  31  |   |  ―  |   |  ―  |   |  31  |
|    Foreign mid-cap                                     |   |  8  |   |  ―  |   |  ―  |   |  8  |
|    Foreign small-cap                                   |   |  5  |   |  ―  |   |  ―  |   |  5  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    U.S. Treasury securities                            |   |  5  |   |  ―  |   |  ―  |   |  5  |
|    Other U.S. government securities                    |   |  ―  |   |  9  |   |  ―  |   |  9  |
|    Domestic municipal bonds                            |   |  ―  |   |  2  |   |  ―  |   |  2  |
|    Foreign government bonds                            |   |  ―  |   |  2  |   |  ―  |   |  2  |
|    Domestic corporate bonds(2)                         |   |  ―  |   |  31  |   |  ―  |   |  31  |
|    Foreign corporate bonds                             |   |  ―  |   |  9  |   |  ―  |   |  9  |
|    Common/collective trusts(3)                         |   |  ―  |   |  3  |   |  ―  |   |  3  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(4) (stated at net asset value) |   |  ―  |   |  ―  |   |  2  |   |  2  |
| Total other Sempra Energy(7)                                          |   |  126  |   |  69  |   |  2  |   |  197  |
| Total Sempra Energy Consolidated(6)                                   | $ |  1,500  | $ |  815  | $ |  27  | $ |  2,342  |
| (1)                                                                   | Investments in common stock of domestic corporations stratified according to the MSCI 2500 index. |
| (2)                                                                   | Investment-grade bonds of U.S. issuers from diverse industries. |
| (3)                                                                   | Investments in common/collective trusts held in Sempra Energy’s Pension Master Trust. |
| (4)                                                                   | Investments in venture capital and real estate funds. |
| (5)                                                                   | Excludes cash and cash equivalents of $1 million and transfers payable to other plans of $7 million. |
| (6)                                                                   | Excludes cash and cash equivalents of $14 million and $12 million at December 31, 2011 and 2010, respectively. |
| (7)                                                                   | Excludes transfers payable to other plans of $12 million. |
|                                                                  |   |

| FAIR VALUE MEASUREMENTS — SDG&E                             |
|-----------------------------------------------------------------------|
| (Dollars in millions)                                                 |
|                                                                  |   | At fair value as of December 31, 2011 |
| PENSION PLANS - INVESTMENT ASSETS                                     |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               | $ |  199  | $ |  ―  | $ |  ―  | $ |  199  |
|    Domestic mid-cap(1)                                 |   |  39  |   |  ―  |   |  ―  |   |  39  |
|    Domestic small-cap(1)                               |   |  45  |   |  ―  |   |  ―  |   |  45  |
|    Foreign large-cap                                   |   |  125  |   |  ―  |   |  ―  |   |  125  |
|    Foreign mid-cap                                     |   |  31  |   |  ―  |   |  ―  |   |  31  |
|    Foreign small-cap                                   |   |  22  |   |  ―  |   |  ―  |   |  22  |
|    Foreign preferred large-cap                         |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Registered investment companies                     |   |  4  |   |  ―  |   |  ―  |   |  4  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    Domestic municipal bonds                            |   |  ―  |   |  9  |   |  ―  |   |  9  |
|    Foreign government bonds                            |   |  ―  |   |  25  |   |  ―  |   |  25  |
|    Domestic corporate bonds(2)                         |   |  ―  |   |  139  |   |  ―  |   |  139  |
|    Foreign corporate bonds                             |   |  ―  |   |  48  |   |  ―  |   |  48  |
|    Common/collective trusts(3)                         |   |  ―  |   |  23  |   |  ―  |   |  23  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(4) (stated at net asset value) |   |  ―  |   |  ―  |   |  7  |   |  7  |
| Total investment assets(5)                                            | $ |  466  | $ |  244  | $ |  7  | $ |  717  |
|                                                                  |   |
|                                                                  |   | At fair value as of December 31, 2010 |
| PENSION PLANS - INVESTMENT ASSETS                                     |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               | $ |  198  | $ |  ―  | $ |  ―  | $ |  198  |
|    Domestic mid-cap(1)                                 |   |  39  |   |  ―  |   |  ―  |   |  39  |
|    Domestic small-cap(1)                               |   |  42  |   |  ―  |   |  ―  |   |  42  |
|    Foreign emerging market funds                       |   |  ―  |   |  46  |   |  ―  |   |  46  |
|    Foreign large-cap                                   |   |  108  |   |  ―  |   |  ―  |   |  108  |
|    Foreign mid-cap                                     |   |  25  |   |  ―  |   |  ―  |   |  25  |
|    Foreign small-cap                                   |   |  19  |   |  ―  |   |  ―  |   |  19  |
|    Foreign preferred large-cap                         |   |  1  |   |  ―  |   |  ―  |   |  1  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    U.S. Treasury securities                            |   |  18  |   |  ―  |   |  ―  |   |  18  |
|    Other U.S. government securities                    |   |  ―  |   |  32  |   |  ―  |   |  32  |
|    Domestic municipal bonds                            |   |  ―  |   |  8  |   |  ―  |   |  8  |
|    Foreign government bonds                            |   |  ―  |   |  9  |   |  ―  |   |  9  |
|    Domestic corporate bonds(2)                         |   |  ―  |   |  111  |   |  ―  |   |  111  |
|    Foreign corporate bonds                             |   |  ―  |   |  33  |   |  ―  |   |  33  |
|    Common/collective trusts(3)                         |   |  ―  |   |  6  |   |  ―  |   |  6  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(4) (stated at net asset value) |   |  ―  |   |  ―  |   |  8  |   |  8  |
| Total investment assets(6)                                            | $ |  450  | $ |  245  | $ |  8  | $ |  703  |
| (1)                                                                   | Investments in common stock of domestic corporations stratified according to the MSCI 2500 index. |
| (2)                                                                   | Investment-grade bonds of U.S. issuers from diverse industries. |
| (3)                                                                   | Investments in common/collective trusts held in Sempra Energy’s Pension Master Trust. |
| (4)                                                                   | Investments in venture capital and real estate funds. |
| (5)                                                                   | Excludes cash and cash equivalents of $4 million and $9 million of transfers payable to other plans. |
| (6)                                                                   | Excludes cash and cash equivalents of $4 million and transfers receivable from other plans of $6 million. |

| FAIR VALUE MEASUREMENTS — SOCALGAS                              |
|-----------------------------------------------------------------------|
| (Dollars in millions)                                                 |
|                                                                  |   | At fair value as of December 31, 2011 |
| PENSION PLANS - INVESTMENT ASSETS                                     |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               | $ |  393  | $ |  ―  | $ |  ―  | $ |  393  |
|    Domestic mid-cap(1)                                 |   |  76  |   |  ―  |   |  ―  |   |  76  |
|    Domestic small-cap(1)                               |   |  89  |   |  ―  |   |  ―  |   |  89  |
|    Foreign large-cap                                   |   |  247  |   |  ―  |   |  ―  |   |  247  |
|    Foreign mid-cap                                     |   |  61  |   |  ―  |   |  ―  |   |  61  |
|    Foreign small-cap                                   |   |  43  |   |  ―  |   |  ―  |   |  43  |
|    Foreign preferred large-cap                         |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Registered investment companies                     |   |  8  |   |  ―  |   |  ―  |   |  8  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    Domestic municipal bonds                            |   |  ―  |   |  18  |   |  ―  |   |  18  |
|    Foreign government bonds                            |   |  ―  |   |  49  |   |  ―  |   |  49  |
|    Domestic corporate bonds(2)                         |   |  ―  |   |  275  |   |  ―  |   |  275  |
|    Foreign corporate bonds                             |   |  ―  |   |  96  |   |  ―  |   |  96  |
|    Common/collective trusts(3)                         |   |  ―  |   |  46  |   |  ―  |   |  46  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(4) (stated at net asset value) |   |  1  |   |  ―  |   |  15  |   |  16  |
| Total investment assets(5)                                            | $ |  919  | $ |  484  | $ |  15  | $ |  1,418  |
|                                                                  |   |
|                                                                  |   | At fair value as of December 31, 2010 |
| PENSION PLANS - INVESTMENT ASSETS                                     |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               | $ |  409  | $ |  ―  | $ |  ―  | $ |  409  |
|    Domestic mid-cap(1)                                 |   |  80  |   |  ―  |   |  ―  |   |  80  |
|    Domestic small-cap(1)                               |   |  86  |   |  ―  |   |  ―  |   |  86  |
|    Foreign emerging market funds                       |   |  ―  |   |  95  |   |  ―  |   |  95  |
|    Foreign large-cap                                   |   |  221  |   |  ―  |   |  ―  |   |  221  |
|    Foreign mid-cap                                     |   |  52  |   |  ―  |   |  ―  |   |  52  |
|    Foreign small-cap                                   |   |  39  |   |  ―  |   |  ―  |   |  39  |
|    Foreign preferred large-cap                         |   |  1  |   |  ―  |   |  ―  |   |  1  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    U.S. Treasury securities                            |   |  36  |   |  ―  |   |  ―  |   |  36  |
|    Other U.S. government securities                    |   |  ―  |   |  65  |   |  ―  |   |  65  |
|    Domestic municipal bonds                            |   |  ―  |   |  16  |   |  ―  |   |  16  |
|    Foreign government bonds                            |   |  ―  |   |  18  |   |  ―  |   |  18  |
|    Domestic corporate bonds(2)                         |   |  ―  |   |  227  |   |  ―  |   |  227  |
|    Foreign corporate bonds                             |   |  ―  |   |  67  |   |  ―  |   |  67  |
|    Common/collective trusts(3)                         |   |  ―  |   |  13  |   |  ―  |   |  13  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(4) (stated at net asset value) |   |  ―  |   |  ―  |   |  17  |   |  17  |
| Total investment assets(6)                                            | $ |  924  | $ |  501  | $ |  17  | $ |  1,442  |
| (1)                                                                   | Investments in common stock of domestic corporations stratified according to the MSCI 2500 index. |
| (2)                                                                   | Investment-grade bonds of U.S. issuers from diverse industries. |
| (3)                                                                   | Investments in common/collective trusts held in Sempra Energy’s Pension Master Trust. |
| (4)                                                                   | Investments in venture capital and real estate funds. |
| (5)                                                                   | Excludes cash and cash equivalents of $9 million and transfers receivable from other plans of $16 million. |
| (6)                                                                   | Excludes cash and cash equivalents of $8 million and transfers receivable from other plans of $6 million. |

| FAIR VALUE MEASUREMENTS — SEMPRA ENERGY CONSOLIDATED |
|------------------------------------------------------------|
| (Dollars in millions)                                      |
|                                                       |   | At fair value as of December 31, 2011 |
| OTHER POSTRETIREMENT BENEFIT PLANS - INVESTMENT ASSETS     |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| SDG&E (see table below)                                | $ |  47  | $ |  24  | $ |  1  | $ |  72  |
| SoCalGas (see table below)                                 |   |  176  |   |  390  |   |  3  |   |  569  |
| Other Sempra Energy                                        |   |   |   |   |   |   |   |   |
| Equity securities:                                         |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                    |   |  4  |   |  ―  |   |  ―  |   |  4  |
|    Domestic mid-cap(1)                      |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Domestic small-cap(1)                    |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Foreign large-cap                        |   |  2  |   |  ―  |   |  ―  |   |  2  |
|    Foreign small-cap                        |   |  1  |   |  ―  |   |  ―  |   |  1  |
| Fixed income securities:                                   |   |   |   |   |   |   |   |   |
|    Domestic corporate bonds(2)              |   |  ―  |   |  4  |   |  ―  |   |  4  |
|    Foreign government bonds                 |   |  ―  |   |  1  |   |  ―  |   |  1  |
|    Foreign corporate bonds                  |   |  ―  |   |  1  |   |  ―  |   |  1  |
| Total other Sempra Energy(3)                               |   |  9  |   |  6  |   |  ―  |   |  15  |
| Total Sempra Energy Consolidated(4)                        | $ |  232  | $ |  420  | $ |  4  | $ |  656  |
|                                                       |   |   |   |   |   |   |   |   |   |
|                                                       |   | At fair value as of December 31, 2010 |
| OTHER POSTRETIREMENT BENEFIT PLANS - INVESTMENT ASSETS     |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| SDG&E (see table below)                                | $ |  45  | $ |  24  | $ |  1  | $ |  70  |
| SoCalGas (see table below)                                 |   |  184  |   |  395  |   |  3  |   |  582  |
| Other Sempra Energy                                        |   |   |   |   |   |   |   |   |
| Equity securities:                                         |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                    |   |  3  |   |  ―  |   |  ―  |   |  3  |
|    Domestic mid-cap(1)                      |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Domestic small-cap(1)                    |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Foreign large-cap                        |   |  2  |   |  ―  |   |  ―  |   |  2  |
|    Foreign mid-cap                          |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Foreign small-cap                        |   |  1  |   |  ―  |   |  ―  |   |  1  |
| Fixed income securities:                                   |   |   |   |   |   |   |   |   |
|    U.S. Treasury securities                 |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Domestic corporate bonds(2)              |   |  ―  |   |  3  |   |  ―  |   |  3  |
| Total other Sempra Energy(5)                               |   |  10  |   |  3  |   |  ―  |   |  13  |
| Total Sempra Energy Consolidated(6)                        | $ |  239  | $ |  422  | $ |  4  | $ |  665  |
| (1)                                                        | Investments in common stock of domestic corporations stratified according to the MSCI 2500 index. |
| (2)                                                        | Investment-grade bonds of U.S. issuers from diverse industries. |
| (3)                                                        | Excludes transfers payable to other plans of $1 million. |
| (4)                                                        | Excludes cash and cash equivalents of $122 million, $86 million and $36 million of which is held in SoCalGas and SDG&E |
|                                                       | PBOP plan trusts, respectively. |
| (5)                                                        | Excludes cash and cash equivalents of $2 million. |
| (6)                                                        | Excludes cash and cash equivalents of $81 million, $50 million and $29 million of which is held in SoCalGas and SDG&E |
|                                                       | PBOP plan trusts, respectively. |   |   |   |   |   |   |   |   |
|                                                       |
|                                                       |   |

| FAIR VALUE MEASUREMENTS — SDG&E                             |
|-----------------------------------------------------------------------|
| (Dollars in millions)                                                 |
|                                                                  |   | At fair value as of December 31, 2011 |
| OTHER POSTRETIREMENT BENEFIT PLANS - INVESTMENT ASSETS                |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               | $ |  17  | $ |  ―  | $ |  ―  | $ |  17  |
|    Domestic mid-cap(1)                                 |   |  3  |   |  ―  |   |  ―  |   |  3  |
|    Domestic small-cap(1)                               |   |  4  |   |  ―  |   |  ―  |   |  4  |
|    Foreign large-cap                                   |   |  11  |   |  ―  |   |  ―  |   |  11  |
|    Foreign mid-cap                                     |   |  3  |   |  ―  |   |  ―  |   |  3  |
|    Foreign small-cap                                   |   |  2  |   |  ―  |   |  ―  |   |  2  |
|    Registered investment company                       |   |  7  |   |  ―  |   |  ―  |   |  7  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    Domestic municipal bonds(2)                         |   |  ―  |   |  4  |   |  ―  |   |  4  |
|    Domestic corporate bonds(3)                         |   |  ―  |   |  12  |   |  ―  |   |  12  |
|    Foreign government bonds                            |   |  ―  |   |  2  |   |  ―  |   |  2  |
|    Foreign corporate bonds                             |   |  ―  |   |  4  |   |  ―  |   |  4  |
|    Common/collective trusts(4)                         |   |  ―  |   |  2  |   |  ―  |   |  2  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(5) (stated at net asset value) |   |  ―  |   |  ―  |   |  1  |   |  1  |
| Total investment assets(6)                                            | $ |  47  | $ |  24  | $ |  1  | $ |  72  |
|                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                  |   | At fair value as of December 31, 2010 |
| OTHER POSTRETIREMENT BENEFIT PLANS - INVESTMENT ASSETS                |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               | $ |  16  | $ |  ―  | $ |  ―  | $ |  16  |
|    Domestic mid-cap(1)                                 |   |  3  |   |  ―  |   |  ―  |   |  3  |
|    Domestic small-cap(1)                               |   |  3  |   |  ―  |   |  ―  |   |  3  |
|    Foreign emerging market funds                       |   |  ―  |   |  4  |   |  ―  |   |  4  |
|    Foreign large-cap                                   |   |  8  |   |  ―  |   |  ―  |   |  8  |
|    Foreign mid-cap                                     |   |  2  |   |  ―  |   |  ―  |   |  2  |
|    Foreign small-cap                                   |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Registered investment company                       |   |  11  |   |  ―  |   |  ―  |   |  11  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    U.S. Treasury securities                            |   |  1  |   |  ―  |   |  ―  |   |  1  |
|    Other U.S. government securities                    |   |  ―  |   |  2  |   |  ―  |   |  2  |
|    Foreign government  bonds                 |   |  ―  |   |  1  |   |  ―  |   |  1  |
|    Domestic municipal bonds(2)                         |   |  ―  |   |  6  |   |  ―  |   |  6  |
|    Domestic corporate bonds(3)                         |   |  ―  |   |  9  |   |  ―  |   |  9  |
|    Foreign corporate bonds                             |   |  ―  |   |  2  |   |  ―  |   |  2  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(5) (stated at net asset value) |   |  ―  |   |  ―  |   |  1  |   |  1  |
| Total investment assets(7)                                            | $ |  45  | $ |  24  | $ |  1  | $ |  70  |
| (1)                                                                   | Investments in common stock of domestic corporations stratified according to the MSCI 2500 index. |
| (2)                                                                   | Bonds of California municipalities held in SDG&E PBOP plan trusts. |
| (3)                                                                   | Investment-grade bonds of U.S. issuers from diverse industries. |
| (4)                                                                   | Investment in common/collective trusts held in PBOP plan VEBA trusts. |   |   |   |   |   |   |   |
| (5)                                                                   | Investments in venture capital and real estate funds. |
| (6)                                                                   | Excludes cash and cash equivalents of $36 million, all of which is held in SDG&E PBOP plan trusts, and transfers payable to other plans of $2 million. |
| (7)                                                                   | Excludes cash and cash equivalents of $29 million, all of which is held in SDG&E PBOP plan trusts. |

| FAIR VALUE MEASUREMENTS — SOCALGAS                              |
|-----------------------------------------------------------------------|
| (Dollars in millions)                                                 |
|                                                                  |   | At fair value as of December 31, 2011 |
| OTHER POSTRETIREMENT BENEFIT PLANS - INVESTMENT ASSETS                |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               | $ |  75  | $ |  ―  | $ |  ―  | $ |  75  |
|    Domestic mid-cap(1)                                 |   |  15  |   |  ―  |   |  ―  |   |  15  |
|    Domestic small-cap(1)                               |   |  17  |   |  ―  |   |  ―  |   |  17  |
|    Foreign large-cap                                   |   |  47  |   |  ―  |   |  ―  |   |  47  |
|    Foreign mid-cap                                     |   |  12  |   |  ―  |   |  ―  |   |  12  |
|    Foreign small-cap                                   |   |  8  |   |  ―  |   |  ―  |   |  8  |
|    Registered investment company                       |   |  2  |   |  ―  |   |  ―  |   |  2  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    Domestic municipal bonds                            |   |  ―  |   |  3  |   |  ―  |   |  3  |
|    Foreign government bonds                            |   |  ―  |   |  9  |   |  ―  |   |  9  |
|    Domestic corporate bonds(2)                         |   |  ―  |   |  52  |   |  ―  |   |  52  |
|    Foreign corporate bonds                             |   |  ―  |   |  18  |   |  ―  |   |  18  |
|    Common/collective trusts(3)                         |   |  ―  |   |  308  |   |  ―  |   |  308  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(4) (stated at net asset value) |   |  ―  |   |  ―  |   |  3  |   |  3  |
| Total investment assets(5)                                            | $ |  176  | $ |  390  | $ |  3  | $ |  569  |
|                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                  |   | At fair value as of December 31, 2010 |
| OTHER POSTRETIREMENT BENEFIT PLANS - INVESTMENT ASSETS                |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
| Equity securities:                                                    |   |   |   |   |   |   |   |   |
|    Domestic large-cap(1)                               | $ |  82  | $ |  ―  | $ |  ―  | $ |  82  |
|    Domestic mid-cap(1)                                 |   |  16  |   |  ―  |   |  ―  |   |  16  |
|    Domestic small-cap(1)                               |   |  17  |   |  ―  |   |  ―  |   |  17  |
|    Foreign emerging market funds                       |   |  ―  |   |  19  |   |  ―  |   |  19  |
|    Broad market fund(6)                                |   |  ―  |   |  220  |   |  ―  |   |  220  |
|    Foreign large-cap                                   |   |  44  |   |  ―  |   |  ―  |   |  44  |
|    Foreign mid-cap                                     |   |  10  |   |  ―  |   |  ―  |   |  10  |
|    Foreign small-cap                                   |   |  8  |   |  ―  |   |  ―  |   |  8  |
| Fixed income securities:                                              |   |   |   |   |   |   |   |   |
|    U.S. Treasury securities                            |   |  7  |   |  ―  |   |  ―  |   |  7  |
|    Other U.S. government securities                    |   |  ―  |   |  14  |   |  ―  |   |  14  |
|    Domestic municipal bonds                            |   |  ―  |   |  3  |   |  ―  |   |  3  |
|    Foreign government bonds                            |   |  ―  |   |  3  |   |  ―  |   |  3  |
|    Domestic corporate bonds(2)                         |   |  ―  |   |  45  |   |  ―  |   |  45  |
|    Foreign corporate bonds                             |   |  ―  |   |  14  |   |  ―  |   |  14  |
|    Common/collective trusts(3)                         |   |  ―  |   |  77  |   |  ―  |   |  77  |
| Other types of investments:                                           |   |   |   |   |   |   |   |   |
|    Private equity funds(4) (stated at net asset value) |   |  ―  |   |  ―  |   |  3  |   |  3  |
| Total investment assets(7)                                            | $ |  184  | $ |  395  | $ |  3  | $ |  582  |
| (1)                                                                   | Investments in common stock of domestic corporations stratified according to the MSCI 2500 index. |
| (2)                                                                   | Investment-grade bonds of U.S. issuers from diverse industries. |
| (3)                                                                   | Investments in common/collective trusts held in PBOP plan VEBA trusts. |
| (4)                                                                   | Investments in venture capital and real estate funds. |
| (5)                                                                   | Excludes cash and cash equivalents of $86 million, all of which is held in SoCalGas PBOP plan trusts, and transfers receivable from other plans of $3 million. |
| (6)                                                                   | A passively managed broad market fund held in SoCalGas PBOP plan trusts. |
| (7)                                                                   | Excludes cash and cash equivalents of $50 million, all of which is held in SoCalGas PBOP plan trusts. |

|                                                         | Private Equity Funds |
|--------------------------------------------------------------|----------------------|
|                                                         | 2011            |   | 2010  |
| (Dollars in millions)                                        | SDG&E            | SoCalGas | All Other | Sempra Energy Consolidated |   | SDG&E | SoCalGas | All Other | Sempra Energy Consolidated |
| PENSION PLANS                                                |                 |   |   |   |   |   |   |   |   |
| Total Level 3 investment    assets       | $7                   | $15 | $2 | $24 |   | $8 | $17 | $2 | $27 |
| Percentage of total    investment assets | 1%                   | 1% | -% | 1% |   | 1% | 1% | -% | 1% |
| OTHER POSTRETIREMENT BENEFIT PLANS                      |                 |   |   |   |   |
| Total Level 3 investment    assets       | $1                   | $3 | $- | $4 |   | $1 | $3 | $- | $4 |
| Percentage of total    investment assets | 1%                   | -% | -% | 1% |   | 1% | -% | -% | 1% |

| LEVEL 3 RECONCILIATIONS                         |
|-------------------------------------------------|
| (Dollars in millions)                           |
|                                            | Private Equity Funds |
|                                            |   | SDG&E |   | SoCalGas |   | All Other |   | Sempra EnergyConsolidated |
| PENSION PLANS                                   |   |   |   |   |   |   |   |   |
| Balance as of January 1, 2010                   | $ |  9  | $ |  19  | $ |  2  | $ |  30  |
|    Actual returns on plan assets |   |  ―  |   |  1  |   |  ―  |   |  1  |
|    Purchases                     |   |  ―  |   |  1  |   |  ―  |   |  1  |
|    Sales                         |   |  (1) |   |  (4) |   |  ―  |   |  (5) |
| Balance as of December 31, 2010                 |   |  8  |   |  17  |   |  2  |   |  27  |
|    Realized gains                |   |  1  |   |  1  |   |  ―  |   |  2  |
|    Purchases                     |   |  ―  |   |  1  |   |  ―  |   |  1  |
|    Sales                         |   |  (2) |   |  (4) |   |  ―  |   |  (6) |
| Balance as of December 31, 2011                 | $ |  7  | $ |  15  | $ |  2  | $ |  24  |
| OTHER POSTRETIREMENT BENEFIT PLANS              |   |   |   |   |   |   |   |   |
| Balance as of January 1, 2010                   | $ |  1  | $ |  4  | $ | ― | $ |  5  |
|    Sales                         |   |  ―  |   |  (1) |   | ― |   |  (1) |
| Balance as of December 31, 2010 and 2011        | $ | 1  | $ | 3  | $ |   ― | $ | 4  |

|                               | Sempra Energy |            |     |
|------------------------------------|---------------|-----------------|----------|
| (Dollars in millions)              | Consolidated  | SDG&E       | SoCalGas |
| Pension plans                      | $             |  215  | $        |  67  | $ |  113  |
| Other postretirement benefit plans |          |  59   |     |  14  |   |  40  |

|                  | Sempra Energy Consolidated |              | SDG&E |            | SoCalGas       |
|-----------------------|----------------------------|-------------------|-----------|-----------------|----------------|
|                  |                       | Other             |      |            | Other          |   |   | Other |
|                  | Pension                    | Postretirement    |      | Pension         | Postretirement |   | Pension | Postretirement |
| (Dollars in millions) | Benefits                   | Benefits          |      | Benefits        | Benefits       |   | Benefits | Benefits |
| 2012             | $                          |  302    | $         |  49   |           | $ |  89  | $ |  7  |   | $ |  173  | $ |  37  |
| 2013             |                       |  309    |      |  52   |           |   |  91  |   |  8  |   |   |  183  |   |  40  |
| 2014             |                       |  313    |      |  56   |           |   |  91  |   |  9  |   |   |  185  |   |  43  |
| 2015             |                       |  304    |      |  60   |           |   |  89  |   |  10  |   |   |  179  |   |  46  |
| 2016             |                       |  302    |      |  64   |           |   |  82  |   |  11  |   |   |  182  |   |  49  |
| 2017-2021             |                       |  1,344  |      |  373  |           |   |  377  |   |  67  |   |   |  806  |   |  283  |

| (Dollars in millions)      | 2011  | 2010      | 2009  |
|----------------------------|------------|----------------|------------|
| Sempra Energy Consolidated | $          |  32  | $          |  31  | $ |  31  |
| SDG&E                  |       |  14  |       |  14  |   |  13  |
| SoCalGas                   |       |  14  |       |  13  |   |  13  |

----

| §   | non-qualified stock options |
|--------------------|-----------------------------|

| §   | incentive stock options |
|--------------------|-------------------------|

| §   | restricted stock |
|--------------------|------------------|

| §   | restricted stock units |
|--------------------|------------------------|

| §   | stock appreciation rights |
|--------------------|---------------------------|

| §   | performance awards |
|--------------------|--------------------|

| §   | stock payments |
|--------------------|----------------|

| §   | dividend equivalents |
|--------------------|----------------------|

| §   | Non-Qualified Stock Options: Options have an exercise price equal to the market price of the common stock at the date of grant, are service-based, become exercisable over a four-year period, and expire 10 years from the date of grant. Vesting and/or the ability to exercise may be accelerated upon a change in control, in accordance with severance pay agreements or upon eligibility for retirement. Options are subject to forfeiture or earlier expiration when an employee terminates employment. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Restricted Stock: Substantially all restricted stock awards vest at the end of four-year performance periods based on Sempra Energy’s total return to shareholders relative to that of market indices. Vesting is subject to earlier forfeiture upon termination of employment and accelerated vesting upon a change in control, in accordance with severance pay agreements or upon eligibility for retirement. Holders of restricted stock have full voting rights. They also have full dividend rights; however, dividends paid on restricted stock held by officers are reinvested to purchase additional shares that become subject to the same vesting conditions as the restricted stock to which the dividends relate. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Restricted Stock Units: Restricted stock unit awards vest at the end of four-year performance periods based on Sempra Energy’s total return to shareholders relative to that of market indices. If Sempra Energy’s total return to shareholders exceeds the target levels established under the 2008 Long Term Incentive Plan for awards granted beginning in 2008 and each year since, up to an additional 50 percent of the number of granted restricted stock units may be issued. If Sempra Energy’s total return to shareholders is below the target levels, shares are subject to partial vesting on a pro rata basis. Vesting is subject to earlier forfeiture upon termination of employment and accelerated vesting upon a change in control, in accordance with severance pay agreements or upon eligibility for retirement. Dividend equivalents on shares subject to restricted stock units are reinvested to purchase additional shares that become subject to the same vesting conditions as the restricted stock units to which the dividends relate. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| SHARE-BASED COMPENSATION EXPENSE ― SEMPRA ENERGY CONSOLIDATED |
|---------------------------------------------------------------------|
| (Dollars in millions, except per share amounts)                     |
|                                                                | Years ended December 31, |
|                                                                | 2011  | 2010  | 2009  |
| Share-based compensation expense, before income taxes               | $ |  44  | $ |  34  | $ |  34  |
| Income tax benefit                                                  |   |  (18) |   |  (13) |   |  (13) |
| Share-based compensation expense, net of income taxes               | $ |  26  | $ |  21  | $ |  21  |
|                                                                |   |   |   |   |   |   |
| Net share-based compensation expense, per common share              |   |   |   |   |   |   |
|     Basic                                       | $ |  0.11  | $ |  0.09  | $ |  0.09  |
|     Diluted                                     | $ |  0.11  | $ |  0.08  | $ |  0.08  |

| SHARE-BASED COMPENSATION EXPENSE ― SDG&E AND SOCALGAS |
|-----------------------------------------------------------------|
| (Dollars in millions)                                           |
|                                                            | Years ended December 31, |
|                                                            | 2011  | 2010  | 2009  |
| SDG&E:                                                      |   |   |   |   |   |   |
|     Compensation expense                    | $ |  8  | $ |  9  | $ |  6  |
|     Capitalized compensation cost           |   |  3  |   |  2  |   |  3  |
| SoCalGas:                                                       |   |   |   |   |   |   |
|     Compensation expense                    | $ |  9  | $ |  8  | $ |  7  |
|     Capitalized compensation cost           |   |  1  |   |  1  |   |  2  |

|                     | 2010  | 2009  |
|--------------------------|------------|------------|
| Stock price volatility   | 19%        |       | 18% |   |
| Risk-free rate of return | 2.6%       |       | 1.9% |   |
| Annual dividend yield    | 2.8%       |       | 3.2% |   |
| Expected life            | 5.5 years  |       | 5.6 years |   |

| NON-QUALIFIED STOCK OPTIONS                      |
|--------------------------------------------------|
|                                             |
|                                             |   |   | Weighted- |   |
|                                             |   | Weighted- | Average |   |
|                                             | Shares | Average | Remaining | Aggregate |
|                                             | Under | Exercise | Contractual Term | Intrinsic Value |
|                                             | Option | Price | (in years) | (in millions) |
| Outstanding at December 31, 2010                 |   |  5,630,472  | $ |  44.79  |   |   |   |   |
|     Exercised                |   |  (958,126) | $ |  29.41  |   |   |   |   |
|     Forfeited/canceled       |   |  (41,375) | $ |  57.75  |   |   |   |   |
| Outstanding at December 31, 2011                 |   |  4,630,971  | $ |  47.85  |   |  4.9  | $ |  40  |
|                                             |   |   |   |   |   |   |   |   |
| Vested or expected to vest, at December 31, 2011 |   |  4,615,468  | $ |  47.83  |   |  4.8  | $ |  40  |
| Exercisable at December 31, 2011                 |   |  3,542,346  | $ |  46.56  |   |  4.2  | $ |  35  |

| §   | $23 million in 2011 |
|--------------------|---------------------|

| §   | $22 million in 2010 |
|--------------------|---------------------|

| §   | $45 million in 2009 |
|--------------------|---------------------|

| §   | $7 million in 2011 |
|--------------------|--------------------|

| §   | $8 million in 2010 |
|--------------------|--------------------|

| §   | $9 million in 2009 |
|--------------------|--------------------|

|                     | 2011  | 2010  | 2009  |
|--------------------------|------------|------------|------------|
| Risk-free rate of return | 1.5%       |       | 2.1%       |   | 1.4% |   |
| Annual dividend yield    | 3.0%       |       | 2.8%       |   | 3.2% |   |
| Stock price volatility   | 27%        |       | 26%        |   | 25% |   |

| RESTRICTED STOCK AWARDS                          |
|--------------------------------------------------|
|                                             |
|                                             |   | Weighted- |
|                                             |   | Average |
|                                             |   | Grant-Date |
|                                             | Shares | Fair Value |
| Nonvested at December 31, 2010                   |   |  787,973  | $ |  36.73  |
|     Granted                  |   |  11,876  | $ |  52.96  |
|     Vested                   |   |  (775,573) | $ |  36.67  |
| Nonvested at December 31, 2011                   |   |  24,276  | $ |  46.51  |
| Vested or expected to vest, at December 31, 2011 |   |  24,276  | $ |  46.51  |

| §   | $28 million in 2011 |
|--------------------|---------------------|

| §   | $4 million in 2010 |
|--------------------|--------------------|

| §   | $27 million in 2009 |
|--------------------|---------------------|

| RESTRICTED STOCK UNITS                           |
|--------------------------------------------------|
|                                             |
|                                             |   |   | Weighted- |
|                                             |   |   | Average |
|                                             |   |   | Grant-Date |
|                                             |   | Units | Fair Value |
| Nonvested at December 31, 2010                   |   |  2,231,325  | $ |  43.46  |
|     Granted                  |   |  1,089,223  | $ |  42.35  |
|     Vested                   |   |  (10,336) | $ |  50.40  |
|     Forfeited                |   |  (17,700) | $ |  42.34  |
| Nonvested at December 31, 2011(1)                |   |  3,292,512  | $ |  43.08  |
| Vested or expected to vest, at December 31, 2011 |   |  3,231,843  | $ |  43.10  |
| (1)                                              | Each unit represents the right to receive one share of our common stock if applicable performance conditions are satisfied. Up to an additional 50% of the shares represented by the units may be issued if Sempra Energy exceeds target performance conditions. |

----

| §   | The Sempra Utilities use natural gas energy derivatives, on their customers’ behalf, with the objective of managing price risk and basis risks, and lowering natural gas costs. These derivatives include fixed price natural gas positions, options, and basis risk instruments, which are either exchange-traded or over-the-counter financial instruments. This activity is governed by risk management and transacting activity plans that have been filed with and approved by the CPUC. Natural gas derivative activities are recorded as commodity costs that are offset by regulatory account balances and are recovered in rates. Net commodity cost impacts on the Consolidated Statements of Operations are reflected in Cost of Electric Fuel and Purchased Power or in Cost of Natural Gas. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | SDG&E is allocated and may purchase congestion revenue rights (CRRs), which serve to reduce the regional electricity price volatility risk that may result from local transmission capacity constraints. Unrealized gains and losses do not impact earnings, as they are offset by regulatory account balances. Realized gains and losses associated with CRRs are recorded in Cost of Electric Fuel and Purchased Power, which is recoverable in rates, on the Consolidated Statements of Operations. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Sempra Generation uses natural gas and electricity instruments to market energy products and optimize the earnings of its natural gas power plants. Gains and losses associated with these undesignated derivatives are recognized in Energy-Related Businesses Revenues or in Cost of Natural Gas, Electric Fuel and Purchased Power on the Consolidated Statements of Operations. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Sempra LNG and Sempra Pipelines & Storage use natural gas derivatives to market energy products and optimize the earnings of our liquefied natural gas business and Sempra Pipelines & Storage’s natural gas storage and transportation assets. Sempra Pipelines & Storage also uses natural gas energy derivatives with the objective of managing price risk and lowering natural gas prices at its Mexican distribution operations. These derivatives, which are recorded as commodity costs that are offset by regulatory account balances and recovered in rates, are recognized in Cost of Natural Gas on the Consolidated Statements of Operations. At Sempra Pipelines & Storage’s non-utility businesses, derivatives are undesignated, and their impact on earnings is recorded in Energy-Related Businesses Revenues or in Cost of Natural Gas, Electric Fuel and Purchased Power on the Consolidated Statements of Operations. Sempra LNG’s derivatives are undesignated, and their impact on earnings is recorded in Energy-Related Businesses Revenues on the Consolidated Statements of Operations. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | From time to time, our various businesses, including the Sempra Utilities, may use other energy derivatives to hedge exposures such as the price of vehicle fuel. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                 |                          |             | December 31,     |
|----------------------------------------------------------------------|-------------------------------|------------------|------------------|
| Business Unit and Commodity                                          | 2011                     | 2010        |
| Sempra Utilities:                                                    |                          |             |             |
|     SDG&E:                                   |                          |             |             |
|                                                                 | Natural gas                   | 35 million MMBtu | 51 million MMBtu | (1) |
|                                                                 | Congestion revenue rights     | 19 million MWh   | 21 million MWh   | (2) |
|                                                                 |                          |             |             |   |   |
| Energy-Related Businesses:                                           |                          |             |             |
|     Sempra Generation - electric power           | 5 million MWh                 | 1 million MWh    |             |
|     Sempra Pipelines & Storage - natural gas | 16 million MMBtu              | 8 million MMBtu  |             |
|     Sempra LNG - natural gas                     | 5 million MMBtu               | 7 million MMBtu  |             |
| (1)                                                                  | Million British thermal units |             |
| (2)                                                                  | Megawatt hours                |             |

|                          |                                                                                                | December 31, 2011 | December 31, 2010 |
|-------------------------------|-----------------------------------------------------------------------------------------------------|-------------------|-------------------|
| (Dollars in millions)         | Notional Debt                                                                                       | Maturities        | Notional Debt     | Maturities |
| Sempra Energy Consolidated(1) | $                                                                                                   | 15-305            | 2013-2019         | $ | 215-355 | 2011-2019 |
| SDG&E(1)                  |                                                                                                | 285-355           | 2019              |   | 285-365 | 2019 |
| SoCalGas                      |                                                                                                |  -      |  -      |   | 150 | 2011 |
| (1)                           | Includes Otay Mesa VIE. All of SDG&E’s interest rate derivatives relate to Otay Mesa VIE. |

| DERIVATIVE INSTRUMENTS ON THE CONSOLIDATED BALANCE SHEETS |
|-----------------------------------------------------------|
| (Dollars in millions)                                     |
|                                                      |   | December 31, 2011 |
|                                                      |   |   |   |   |   |   |   |   | Deferred |
|                                                      |   |   |   |   |   |   |   |   | credits |
|                                                      |   |   | Current |   |   |   | Current |   | and other |
|                                                      |   |   | assets: |   |   |   | liabilities: |   | liabilities: |
|                                                      |   |   | Fixed-price |   | Investments |   | Fixed-price |   | Fixed-price |
|                                                      |   |   | contracts |   | and other |   | contracts |   | contracts |
|                                                      |   |   | and other |   | assets: |   | and other |   | and other |
| Derivatives designated as hedging instruments             |   | derivatives(1) |   | Sundry |   | derivatives(2) |   | derivatives |
| Sempra Energy Consolidated:                               |   |   |   |   |   |   |   |   |
|                                                      | Interest rate instruments(3) | $ |  5  | $ |  11  | $ |  (17) | $ |  (65) |
| SDG&E:                                                |   |   |   |   |   |   |   |   |
|                                                      | Interest rate instruments(3) | $ |  ―  | $ |  ―  | $ |  (16) | $ |  (65) |
|                                                      |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments         |   |   |   |   |   |   |   |   |
| Sempra Energy Consolidated:                               |   |   |   |   |   |   |   |   |
|                                                      | Interest rate instruments | $ |  8  | $ |  41  | $ |  (7) | $ |  (36) |
|                                                      | Commodity contracts not subject to rate recovery |   |  156  |   |  72  |   |  (148) |   |  (94) |
|                                                      |     Associated offsetting commodity contracts |   |  (120) |   |  (68) |   |  120  |   |  68  |
|                                                      | Commodity contracts subject to rate recovery |   |  28  |   |  8  |   |  (62) |   |  (24) |
|                                                      |     Associated offsetting commodity contracts |   |  (10) |   |  (2) |   |  10  |   |  2  |
|                                                      | Total | $ |  62  | $ |  51  | $ |  (87) | $ |  (84) |
| SDG&E:                                                |   |   |   |   |   |   |   |   |
|                                                      | Commodity contracts subject to rate recovery | $ |  22  | $ |  8  | $ |  (55) | $ |  (24) |
|                                                      |     Associated offsetting commodity contracts |   |  (5) |   |  (2) |   |  5  |   |  2  |
|                                                      | Total | $ |  17  | $ |  6  | $ |  (50) | $ |  (22) |
| SoCalGas:                                                 |   |   |   |   |   |   |   |   |
|                                                      | Commodity contracts subject to rate recovery | $ |  6  | $ |  ―  | $ |  (7) | $ |  ―  |
|                                                      |     Associated offsetting commodity contracts |   |  (5) |   |  ―  |   |  5  |   |  ―  |
|                                                      | Total | $ |  1  | $ |  ―  | $ |  (2) | $ |  ―  |
| (1)                                                       | Included in Current Assets: Other for SoCalGas. |
| (2)                                                       | Included in Current Liabilities: Other for SoCalGas. |
| (3)                                                       | Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE. |

| DERIVATIVE INSTRUMENTS ON THE CONSOLIDATED BALANCE SHEETS (Continued) |
|-----------------------------------------------------------------------|
| (Dollars in millions)                                                 |
|                                                                  |   | December 31, 2010 |
|                                                                  |   |   |   |   |   |   |   |   | Deferred |
|                                                                  |   |   |   |   |   |   |   |   | credits |
|                                                                  |   |   | Current |   |   |   | Current |   | and other |
|                                                                  |   |   | assets: |   |   |   | liabilities: |   | liabilities: |
|                                                                  |   |   | Fixed-price |   | Investments |   | Fixed-price |   | Fixed-price |
|                                                                  |   |   | contracts |   | and other |   | contracts |   | contracts |
|                                                                  |   |   | and other |   | assets: |   | and other |   | and other |
| Derivatives designated as hedging instruments                         |   | derivatives(1) |   | Sundry |   | derivatives(2) |   | derivatives |
| Sempra Energy Consolidated:                                           |   |   |   |   |   |   |   |   |
|                                                                  | Interest rate instrument | $ |  3  | $ |  ―  | $ |  ―  | $ |  ―  |
| SoCalGas:                                                             |   |   |   |   |   |   |   |   |
|                                                                  | Interest rate instrument | $ |  3  | $ |  ―  | $ |  ―  | $ |  ―  |
|                                                                  |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments                     |   |   |   |   |   |   |   |   |
| Sempra Energy Consolidated:                                           |   |   |   |   |   |   |   |   |
|                                                                  | Interest rate instruments(3) | $ |  9  | $ |  22  | $ |  (25) | $ |  (57) |
|                                                                  | Commodity contracts not subject to rate recovery |   |  59  |   |  20  |   |  (44) |   |  (34) |
|                                                                  |     Associated offsetting commodity contracts |   |  (2) |   |  (8) |   |  2  |   |  8  |
|                                                                  | Commodity contracts subject to rate recovery |   |  5  |   |  ―  |   |  (43) |   |  (27) |
|                                                                  |     Associated offsetting commodity contracts |   |  (37) |   |  (26) |   |  37  |   |  26  |
|                                                                  | Total | $ |  34  | $ |  8  | $ |  (73) | $ |  (84) |
| SDG&E:                                                            |   |   |   |   |   |   |   |   |
|                                                                  | Interest rate instruments(3) | $ |  ―  | $ |  ―  | $ |  (17) | $ |  (41) |
|                                                                  | Commodity contracts not subject to rate recovery |   |  1  |   |  ―  |   |  ―  |   |  ―  |
|                                                                  | Commodity contracts subject to rate recovery |   |  2  |   |  ―  |   |  (35) |   |  (27) |
|                                                                  |     Associated offsetting commodity contracts |   |  (34) |   |  (26) |   |  34  |   |  26  |
|                                                                  | Total | $ |  (31) | $ |  (26) | $ |  (18) | $ |  (42) |
| SoCalGas:                                                             |   |   |   |   |   |   |   |   |
|                                                                  | Commodity contracts not subject to rate recovery | $ |  1  | $ |  ―  | $ |  ―  | $ |  ―  |
|                                                                  | Commodity contracts subject to rate recovery |   |  3  |   |  ―  |   |  (3) |   |  ―  |
|                                                                  |     Associated offsetting commodity contracts |   |  (3) |   |  ―  |   |  3  |   |  ―  |
|                                                                  | Total | $ |  1  | $ |  ―  | $ |  ―  | $ |  ―  |
| (1)                                                                   | Included in Current Assets: Other for SoCalGas. |
| (2)                                                                   | Included in Current Liabilities: Other for SoCalGas. |
| (3)                                                                   | Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE. |

| FAIR VALUE HEDGE IMPACT ON THE CONSOLIDATED STATEMENTS OF OPERATIONS |
|----------------------------------------------------------------------|
| (Dollars in millions)                                                |
|                                                                 |   |   | Gain (loss) on derivatives recognized in earnings |
|                                                                 |   |   | Years ended December 31, |
|                                                                 | Location | 2011  | 2010  | 2009  |
| Sempra Energy Consolidated:                                          |   |   |   |   |   |   |   |
|                                                                 | Interest rate instruments | Interest Expense | $ |  9  | $ |  10  | $ |  19  |
|                                                                 | Interest rate instruments | Other Income, Net |   |  13  |   |  (11) |   |  (11) |
|                                                                 | Total(1) |   | $ |  22  | $ |  (1) | $ |  8  |
| SoCalGas:                                                            |   |   |   |   |   |   |   |
|                                                                 | Interest rate instrument | Interest Expense | $ |  1  | $ |  6  | $ |  6  |
|                                                                 | Interest rate instrument | Other Income, Net |   |  (3) |   |  (4) |   |  (2) |
|                                                                 | Total(1) |   | $ |  (2) | $ |  2  | $ |  4  |
| (1)                                                                  | There has been no hedge ineffectiveness on these swaps. Changes in the fair values of the interest rate swap agreements are exactly offset by changes in the fair value of the underlying long-term debt. |

| CASH FLOW HEDGE IMPACT ON THE CONSOLIDATED STATEMENTS OF OPERATIONS |
|---------------------------------------------------------------------|
| (Dollars in millions)                                               |
|                                                                |   | Pretax gain (loss)recognized in OCI |   |   | Gain (loss) reclassifiedfrom AOCI into earnings |
|                                                                |   | (effective portion) |   |   | (effective portion) |
|                                                                |   | Years ended December 31, |   |   | Years ended December 31, |
|                                                                |   | 2011  |   | 2010  |   | 2009  |   | Location |   | 2011  |   | 2010  |   | 2009  |
| Sempra Energy Consolidated:                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                | Interest rate instruments(1) | $ |  (42) | $ |  ―  | $ |  ―  |   | Interest Expense | $ |  (8) | $ |  (12) | $ |  (2) |
|                                                                | Interest rate instruments |   |  ―  |   |  ―  |   |  13  |   | Other Income, Net(2) |   |  ―  |   |  10  |   |  3  |
|                                                                |   |   |   |   |   |   |   |   | Equity Earnings, Net of Income |   |   |   |   |   |   |
|                                                                | Interest rate instruments |   |  (32) |   |  2  |   |  ―  |   |     Tax |   |  (5) |   |  (1) |   |  ―  |
|                                                                | Commodity contracts not subject |   |   |   |   |   |   |   | Revenues: Energy-Related |   |   |   |   |   |   |
|                                                                |     to rate recovery |   |  ―  |   |  ―  |   |  17  |   |     Businesses |   |  ―  |   |  ―  |   |  22  |
|                                                                | Commodity contracts not subject |   |   |   |   |   |   |   | Cost of Natural Gas, Electric |   |   |   |   |   |   |
|                                                                |     to rate recovery |   |  ―  |   |  ―  |   |  ―  |   |     Fuel and Purchased Power |   |  ―  |   |  ―  |   |  (16) |
|                                                                | Commodity contracts not subject |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |     to rate recovery |   |  ―  |   |  ―  |   |  1  |   | Other Operation and Maintenance |   |  ―  |   |  ―  |   |  2  |
|                                                                | Commodity contracts not subject |   |   |   |   |   |   |   | Equity Earnings (Losses): RBS |   |   |   |   |   |   |
|                                                                |     to rate recovery |   |  ―  |   |  1  |   |  37  |   |     Sempra Commodities LLP |   |  ―  |   |  21  |   |  7  |
|                                                                | Total | $ |  (74) | $ |  3  | $ |  68  |   |   | $ |  (13) | $ |  18  | $ |  16  |
| SDG&E:                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                | Interest rate instruments(1) | $ |  (40) | $ |  ―  | $ |  ―  |   | Interest Expense | $ |  (5) | $ |  (7) | $ |  3  |
|                                                                | Commodity contracts not subject |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |     to rate recovery |   |  ―  |   |  ―  |   |  ―  |   | Operation and Maintenance |   |  ―  |   |  ―  |   |  1  |
|                                                                | Total | $ |  (40) | $ |  ―  | $ |  ―  |   |   | $ |  (5) | $ |  (7) | $ |  4  |
| SoCalGas:                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                | Interest rate instrument | $ |  ―  | $ |  ―  | $ |  ―  |   | Interest Expense | $ |  (3) | $ |  (5) | $ |  (4) |
|                                                                | Commodity contracts not subject |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |     to rate recovery |   |  ―  |   |  ―  |   |  1  |   | Operation and Maintenance |   |  ―  |   |  ―  |   |  1  |
|                                                                | Total | $ |  ―  | $ |  ―  | $ |  1  |   |   | $ |  (3) | $ |  (5) | $ |  (3) |
| (1)                                                                 | Amounts include Otay Mesa VIE. All of SDG&E’s 2010 and 2011 interest rate derivative activity relates to Otay Mesa VIE. There has been a negligible amount of ineffectiveness related to these swaps. |
| (2)                                                                 | Gains reclassified into earnings due to changes in cash requirements and associated impacts on forecasted interest payments, primarily related to proceeds received from RBS Sempra Commodities. See Note 4. |

| UNDESIGNATED DERIVATIVE IMPACT ON THE CONSOLIDATED STATEMENTS OF OPERATIONS |
|-----------------------------------------------------------------------------|
| (Dollars in millions)                                                       |
|                                                                        |   |   | Gain (loss) on derivatives recognized in earnings |
|                                                                        |   |   | Years ended December 31, |
|                                                                        |   | Location | 2011  | 2010  | 2009  |
| Sempra Energy Consolidated:                                                 |   |   |   |   |   |   |   |
|                                                                        | Interest rate and foreign |   |   |   |   |   |   |   |
|                                                                        |     exchange instruments(1) | Other Income, Net | $ |  (14) | $ |  (34) | $ |  30  |
|                                                                        | Commodity contracts not subject | Revenues: Energy-Related |   |   |   |   |   |   |
|                                                                        |     to rate recovery |     Businesses |   |  30  |   |  47  |   |  47  |
|                                                                        | Commodity contracts not subject | Cost of Natural Gas, Electric |   |   |   |   |   |   |
|                                                                        |     to rate recovery |     Fuel and Purchased Power |   |  1  |   |  (29) |   |  (39) |
|                                                                        | Commodity contracts not subject |   |   |   |   |   |   |   |
|                                                                        |     to rate recovery | Other Operation and Maintenance |   |  1  |   |  2  |   |  ―  |
|                                                                        | Commodity contracts subject | Cost of Electric Fuel |   |   |   |   |   |   |
|                                                                        |     to rate recovery |     and Purchased Power |   |  (14) |   |  (102) |   |  (54) |
|                                                                        | Commodity contracts subject |   |   |   |   |   |   |   |
|                                                                        |     to rate recovery | Cost of Natural Gas |   |  (2) |   |  (9) |   |  (10) |
|                                                                        | Total |   | $ |  2  | $ |  (125) | $ |  (26) |
| SDG&E:                                                                  |   |   |   |   |   |   |   |
|                                                                        | Interest rate instruments(1) | Other Income, Net | $ |  (1) | $ |  (34) | $ |  27  |
|                                                                        | Commodity contracts not subject |   |   |   |   |   |   |   |
|                                                                        |     to rate recovery | Operation and Maintenance |   |  ―  |   |  1  |   |  ―  |
|                                                                        | Commodity contracts subject | Cost of Electric Fuel |   |   |   |   |   |   |
|                                                                        |     to rate recovery |     and Purchased Power |   |  (14) |   |  (102) |   |  (54) |
|                                                                        | Total |   | $ |  (15) | $ |  (135) | $ |  (27) |
| SoCalGas:                                                                   |   |   |   |   |   |   |   |
|                                                                        | Commodity contracts not subject |   |   |   |   |   |   |   |
|                                                                        |     to rate recovery | Operation and Maintenance | $ |  1  | $ |  1  | $ |  ―  |
|                                                                        | Commodity contracts subject |   |   |   |   |   |   |   |
|                                                                        |     to rate recovery | Cost of Natural Gas |   |  (2) |   |  (5) |   |  (5) |
|                                                                        | Total |   | $ |  (1) | $ |  (4) | $ |  (5) |
| (1)                                                                         | Amounts are related to Otay Mesa VIE. Sempra Energy Consolidated also includes additional instruments. |   |   |

----

| FAIR VALUE OF FINANCIAL INSTRUMENTS               |
|---------------------------------------------------|
| (Dollars in millions)                             |
|                                              |   | December 31, 2011 | December 31, 2010 |
|                                              |   | Carrying | Fair | Carrying | Fair |
|                                              |   | Amount | Value | Amount | Value |
| Sempra Energy Consolidated:                       |   |   |   |   |   |   |   |   |
| Investments in affordable housing partnerships(1) | $ |  21  | $ |  48  | $ |  28  | $ |  58  |
| Total long-term debt(2)                           |   |  9,826  |   |  11,047  |   |  8,330  |   |  8,883  |
| Due to unconsolidated affiliate(3)                |   |  ―  |   |  ―  |   |  2  |   |  2  |
| Preferred stock of subsidiaries                   |   |  99  |   |  106  |   |  179  |   |  166  |
| SDG&E:                                        |   |   |   |   |   |   |   |   |
| Total long-term debt(4)                           | $ |  3,895  | $ |  4,288  | $ |  3,305  | $ |  3,300  |
| Contingently redeemable preferred stock           |   |  79  |   |  86  |   |  79  |   |  78  |
| SoCalGas:                                         |   |   |   |   |   |   |   |   |
| Total long-term debt(5)                           | $ |  1,313  | $ |  1,506  | $ |  1,566  | $ |  1,638  |
| Preferred stock                                   |   |  22  |   |  23  |   |  22  |   |  21  |
| (1)                                               | We discuss our investments in affordable housing partnerships in Note 4. |
| (2)                                               | Before reductions for unamortized discount (net of premium) of $16 million at December 31, 2011 and $22 million at December 31, 2010, and excluding capital leases of $204 million at December 31, 2011 and $221 million at December 31, 2010, and commercial paper classified as long-term debt of $400 million at December 31, 2011 and $800 million at December 31, 2010. We discuss our long-term debt in Note 5. |
| (3)                                               | Note payable was extinguished due to the increase in our ownership of Chilquinta Energía to 100% in 2011. |
| (4)                                               | Before reductions for unamortized discount of $11 million at December 31, 2011 and $9 million at December 31, 2010, and excluding capital leases of $193 million at December 31, 2011 and $202 million at December 31, 2010. |
| (5)                                               | Before reductions for unamortized discount of $3 million at both December 31, 2011 and 2010, and excluding capital leases of $11 million at December 31, 2011 and $19 million at December 31, 2010. |

|                       | December 31, |
|----------------------------|--------------|
| (Dollars in millions)      | 2011    | 2010  |
| Sempra Energy Consolidated | $            |  20  | $ |  32  |
| SDG&E                  |         |  10  |   |  25  |
| SoCalGas                   |         |  2  |   |  3  |

| §   | Nuclear decommissioning trusts reflect the assets of SDG&E’s nuclear decommissioning trusts, excluding cash balances, as we discuss in Note 6. The trust assets are valued by a third party trustee. The trustee obtains prices from pricing services that are derived from observable data. We monitor the prices supplied by pricing services by validating pricing with other sources of data. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Investments include marketable securities and are primarily priced based on observable interest rates for similar instruments actively trading in the marketplace. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Commodity and other derivative positions, which include other interest rate management instruments, are entered into primarily as a means to manage price exposures. We use market participant assumptions to price these derivatives. Market participant assumptions include those about risk, and the risk inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| RECURRING FAIR VALUE MEASURES ― SEMPRA ENERGY CONSOLIDATED                                                                                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                                                                                       |
|                                                                                                                                                        |   | At fair value as of December 31, 2011 |
|                                                                                                                                                        |   |   |   |   |   |   |   |   | Collateral |   |   |
|                                                                                                                                                        |   |   | Level 1 |   | Level 2 |   | Level 3 |   | Netted |   | Total |
| Assets:                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |
|     Nuclear decommissioning trusts                                                                                                      |   |   |   |   |   |   |   |   |   |   |
|           Equity securities                                                                               | $ |  468  | $ |  ―  | $ |  ―  | $ |  ―  | $ |  468  |
|           Debt securities:                                                                                |   |   |   |   |   |   |   |   |   |   |
|               Debt securities issued by the U.S. Treasury and other                   |   |   |   |   |   |   |   |   |   |   |
|                    U.S. government corporations and agencies |   |  92  |   |  78  |   |  ―  |   |  ―  |   |  170  |
|               Municipal bonds                                                         |   |  ―  |   |  77  |   |  ―  |   |  ―  |   |  77  |
|               Other securities                                                        |   |  ―  |   |  78  |   |  ―  |   |  ―  |   |  78  |
|           Total debt securities                                                                           |   |  92  |   |  233  |   |  ―  |   |  ―  |   |  325  |
|     Total nuclear decommissioning trusts(1)                                                                                             |   |  560  |   |  233  |   |  ―  |   |  ―  |   |  793  |
|     Interest rate instruments                                                                                                           |   |  ―  |   |  66  |   |  ―  |   |  ―  |   |  66  |
|     Commodity contracts subject to rate recovery                                                                                        |   |  10  |   |  1  |   |  23  |   |  ―  |   |  34  |
|     Commodity contracts not subject to rate recovery                                                                                    |   |  15  |   |  35  |   |  ―  |   |  (2) |   |  48  |
|     Investments                                                                                                                         |   |  5  |   |  ―  |   |  ―  |   |  ―  |   |  5  |
| Total                                                                                                                                                       | $ |  590  | $ |  335  | $ |  23  | $ |  (2) | $ |  946  |
| Liabilities:                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |
|     Interest rate instruments                                                                                                           | $ |  1  | $ |  124  | $ |  ―  | $ |  ―  | $ |  125  |
|     Commodity contracts subject to rate recovery                                                                                        |   |  61  |   |  13  |   |  ―  |   |  (61) |   |  13  |
|     Commodity contracts not subject to rate recovery                                                                                    |   |  1  |   |  52  |   |  ―  |   |  (4) |   |  49  |
| Total                                                                                                                                                       | $ |  63  | $ |  189  | $ |  ―  | $ |  (65) | $ |  187  |
|                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                        | At fair value as of December 31, 2010 |
|                                                                                                                                                        |   |   |   |   |   |   |   | Collateral |   |   |
|                                                                                                                                                        |   | Level 1 |   | Level 2 |   | Level 3 |   | netted |   | Total |
| Assets:                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |
|     Nuclear decommissioning trusts                                                                                                      |   |   |   |   |   |   |   |   |   |   |
|           Equity securities                                                                               | $ |  460  | $ |  ―  | $ |  ―  | $ |  ―  | $ |  460  |
|           Debt securities:                                                                                |   |   |   |   |   |   |   |   |   |   |
|               Debt securities issued by the U.S. Treasury and other                   |   |   |   |   |   |   |   |   |   |   |
|                    U.S. government corporations and agencies |   |  144  |   |  30  |   |  ―  |   |  ―  |   |  174  |
|               Municipal bonds                                                         |   |  ―  |   |  100  |   |  ―  |   |  ―  |   |  100  |
|               Other securities                                                        |   |  ―  |   |  25  |   |  ―  |   |  ―  |   |  25  |
|           Total debt securities                                                                           |   |  144  |   |  155  |   |  ―  |   |  ―  |   |  299  |
|     Total nuclear decommissioning trusts(1)                                                                                             |   |  604  |   |  155  |   |  ―  |   |  ―  |   |  759  |
|     Interest rate instruments                                                                                                           |   |  ―  |   |  34  |   |  ―  |   |  ―  |   |  34  |
|     Commodity contracts subject to rate recovery                                                                                        |   |  25  |   |  1  |   |  2  |   |  ―  |   |  28  |
|     Commodity contracts not subject to rate recovery                                                                                    |   |  9  |   |  66  |   |  ―  |   |  (22) |   |  53  |
|     Investments                                                                                                                         |   |  1  |   |  ―  |   |  ―  |   |  ―  |   |  1  |
| Total                                                                                                                                                       | $ |  639  | $ |  256  | $ |  2  | $ |  (22) | $ |  875  |
| Liabilities:                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |
|     Interest rate instruments                                                                                                           | $ |  ―  | $ |  82  | $ |  ―  | $ |  ―  | $ |  82  |
|     Commodity contracts subject to rate recovery                                                                                        |   |  60  |   |  8  |   |  ―  |   |  (60) |   |  8  |
|     Commodity contracts not subject to rate recovery                                                                                    |   |  ―  |   |  67  |   |  ―  |   |  ―  |   |  67  |
| Total                                                                                                                                                       | $ |  60  | $ |  157  | $ |  ―  | $ |  (60) | $ |  157  |
| (1)                                                                                                                                                         | Excludes cash balances and cash equivalents. |   |   |   |   |   |   |   |   |   |   |

| RECURRING FAIR VALUE MEASURES ― SDG&E                                                                                                             |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Dollars in millions)                                                                                                                                       |
|                                                                                                                                                        | At fair value as of December 31, 2011 |
|                                                                                                                                                        |   |   |   |   |   |   |   | Collateral |   |   |
|                                                                                                                                                        |   | Level 1 |   | Level 2 |   | Level 3 |   | netted |   | Total |
| Assets:                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |
|     Nuclear decommissioning trusts                                                                                                      |   |   |   |   |   |   |   |   |   |   |
|           Equity securities                                                                               | $ |  468  | $ |  ―  | $ |  ―  | $ |  ―  | $ |  468  |
|           Debt securities:                                                                                |   |   |   |   |   |   |   |   |   |   |
|               Debt securities issued by the U.S. Treasury and other                   |   |   |   |   |   |   |   |   |   |   |
|                    U.S. government corporations and agencies |   |  92  |   |  78  |   |  ―  |   |  ―  |   |  170  |
|               Municipal bonds                                                         |   |  ―  |   |  77  |   |  ―  |   |  ―  |   |  77  |
|               Other securities                                                        |   |  ―  |   |  78  |   |  ―  |   |  ―  |   |  78  |
|           Total debt securities                                                                           |   |  92  |   |  233  |   |  ―  |   |  ―  |   |  325  |
|     Total nuclear decommissioning trusts(1)                                                                                             |   |  560  |   |  233  |   |  ―  |   |  ―  |   |  793  |
|     Commodity contracts subject to rate recovery                                                                                        |   |  9  |   |  ―  |   |  23  |   |  ―  |   |  32  |
|     Commodity contracts not subject to rate recovery                                                                                    |   |  1  |   |  ―  |   |  ―  |   |  ―  |   |  1  |
| Total                                                                                                                                                       | $ |  570  | $ |  233  | $ |  23  | $ |  ―  | $ |  826  |
|                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |
|     Interest rate instruments                                                                                                           | $ |  ―  | $ |  81  | $ |  ―  | $ |  ―  | $ |  81  |
|     Commodity contracts subject to rate recovery                                                                                        |   |  61  |   |  12  |   |  ―  |   |  (61) |   |  12  |
| Total                                                                                                                                                       | $ |  61  | $ |  93  | $ |  ―  | $ |  (61) | $ |  93  |
|                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                        | At fair value as of December 31, 2010 |
|                                                                                                                                                        |   |   |   |   |   |   |   | Collateral |   |   |
|                                                                                                                                                        |   | Level 1 |   | Level 2 |   | Level 3 |   | netted |   | Total |
| Assets:                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |
|     Nuclear decommissioning trusts                                                                                                      |   |   |   |   |   |   |   |   |   |   |
|           Equity securities                                                                               | $ |  460  | $ |  ―  | $ |  ―  | $ |  ―  | $ |  460  |
|           Debt securities:                                                                                |   |   |   |   |   |   |   |   |   |   |
|               Debt securities issued by the U.S. Treasury and other                   |   |   |   |   |   |   |   |   |   |   |
|                    U.S. government corporations and agencies |   |  144  |   |  30  |   |  ―  |   |  ―  |   |  174  |
|               Municipal bonds                                                         |   |  ―  |   |  100  |   |  ―  |   |  ―  |   |  100  |
|               Other securities                                                        |   |  ―  |   |  25  |   |  ―  |   |  ―  |   |  25  |
|           Total debt securities                                                                           |   |  144  |   |  155  |   |  ―  |   |  ―  |   |  299  |
|     Total nuclear decommissioning trusts(1)                                                                                             |   |  604  |   |  155  |   |  ―  |   |  ―  |   |  759  |
|     Commodity contracts subject to rate recovery                                                                                        |   |  24  |   |  ―  |   |  2  |   |  ―  |   |  26  |
|     Commodity contracts not subject to rate recovery                                                                                    |   |  2  |   |  ―  |   |  ―  |   |  ―  |   |  2  |
| Total                                                                                                                                                       | $ |  630  | $ |  155  | $ |  2  | $ |  ―  | $ |  787  |
|                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |
|     Interest rate instruments                                                                                                           | $ |  ―  | $ |  58  | $ |  ―  | $ |  ―  | $ |  58  |
|     Commodity contracts subject to rate recovery                                                                                        |   |  60  |   |  2  |   |  ―  |   |  (60) |   |  2  |
| Total                                                                                                                                                       | $ |  60  | $ |  60  | $ |  ―  | $ |  (60) | $ |  60  |
| (1)                                                                                                                                                         | Excludes cash balances and cash equivalents. |   |   |   |   |   |   |   |   |   |   |

| RECURRING FAIR VALUE MEASURES ― SOCALGAS                           |
|--------------------------------------------------------------------------|
| (Dollars in millions)                                                    |
|                                                                     | At fair value as of December 31, 2011 |
|                                                                     |   |   |   |   |   |   |   | Collateral |   |   |
|                                                                     |   | Level 1 |   | Level 2 |   | Level 3 |   | netted |   | Total |
| Assets:                                                                  |   |   |   |   |   |   |   |   |   |   |
|     Commodity contracts subject to rate recovery     | $ |  1  | $ |  1  | $ |  ―  | $ |  ―  | $ |  2  |
|     Commodity contracts not subject to rate recovery |   |  2  |   |  ―  |   |  ―  |   |  ―  |   |  2  |
| Total                                                                    | $ |  3  | $ |  1  | $ |  ―  | $ |  ―  | $ |  4  |
|                                                                     |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                             |   |   |   |   |   |   |   |   |   |   |
|     Commodity contracts subject to rate recovery     | $ |  ―  | $ |  1  | $ |  ―  | $ |  ―  | $ |  1  |
| Total                                                                    | $ |  ―  | $ |  1  | $ |  ―  | $ |  ―  | $ |  1  |
|                                                                     |   |   |   |   |   |   |   |   |   |   |
|                                                                     | At fair value as of December 31, 2010 |
|                                                                     |   |   |   |   |   |   |   | Collateral |   |   |
|                                                                     |   | Level 1 |   | Level 2 |   | Level 3 |   | netted |   | Total |
| Assets:                                                                  |   |   |   |   |   |   |   |   |   |   |
|     Interest rate instruments                        | $ |  ―  | $ |  3  | $ |  ―  | $ |  ―  | $ |  3  |
|     Commodity contracts subject to rate recovery     |   |  1  |   |  1  |   |  ―  |   |  ―  |   |  2  |
|     Commodity contracts not subject to rate recovery |   |  3  |   |  ―  |   |  ―  |   |  ―  |   |  3  |
| Total                                                                    | $ |  4  | $ |  4  | $ |  ―  | $ |  ―  | $ |  8  |

| LEVEL 3 RECONCILIATIONS                                        |
|----------------------------------------------------------------|
| (Dollars in millions)                                          |
|                                                           | Years ended December 31, |
|                                                           | 2011  | 2010  | 2009  |
| Balance as of January 1                                        | $ |  2  | $ |  10  | $ |  27  |
|     Realized and unrealized gains (losses) |   |  32  |   |  (16) |   |  (31) |
|     Allocated transmission instruments     |   |  7  |   |  8  |   |  15  |
|     Settlements                            |   |  (18) |   |  ―  |   |  (1) |
| Balance as of December 31                                      | $ |  23  | $ |  2  | $ |  10  |
| Change in unrealized gains or losses relating to               |   |   |   |   |   |   |
|     instruments still held at December 31  | $ |  17  | $ |  (9) | $ |  (16) |

----

| PREFERRED STOCK                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------|
|                                                                                                               |   |   |   |   |   |   |   |
|                                                                                                               |   |   | Call/ |   |   |   |   |
|                                                                                                               |   |   | Redemption | December 31, |
|                                                                                                               |   |   | Price | 2011  | 2010  |
|                                                                                                               |   |   |   | (in millions) |
| Contingently redeemable:                                                                                           |   |   |   |   |   |   |
|                                                                                                               | SDG&E: |   |   |   |   |   |   |
|                                                                                                               |     $20 par value, authorized 1,375,000 shares: |   |   |   |   |   |   |
|                                                                                                               |         5% Series, 375,000 shares outstanding | $ |  24.00  | $ |  8  | $ |  8  |
|                                                                                                               |         4.5% Series, 300,000 shares outstanding | $ |  21.20  |   |  6  |   |  6  |
|                                                                                                               |         4.4% Series, 325,000 shares outstanding | $ |  21.00  |   |  7  |   |  7  |
|                                                                                                               |         4.6% Series, 373,770 shares outstanding | $ |  20.25  |   |  7  |   |  7  |
|                                                                                                               |     Without par value: |   |   |   |   |   |   |
|                                                                                                               |         $1.70 Series, 1,400,000 shares outstanding | $ |  25.17  |   |  35  |   |  35  |
|                                                                                                               |         $1.82 Series, 640,000 shares outstanding | $ |  26.00  |   |  16  |   |  16  |
|                                                                                                               |     SDG&E - Total contingently redeemable preferred stock |   |   |   |  79  |   |  79  |
|                                                                                                               |     Sempra Energy - Total preferred stock of subsidiary, |   |   |   |   |   |   |
|                                                                                                               |         contingently redeemable |   |   | $ |  79  | $ |  79  |
|                                                                                                               |   |   |   |   |   |   |
| SoCalGas:                                                                                                          |   |   |   |   |   |   |
|     $25 par value, authorized 1,000,000 shares:                                                |   |   |   |   |   |   |
|         6% Series, 79,011 shares outstanding                               |   |   | $ |  3  | $ |  3  |
|         6% Series A, 783,032 shares outstanding                            |   |   |   |  19  |   |  19  |
|     Total preferred stock of SoCalGas                                                          |   |   |   |  22  |   |  22  |
|     Less: 50,970 shares of the 6% Series outstanding owned by PE                               |   |   |   |  (2) |   |  (2) |
|                                                                                                               |   |   |   |  20  |   |  20  |
| Pacific Enterprises:                                                                                               |   |   |   |   |   |   |
|     Without par value, authorized 15,000,000 shares; outstanding                               |
|                                                                                                               |    as of December 31, 2010: |   |   |   |   |   |   |
|               $4.75 Dividend, 200,000 shares | $ |  100.00  |   |  ―  |   |  20  |
|               $4.50 Dividend, 300,000 shares | $ |  100.00  |   |  ―  |   |  30  |
|               $4.40 Dividend, 100,000 shares | $ |  101.50  |   |  ―  |   |  10  |
|               $4.36 Dividend, 200,000 shares | $ |  101.00  |   |  ―  |   |  20  |
|               $4.75 Dividend, 253 shares     | $ |  101.00  |   |  ―  |   |  ―  |
|     Total preferred stock of Pacific Enterprises                                               |   |   |   |  ―  |   |  80  |
|                                                                                                               |   |   |   |   |   |   |   |
|                                                                                                               |     Sempra Energy - Total preferred stock of subsidiaries |   |   | $ |  20  | $ |  100  |

| §   | All outstanding series are callable. |
|--------------------|--------------------------------------|

| §   | The $20 par value preferred stock has two votes per share on matters being voted upon by shareholders of SDG&E and a liquidation preference at par plus any unpaid dividends. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | All outstanding series of SDG&E’s preferred stock have cumulative preferences as to dividends. |
|--------------------|----------------------------------------------------------------------------------------------------------|

| §   | The no-par-value preferred stock is nonvoting and has a liquidation preference of $25 per share plus any unpaid dividends. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| §   | SDG&E is authorized to issue 10 million shares of no-par-value preferred stock (both subject to and not subject to mandatory redemption). |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| §   | None of SoCalGas’ outstanding preferred stock is callable. |
|--------------------|------------------------------------------------------------------|

| §   | All outstanding series have one vote per share, cumulative preferences as to dividends and liquidation preferences of $25 per share plus any unpaid dividends. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| EARNINGS PER SHARE COMPUTATIONS                                                       |
|---------------------------------------------------------------------------------------|
| (Dollars in millions, except per share amounts; shares in thousands)                  |
|                                                                                  | Years ended December 31, |
|                                                                                  | 2011  | 2010  | 2009  |
| Numerator:                                                                            |   |   |   |   |   |   |
|     Earnings/Income attributable to common shareholders           | $ |  1,357  | $ |  739  | $ |  1,119  |
|                                                                                  |   |   |   |   |   |   |
| Denominator:                                                                          |   |   |   |   |   |   |
|     Weighted-average common shares outstanding for basic EPS      |   |  239,720  |   |  244,736  |   |  243,339  |
|     Dilutive effect of stock options, restricted stock awards and |   |   |   |   |   |   |
|         restricted stock units                |   |  1,803  |   |  3,206  |   |  4,045  |
|     Weighted-average common shares outstanding for diluted EPS    |   |  241,523  |   |  247,942  |   |  247,384  |
|                                                                                  |   |   |   |   |   |   |
| Earnings per share:                                                                   |   |   |   |   |   |   |
|     Basic                                                         | $ |  5.66  | $ |  3.02  | $ |  4.60  |
|     Diluted                                                       | $ |  5.62  | $ |  2.98  | $ |  4.52  |

| Four-Year Cumulative Total Shareholder Return Ranking versus S&P 500 Utilities Index(1) | Number of Sempra Energy Common Shares Received for Each Restricted Stock Unit(2)                                                                                                                                                                                                         |
|---------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 75th Percentile or Above                                                                    | 1.5                                                                                                                                                                                                                                                                                 |
| 50th Percentile                                                                             | 1                                                                                                                                                                                                                                                                                   |
| 35th Percentile or Below                                                                    | ―                                                                                                                                                                                                                                                                                  |
|  (1)                                                                                   | If Sempra Energy ranks at or above the 50th percentile compared to the S&P 500 Index, participants will receive a minimum of 1.0 share for each restricted stock unit.                                                                                                               |
|  (2)                                                                                   | Participants may also receive additional shares for dividend equivalents on shares subject to restricted stock units, which are reinvested to purchase additional shares that become subject to the same vesting conditions as the restricted stock units to which the dividends relate. |

| COMMON STOCK ACTIVITY                                     |
|-----------------------------------------------------------|
|                                                      |
|                                                      |   |   | 2011  |   | 2010  |   | 2009  |
| Common shares outstanding, January 1                      |   |  240,447,416  |   |  246,507,865  |   |  243,324,281  |
|     Savings plan issuance             |   |  ―  |   |  560,600  |   |  1,021,023  |
|     Shares released from ESOP         |   |  350,815  |   |  363,733  |   |  309,023  |
|     Stock options exercised           |   |  958,126  |   |  912,725  |   |  1,835,184  |
|     Restricted stock issuances        |   |  11,876  |   |  ―  |   |  37,233  |
|     Restricted stock units vesting(1) |   |  2,625  |   |  ―  |   |  ―  |
|     Shares repurchased                |   |  (1,836,177) |   |  (8,108,579) |   |  (396,046) |
|     Common stock investment plan(2)   |   |  ―  |   |  217,772  |   |  381,167  |
|     Shares forfeited and other        |   |  ―  |   |  (6,700) |   |  (4,000) |
| Common shares outstanding, December 31                    |   |  239,934,681  |   |  240,447,416  |   |  246,507,865  |
| (1)                                                       | Includes dividend equivalents. |
| (2)                                                       | Participants in the Direct Stock Purchase Plan may reinvest dividends to purchase newly issued shares. |

----

| §   | directed the IOUs, including SDG&E, to resume electric commodity procurement to cover their net short energy requirements, which are the total customer energy requirements minus supply from resources owned, operated or contracted; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | implemented legislation regarding procurement and renewable energy portfolio standards; and |
|--------------------|---------------------------------------------------------------------------------------------|

| §   | established a process for review and approval of the utilities’ long-term resource and procurement plans. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| §   | access to electric transmission infrastructure; |
|--------------------|-------------------------------------------------|

| §   | timely regulatory approval of contracted renewable energy projects; |
|--------------------|---------------------------------------------------------------------|

| §   | the renewable energy project developers’ ability to obtain project financing and permitting; and |
|--------------------|--------------------------------------------------------------------------------------------------------|

| §   | successful development and implementation of the renewable energy technologies. |
|--------------------|---------------------------------------------------------------------------------|

| §   | operational incentives |
|--------------------|------------------------|

| §   | energy efficiency/demand side management |
|--------------------|------------------------------------------|

| §   | natural gas procurement |
|--------------------|-------------------------|

| §   | unbundled natural gas storage and system operator hub services |
|--------------------|----------------------------------------------------------------|

| UTILITY INCENTIVE AWARDS 2009-2011             |                     |           |       |   |                |   |   |                |   |
|------------------------------------------------|--------------------------|----------------|------------|--------|---------------------|--------|--------|---------------------|--------|
| (Dollars in millions)                          |                     |           |       |   |                |   |   |                |   |
|                                           | Years ended December 31, |
|                                           | 2011                | 2010      | 2009  |
| Sempra Energy Consolidated                     |                     |           |       |   |                |   |   |                |   |
| Energy efficiency and demand side management   | $                        |  16  |       | $      |  15       |   | $      |  2        |   |
| Unbundled natural gas storage and hub services |                     |  4   |       |   |  15       |   |   |  19       |   |
| Natural gas procurement                        |                     |  6   |       |   |  12       |   |   |  7        |   |
| Operational incentives                         |                     |  3   |       |   |  1        |   |   |  1        |   |
| Total awards                                   | $                        |  29  |       | $      |  43       |   | $      |  29       |   |
| SDG&E                                      |                     |           |       |   |                |   |   |                |   |
| Energy efficiency and demand side management   | $                        |  14  |       | $      |  5        |   | $      |  ―  |   |
| Operational incentives                         |                     |  1   |       |   |  1        |   |   |  1        |   |
| Total awards                                   | $                        |  15  |       | $      |  6        |   | $      |  1        |   |
| SoCalGas                                       |                     |           |       |   |                |   |   |                |   |
| Energy efficiency and demand side management   | $                        |  2   |       | $      |  10       |   | $      |  2        |   |
| Unbundled natural gas storage and hub services |                     |  4   |       |   |  15       |   |   |  19       |   |
| Natural gas procurement                        |                     |  6   |       |   |  12       |   |   |  7        |   |
| Operational incentives                         |                     |  2   |       |   |  ―  |   |   |  ―  |   |
| Total awards                                   | $                        |  14  |       | $      |  37       |   | $      |  28       |   |

| §   | the first $15 million of net revenue to be shared 90 percent ratepayers/10 percent shareholders; |
|--------------------|--------------------------------------------------------------------------------------------------|

| §   | the next $15 million of net revenue to be shared 75 percent ratepayers/25 percent shareholders; |
|--------------------|-------------------------------------------------------------------------------------------------|

| §   | all additional net revenues to be shared evenly between ratepayers and shareholders; and |
|--------------------|------------------------------------------------------------------------------------------|

| §   | the maximum total annual shareholder-allocated portion of the net revenues cannot exceed $20 million. |
|--------------------|-------------------------------------------------------------------------------------------------------|

| §   | 49.0 percent common equity |
|--------------------|----------------------------|

| §   | 5.75 percent preferred equity |
|--------------------|-------------------------------|

| §   | 45.25 percent long-term debt |
|--------------------|------------------------------|

| §   | 48.0 percent common equity |
|--------------------|----------------------------|

| §   | 6.39 percent preferred equity |
|--------------------|-------------------------------|

| §   | 45.61 percent long-term debt |
|--------------------|------------------------------|

| §   | Phase 1 focuses on populated areas of SoCalGas’ and SDG&E’s service territories and would be implemented over a 10-year period, from 2012 to 2022. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Phase 2 covers unpopulated areas of SoCalGas’ and SDG&E’s service territories and will be filed with the CPUC at a later date. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Sempra Energy Consolidated |
|----------------------------|
|                       |   | Storage and |   |   |   |   |
| (Dollars in millions)      | Transportation | Natural Gas(1) | Total(1) |
| 2012                  |   | $ |  143  | $ |  415  | $ |  558  |
| 2013                  |   |   |  106  |   |  148  |   |  254  |
| 2014                  |   |   |  74  |   |  103  |   |  177  |
| 2015                  |   |   |  60  |   |  3  |   |  63  |
| 2016                  |   |   |  55  |   |  3  |   |  58  |
| Thereafter                 |   |  252  |   |  5  |   |  257  |
| Total minimum payments     | $ |  690  | $ |  677  | $ |  1,367  |
| (1)                        | Excludes amounts related to LNG purchase agreements at Sempra LNG discussed below. |

| SoCalGas               |
|------------------------|
| (Dollars in millions)  | Transportation | Natural Gas | Total |
| 2012              | $ |  110  | $ |  290  | $ |  400  |
| 2013              |   |  81  |   |  19  |   |  100  |
| 2014              |   |  55  |   |  2  |   |  57  |
| 2015              |   |  41  |   |  2  |   |  43  |
| 2016              |   |  36  |   |  2  |   |  38  |
| Thereafter             |   |  145  |   |  ―  |   |  145  |
| Total minimum payments | $ |  468  | $ |  315  | $ |  783  |

|                       | Years ended December 31, |
|----------------------------|--------------------------|
| (Dollars in millions)      | 2011                | 2010  | 2009  |
| Sempra Energy Consolidated | $                        |  1,991  | $ |  2,097  | $ |  1,754  |
| SoCalGas                   |                     |  1,810  |   |  1,936  |   |  1,452  |

| §   | $517 million in 2012 |
|--------------------|----------------------|

| §   | $625 million in 2013 |
|--------------------|----------------------|

| §   | $689 million in 2014 |
|--------------------|----------------------|

| §   | $733 million in 2015 |
|--------------------|----------------------|

| §   | $774 million in 2016 |
|--------------------|----------------------|

| §   | $12.1 billion in 2017 – 2029 |
|--------------------|------------------------------------|

| §   | SONGS: 18 percent |
|--------------------|-------------------|

| §   | Long-term contracts: 20 percent (of which 9 percent is provided by renewable energy contracts expiring on various dates through 2037) |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

| §   | Other SDG&E-owned generation (including Palomar, Miramar I and II, Desert Star Energy Center and Cuyamaca Peak Energy Plant) and tolling contracts (including OMEC): 40 percent |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Spot market purchases: 13 percent |
|--------------------|-----------------------------------|

|                      |                                                                                                                                                     | Sempra             |   |              |
|---------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|--------|-------------------|
|                      |                                                                                                                                                     | Energy             |   |              |
| (Dollars in millions)     | Consolidated                                                                                                                                             | SDG&E          |
| 2012                 | $                                                                                                                                                        |  1,049   | $      |  319    |
| 2013                 |                                                                                                                                                     |  1,120   |   |  321    |
| 2014                 |                                                                                                                                                     |  1,110   |   |  260    |
| 2015                 |                                                                                                                                                     |  1,164   |   |  229    |
| 2016                 |                                                                                                                                                     |  1,199   |   |  231    |
| Thereafter                |                                                                                                                                                     |  9,555   |   |  1,948  |
| Total minimum payments(1) | $                                                                                                                                                        |  15,197  | $      |  3,308  |
| (1)                       | Excludes purchase agreements accounted for as capital leases and amounts related to Otay Mesa VIE, as it is consolidated by Sempra Energy and SDG&E. |

|                           | Years ended December 31, |
|--------------------------------|--------------------------|
| (Dollars in millions)          | 2011                | 2010  | 2009  |
| Sempra Energy Consolidated     | $                        | 918  | $ | 314  | $ |  413  |
| Sempra Pipelines & Storage |                     | 572  |   |  -  |   |  -  |
| SDG&E                      |                     | 346  |   | 314  |   |  413  |

|                       | Years ended December 31, |
|----------------------------|--------------------------|
| (Dollars in millions)      | 2011                | 2010  | 2009  |
| Sempra Energy Consolidated | $                        |  77  | $ |  85  | $ |  101  |
| SDG&E                  |                     |  18  |   |  20  |   |  24  |
| SoCalGas                   |                     |  35  |   |  40  |   |  52  |

|                            | Sempra       |            |     |
|---------------------------------|--------------|-----------------|----------|
|                            | Energy       |            |     |
| (Dollars in millions)           | Consolidated | SDG&E       | SoCalGas |
| 2012                       | $            |  73   | $        |  19  | $ |  28  |
| 2013                       |         |  72   |     |  18  |   |  28  |
| 2014                       |         |  68   |     |  18  |   |  28  |
| 2015                       |         |  65   |     |  17  |   |  28  |
| 2016                       |         |  60   |     |  17  |   |  26  |
| Thereafter                      |         |  538  |     |  46  |   |  240  |
| Total future rental commitments | $            |  876  | $        |  135  | $ |  378  |

|                                        | Sempra       |                |     |
|---------------------------------------------|--------------|---------------------|----------|
|                                        | Energy       |                |     |
| (Dollars in millions)                       | Consolidated | SDG&E           | SoCalGas |
| 2012                                   | $            |  13       | $        |  7  | $ |  6  |
| 2013                                   |         |  7        |     |  4  |   |  3  |
| 2014                                   |         |  4        |     |  2  |   |  2  |
| Total minimum lease payments                |         |  24       |     |  13  |   |  11  |
| Less:  interest                   |         |  ―  |     |  ―  |   |  ―  |
| Present value of net minimum lease payments | $            |  24       | $        |  13  | $ |  11  |
|                                        |         |                |     |   |   |   |

| (Dollars in millions) |                                                                                                                                                                                                                                                                               |
|-----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  | 2012                                                                                                                                                                                                                                                                          | $ |  24  |
|                  | 2013                                                                                                                                                                                                                                                                          |   |  24  |
|                  | 2014                                                                                                                                                                                                                                                                          |   |  24  |
|                  | 2015                                                                                                                                                                                                                                                                          |   |  24  |
|                  | 2016                                                                                                                                                                                                                                                                          |   |  24  |
|                  | Thereafter                                                                                                                                                                                                                                                                         |   |  442  |
|                  | Total minimum lease payments(1)                                                                                                                                                                                                                                                    |   |  562  |
|                  | Less:  estimated executory costs                                                                                                                                                                                                                                         |   |  (93) |
|                  | Less:  interest(2)                                                                                                                                                                                                                                                       |   |  (289) |
|                  | Present value of net minimum lease payments(3)                                                                                                                                                                                                                                     | $ |  180  |
| (1)                   | This amount will be recorded over the lives of the leases as Cost of Electric Fuel and Purchased Power on Sempra Energy’s and SDG&E’s Consolidated Statements of Operations. This expense will receive ratemaking treatment consistent with purchased-power costs. |
| (2)                   | Amount necessary to reduce net minimum lease payments to present value at the inception of the leases.                                                                                                                                                                             |
| (3)                   | Includes $2 million in Current Portion of Long-Term Debt and $178 million in Long-Term Debt on Sempra Energy’s and SDG&E’s Consolidated Balance Sheets at December 31, 2011.                                                                                       |

| §   | $147 million for the engineering, material procurement and construction costs associated with the Sunrise Powerlink project; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| §   | $205 million related to nuclear fuel fabrication and other construction projects at SONGS. |
|--------------------|--------------------------------------------------------------------------------------------|

| §   | $129 million for the construction of the Santa Teresa hydroelectric power plant at Luz del Sur; and |
|--------------------|-----------------------------------------------------------------------------------------------------|

| §   | $34 million for the construction of natural gas storage facilities at Bay Gas and Mississippi Hub. |
|--------------------|----------------------------------------------------------------------------------------------------|

|                          |                                                              | Years ended December 31, |
|-------------------------------|-------------------------------------------------------------------|--------------------------|
|                          |                                                              | 2011                | 2010  | 2009  |
| Sempra Energy Consolidated(1) | $                                                                 |  21            | $ |  21  | $ |  43  |
| SDG&E                     |                                                              |  7             |   |  10  |   |  24  |
| SoCalGas                      |                                                              |  13            |   |  10  |   |  17  |
| (1)                           | In cases of non-wholly owned affiliates, includes only our share. |

|                             | # Sites   | # Sites        |
|----------------------------------|-----------|----------------|
|                             | Completed | In Process     |
| SDG&E                        |      |           |   |   |
| Manufactured-gas sites           |      |  3   |   |  ―  |
| Third-party waste-disposal sites |      |  1   |   |  1  |
| SoCalGas                         |      |           |   |   |
| Manufactured-gas sites           |      |  38  |   |  4  |
| Third-party waste-disposal sites |      |  1   |   |  2  |

|                                        |                                                                        |             | Waste          | Former Fossil-      | Other       |                |
|---------------------------------------------|-----------------------------------------------------------------------------|------------------|----------------|---------------------|-------------|---------------------|
|                                        |                                                                        | Manufactured-    | Disposal       | Fueled Power        | Hazardous   |                |
|                                        |                                                                        | Gas Sites        | Sites (PRP)(1) | Plants              | Waste Sites | Total               |
| SDG&E(2)                                | $                                                                           |  0.1   | $              |  ―  | $           |  1.0      | $ |  0.5  | $ |  1.6  |
| SoCalGas                                    |                                                                        |  21.3  |           |  0.5      |        |  ―  |   |  1.6  |   |  23.4  |
| Other                                       |                                                                        |  2.7   |           |  1.2      |        |  ―  |   |  0.1  |   |  4.0  |
|     Total Sempra Energy | $                                                                           |  24.1  | $              |  1.7      | $           |  1.0      | $ |  2.2  | $ |  29.0  |
| (1)                                         | Sites for which we have been identified as a Potentially Responsible Party. |
| (2)                                         | Does not include SDG&E’s liability for SONGS marine mitigation.   |

----

| 1.   | SDG&E provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County. |
|----------------|----------------------------------------------------------------------------------------------------------------------------|

| 2.   | SoCalGas is a natural gas distribution utility, serving customers throughout most of Southern California and part of central California. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Sempra Generation develops, owns and operates, or holds interests in, electric power plants and energy projects in Arizona, California, Colorado, Hawaii, Indiana, Kansas, Nevada, Pennsylvania and Mexico to serve wholesale electricity markets in the United States and Mexico. Sempra Generation also includes the operating results of Sempra Rockies Marketing, which holds firm service capacity on the Rockies Express Pipeline. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | Sempra Pipelines & Storage develops, owns and operates, or holds interests in, natural gas and propane pipelines and natural gas storage facilities in the United States and Mexico, and companies that provide natural gas or electricity services in Argentina, Chile, Mexico and Peru. We are currently pursuing the sale of our interests in the Argentine utilities, which we discuss further in Note 4 above. Sempra Pipelines & Storage also operates a natural gas distribution utility in Alabama. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.   | Sempra LNG develops, owns and operates terminals in the U.S. and Mexico for the import and export of LNG, and has supply and marketing agreements to purchase and sell LNG and natural gas. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| SEGMENT INFORMATION                        |
|--------------------------------------------|
| (Dollars in millions)                      |
|                                       | Years ended December 31, |
|                                       | 2011  | 2010  | 2009  |
| REVENUES                                   |   |   |   |   |   |   |   |   |   |   |   |   |
|   SDG&E                      | $ |  3,373  |  34  | % | $ |  3,049  |  34  | % | $ |  2,916  |  36  | % |
|   SoCalGas                       |   |  3,816  |  38  |   |   |  3,822  |  42  |   |   |  3,355  |  41  |   |
|   Sempra Generation              |   |  886  |  9  |   |   |  1,172  |  13  |   |   |  1,179  |  15  |   |
|   Sempra Pipelines & Storage |   |  1,443  |  14  |   |   |  350  |  4  |   |   |  465  |  6  |   |
|   Sempra LNG                     |   |  714  |  7  |   |   |  711  |  8  |   |   |  278  |  3  |   |
|   Adjustments and eliminations   |   |  (1) |  ―  |   |   |  (5) |  ―  |   |   |  ―  |  ―  |   |
|   Intersegment revenues(1)       |   |  (195) |  (2) |   |   |  (96) |  (1) |   |   |  (87) |  (1) |   |
|       Total  | $ |  10,036  |  100  | % | $ |  9,003  |  100  | % | $ |  8,106  |  100  | % |
| INTEREST EXPENSE                           |   |   |   |   |   |   |   |   |   |   |   |   |
|   SDG&E                      | $ |  142  |   |   | $ |  136  |   |   | $ |  104  |   |   |
|   SoCalGas                       |   |  69  |   |   |   |  66  |   |   |   |  68  |   |   |
|   Sempra Generation              |   |  13  |   |   |   |  13  |   |   |   |  12  |   |   |
|   Sempra Pipelines & Storage |   |  77  |   |   |   |  36  |   |   |   |  34  |   |   |
|   Sempra LNG                     |   |  42  |   |   |   |  48  |   |   |   |  24  |   |   |
|   All other                      |   |  233  |   |   |   |  244  |   |   |   |  229  |   |   |
|   Intercompany eliminations(2)   |   |  (111) |   |   |   |  (107) |   |   |   |  (104) |   |   |
|       Total  | $ |  465  |   |   | $ |  436  |   |   | $ |  367  |   |   |
| INTEREST INCOME                            |   |   |   |   |   |   |   |   |   |   |   |   |
|   SDG&E                      | $ |  ―  |   |   | $ |  ―  |   |   | $ |  1  |   |   |
|   SoCalGas                       |   |  1  |   |   |   |  1  |   |   |   |  3  |   |   |
|   Sempra Generation              |   |  8  |   |   |   |  16  |   |   |   |  12  |   |   |
|   Sempra Pipelines & Storage |   |  31  |   |   |   |  15  |   |   |   |  17  |   |   |
|   Sempra LNG                     |   |  4  |   |   |   |  1  |   |   |   |  ―  |   |   |
|   All other                      |   |  ―  |   |   |   |  1  |   |   |   |  ―  |   |   |
|   Intercompany eliminations(2)   |   |  (18) |   |   |   |  (18) |   |   |   |  (12) |   |   |
|       Total  | $ |  26  |   |   | $ |  16  |   |   | $ |  21  |   |   |
| DEPRECIATION AND AMORTIZATION              |   |   |   |   |   |   |   |   |   |   |   |   |
|   SDG&E                      | $ |  422  |  43  | % | $ |  381  |  44  | % | $ |  329  |  42  | % |
|   SoCalGas                       |   |  331  |  34  |   |   |  309  |  36  |   |   |  293  |  38  |   |
|   Sempra Generation              |   |  70  |  7  |   |   |  65  |  7  |   |   |  58  |  8  |   |
|   Sempra Pipelines & Storage |   |  92  |  10  |   |   |  44  |  5  |   |   |  45  |  6  |   |
|   Sempra LNG                     |   |  51  |  5  |   |   |  51  |  6  |   |   |  35  |  4  |   |
|   All other                      |   |  12  |  1  |   |   |  17  |  2  |   |   |  15  |  2  |   |
|       Total  | $ |  978  |  100  | % | $ |  867  |  100  | % | $ |  775  |  100  | % |
| INCOME TAX EXPENSE (BENEFIT)               |   |   |   |   |   |   |   |   |   |   |   |   |
|   SDG&E                      | $ |  237  |   |   | $ |  173  |   |   | $ |  177  |   |   |
|   SoCalGas                       |   |  143  |   |   |   |  176  |   |   |   |  144  |   |   |
|   Sempra Generation              |   |  (3) |   |   |   |  (7) |   |   |   |  108  |   |   |
|   Sempra Pipelines & Storage |   |  70  |   |   |   |  26  |   |   |   |  (20) |   |   |
|   Sempra LNG                     |   |  42  |   |   |   |  25  |   |   |   |  (15) |   |   |
|   All other                      |   |  (123) |   |   |   |  (291) |   |   |   |  28  |   |   |
|       Total  | $ |  366  |   |   | $ |  102  |   |   | $ |  422  |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |

| SEGMENT INFORMATION (Continued)                  |
|--------------------------------------------------|
| (Dollars in millions)                            |
|                                             |   | At December 31 or for the years ended December 31, |
|                                             |   | 2011  | 2010  | 2009  |
| EARNINGS (LOSSES)                                |   |   |   |   |   |   |   |   |   |   |   |   |
|    SDG&E(3)                   | $ |  431  |  32  | % | $ |  369  |  50  | % | $ |  344  |  31  | % |
|    SoCalGas(3)                    |   |  287  |  21  |   |   |  286  |  39  |   |   |  273  |  25  |   |
|    Sempra Generation              |   |  137  |  10  |   |   |  103  |  14  |   |   |  169  |  15  |   |
|    Sempra Pipelines & Storage |   |  527  |  39  |   |   |  159  |  21  |   |   |  101  |  9  |   |
|    Sempra LNG                     |   |  99  |  7  |   |   |  68  |  9  |   |   |  16  |  1  |   |
|    All other                      |   |  (124) |  (9) |   |   |  (246) |  (33) |   |   |  216  |  19  |   |
|        Total  | $ |  1,357  |  100  | % | $ |  739  |  100  | % | $ |  1,119  |  100  | % |
| ASSETS                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|    SDG&E                      | $ |  13,555  |  41  | % | $ |  12,077  |  40  | % | $ |  10,229  |  36  | % |
|    SoCalGas                       |   |  8,475  |  25  |   |   |  7,986  |  26  |   |   |  7,287  |  25  |   |
|    Sempra Generation              |   |  2,285  |  7  |   |   |  2,401  |  8  |   |   |  2,049  |  7  |   |
|    Sempra Pipelines & Storage |   |  7,146  |  21  |   |   |  5,175  |  17  |   |   |  4,485  |  16  |   |
|    Sempra LNG                     |   |  2,411  |  7  |   |   |  2,379  |  8  |   |   |  2,277  |  8  |   |
|    All other                      |   |  553  |  2  |   |   |  1,691  |  6  |   |   |  2,775  |  10  |   |
|    Intersegment receivables       |   |  (1,069) |  (3) |   |   |  (1,426) |  (5) |   |   |  (590) |  (2) |   |
|        Total  | $ |  33,356  |  100  | % | $ |  30,283  |  100  | % | $ |  28,512  |  100  | % |
| EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT |   |   |   |   |   |   |   |   |   |   |   |   |
|    SDG&E                      | $ |  1,831  |  64  | % | $ |  1,210  |  59  | % | $ |  955  |  50  | % |
|    SoCalGas                       |   |  683  |  24  |   |   |  503  |  24  |   |   |  480  |  25  |   |
|    Sempra Generation              |   |  267  |  9  |   |   |  135  |  7  |   |   |  38  |  2  |   |
|    Sempra Pipelines & Storage |   |  252  |  9  |   |   |  192  |  9  |   |   |  200  |  11  |   |
|    Sempra LNG                     |   |  11  |  1  |   |   |  18  |  1  |   |   |  235  |  12  |   |
|    All other                      |   |  5  |  ―  |   |   |  4  |  ―  |   |   |  4  |  ―  |   |
|    Intercompany eliminations(4)   |   |  (205) |  (7) |   |   |  ―  |  ―  |   |   |  ―  |  ―  |   |
|        Total  | $ |  2,844  |  100  | % | $ |  2,062  |  100  | % | $ |  1,912  |  100  | % |
| GEOGRAPHIC INFORMATION                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-lived assets:                               |   |   |   |   |   |   |   |   |   |   |   |   |
|    United States                  | $ |  21,505  |  85  | % | $ |  19,905  |  87  | % | $ |  19,870  |  88  | % |
|    Mexico                         |   |  2,196  |  9  |   |   |  2,217  |  10  |   |   |  1,954  |  9  |   |
|    South America                  |   |  1,542  |  6  |   |   |  705  |  3  |   |   |  780  |  3  |   |
|       Total        | $ |  25,243  |  100  | % | $ |  22,827  |  100  | % | $ |  22,604  |  100  | % |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues:                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|    United States                  | $ |  8,135  |  81  | % | $ |  8,118  |  90  | % | $ |  7,476  |  92  | % |
|    South America                  |   |  1,080  |  11  |   |   |  1  |  ―  |   |   |  1  |  ―  |   |
|    Mexico                         |   |  821  |  8  |   |   |  884  |  10  |   |   |  629  |  8  |   |
|       Total        | $ |  10,036  |  100  | % | $ |  9,003  |  100  | % | $ |  8,106  |  100  | % |
| (1)                                              | Revenues for reportable segments include intersegment revenues of: |
|                                             | $6 million, $53 million and $47 million for 2011, $6 million, $44 million and $46 million for 2010, and $7 million, $43 million and $37 million for 2009 for SDG&E, SoCalGas and Sempra Pipelines & Storage, respectively. Revenues in 2011 also included $88 million and $1 million of intersegment revenues at Sempra LNG and Sempra Generation, respectively. |
| (2)                                              | Prior year amounts have been revised to present amounts after eliminations between Parent and corporate entities. |
| (3)                                              | After preferred dividends. |
| (4)                                              | Amount represents elimination of intercompany sale of El Dorado power plant in 2011, as discussed in Note 14. |

----

| SEMPRA ENERGY                                                      |
|--------------------------------------------------------------------|
| (In millions, except for per share amounts)                        |
|                                                               |   | Quarters ended |
|                                                               |   | March 31 | June 30 | September 30 | December 31 |
| 2011                                                          |   |   |   |   |   |   |   |   |
| Revenues                                                           | $ |  2,434  | $ |  2,422  | $ |  2,576  | $ |  2,604  |
| Expenses and other income                                          | $ |  2,092  | $ |  1,836  | $ |  2,188  | $ |  2,199  |
|                                                               |   |   |   |   |   |   |   |   |   |
| Net income                                                         | $ |  264  | $ |  502  | $ |  326  | $ |  315  |
| Earnings attributable to Sempra Energy                             | $ |  258  | $ |  511  | $ |  296  | $ |  292  |
|                                                               |   |   |   |   |   |   |   |   |   |
| Basic per-share amounts(1):                                        |   |   |   |   |   |   |   |   |
|     Net income                                 | $ |  1.10  | $ |  2.10  | $ |  1.36  | $ |  1.31  |
|     Earnings attributable to Sempra Energy     | $ |  1.07  | $ |  2.14  | $ |  1.23  | $ |  1.22  |
|     Weighted average common shares outstanding |   |  240.1  |   |  239.4  |   |  239.5  |   |  239.8  |
|                                                               |   |   |   |   |   |   |   |   |   |
| Diluted per-share amounts(1):                                      |   |   |   |   |   |   |   |   |
|     Net income                                 | $ |  1.09  | $ |  2.09  | $ |  1.35  | $ |  1.30  |
|     Earnings attributable to Sempra Energy     | $ |  1.07  | $ |  2.12  | $ |  1.22  | $ |  1.21  |
|     Weighted average common shares outstanding |   |  241.9  |   |  240.8  |   |  241.9  |   |  241.8  |
| 2010                                                          |   |   |   |   |   |   |   |   |
| Revenues                                                           | $ |  2,534  | $ |  2,008  | $ |  2,116  | $ |  2,345  |
| Expenses and other income                                          | $ |  2,395  | $ |  1,771  | $ |  2,017  | $ |  2,034  |
|                                                               |   |   |   |   |   |   |   |   |   |
| Net income                                                         | $ |  100  | $ |  205  | $ |  127  | $ |  301  |
| Earnings attributable to Sempra Energy                             | $ |  106  | $ |  222  | $ |  131  | $ |  280  |
|                                                               |   |   |   |   |   |   |   |   |   |
| Basic per-share amounts(1):                                        |   |   |   |   |   |   |   |   |
|     Net income                                 | $ |  0.41  | $ |  0.83  | $ |  0.52  | $ |  1.26  |
|     Earnings attributable to Sempra Energy     | $ |  0.43  | $ |  0.90  | $ |  0.53  | $ |  1.17  |
|     Weighted average common shares outstanding |   |  246.1  |   |  246.8  |   |  246.7  |   |  239.5  |
|                                                               |   |   |   |   |   |   |   |   |   |
| Diluted per-share amounts(1):                                      |   |   |   |   |   |   |   |   |
|     Net income                                 | $ |  0.40  | $ |  0.82  | $ |  0.51  | $ |  1.24  |
|     Earnings attributable to Sempra Energy     | $ |  0.42  | $ |  0.89  | $ |  0.53  | $ |  1.15  |
|     Weighted average common shares outstanding |   |  250.4  |   |  249.7  |   |  249.8  |   |  242.5  |
| (1)                                                                | Earnings per share are computed independently for each of the quarters and therefore may not sum to the total for the year. |
|                                                               |

| SDG&E                                                  |
|------------------------------------------------------------|
| (Dollars in millions)                                      |
|                                                       | Quarters ended |
|                                                       | March 31 | June 30 | September 30 | December 31 |
| 2011                                                  |   |   |   |   |   |   |   |   |
| Operating revenues                                         | $ |  840  | $ |  697  | $ |  868  | $ |  968  |
| Operating expenses                                         |   |  677  |   |  584  |   |  658  |   |  699  |
| Operating income                                           | $ |  163  | $ |  113  | $ |  210  | $ |  269  |
|                                                       |   |   |   |   |   |   |   |   |
| Net income                                                 | $ |  94  | $ |  53  | $ |  136  | $ |  172  |
| (Earnings) losses attributable to noncontrolling interests |   |  (4) |   |  19  |   |  (21) |   |  (13) |
| Earnings                                                   |   |  90  |   |  72  |   |  115  |   |  159  |
| Dividends on preferred stock                               |   |  (1) |   |  (1) |   |  (2) |   |  (1) |
| Earnings attributable to common shares                     | $ |  89  | $ |  71  | $ |  113  | $ |  158  |
| 2010                                                  |   |   |   |   |   |   |   |   |
| Operating revenues                                         | $ |  742  | $ |  692  | $ |  811  | $ |  804  |
| Operating expenses                                         |   |  604  |   |  546  |   |  613  |   |  629  |
| Operating income                                           | $ |  138  | $ |  146  | $ |  198  | $ |  175  |
|                                                       |   |   |   |   |   |   |   |   |
| Net income                                                 | $ |  76  | $ |  55  | $ |  103  | $ |  124  |
| (Earnings) losses attributable to noncontrolling interests |   |  8  |   |  21  |   |  5  |   |  (18) |
| Earnings                                                   |   |  84  |   |  76  |   |  108  |   |  106  |
| Dividends on preferred stock                               |   |  (1) |   |  (1) |   |  (2) |   |  (1) |
| Earnings attributable to common shares                     | $ |  83  | $ |  75  | $ |  106  | $ |  105  |
|                                                       |

| SOCALGAS                               |
|----------------------------------------|
| (Dollars in millions)                  |
|                                   | Quarters ended |
|                                   | March 31 | June 30 | September 30 | December 31 |
| 2011                              |   |   |   |   |   |   |   |   |
| Operating revenues                     | $ |  1,056  | $ |  876  | $ |  844  | $ |  1,040  |
| Operating expenses                     |   |  937  |   |  773  |   |  709  |   |  911  |
| Operating income                       | $ |  119  | $ |  103  | $ |  135  | $ |  129  |
|                                   |   |   |   |   |   |   |   |   |
| Net income                             | $ |  68  | $ |  60  | $ |  81  | $ |  79  |
| Dividends on preferred stock           |   |  ―  |   |  (1) |   |  ―  |   |  ―  |
| Earnings attributable to common shares | $ |  68  | $ |  59  | $ |  81  | $ |  79  |
| 2010                              |   |   |   |   |   |   |   |   |
| Operating revenues                     | $ |  1,182  | $ |  834  | $ |  776  | $ |  1,030  |
| Operating expenses                     |   |  1,048  |   |  716  |   |  642  |   |  900  |
| Operating income                       | $ |  134  | $ |  118  | $ |  134  | $ |  130  |
|                                   |   |   |   |   |   |   |   |   |
| Net income                             | $ |  65  | $ |  70  | $ |  78  | $ |  74  |
| Dividends on preferred stock           |   |  ―  |   |  (1) |   |  ―  |   |  ―  |
| Earnings attributable to common shares | $ |  65  | $ |  69  | $ |  78  | $ |  74  |

| GLOSSARY                |                                                                             |   |                 |
|-------------------------|----------------------------------------------------------------------------------|--------|----------------------|
|                    |                                                                             |   |                 |
|                    |                                                                             |   |                 |
| 2010 Tax Act            | Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 |   | EPA                  | Environmental Protection Agency |
| AB 32                   | California Assembly Bill 32                                                      |   | EPS                  | Earnings per common share |
| AFUDC                   | Allowance for funds used during construction                                     |   | ERRP                 | Early Retiree Reinsurance Program |
| AMI                     | Advanced Metering Infrastructure                                                 |   | ESOP                 | Employee stock ownership plan |
| AOCI                    | Accumulated other comprehensive income (loss)                                    |   | FERC                 | Federal Energy Regulatory Commission |
| AROs                    | Asset retirement obligations                                                     |   | Fowler Ridge 2       | Fowler Ridge 2 Wind Farm |
| ASC                     | Accounting Standards Codification                                                |   | GAAP                 | Accounting Principles Generally Accepted in the United States of America |
| ASU                     | Accounting Standards Update                                                      |   | Gazprom              | Gazprom Marketing & Trading Mexico |
| Bay Gas                 | Bay Gas Storage, LLC                                                             |   | GCIM                 | Gas Cost Incentive Mechanism |
| Bcf                     | Billion cubic feet                                                               |   | GHG                  | Greenhouse Gas |
| Black-Scholes Model     | Black-Scholes option-pricing model                                               |   | GRC                  | General Rate Case |
| BLM                     | Bureau of Land Management                                                        |   | IBLA                 | Interior Board of Land Appeals |
| Cal Fire                | California Department of Forestry and Fire Protection                            |   | ICSID                | International Center for the Settlement of Investment Disputes |
| CARB                    | California Air Resources Board                                                   |   | IFRS                 | International Financial Reporting Standards |
| CBD                     | Center for Biological Diversity/Sierra Club                                      |   | IOUs                 | Investor-owned Utilities |
| CEC                     | California Energy Commission                                                     |   | ISFSI                | Independent spent fuel storage installation |
| Cedar Creek 2           | Cedar Creek 2 Wind Farm                                                          |   | ISO                  | Independent System Operator |
| CEQA                    | California Environmental Quality Act                                             |   | JP Morgan            | J.P. Morgan Chase & Co. |
| CFE                     | Comisión Federal de Electricidad (Federal Electricity Commission)           |   | J.P. Morgan Ventures | J.P. Morgan Ventures Energy Corporation |
| CFTC                    | U.S. Commodity Futures Trading Commission                                        |   | KMP                  | Kinder Morgan Energy Partners, L.P. |
| Chilquinta Energía | Chilquinta Energía S.A.                                                     |   | kV                   | Kilovolt |
| CMS 2                   | Copper Mountain Solar 2                                                          |   | Liberty              | Liberty Gas Storage, LLC |
| CNE                     | Comisión Nacional de Energía (National Energy Commission)              |   | LIBOR                | London interbank offered rate |
| Conoco                  | ConocoPhillips                                                                   |   | LIFO                 | Last-in first-out inventory |
| Cox                     | Cox Communications                                                               |   | LNG                  | Liquefied natural gas |
| CPSD                    | Consumer Protection and Safety Division                                          |   | Luz del Sur          | Luz del Sur S.A.A. |
| CPUC                    | California Public Utilities Commission                                           |   | MAOP                 | Maximum allowable operating pressure |
| CRE                     | Comisión Reguladora de Energía (Energy Regulatory Commission)          |   | MBFC                 | Mississippi Business Finance Corporation |
| CRRs                    | Congestion revenue rights                                                        |   | Mcf                  | Thousand cubic feet |
| DOE                     | U.S. Department of Energy                                                        |   | MHI                  | Mitsubishi Heavy Industries |
| DRA                     | Division of Ratepayer Advocates                                                  |   | MICAM                | Market Indexed Capital Adjustment Mechanism |
| DWR                     | California Department of Water Resources                                         |   | Midstream Services   | Sempra Midstream Services |
| EBITDA                  | Earnings before interest, taxes, depreciation and amortization                   |   | Mississippi Hub      | Mississippi Hub, LLC |
| Ecogas                  | Ecogas Mexico, S de RL de CV                                                     |   | MMBtu                | Million British Thermal Units (of natural gas) |
| Edison                  | Southern California Edison Company                                               |   | MMcf                 | Million cubic feet |
| Elk Hills               | Elk Hills Power                                                                  |   | Mobile Gas           | Mobile Gas Service Corporation |

| GLOSSARY (CONTINUED)   |                                                                                                                     |   |
|------------------------|--------------------------------------------------------------------------------------------------------------------------|--------|
|                   |                                                                                                                     |   |   |
|                   |                                                                                                                     |   |   |   |
| MSCI                   | Morgan Stanley Capital International                                                                                     |   | ROE | Return on equity |
| MSCI EAFE Index        | MSCI Index for equity market performance in Europe, Australasia and Far East                                             |   | ROR | Rate of return |
| MW                     | Megawatt                                                                                                                 |   | RPS | Renewables Portfolio Standard |
| MWh                    | Megawatt hour                                                                                                            |   | RSAs | Restricted stock awards |
| Noble Group            | Noble Group Ltd.                                                                                                         |   | RSUs | Restricted stock units |
| NOLs                   | Net operating losses                                                                                                     |   | SDG&E | San Diego Gas & Electric Company |
| NRC                    | Nuclear Regulatory Commission                                                                                            |   | Sempra Utilities | San Diego Gas & Electric Company and Southern California Gas Company |
| NTSB                   | National Transportation Safety Board                                                                                     |   | SFP | Secondary Financial Protection |
| OCI                    | Other comprehensive income                                                                                               |   | Shell | Shell México Gas Natural |
| OMEC                   | Otay Mesa Energy Center                                                                                                  |   | SoCalGas | Southern California Gas Company |
| OMEC LLC               | Otay Mesa Energy Center LLC                                                                                              |   | SONGS | San Onofre Nuclear Generating Station |
| OSINERGMIN             | Organismo Supervisor de la Inversión en Energía y Minería (Energy and Mining Investment Supervisory Body) |   | SPPR Group | Southwest Public Power Resources Group |
| Otay Mesa VIE          | Otay Mesa Energy Center LLC                                                                                              |   | S&P | Standard & Poor’s |
| OTC                    | Over-the-counter                                                                                                         |   | Tangguh PSC | Tangguh PSC Contractors |
| PBOP                   | Other postretirement benefit plans                                                                                       |   | Tecnored | Tecnored S.A. |
| PBOP plan trusts       | Postretirement benefit plan trusts                                                                                       |   | Tecsur | Tecsur S.A. |
| PCBs                   | Polychlorinated biphenyls                                                                                                |   | The Committee | Pension and Benefits Investment Committee |
| PE                     | Pacific Enterprises                                                                                                      |   | The Plan | Sempra Energy 2008 Long Term Incentive Plan for EnergySouth, Inc. Employees and Other Eligible Individuals |
| PEMEX                  | Petroleos Mexicanos (Mexican state-owned oil company)                                                                    |   | The Prior Plan | 2008 Incentive Plan of EnergySouth, Inc. |
| PG&E               | Pacific Gas and Electric Company                                                                                         |   | Trust | ESOP trust |
| PPACA                  | Patient Protection and Affordable Care Act                                                                               |   | TURN | The Utility Reform Network |
| PRP                    | Potentially Responsible Party                                                                                            |   | UCAN | Utility Consumers’ Action Network |
| PSEP                   | Pipeline Safety Enhancement Plan                                                                                         |   | USFS | United States Forest Service |
| RBS                    | The Royal Bank of Scotland plc                                                                                           |   | VaR | Value at Risk |
| RBS Sempra Commodities | RBS Sempra Commodities LLP                                                                                               |   | VEBA | Voluntary Employee Beneficiary Association |
| RDS                    | Retiree Drug Subsidy                                                                                                     |   | VIE | Variable Interest Entity |
| REX                    | Rockies Express Pipeline                                                                                                 |   | VNR | Valor Nuevo de Reemplazo (New replacement value) |
| Rockies Express        | Rockies Express Pipeline LLC                                                                                             |   | Williams | Williams Midstream Natural Gas Liquids, Inc. |
|                   |                                                                                                                     |   |   |   |