1.0.0.3 false INVESTMENTS IN UNCONSOLIDATED ENTITIES false 1 $ false false 2 Notes to Consolidated Financial Statements 0 sre_NotesToConsolidatedFinancialStatementsAbstract sre false na duration string No definition available. false false false false false true false false false 1 false false 0 0 false false No definition available. false 3 Investments in Unconsolidated Entities Disclosure 1 us-gaap_EquityMethodInvestmentsDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div style="font-size:12pt">Sempra Commodities On April 1, 2008, Sempra Energy and The Royal Bank of Scotland (RBS) completed the formation of RBS Sempra Commodities, a partnership to own and operate the commodities-marketing businesses previously operated through wholly owned subsidiaries of Sempra Energy. Our initial equity contribution to the partnership was $1.6 billion. RBS made an initial equity contribution of $1.665 billion and is committed to provide any additional funding required for the ongoing operations of the partnership’s businesses.  As a result of the transaction, we received approximately $1.2 billion in cash, net of our contribution and including cash withdrawn from the businesses in anticipation of the transaction. We recorded an after-tax gain of $67 million on the transaction. We provide additional information about this transaction in Notes 4 and 6. On February 16, 2010, Sempra Energy, RBS and the partnership entered into an agreement to sell certain businesses within the partnership. We discuss this transaction and related agreements affecting the partnership in Note 20. Sempra Generation We provide information about investment activity at Sempra Generation in Note 4. NOTE 4. INVESTMENTS IN UNCONSOLIDATED ENTITIES We account for investments under the equity method when we have an ownership interest of 20 to 50 percent. In these cases, our pro rata shares of the subsidiaries’ net assets are included in Other Investments and in Investment in RBS Sempra Commodities LLP on the Consolidated Balance Sheets. These investments are adjusted for our share of each investee’s earnings or losses, dividends, and other comprehensive income or loss. Equity in earnings of unconsolidated subsidiaries that is recorded before income tax is reported in Equity Earnings (Losses) – RBS Sempra Commodities LLP and in Equity Earnings (Losses) – Other on the Consolidated Statements of Operations. Equity earnings recorded net of income tax recorded by the subsidiary are reported in Equity Earnings (Losses), Net of Income Tax, on the Consolidated Statements of Operations. The carrying value of unconsolidated subsidiaries is evaluated for impairment under the GAAP provisions for equity method investments. We account for certain investments in housing partnerships made before May 19, 1995 under the cost method, whereby the costs were amortized over ten years based on the expected residual value. We summarize our investment balances and earnings below:<table style="border-collapse: collapse; margin-top: 20px;"><tr><td width="561" align="left" colspan="6" style="border-top: 1px solid #000000;" height="19">EQUITY METHOD AND OTHER INVESTMENTS ON THE CONSOLIDATED BALANCE SHEETS</td></tr><tr><td width="561" align="left" height="19" colspan="6">(Dollars in millions)</td></tr><tr><td height="14" width="32" align="left"> </td><td height="14" width="355" align="left"> </td><td width="174" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="14">Investment at December 31,</td></tr><tr><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="32"> </td><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="355"> </td><td width="87" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2009 </td><td width="87" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2008 </td></tr><tr><td width="387" align="left" colspan="2" style="border-top: 1px solid #000000;" height="16">Sempra Commodities:</td><td height="16" style="border-top: 1px solid #000000;" align="left" width="26"> </td><td height="16" style="border-top: 1px solid #000000;" align="center" width="61"> </td><td height="16" style="border-top: 1px solid #000000;" align="left" width="26"> </td><td height="16" style="border-top: 1px solid #000000;" align="center" width="61"> </td></tr><tr><td width="387" align="left" height="16" colspan="2">    Investment in RBS Sempra Commodities LLP</td><td height="16" style="border-bottom: 3px solid #000000;" align="left" width="26">$</td><td height="16" style="border-bottom: 3px solid #000000;" align="right" width="61"> 2,172 </td><td height="16" style="border-bottom: 3px solid #000000;" align="left" width="26">$</td><td height="16" style="border-bottom: 3px solid #000000;" align="right" width="61"> 2,082 </td></tr><tr><td width="387" align="left" height="16" colspan="2">Other equity method investments:</td><td height="16" style="border-top: 3px solid #000000;" align="left" width="26"> </td><td height="16" style="border-top: 3px solid #000000;" align="left" width="61"> </td><td height="16" style="border-top: 3px solid #000000;" align="left" width="26"> </td><td height="16" style="border-top: 3px solid #000000;" align="left" width="61"> </td></tr><tr><td width="387" align="left" height="16" colspan="2">    Sempra Pipelines & Storage:</td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="left"> </td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="left"> </td></tr><tr><td width="387" align="left" height="16" colspan="2">        Chilquinta Energía S.A.</td><td height="16" width="26" align="left">$</td><td height="16" width="61" align="right"> 373 </td><td height="16" width="26" align="left">$</td><td height="16" width="61" align="right"> 364 </td></tr><tr><td width="387" align="left" height="16" colspan="2">        Luz del Sur S.A.</td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> 206 </td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> 183 </td></tr><tr><td width="387" align="left" height="16" colspan="2">        Rockies Express</td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> 850 </td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> 249 </td></tr><tr><td width="387" align="left" height="16" colspan="2">    Sempra Generation:</td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> </td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="left"> </td></tr><tr><td width="387" align="left" height="16" colspan="2">        Elk Hills Power</td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> 198 </td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> 198 </td></tr><tr><td width="387" align="left" height="16" colspan="2">        Fowler Ridge II Wind Farm</td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> 236 </td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> - </td></tr><tr><td width="387" align="left" height="16" colspan="2">Housing partnerships</td><td height="16" style="border-bottom: 1px solid #000000;" align="left" width="26"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="61"> 21 </td><td height="16" style="border-bottom: 1px solid #000000;" align="left" width="26"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="61"> 30 </td></tr><tr><td width="387" align="left" height="16" colspan="2">    Total other equity method investments</td><td height="16" style="border-top: 1px solid #000000;" align="left" width="26"> </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="61"> 1,884 </td><td height="16" style="border-top: 1px solid #000000;" align="left" width="26"> </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="61"> 1,024 </td></tr><tr><td width="387" align="left" height="16" colspan="2">Cost method investments - housing partnerships</td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> 12 </td><td height="16" width="26" align="left"> </td><td height="16" width="61" align="right"> 13 </td></tr><tr><td width="387" align="left" height="16" colspan="2">Other(1)</td><td height="16" style="border-bottom: 1px solid #000000;" align="left" width="26"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="61"> 255 </td><td height="16" style="border-bottom: 1px solid #000000;" align="left" width="26"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="61"> 129 </td></tr><tr><td width="387" align="left" colspan="2" style="border-bottom: 3px solid #000000;" height="16">Total</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="left" width="26">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="61"> 2,151 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="left" width="26">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="61"> 1,166 </td></tr><tr><td height="62" style="border-top: 3px solid #000000;" align="right" width="32">(1)</td><td width="529" align="left" colspan="5" style="border-top: 3px solid #000000;" height="62">Other includes Sempra Pipelines & Storage’s investments in bonds, which include $51 million in bonds issued by Chilquinta Energía S.A. at December 31, 2009 (discussed below); $128 million in industrial development bonds at Liberty Gas Storage at December 31, 2009 and 2008; and $75 million in industrial development bonds at Mississippi Hub at December 31, 2009 (discussed in Note 6).</td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width="577" align="left" colspan="7" style="border-top: 1px solid #000000;" height="19">EQUITY METHOD INVESTMENTS ON THE CONSOLIDATED STATEMENTS OF OPERATIONS</td></tr><tr><td width="577" align="left" height="19" colspan="7">(Dollars in millions)</td></tr><tr><td height="14" width="285" align="left"> </td><td width="292" align="center" colspan="6" style="border-bottom: 1px solid #000000;" height="14">Years ended December 31,</td></tr><tr><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="285"> </td><td width="98" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2009 </td><td width="97" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2008 </td><td width="97" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2007 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;" align="left" width="285">Earnings (losses) recorded before tax:</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="22"> </td><td height="16" style="border-top: 1px solid #000000;" align="left" width="76"> </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="22"> </td><td height="16" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="22"> </td><td height="16" style="border-top: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="16" width="285" align="left">    RBS Sempra Commodities LLP</td><td height="16" style="border-bottom: 3px solid #000000;" align="right" width="22">$</td><td height="16" style="border-bottom: 3px solid #000000;" align="right" width="76"> 463 </td><td height="16" style="border-bottom: 3px solid #000000;" align="right" width="22">$</td><td height="16" style="border-bottom: 3px solid #000000;" align="right" width="75"> 383 </td><td height="16" style="border-bottom: 3px solid #000000;" align="right" width="22">$</td><td height="16" style="border-bottom: 3px solid #000000;" align="right" width="75"> - </td></tr><tr><td height="16" width="285" align="left"> </td><td height="16" style="border-top: 3px solid #000000;" align="right" width="22"> </td><td height="16" style="border-top: 3px solid #000000;" align="left" width="76"> </td><td height="16" style="border-top: 3px solid #000000;" align="right" width="22"> </td><td height="16" style="border-top: 3px solid #000000;" align="left" width="75"> </td><td height="16" style="border-top: 3px solid #000000;" align="right" width="22"> </td><td height="16" style="border-top: 3px solid #000000;" align="left" width="75"> </td></tr><tr><td height="16" width="285" align="left">    Elk Hills Power</td><td height="16" width="22" align="right">$</td><td height="16" width="76" align="right"> (3)</td><td height="16" width="22" align="right">$</td><td height="16" width="75" align="right"> 8 </td><td height="16" width="22" align="right">$</td><td height="16" width="75" align="right"> 9 </td></tr><tr><td height="16" width="285" align="left">    Fowler Ridge II Wind Farm</td><td height="16" width="22" align="right"> </td><td height="16" width="76" align="right"> 1 </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> - </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> - </td></tr><tr><td height="16" width="285" align="left">    Housing partnerships</td><td height="16" width="22" align="right"> </td><td height="16" width="76" align="right"> (12)</td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> (14)</td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> (14)</td></tr><tr><td height="16" width="285" align="left">    Rockies Express</td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="22"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="76"> 50 </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="22"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="75"> 43 </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="22"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="75"> (4)</td></tr><tr><td height="16" width="285" align="left"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="22">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="76"> 36 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="22">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="75"> 37 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="22">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="75"> (9)</td></tr><tr><td height="16" width="285" align="left"> </td><td height="16" style="border-top: 3px solid #000000;" align="right" width="22"> </td><td height="16" style="border-top: 3px solid #000000;" align="left" width="76"> </td><td height="16" style="border-top: 3px solid #000000;" align="right" width="22"> </td><td height="16" style="border-top: 3px solid #000000;" align="left" width="75"> </td><td height="16" style="border-top: 3px solid #000000;" align="right" width="22"> </td><td height="16" style="border-top: 3px solid #000000;" align="left" width="75"> </td></tr><tr><td height="16" width="285" align="left">Earnings recorded net of tax:</td><td height="16" width="22" align="right"> </td><td height="16" width="76" align="left"> </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="left"> </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="left"> </td></tr><tr><td height="16" width="285" align="left">    Chilquinta Energía S.A.</td><td height="16" width="22" align="right">$</td><td height="16" width="76" align="right"> 23 </td><td height="16" width="22" align="right">$</td><td height="16" width="75" align="right"> 28 </td><td height="16" width="22" align="right">$</td><td height="16" width="75" align="right"> 28 </td></tr><tr><td height="16" width="285" align="left">    Luz del Sur S.A.</td><td height="16" width="22" align="right"> </td><td height="16" width="76" align="right"> 38 </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> 31 </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> 27 </td></tr><tr><td height="16" width="285" align="left">    Sodigas Pampeana and Sodigas Sur</td><td height="16" width="22" align="right"> </td><td height="16" width="76" align="right"> 7 </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> 1 </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> 4 </td></tr><tr><td height="16" width="285" align="left">    Sempra Commodities:</td><td height="16" width="22" align="right"> </td><td height="16" width="76" align="left"> </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="left"> </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="left"> </td></tr><tr><td height="16" width="285" align="left">        Gain on sale of investments</td><td height="16" width="22" align="right"> </td><td height="16" width="76" align="right"> - </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> - </td><td height="16" width="22" align="right"> </td><td height="16" width="75" align="right"> 30 </td></tr><tr><td height="16" width="285" align="left">        Earnings from operations</td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="22"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="76"> - </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="22"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="75"> 3 </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="22"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="75"> 10 </td></tr><tr><td height="16" style="border-bottom: 3px solid #000000;" align="left" width="285"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="22">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="76"> 68 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="22">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="75"> 63 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="22">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;" align="right" width="75"> 99 </td></tr></table>The undistributed earnings of equity method investments were $692 million and $604 million at December 31, 2009 and December 31, 2008, respectively. Equity method goodwill of $252 million related to our investment in RBS Sempra Commodities is included in Investment in RBS Sempra Commodities LLP on the Sempra Energy Consolidated Balance Sheets. Equity method goodwill related to our unconsolidated subsidiaries located in South America is included in Other Investments on the Sempra Energy Consolidated Balance Sheets. These amounts, before foreign-currency translation adjustments, were $254 million at both December 31, 2009 and 2008. Including foreign-currency translation adjustments, these amounts were <ul><li>$253 million at December 31, 2009 </li><li>$213 million at December 31, 2008 </li></ul>Descriptive information concerning our equity method investments by segment follows.Sempra Commodities RBS Sempra Commodities is a United Kingdom limited liability partnership formed to own and operate the commodities-marketing businesses previously operated through wholly owned subsidiaries of Sempra Energy, as we discuss in Note 3. We account for our investment in RBS Sempra Commodities under the equity method. Our share of partnership earnings is reported in the Sempra Commodities segment. Subject to certain limited exceptions, partnership pretax income is allocated each year as follows: <ul><li>First, we receive a preferred 15-percent return on our adjusted equity capital. </li><li>Next, RBS receives a preferred 15-percent return on any capital in excess of capital attributable to us that is required by the U.K. Financial Services Authority to be maintained by RBS in respect of the operations of the partnership. </li><li>Next, we receive 70 percent of the next $500 million in pretax income; RBS receives the remaining 30 percent. </li><li>Then, we receive 30 percent and RBS receives 70 percent of any remaining pretax income. </li><li>Any losses of the partnership are shared equally between us and RBS. </li></ul>We had pretax equity earnings from RBS Sempra Commodities of $463 million for the year ended December 31, 2009, and $383 million for the nine months ended December 31, 2008. The partnership income that is distributable to us on an annual basis is computed on the partnership's basis of accounting, International Financial Reporting Standards (IFRS), as adopted by the European Union. This distributable income, on an IFRS basis, was $300 million for the year ended December 31, 2009, and $389 million for the nine months ended December 31, 2008. In 2009 and 2008, we received cash distributions from the partnership of $407 million and $85 million, respectively. We have indemnified the partnership for certain litigation and tax liabilities related to the businesses purchased by the partnership. We recorded these obligations at a fair value of $5 million on April 1, 2008, the date we formed the partnership. This liability is being amortized over its expected life. On February 16, 2010, Sempra Energy, RBS and the partnership entered into an agreement to sell certain businesses within the partnership. We discuss this transaction and related agreements, including expected changes in earnings sharing, affecting the partnership in Note 20. We provide information regarding the Sempra Commodities segment in Note 18. The following tables show summarized financial information for RBS Sempra Commodities (on a GAAP basis):<table style="border-collapse: collapse; margin-top: 20px;"><tr><td width="506" align="left" colspan="5" style="border-top: 1px solid #000000;" height="19">RBS SEMPRA COMMODITIES SUMMARIZED FINANCIAL INFORMATION</td></tr><tr><td width="506" align="left" height="19" colspan="5">(Dollars in millions)</td></tr><tr><td height="61" style="border-bottom: 1px solid #000000;" align="left" width="306"> </td><td height="61" style="border-bottom: 1px solid #000000;" align="center" width="15"> </td><td height="61" style="border-bottom: 1px solid #000000;" align="center" width="85">Year ended December 31, 2009</td><td height="61" style="border-bottom: 1px solid #000000;" align="center" width="17"> </td><td height="61" style="border-bottom: 1px solid #000000;" align="center" width="83">Nine months ended December 31, 2008</td></tr><tr><td height="16" style="border-top: 1px solid #000000;" align="left" width="306">Gross revenues and fee income</td><td height="16" style="border-top: 1px solid #000000;" align="center" width="15">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="85"> 2,179 </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="17">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="83"> 2,051 </td></tr><tr><td height="16" width="306" align="left">Gross profit</td><td height="16" width="15" align="right"> </td><td height="16" width="85" align="right"> 1,461 </td><td height="16" width="17" align="right"> </td><td height="16" width="83" align="right"> 1,370 </td></tr><tr><td height="16" width="306" align="left">Income from continuing operations</td><td height="16" width="15" align="left"> </td><td height="16" width="85" align="right"> 639 </td><td height="16" width="17" align="right"> </td><td height="16" width="83" align="right"> 592 </td></tr><tr><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="left" width="306">Partnership net income </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="15"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="85"> 639 </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="17"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="83"> 592 </td></tr><tr><td height="16" style="border-top: 3px solid #C0C0C0;" align="left" width="306"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="15"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="left" width="85"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="17"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="83"> </td></tr><tr><td height="14" width="306" align="left"> </td><td width="200" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="14">December 31,</td></tr><tr><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="306"> </td><td width="100" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2009 </td><td width="100" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2008 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;" align="left" width="306">Current assets</td><td height="16" style="border-top: 1px solid #000000;" align="center" width="15">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="85"> 7,272 </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="17">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="83"> 8,713 </td></tr><tr><td height="16" width="306" align="left">Noncurrent assets</td><td height="16" width="15" align="right"> </td><td height="16" width="85" align="right"> 521 </td><td height="16" width="17" align="right"> </td><td height="16" width="83" align="right"> 516 </td></tr><tr><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="left" width="306">Current liabilities</td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="15"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="85"> 4,074 </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="17"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="83"> 5,581 </td></tr></table>Investments in Other Unconsolidated Subsidiaries In February 2007, Sempra Commodities sold its interests in an equity method investment, along with a related cost-basis investment, receiving cash and a 12.7-percent interest in a newly formed entity. The after-tax gain on this transaction, recorded in Equity Earnings (Losses), Net of Income Tax, on the Consolidated Statements of Operations, was $30 million. Sempra Generation The 550-MW Elk Hills Power (Elk Hills) plant located near Bakersfield, California began commercial operations in July 2003. Elk Hills is 50-percent owned by Sempra Generation. During 2009, Sempra Generation invested $235 million to become an equal partner with BP Wind Energy, a wholly owned subsidiary of BP p.l.c., in the development of the 200-MW Fowler Ridge II Wind Farm (Fowler Ridge II) project near Indianapolis, Indiana. The project became operational in December 2009. The project uses 133 wind turbines, each with the ability to generate 1.5 MW. The project's entire power output has been sold under four long-term contracts, each for 50 MW and 20-year terms. Our investment in Fowler Ridge II is accounted for as an equity method investment.Sempra Pipelines & Storage Sempra Pipelines & Storage owns a 25-percent interest in Rockies Express, a partnership that operates a natural gas pipeline, the Rockies Express Pipeline (REX), that links producing areas in the Rocky Mountain region to the upper Midwest and the eastern United States. Kinder Morgan Energy Partners, L.P. (KMP) and ConocoPhillips (Conoco) own the remaining interests of 50 percent and 25 percent, respectively. We made investments in Rockies Express of $625 million in 2009, $150 million in 2008 and $100 million in 2007. We provide additional information in Note 6. Sempra Pipelines & Storage owns a 50-percent interest in Chilquinta Energía S.A., a Chilean electric utility, and a 38-percent interest in Luz del Sur S.A., a Peruvian electric utility. In November 2009, Sempra Pipelines & Storage purchased $50 million of 2.75-percent bonds issued by Chilquinta Energía S.A. that are denominated in Chilean Unidades de Fomento. The Chilean Unidad de Fomento is a unit of account used in Chile that is adjusted for inflation, and its value is quoted in Chilean Pesos. The bonds mature on October 30, 2014. The carrying value of the bonds after the effect of foreign currency translation was $51 million at December 31, 2009. Sempra Pipelines & Storage also owns 43 percent of two Argentine natural gas utility holding companies, Sodigas Pampeana and Sodigas Sur. As a result of the devaluation of the Argentine peso at the end of 2001 and subsequent changes in the value of the peso, Sempra Pipelines & Storage has reduced the carrying value of its investment by a cumulative total of $270 million as of December 31, 2009. These noncash adjustments, based on fluctuations in the value of the Argentine peso, did not affect earnings, but were recorded in Comprehensive Income and Accumulated Other Comprehensive Income (Loss). The Argentine economic decline and government responses (including Argentina’s unilateral, retroactive abrogation of utility agreements early in 2002) continue to adversely affect the operations of these Argentine utilities. In 2002, Sempra Pipelines & Storage initiated arbitration proceedings at the International Center for the Settlement of Investment Disputes (ICSID) under the 1994 Bilateral Investment Treaty between the United States and Argentina for recovery of the diminution of the value of its investments that has resulted from Argentine governmental actions. In September 2007, the tribunal officially closed the arbitration proceedings and awarded us compensation of $172 million, which includes interest up to the award date. In January 2008, Argentina filed an action at the ICSID seeking to annul the award. The Annulment Committee lifted the stay of enforcement so that we may now attach and sell any non-sovereign assets of the Argentine government. The annulment hearing was held in early September 2009 and we anticipate a decision by the second quarter of 2010. We will not recognize the award until collectibility is assured. In December 2006, we decided to sell our Argentine investments, and we continue to actively pursue their sale. We adjusted our investments to estimated fair value and recorded a noncash impairment charge to 2006 earnings of $221 million. The following tables show summarized financial information for Sodigas Pampeana and Sodigas Sur:<table style="border-collapse: collapse; margin-top: 20px;"><tr><td width="476" align="left" colspan="8" style="border-top: 1px solid #000000;" height="19">SODIGAS PAMPEANA AND SODIGAS SUR – SUMMARIZED FINANCIAL INFORMATION</td></tr><tr><td width="476" align="left" height="19" colspan="8">(Dollars in millions)</td></tr><tr><td height="14" width="21" align="left"> </td><td height="14" width="173" align="left"> </td><td width="282" align="center" colspan="6" style="border-bottom: 1px solid #000000;" height="14">Years ended December 31,</td></tr><tr><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="21"> </td><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="173"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2009 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2007 </td></tr><tr><td width="194" align="left" colspan="2" style="border-top: 1px solid #000000;" height="16">Gross revenues</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 241 </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 232 </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 227 </td></tr><tr><td width="194" align="left" height="16" colspan="2">Gross profit</td><td height="16" width="26" align="left"> </td><td height="16" width="68" align="right"> 100 </td><td height="16" width="26" align="left"> </td><td height="16" width="68" align="right"> 110 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 111 </td></tr><tr><td width="194" align="left" height="16" colspan="2">Income from operations</td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 30 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 12 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 21 </td></tr><tr><td width="194" align="left" height="16" colspan="2">Gain on sale of assets</td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 1 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 1 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 1 </td></tr><tr><td width="194" align="left" colspan="2" style="border-bottom: 3px solid #C0C0C0;" height="16">Net income</td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 20 </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 4 </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 14 </td></tr><tr><td height="16" style="border-top: 3px solid #C0C0C0;" align="left" width="21"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="left" width="173"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="68"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="left" width="68"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="68"> </td></tr><tr><td height="14" width="21" align="left"> </td><td height="14" width="173" align="left"> </td><td height="14" width="26" align="left"> </td><td height="14" width="68" align="left"> </td><td width="188" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="14">At December 31,</td></tr><tr><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="21"> </td><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="173"> </td><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="26"> </td><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="68"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2009 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2008 </td></tr><tr><td width="288" align="left" colspan="4" style="border-top: 1px solid #000000;" height="16">Current assets</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 75 </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 93 </td></tr><tr><td width="288" align="left" height="16" colspan="4">Noncurrent assets</td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 294 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 323 </td></tr><tr><td width="288" align="left" height="16" colspan="4">Current liabilities</td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 169 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 192 </td></tr><tr><td width="288" align="left" colspan="4" style="border-bottom: 3px solid #C0C0C0;" height="16">Noncurrent liabilities</td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 26 </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 25 </td></tr></table>Sempra Financial Prior to June 2006, Sempra Financial invested as a limited partner in affordable-housing properties. Sempra Financial’s portfolio included 1,300 properties throughout the United States that provided income tax benefits (primarily from income tax credits). In June 2006, Sempra Financial effectively sold the majority of its interests in affordable-housing projects to an unrelated party subject to certain guarantees. Because of the guarantees, the transaction was recorded as a financing transaction rather than as a sale, and we continue to consolidate the investments in the housing partnerships. The transaction almost completely eliminated the income tax benefits from the investments. Other Equity Method Information We present aggregated information below for: <ul><li>Chilquinta Energía S.A. </li><li>Luz del Sur S.A. </li><li>Elk Hills Power </li><li>Fowler Ridge II, beginning in 2009 </li><li>Rockies Express </li><li>Sempra Commodities' investments (prior to the formation of RBS Sempra Commodities) </li><li>Sempra Energy’s housing partnerships (accounted for under the equity method)</li></ul><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width="476" align="left" colspan="8" style="border-top: 1px solid #000000;" height="19">OTHER EQUITY METHOD INFORMATION</td></tr><tr><td width="476" align="left" height="19" colspan="8">(Dollars in millions)</td></tr><tr><td height="14" width="21" align="left"> </td><td height="14" width="173" align="left"> </td><td width="282" align="center" colspan="6" style="border-bottom: 1px solid #000000;" height="14">Years ended December 31,</td></tr><tr><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="21"> </td><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="173"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2009 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2007 </td></tr><tr><td width="194" align="left" colspan="2" style="border-top: 1px solid #000000;" height="16">Gross revenues</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 1,192 </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 1,852 </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 1,570 </td></tr><tr><td width="194" align="left" height="16" colspan="2">Gross profit</td><td height="16" width="26" align="left"> </td><td height="16" width="68" align="right"> 429 </td><td height="16" width="26" align="left"> </td><td height="16" width="68" align="right"> 487 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 456 </td></tr><tr><td width="194" align="left" height="16" colspan="2">Income from operations</td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 194 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 234 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 225 </td></tr><tr><td width="194" align="left" height="16" colspan="2">Gain (loss) on sale of assets</td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> - </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> (46)</td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 7 </td></tr><tr><td width="194" align="left" colspan="2" style="border-bottom: 3px solid #C0C0C0;" height="16">Net income</td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 173 </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 171 </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 138 </td></tr><tr><td height="16" style="border-top: 3px solid #C0C0C0;" align="left" width="21"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="left" width="173"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="68"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="left" width="68"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-top: 3px solid #C0C0C0;" align="right" width="68"> </td></tr><tr><td height="14" width="21" align="left"> </td><td height="14" width="173" align="left"> </td><td height="14" width="26" align="left"> </td><td height="14" width="68" align="left"> </td><td width="188" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="14">At December 31,</td></tr><tr><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="21"> </td><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="173"> </td><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="26"> </td><td height="14" style="border-bottom: 1px solid #000000;" align="left" width="68"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2009 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="14">2008 </td></tr><tr><td width="288" align="left" colspan="4" style="border-top: 1px solid #000000;" height="16">Current assets</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 1,056 </td><td height="16" style="border-top: 1px solid #000000;" align="right" width="26">$</td><td height="16" style="border-top: 1px solid #000000;" align="right" width="68"> 795 </td></tr><tr><td width="288" align="left" height="16" colspan="4">Noncurrent assets</td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 3,395 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 2,091 </td></tr><tr><td width="288" align="left" height="16" colspan="4">Current liabilities</td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 405 </td><td height="16" width="26" align="right"> </td><td height="16" width="68" align="right"> 324 </td></tr><tr><td width="288" align="left" colspan="4" style="border-bottom: 3px solid #C0C0C0;" height="16">Noncurrent liabilities</td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 625 </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="26"> </td><td height="16" style="border-bottom: 3px solid #C0C0C0;" align="right" width="68"> 519 </td></tr></table></div> Sempra CommoditiesOn April 1, 2008, Sempra Energy and The Royal Bank of Scotland (RBS) completed the formation of RBS Sempra Commodities, a partnership to own false false No definition available. 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