SOURCE: Sempra Energy

May 05, 2009 09:00 ET

Sempra Energy's First-Quarter 2009 Earnings per Share Rise 40 Percent

SAN DIEGO, CA--(Marketwire - May 5, 2009) - Boosted by improved results in nearly all of its operations, Sempra Energy (NYSE: SRE) today reported first-quarter 2009 earnings of $316 million, or $1.29 per diluted share, an increase of 40 percent per share over first-quarter 2008 earnings of $242 million, or $0.92 per diluted share.

"We had an outstanding first quarter -- a solid step toward meeting our 2009 financial objectives," said Donald E. Felsinger, chairman and chief executive officer of Sempra Energy. "In a tough economy, our businesses are continuing to grow and build long-term value for our shareholders."

SUBSIDIARY OPERATING RESULTS

San Diego Gas & Electric

First-quarter earnings for San Diego Gas & Electric (SDG&E) rose to $99 million in 2009 from $74 million in 2008. Earnings were higher primarily due to the favorable impact of SDG&E's rate case, which was approved by the California Public Utilities Commission and went into effect in the third quarter 2008. This improvement was partially offset by a favorable resolution in 2008 of prior-year's income-tax issues.

In March, SDG&E expanded the roll-out of smart meters for its 1.4 million customers. The new digital meters will allow two-way communications between SDG&E and its customers, increasing operational efficiency and giving customers more information with which to manage their energy usage. All of the new meters are expected to be installed by the end of 2011.

Southern California Gas Co.

Earnings for Southern California Gas Co. (SoCalGas) in the first quarter 2009 were $59 million, compared with $57 million in the prior-year's quarter.

RBS Sempra Commodities

First-quarter earnings from Sempra Energy's commodity operations nearly doubled in 2009 to $114 million. During the most recent quarter, the RBS Sempra Commodities joint venture benefited from improved results in natural gas and oil marketing. First-quarter 2008 results of $59 million represented 100 percent of the earnings of Sempra Energy's commodities-marketing business prior to the formation of the joint venture and reflected a $17 million write-down related to a credit issue with a counterparty.

Sempra Generation

Sempra Generation's earnings were $43 million in the first quarter 2009, compared with $45 million in last year's first quarter.

On April 15, Sempra Generation announced its intention to construct a new 48-megawatt (MW) expansion of its existing 10-MW photovoltaic power-generation facility near Las Vegas. The combined 58-MW installation would become the largest operational photovoltaic solar-power facility in North America. Construction will commence after Sempra Generation contracts with customers for the facility's power output.

Sempra Pipelines & Storage

First-quarter earnings for Sempra Pipelines & Storage rose 42 percent to $37 million in 2009 from $26 million in 2008, due primarily to increased contributions from its Mexico pipeline operations and Mobile Gas, offset by the negative effect of foreign currency exchange rates. Mobile Gas typically reports its highest earnings in the first quarter, when heating demand is stronger due to colder weather.

Sempra LNG

Sempra LNG recorded a loss of $7 million in the first quarter 2009, compared with a loss of $9 million in last year's first quarter.

INTERNET BROADCAST

Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. EDT with senior management of the company. Access is available by logging onto the Web site at www.sempra.com. For those unable to log onto the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 8962347.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2008 revenues of nearly $11 billion. The Sempra Energy companies' 13,600 employees serve about 29 million consumers worldwide.

Complete financial tables, including earnings information by business unit, are available on Sempra Energy's Web site at http://www.sempra.com/downloads/1Q2009.pdf.

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

Sempra Pipelines & Storage, Sempra Generation, Sempra LNG and Sempra Commodities are not the same companies as the utility, San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra Pipelines & Storage, Sempra Generation, Sempra LNG and Sempra Commodities are not regulated by the California Public Utilities Commission.

                              SEMPRA ENERGY
                                 Table A



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                            Three months
                                                                ended
                                                              March 31,
                                                          ----------------
(Dollars in millions, except per share amounts)             2009    2008*
                                                          -------  -------
                                                             (unaudited)
REVENUES
Sempra Utilities                                          $ 1,642  $ 2,290
Sempra Global and parent                                      466      980
                                                          -------  -------
    Total revenues                                          2,108    3,270
EXPENSES AND OTHER INCOME
Sempra Utilities:
    Cost of natural gas                                      (540)  (1,235)
    Cost of electric fuel and purchased power                (171)    (163)
Sempra Global and parent:
    Cost of natural gas, electric fuel and purchased
     power                                                   (268)    (409)
    Other cost of sales                                       (17)    (136)
Operation and maintenance                                    (516)    (698)
Depreciation and amortization                                (183)    (175)
Franchise fees and other taxes                                (82)     (83)
Equity earnings:
    RBS Sempra Commodities LLP                                153        -
    Other                                                       7        6
Other income, net                                               3       19
Interest income                                                 6       14
Interest expense                                              (82)     (60)
                                                          -------  -------
Income before income taxes and equity earnings of certain
 unconsolidated subsidiaries                                  418      350
Income tax expense                                           (109)    (127)
Equity earnings, net of income tax                             16       21
                                                          -------  -------
Net income                                                    325      244
Earnings attributable to noncontrolling interests              (7)       -
Preferred dividends of subsidiaries                            (2)      (2)
                                                          -------  -------
Earnings                                                  $   316  $   242
                                                          =======  =======

Basic earnings per common share                           $  1.31  $  0.94
                                                          =======  =======
Weighted-average number of shares outstanding, basic
 (thousands)                                              241,766  258,624
                                                          =======  =======

Diluted earnings per common share                         $  1.29  $  0.92
                                                          =======  =======
Weighted-average number of shares outstanding, diluted
 (thousands)                                              245,017  262,671
                                                          =======  =======
Dividends declared per share of common stock              $  0.39  $  0.32
                                                          =======  =======


* As adjusted for the retrospective adoption of SFAS 160.


                              SEMPRA ENERGY
                                  Table B


CONSOLIDATED BALANCE SHEETS

                                                   March 31,   December 31,
(Dollars in millions)                                 2009        2008*
                                                  ------------ ------------
                                                         (unaudited)
Assets
Current assets:
   Cash and cash equivalents                      $        720 $        331
   Short-term investments                                  176          176
   Restricted cash                                          27           27
   Accounts receivable, net                                882          981
   Income taxes receivable                                   2          195
   Deferred income taxes                                    48           31
   Inventories                                             150          320
   Regulatory assets                                       122          121
   Fixed-price contracts and other derivatives             123          160
   Insurance receivable related to wildfire
    litigation                                             900            -
   Other                                                   177          134
                                                  ------------ ------------
       Total current assets                              3,327        2,476
                                                  ------------ ------------

Investments and other assets:
   Regulatory assets arising from fixed-price
    contracts and other derivatives                        263          264
   Regulatory assets arising from pension and
    other postretirement benefit obligations             1,210        1,188
   Other regulatory assets                                 543          534
   Nuclear decommissioning trusts                          537          577
   Investment in RBS Sempra Commodities LLP              1,958        2,082
   Other investments                                     1,228        1,166
   Goodwill and other intangible assets                    531          539
   Sundry                                                  529          709
                                                  ------------ ------------
       Total investments and other assets                6,799        7,059
                                                  ------------ ------------
Property, plant and equipment, net                      17,208       16,865
                                                  ------------ ------------
Total assets                                      $     27,334 $     26,400
                                                  ============ ============

Liabilities and Equity
Current liabilities:
   Short-term debt                                $        426 $        503
   Accounts payable                                        622          856
   Due to unconsolidated affiliates                         31           38
   Dividends and interest payable                          187          156
   Accrued compensation and benefits                       146          280
   Regulatory balancing accounts, net                      609          335
   Current portion of long-term debt                       921          410
   Fixed-price contracts and other derivatives             196          180
   Customer deposits                                       159          170
   Reserve for wildfire litigation                         900            -
   Other                                                   703          684
                                                  ------------ ------------
       Total current liabilities                         4,900        3,612
                                                  ------------ ------------
Long-term debt                                           6,044        6,544
                                                  ------------ ------------

Deferred credits and other liabilities:
   Due to unconsolidated affiliate                         102          102
   Customer advances for construction                      153          155
   Pension and other postretirement benefit
    obligations, net of plan assets                      1,508        1,487
   Deferred income taxes                                   944          946
   Deferred investment tax credits                          55           57
   Regulatory liabilities arising from removal
    obligations                                          2,402        2,430
   Asset retirement obligations                          1,177        1,159
   Other regulatory liabilities                            216          219
   Fixed-price contracts and other derivatives             366          392
   Deferred credits and other                              875          909
                                                  ------------ ------------
       Total deferred credits and other
        liabilities                                      7,798        7,856
                                                  ------------ ------------
Preferred stock of subsidiary                               79           79
                                                  ------------ ------------
Total Sempra Energy shareholders' equity                 8,247        7,969
Preferred stock of subsidiaries                            100          100
Other noncontrolling interests                             166          240
                                                  ------------ ------------
       Total equity                                      8,513        8,309
                                                  ------------ ------------
Total liabilities and equity                      $     27,334 $     26,400
                                                  ============ ============

* As adjusted for the retrospective adoption of SFAS 160.


                              SEMPRA ENERGY
                                 Table C


CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
                                                       Three months ended
                                                            March 31,
                                                      --------------------
(Dollars in millions)                                   2009       2008*
                                                      ---------  ---------
                                                           (unaudited)
Cash Flows from Operating Activities:
Net income                                            $     325  $     244
Adjustments to reconcile net income to net cash
 provided by operating activities:
  Depreciation and amortization                             183        175
  Deferred income taxes and investment tax credits          (29)       (58)
  Equity earnings                                          (176)       (27)
  Other                                                      49         32
Net changes in other working capital components             491        390
Distribution from RBS Sempra Commodities LLP                305         --
Changes in other assets                                      10         (3)
Changes in other liabilities                                (19)       (22)
                                                      ---------  ---------
  Net cash provided by operating activities               1,139        731
                                                      ---------  ---------

Cash Flows from Investing Activities:
Expenditures for property, plant and equipment             (492)      (544)
Proceeds from sale of assets                                 --         10
Expenditures for investments                                (25)      (579)
Distributions from investments                                5          4
Purchases of nuclear decommissioning and other trust
 assets                                                     (45)      (134)
Proceeds from sales by nuclear decommissioning and
 other trusts                                                42        135
Other                                                        (7)        (1)
                                                      ---------  ---------
  Net cash used in investing activities                    (522)    (1,109)
                                                      ---------  ---------

Cash Flows from Financing Activities:
Common dividends paid                                       (86)       (82)
Preferred dividends paid by subsidiaries                     (2)        (2)
Issuances of common stock                                    10          4
Repurchases of common stock                                  --         (2)
(Decrease) increase in short-term debt, net                 (77)       566
Issuances of long-term debt                                  22         52
Payments on long-term debt                                   (6)       (10)
Purchase of noncontrolling interest                         (94)        --
Other                                                         5        (10)
                                                      ---------  ---------
  Net cash (used in) provided by financing activities      (228)       516
                                                      ---------  ---------

Increase in cash and cash equivalents                       389        138
Cash and cash equivalents, January 1                        331        668
                                                      ---------  ---------
Cash and cash equivalents, March 31                   $     720  $     806
                                                      =========  =========



* As adjusted for the retrospective adoption of SFAS 160.


                              SEMPRA ENERGY
                                 Table D



BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS


                                        Three months ended
                                             March 31,
                                     ------------------------
(Dollars in millions)                   2009         2008
                                     -----------  -----------
                                            (unaudited)
Earnings (Losses)
San Diego Gas & Electric             $        99  $        74
Southern California Gas                       59           57
Sempra Commodities(1)                        114           59
Sempra Generation                             43           45
Sempra Pipelines & Storage                    37           26
Sempra LNG                                    (7)          (9)
Parent & Other                               (29)         (10)
                                     -----------  -----------
Earnings                             $       316  $       242
                                     ===========  ===========

(1) Results for 2009 include the company's portion of RBS Sempra
    Commodities' joint venture earnings and interest, income taxes, cost
    allocations and other items associated with the joint venture.
    Results for 2008 include 100% of the commodities-marketing businesses.
    Both 2009 and 2008 include the results of Sempra Rockies Marketing.


                                        Three months ended
                                             March 31,
                                     ------------------------
(Dollars in millions)                   2009         2008
                                     -----------  -----------
                                            (unaudited)
Capital Expenditures and Investments
San Diego Gas & Electric             $       229  $       471  (1)
Southern California Gas                      112          116
Sempra Commodities                             -           37
Sempra Generation                              3           11
Sempra Pipelines & Storage                   101          209
Sempra LNG                                    71           97
Parent & Other                                 1          182  (1)
                                     -----------  -----------
Consolidated Capital Expenditures
 and Investments                     $       517  $     1,123
                                     ===========  ===========

(1) Purchases of industrial development bonds for SDG&E and Parent & Other
    were $236 and $177, respectively, in the three months ended
    March 31, 2008.


                              SEMPRA ENERGY
                                  Table E



OTHER OPERATING STATISTICS (Unaudited)



                                               Three months ended
                                                    March 31,
                                              ---------------------
SEMPRA UTILITIES                                 2009       2008
                                              ---------- ----------
Revenues (Dollars in millions)
   SDG&E (excludes intercompany sales)        $      730 $      742
   SoCalGas (excludes intercompany sales)     $      912 $    1,548

Gas Sales (bcf)                                      131        144
Transportation and Exchange (bcf)                    128        138
                                              ---------- ----------
Total Deliveries (bcf)                               259        282
                                              ---------- ----------

Total Gas Customers (Thousands)                    6,582      6,543

Electric Sales (Millions of kWhs)                  4,164      4,275
Direct Access (Millions of kWhs)                     740        765
                                              ---------- ----------
Total Deliveries (Millions of kWhs)                4,904      5,040
                                              ---------- ----------

Total Electric Customers (Thousands)               1,373      1,366


SEMPRA GENERATION
                                              ---------- ----------
Power Sold (Millions of kWhs)                      5,727      5,612


SEMPRA PIPELINES & STORAGE
(Represents 100% of the distribution operations of these subsidiaries,
although subsidiaries in Argentina, Chile and Peru are not 100% owned by
Sempra Energy. These subsidiaries are not consolidated within Sempra Energy
and the related investments are accounted for under the equity method).
                                              ---------- ----------
Natural Gas Sales (bcf)
   Argentina                                          65         71
   Mexico                                              5          5
   Mobile Gas                                          9          - *
Natural Gas Customers (Thousands)
   Argentina                                       1,680      1,613
   Mexico                                             94         95
   Mobile Gas                                         94          - *
Electric Sales (Millions of kWhs)
   Peru                                            1,393      1,362
   Chile                                             677        664
Electric Customers (Thousands)
   Peru                                              845        815
   Chile                                             566        553

* Mobile Gas was acquired in October 2008.

                              SEMPRA ENERGY
                            Table E (Continued)




SEMPRA COMMODITIES
The following information for the Sempra Commodities segment includes
information related to RBS Sempra Commodities LLP.  RBS Sempra Commodities
LLP acquired the commodity-marketing businesses of Sempra Energy on April
1, 2008.  For the three months ended March 31, 2009, the Sempra Commodities
segment is composed primarily of the company's equity interest in RBS
Sempra Commodities LLP, but also includes the results of Sempra Rockies
Marketing.  The margin and financial data below represent the total results
of RBS Sempra Commodities LLP as calculated under International Financial
Reporting Standards (IFRS).

RBS Sempra Commodities LLP

Operating Statistics
(in millions of US dollars)

                                                                Three
RBS Sempra Commodities LLP - Joint Venture                   months ended
 level margin*                                              March 31, 2009
                                                            --------------

Geographical:
  North America                                             $          252
  Europe/Asia                                                          102
                                                            --------------
    Total                                                   $          354
                                                            ==============

Product Line:
  Oil - Crude & Products                                    $          123
  Power                                                                 93
  Natural Gas                                                           78
  Metals                                                                54
  Other                                                                  6
                                                            --------------
    Total                                                   $          354
                                                            ==============

* Margin consists of operating revenues less cost of sales (primarily
  transportation and storage costs) reduced by certain transaction-related
  execution costs (primarily brokerage and other fees) and net interest
  income/expense.


Financial Information
(in millions of US dollars)

RBS Sempra Commodities LLP                       Three months ended
                                                   March 31, 2009
                                            ------------------------------
                                            Joint Venture       Sempra
                                                Total           Share**
  Fee income and trading revenue, net of
   selling costs                            $          354
  Operating and other expenses                        (200)
                                            --------------
    Joint Venture distributable income      $          154
                                            ==============


  Preferred return on capital               $           77  $           59
  1st allocation - 70% Sempra / 30% RBS***              77              55
  2nd allocation - 30% Sempra / 70% RBS                  -               -
                                            --------------  --------------
    Distributable income                    $          154  $          114
                                            ==============  ==============


Sempra Commodities Earnings

                                                                Three
                                                             months ended
(in millions of US dollars)                                 March 31, 2009
                                                            --------------
  Sempra share of distributable income -
   IFRS basis                                               $          114
  U.S. GAAP conversion impact                                           39
                                                            --------------
  Sempra equity earnings before income
   taxes - U.S. GAAP basis                                             153
  Income tax expense                                                   (37)
                                                            --------------
  Sempra equity earnings from RBS Sempra
   Commodities LLP                                                     116
  Other segment activity                                                (2)
                                                            --------------
    Sempra Commodities earnings                             $          114
                                                            ==============

** After a 15% preferred return to Sempra and then a 15% return to RBS,
   Sempra receives 70% of the next $500 million and 30% of any remaining
   income on an annual basis.

*** Includes certain transition costs specifically allocated to Sempra and
    RBS.


Contact Information

  • Media Contact:
    Doug Kline
    Sempra Energy
    (877) 866-2066
    www.sempra.com

    Financial Contact:
    Glen Donovan
    Sempra Energy
    (877) 736-7727
    Email Contact