Sempra Energy Third-Quarter Earnings Rise
2009-11-09 15:11:03 -
SAN DIEGO, CA -- (Marketwire) -- 11/09/09 -- Sempra Energy :
sempra.com/ (NYSE: SRE) today reported that earnings increased in the third quarter 2009 to $317 million, or $1.27 per diluted share, from $308 million, or $1.24 per diluted share, in the third quarter 2008.
Earnings for the first nine months of 2009 were $831 million, or $3.37 per diluted share, up nearly 5 percent from $794 million, or $3.13 per diluted share, in the first nine months of last year.
"Our results through the first nine months of the year benefited from the solid performance of our California utilities and our commodities business, as well as continued progress in the build-out of our natural gas infrastructure projects," said Donald E. Felsinger, chairman and chief executive officer of Sempra Energy. "We remain on track to meet our 2009 financial targets."
OPERATING HIGHLIGHTS
San Diego Gas & Electric
Third-quarter earnings for San Diego Gas & Electric :
sdge.com/index/ (SDG&E) were $108 million in 2009, compared with $123 million last year. Third-quarter 2008 results included $33 million in earnings from the retroactive application of SDG&E's rate case, approved in July 2008.
For the first nine months, SDG&E earnings rose to $277 million in 2009 from $258 million last year.
Southern California Gas Co.
Earnings for Southern California Gas Co. :
socalgas.com/index/ (SoCalGas) in the third quarter 2009 were $74 million, compared with $77 million in the third quarter 2008. Third-quarter 2008 results included $7 million in earnings from the retroactive application of SoCalGas' rate case, approved in July 2008.
For the nine-month period, SoCalGas' earnings increased to $198 million in 2009 from $190 million in 2008.
RBS Sempra Commodities
Earnings for Sempra Energy's commodity operations -- concentrated in the RBS Sempra Commodities :
www.rbssempra.com/ joint venture -- were $75 million in the third quarter 2009, compared with a loss of $8 million in last year's third quarter, due primarily to improved performance in natural gas marketing. Results in last year's third quarter were negatively impacted by losses in power marketing caused by the steep decline in commodity prices during the quarter.
For the nine-month period, earnings from Sempra Energy's commodity operations increased to $274 million in 2009 from $181 million last year.
Last week, as part of its ongoing restructuring plan responding to increased government investment, The Royal Bank of Scotland (RBS) announced its intention to divest several of its assets, including its 51-percent stake in the RBS Sempra Commodities joint venture. RBS has told Sempra Energy that the bank will comply with the joint-venture agreement and execute the sale in an orderly manner to maximize the value of the business. RBS also said it is committed to maintaining the usual liquidity, credit and funding operations for the joint venture.
Sempra Generation
In the third quarter 2009, Sempra Generation's :
www.semprageneration.com/ earnings were $43 million, compared with $94 million in the third quarter 2008.
Sempra Generation benefited in last year's third quarter from $28 million of mark-to-market earnings on long-term contracts with RBS Sempra Commodities and other counterparties, as well as $8 million from a solar investment tax credit and more favorable market pricing.
For the first nine months of 2009, Sempra Generation earned $119 million, compared with $162 million in the same period a year ago.
In September, Sempra Generation announced it has become an equal partner with BP Wind Energy in the Fowler Ridge II Wind Farm project in Indiana, scheduled to commence operations in the fourth quarter 2009. The entire output of the 200-megawatt facility already has been sold under four, 20-year contracts.
Sempra Pipelines & Storage
Third-quarter 2009 earnings for Sempra Pipelines & Storage :
www.semprapipelinesandstorage.com/index.html increased to $54 million from $34 million, due primarily to lower income taxes and increased contributions from the Rockies Express pipeline.
For the nine-month period, earnings for Sempra Pipelines & Storage were $64 million in 2009, compared with $84 million last year. In the second quarter 2009, Sempra Pipelines & Storage recorded an after-tax charge of $64 million for the write-off of some of its Louisiana natural gas storage assets.
Sempra LNG
Sempra LNG :
sempralng.com/Pages/About/WhatIsLNG.htm had a break-even third quarter 2009, compared with earnings of $4 million in the prior-year's quarter.
For the nine-month period, Sempra LNG had a net loss of $19 million in 2009, compared with a net loss of $33 million last year.
Internet Broadcast
Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. EST with senior management of the company.
Access is available by logging onto the Web site at www.sempra.com :
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 the passcode 9848386.
Sempra Energy :
sempra.com/aboutUs/about.htm , 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 more than 29 million consumers worldwide.
Complete financial tables, including income-statement information by business unit, are available on Sempra Energy's Web site at
www.sempra.com/downloads/3Q2009.pdf :
www.sempra.com/downloads/3Q2009.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 EDGAR system without charge at the SEC's Web site, www.sec.gov :
www.sec.gov and on the company's Web site, at www.sempra.com :
www.sempra.com .
Sempra Pipelines & Storage, Sempra Generation, Sempra LNG and RBS Commodities dba Sempra Energy Solutions and Sempra Energy Trading 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 RBS Commodities dba Sempra Energy Solutions and Sempra Energy Trading are not regulated by the California Public Utilities Commission.
SEMPRA ENERGY
Table A
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Nine months ended
September 30, September 30,
---------------- ----------------
(Dollars in millions, except per share
amounts) 2009 2008* 2009 2008*
------- ------- ------- -------
(unaudited)
REVENUES
Sempra Utilities $ 1,424 $ 2,013 $ 4,382 $ 6,190
Sempra Global and parent 429 679 1,268 2,275
------- ------- ------- -------
Total revenues 1,853 2,692 5,650 8,465
EXPENSES AND OTHER INCOME
Sempra Utilities:
Cost of natural gas (208) (689) (997) (2,708)
Cost of electric fuel and purchased
power (208) (311) (508) (694)
Sempra Global and parent:
Cost of natural gas, electric fuel
and purchased power (220) (431) (675) (1,353)
Other cost of sales (19) (15) (52) (168)
Operation and maintenance (571) (564) (1,676) (1,816)
Depreciation and amortization (196) (162) (568) (508)
Franchise fees and other taxes (77) (76) (228) (230)
Gains on sale of assets - - 3 114
Write-off of long-lived assets - - (132) -
Equity earnings (losses):
RBS Sempra Commodities LLP 105 (4) 384 142
Other 18 14 27 29
Other income (expense), net 24 (21) 97 30
Interest income 5 12 16 36
Interest expense (96) (67) (257) (165)
------- ------- ------- -------
Income before income taxes and equity
earnings of certain unconsolidated
subsidiaries 410 378 1,084 1,174
Income tax expense (128) (94) (327) (423)
Equity earnings, net of income tax 20 18 59 57
------- ------- ------- -------
Net income 302 302 816 808
(Earnings) losses attributable to
noncontrolling interests 17 8 22 (7)
Preferred dividends of subsidiaries (2) (2) (7) (7)
------- ------- ------- -------
Earnings $ 317 $ 308 $ 831 $ 794
======= ======= ======= =======
Basic earnings per common share $ 1.30 $ 1.26 $ 3.42 $ 3.18
======= ======= ======= =======
Weighted-average number of shares
outstanding, basic (thousands) 243,925 243,793 242,806 249,311
======= ======= ======= =======
Diluted earnings per common share $ 1.27 $ 1.24 $ 3.37 $ 3.13
======= ======= ======= =======
Weighted-average number of shares
outstanding, diluted (thousands) 248,461 247,904 246,875 253,407
======= ======= ======= =======
Dividends declared per share of common
stock $ 0.39 $ 0.35 $ 1.17 $ 1.02
======= ======= ======= =======
* As adjusted for the retrospective adoption of ASC 810 (SFAS 160).
SEMPRA ENERGY
Table B
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
(Dollars in millions) 2009 2008*
------------- -------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 756 $ 331
Short-term investments - 176
Restricted cash 27 27
Accounts receivable, net 744 981
Due from unconsolidated affiliates 19 4
Income taxes receivable 139 195
Deferred income taxes 117 31
Inventories 296 320
Regulatory assets 48 121
Fixed-price contracts and other derivatives 111 160
Insurance receivable related to wildfire
litigation 266 -
Other 173 130
------------- -------------
Total current assets 2,696 2,476
------------- -------------
Investments and other assets:
Regulatory assets arising from fixed-price
contracts and other derivatives 232 264
Regulatory assets arising from pension and
other postretirement benefit obligations 1,218 1,188
Other regulatory assets 568 534
Nuclear decommissioning trusts 664 577
Investment in RBS Sempra Commodities LLP 2,094 2,082
Other investments 2,019 1,166
Goodwill and other intangible assets 527 539
Sundry 605 709
------------- -------------
Total investments and other assets 7,927 7,059
------------- -------------
Property, plant and equipment, net 17,772 16,865
------------- -------------
Total assets $ 28,395 $ 26,400
============= =============
Liabilities and Equity
Current liabilities:
Short-term debt $ 851 $ 503
Accounts payable 581 856
Due to unconsolidated affiliates 16 38
Dividends and interest payable 209 156
Accrued compensation and benefits 221 280
Regulatory balancing accounts, net 605 335
Current portion of long-term debt 622 410
Fixed-price contracts and other derivatives 99 180
Customer deposits 145 170
Reserve for wildfire litigation 289 -
Other 672 684
------------- -------------
Total current liabilities 4,310 3,612
------------- -------------
Long-term debt 6,845 6,544
------------- -------------
Deferred credits and other liabilities:
Due to unconsolidated affiliate 102 102
Customer advances for construction 144 155
Pension and other postretirement benefit
obligations, net of plan assets 1,518 1,487
Deferred income taxes 1,278 946
Deferred investment tax credits 54 57
Regulatory liabilities arising from removal
obligations 2,546 2,430
Asset retirement obligations 1,212 1,159
Other regulatory liabilities 202 219
Fixed-price contracts and other derivatives 348 392
Deferred credits and other 774 909
------------- -------------
Total deferred credits and other
liabilities 8,178 7,856
------------- -------------
Preferred stock of subsidiary 79 79
------------- -------------
Equity:
Total Sempra Energy shareholders' equity 8,745 7,969
Preferred stock of subsidiaries 100 100
Other noncontrolling interests 138 240
------------- -------------
Total equity 8,983 8,309
------------- -------------
Total liabilities and equity $ 28,395 $ 26,400
============= =============
* As adjusted for the retrospective adoption of ASC 810 (SFAS 160).
SEMPRA ENERGY
Table C
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
Nine months ended
September 30,
--------------------------
(Dollars in millions) 2009 2008*
------------ ------------
(unaudited)
Cash Flows from Operating Activities:
Net income $ 816 $ 808
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 568 508
Deferred income taxes and investment tax
credits 181 165
Equity earnings (470) (228)
Gains on sale of assets (3) (114)
Write-off of long-lived assets 132 -
Fixed-price contacts and other derivatives (27) -
Other 45 76
Net change in other working capital components 220 (408)
Distributions from RBS Sempra Commodities LLP 407 56
Changes in other assets 81 (3)
Changes in other liabilities (66) (55)
------------ ------------
Net cash provided by operating activities 1,884 805
------------ ------------
Cash Flows from Investing Activities:
Expenditures for property, plant and equipment (1,371) (1,541)
Proceeds from sale of assets, net of cash sold 179 2,071
Expenditures for investments (762) (2,180)
Distributions from investments 16 23
Purchases of nuclear decommissioning and other
trust assets (167) (361)
Proceeds from sales by nuclear decommissioning
and other trusts 155 350
Decrease in notes receivable from
unconsolidated affiliate - 60
Other (20) (18)
------------ ------------
Net cash used in investing activities (1,970) (1,596)
------------ ------------
Cash Flows from Financing Activities:
Common dividends paid (255) (252)
Preferred dividends paid by subsidiaries (7) (7)
Issuances of common stock 52 17
Repurchases of common stock - (1,002)
(Decrease) increase in short-term debt, net (52) 985
Issuances of long-term debt 1,181 650
Payments on long-term debt (325) (75)
Purchase of noncontrolling interest (94) -
Other 11 5
------------ ------------
Net cash provided by financing activities 511 321
------------ ------------
Increase (decrease) in cash and cash
equivalents 425 (470)
Cash and cash equivalents, January 1 331 668
------------ ------------
Cash and cash equivalents, September 30 $ 756 $ 198
============ ============
* As adjusted for the retrospective adoption of ASC 810 (SFAS 160).
SEMPRA ENERGY
Table D
BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS (Unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------- ------------------
(Dollars in millions) 2009 2008 2009 2008
------ ------ ------ ------
Earnings (Losses)
San Diego Gas & Electric $ 108 $ 123 $ 277 $ 258
Southern California Gas 74 77 198 190
Sempra Commodities(1) 75 (8) 274 181
Sempra Generation 43 94 119 162
Sempra Pipelines & Storage 54 34 64 84
Sempra LNG - 4 (19) (33)
Parent & Other (37) (16) (82) (48)
------ ------ ------ ------
Earnings $ 317 $ 308 $ 831 $ 794
====== ====== ====== ======
(1) Results for 2009 and the second and third quarters of 2008 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 the first quarter of 2008 include
100% of the commodities-marketing businesses. Both 2009 and 2008
include the results of Sempra Rockies Marketing.
Three months ended Nine months ended
September 30, September 30,
---------------- ------------------
(Dollars in millions) 2009 2008 2009 2008
------ ------ ------ ------
Capital Expenditures and
Investments(1)
San Diego Gas & Electric $ 190 $ 277 (2) $ 785 (2) $ 942 (2)
Southern California Gas 109 108 336 350
Sempra Commodities - - - 37
Sempra Generation 194 2 207 15
Sempra Pipelines & Storage 395 43 723 345
Sempra LNG 88 61 230 310
Parent & Other 2 165 (2) 4 426 (2)
Eliminations(2) - (229) (152) (304)
------ ------ ------ ------
Consolidated Capital
Expenditures and
Investments $ 978 $ 427 $2,133 $2,121
====== ====== ====== ======
(1) Investments do not include the $1.6 billion contribution to RBS Sempra
Commodities in the second quarter of 2008.
(2) During the nine months ended September 30, 2008, SDG&E and Parent &
Other purchased $304 and $413, respectively, of SDG&E's industrial
development bonds, including purchases and sales between the entities.
As their cash flow needs changed, SDG&E purchased $68 of the bonds from
Parent & Other during the three months ended September 30, 2008 and
Parent & Other purchased $161 of the bonds from SDG&E in the same
period. In the second quarter of 2009, SDG&E purchased $152 of the
bonds from Parent & Other to facilitate their remarketing.
SEMPRA ENERGY
Table E
OTHER OPERATING STATISTICS (Unaudited)
Three months Nine months
ended ended
September 30, September 30,
--------------- ---------------
SEMPRA UTILITIES 2009 2008 2009 2008
------- ------- ------- -------
Revenues (Dollars in millions)
SDG&E (excludes intercompany sales) $ 771 $ 945 $ 2,130 $ 2,439
SoCalGas (excludes intercompany
sales) $ 653 $ 1,068 $ 2,252 $ 3,751
Gas Sales (Bcf) 61 63 272 288
Transportation and Exchange (Bcf) 170 171 421 445
------- ------- ------- -------
Total Deliveries (Bcf) 231 234 693 733
------- ------- ------- -------
Total Gas Customers (Thousands) 6,599 6,565
Electric Sales (Millions of kWhs) 4,636 4,716 12,768 13,012
Direct Access (Millions of kWhs) 800 781 2,290 2,296
------- ------- ------- -------
Total Deliveries (Millions of kWhs) 5,436 5,497 15,058 15,308
------- ------- ------- -------
Total Electric Customers (Thousands) 1,377 1,370
SEMPRA GENERATION
======= ======= ======= =======
Power Sold (Millions of kWhs) 5,317 5,707 16,526 16,825
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 101 102 249 254
Mexico 5 4 14 14
Mobile Gas 8 - * 24 - *
Natural Gas Customers (Thousands)
Argentina 1,702 1,658
Mexico 91 95
Mobile Gas 92 - *
Electric Sales (Millions of kWhs)
Peru 1,378 1,347 4,151 4,063
Chile 567 565 1,837 1,797
Electric Customers (Thousands)
Peru 856 829
Chile 574 559
* 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 and nine months ended September 30, 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 Three Nine
months months months
RBS Sempra ended ended ended
Commodities LLP - September September September
Joint Venture level 30, 30, 30,
margin* 2009 2008 2009
------- ------- -------
Geographical:
North America $ 100 $ (79) $ 572
Europe/Asia 112 139 317
------- ------- -------
Total $ 212 $ 60 $ 889
======= ======= =======
Product Line:
Oil - Crude &
Products $ 24 $ 22 $ 217
Power 8 (81) 195
Natural Gas 103 57 248
Metals 86 62 221
Other (9) - 8
------- ------- -------
Total $ 212 $ 60 $ 889
======= ======= =======
Financial Information
(in millions of US dollars)
RBS Sempra Three months Three months Nine months
Commodities LLP ended ended ended
September 30, September 30, September 30,
2009 2008 2009
---------------- ----------------- ------------------
Joint Joint Joint
Venture Sempra Venture Sempra Venture Sempra
Total Share** Total Share** Total Share**
Fee income and
trading revenue,
net of selling
costs $ 212 $ 60 $ 889
Operating and other
expenses (129) (93) (510)
------- ------- -------
Joint Venture
distributable
income $ 83 $ (33) $ 379
======= ======= =======
Preferred return on
capital $ 85 $ 61 $ 131 $ 60 $ 246 $ 180
1st allocation -
70% Sempra / 30%
RBS*** (2) (1) (103) (71) 133 96
2nd allocation -
30% Sempra / 70%
RBS - - (61) (18) - -
------- ------- ------- ------- ------- -------
Distributable
income $ 83 $ 60 $ (33) $ (29) $ 379 $ 276
======= ======= ======= ======= ======= =======
Sempra Commodities Earnings
Three Three Nine
months months months
ended ended ended
September September September
(in millions of US dollars) 30, 30, 30,
2009 2008 2009
------- ------- -------
Sempra share of
distributable
income - IFRS
basis $ 60 $ (29) $ 276
U.S. GAAP
conversion impact 45 25 108
------- ------- -------
Sempra equity
earnings before
income taxes -
U.S. GAAP basis 105 (4) 384
Income tax expense (30) 1 (106)
------- ------- -------
Sempra equity
earnings from RBS
Sempra Commodities
LLP 75 (3) 278
Other segment
activity - (5) (4)
------- ------- -------
Sempra Commodities
earnings $ 75 $ (8) $ 274
======= ======= =======
* 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.
** 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.
Media Contact:
Doug Kline
Sempra Energy
(877) 866-2066
www.sempra.com :
www.sempra.com
Financial Contact:
Glen Donovan
Sempra Energy
(877) 736-7727
Email Contact :
www2.marketwire.com/mw/emailprcntct?id=63FDEE4C52E61A28
