Business & Finance
Mon, August 10, 2009Sun, August 9, 2009Sat, August 8, 2009Fri, August 7, 2009Thu, August 6, 2009Wed, August 5, 2009Tue, August 4, 2009Mon, August 3, 2009Sun, August 2, 2009Fri, July 31, 2009Thu, July 30, 2009Wed, July 29, 2009Tue, July 28, 2009Mon, July 27, 2009Sun, July 26, 2009Fri, July 24, 2009Thu, July 23, 2009Sempra Energy: Sempra Energy Reports Second-Quarter 2009 Results, Reaffirms 2009 Earnings-per-Share Guidance of $4.35 to $4.6
Published in Business and Finance on Friday, July 31st 2009 at 5:46 GMT, Last Modified on 2009-07-31 05:47:12 by Market Wire
SAN DIEGO, CA--(Marketwire - July 31, 2009) - Sempra Energy (
Second-quarter 2009 results included an asset write-off of $64 million, or $0.26 per diluted share, at Sempra Pipelines & Storage. The potential for the write-off was previously disclosed.
Earnings for the first six months of 2009 were $514 million, or $2.09 per diluted share, up from $486 million, or $1.90 per diluted share.
Sempra Energy today reaffirmed its previously announced 2009 earnings-per-share guidance range of $4.35 to $4.60.
"We are pleased that our performance through the first half of the year has been strong enough that we are able to reaffirm our 2009 earnings guidance, in spite of the asset write-off in the second quarter," said Donald E. Felsinger, chairman and chief executive officer of Sempra Energy. "We also continue to make progress in growing our natural gas infrastructure businesses. We reached two major operational milestones recently with the start-up of our second liquefied natural gas terminal and the eastern leg of the Rockies Express Pipeline."
SUBSIDIARY OPERATING RESULTS
San Diego Gas & Electric
In the second quarter 2009, earnings for San Diego Gas & Electric (SDG&E) rose to $70 million from $61 million in last year's second quarter, due primarily to higher operating margins.
For the first six months of 2009, SDG&E generated earnings of $169 million, up from $135 million during the same period last year.
Southern California Gas Co.
Southern California Gas Co. (SoCalGas) had second-quarter earnings of $65 million in 2009, up from $56 million in 2008, due primarily to higher operating margins.
SoCalGas' earnings in the first half of the year increased to $124 million in 2009 from $113 million last year.
RBS Sempra Commodities
Earnings for Sempra Energy's commodity operations were $85 million in the second quarter 2009, compared with $130 million in last year's second quarter. Second-quarter 2008 results included a $67 million gain on the transaction with The Royal Bank of Scotland forming the RBS Sempra Commodities joint venture, offset by $30 million of expenses related to litigation and taxes.
For the first six months of 2009, earnings from Sempra Energy's commodity operations increased to $199 million from $189 million in the first six months of 2008. First-quarter 2008 results represented 100 percent of the earnings of Sempra Energy's commodity operations prior to the formation of the joint venture in April 2008.
Sempra Generation
Sempra Generation's earnings increased to $33 million in the second quarter 2009 from $23 million in the same quarter a year ago. In last year's second quarter, Sempra Generation recorded mark-to-market losses on forward contracts.
Sempra Generation's earnings in the first half of 2009 were $76 million, compared with $68 million in the first half of 2008.
Earlier this week, Sempra Generation announced that Pacific Gas and Electric (PG&E) has entered into a 20-year sales agreement for 48 megawatts (MW) of solar power from a new plant under development in Boulder City, Nev., called Copper Mountain Solar. The Copper Mountain Solar facility will be built on land adjacent to the 10-MW El Dorado Solar plant. Construction on the 48-MW Copper Mountain project is slated to begin later this year and be completed in 2011. Last year, PG&E also contracted with Sempra Generation for the output of El Dorado Solar.
Sempra Pipelines & Storage
In the second quarter 2009, Sempra Pipelines & Storage had a net loss of $27 million, compared with earnings of $24 million in last year's second quarter. During the most recent quarter, Sempra Pipelines & Storage recorded a charge of $64 million for the write-off of certain assets at Liberty Gas Storage, principally the salt-caverns and associated facilities near Sulphur, La. Remedial efforts have been unsuccessful in making this facility operational. The charge in the quarter was partially offset by higher earnings from LNG-related pipeline operations.
For the first six months of 2009, Sempra Pipelines & Storage had $10 million in earnings, compared with $50 million in earnings in the first half of 2008.
Last month, Sempra Pipelines & Storage and its project partners initiated service on the eastern portion of the Rockies Express pipeline, which stretches from Missouri to Ohio. The last leg of the 1,679-mile pipeline is expected to be completed in November. When complete, total capacity on the pipeline will be approximately 1.8 billion cubic feet per day, virtually all of which has been contracted under long-term firm commitments from creditworthy shippers.
Sempra LNG
Sempra LNG recorded a net loss of $12 million in the second quarter 2009, compared with a net loss of $28 million in the prior-year's second quarter. The improved results were due primarily to lower mark-to-market losses on a natural gas marketing agreement with RBS Sempra Commodities and lower income-tax expense related to Mexican currency and inflation adjustments.
In the first half of 2009, Sempra LNG recorded a net loss of $19 million, compared with a net loss of $37 million in the first half of 2008.
Yesterday, Cameron LNG, Sempra LNG's Louisiana terminal, began commercial operations after successfully receiving its first two cargoes of liquefied natural gas (LNG). In June, Sempra LNG announced an agreement with an affiliate of RasGas Company Limited to have Cameron LNG serve as a potential U.S. Gulf Coast receipt point for LNG cargoes, beginning next month. Cargoes could be delivered to Cameron LNG through December 2010. The agreement allows RasGas to deliver up to 50 cargoes with each cargo containing up to 4.8 billion cubic feet of natural gas.
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 2144396.
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/2Q2009.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 ] 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 Six months ended ended June 30, June 30, ---------------- ---------------- (Dollars in millions, except per share amounts) 2009 2008* 2009 2008* ------- ------- ------- ------- (unaudited) REVENUES Sempra Utilities $ 1,316 $ 1,887 $ 2,958 $ 4,177 Sempra Global and parent 373 616 839 1,596 ------- ------- ------- ------- Total revenues 1,689 2,503 3,797 5,773 EXPENSES AND OTHER INCOME Sempra Utilities: Cost of natural gas (249) (784) (789) (2,019) Cost of electric fuel and purchased power (129) (220) (300) (383) Sempra Global and parent: Cost of natural gas, electric fuel and purchased power (187) (513) (455) (922) Other cost of sales (16) (17) (33) (153) Operation and maintenance (589) (549) (1,105) (1,252) Depreciation and amortization (189) (171) (372) (346) Franchise fees and other taxes (69) (71) (151) (154) Gains on sale of assets 3 109 3 114 Write-off of long-lived assets (132) - (132) - Equity earnings: RBS Sempra Commodities LLP 126 146 279 146 Other 2 9 9 15 Other income, net 70 32 73 51 Interest income 5 10 11 24 Interest expense (79) (38) (161) (98) ------- ------- ------- ------- Income before income taxes and equity earnings of certain unconsolidated subsidiaries 256 446 674 796 Income tax expense (90) (202) (199) (329) Equity earnings, net of income tax 23 18 39 39 ------- ------- ------- ------- Net income 189 262 514 506 (Earnings) losses attributable to noncontrolling interests 12 (15) 5 (15) Preferred dividends of subsidiaries (3) (3) (5) (5) ------- ------- ------- ------- Earnings $ 198 $ 244 $ 514 $ 486 ======= ======= ======= ======= Basic earnings per common share $ 0.82 $ 0.99 $ 2.12 $ 1.93 ======= ======= ======= ======= Weighted-average number of shares outstanding, basic (thousands) 242,718 245,576 242,245 252,100 ======= ======= ======= ======= Diluted earnings per common share $ 0.80 $ 0.98 $ 2.09 $ 1.90 ======= ======= ======= ======= Weighted-average number of shares outstanding, diluted (thousands) 247,090 249,677 246,039 256,169 ======= ======= ======= ======= Dividends declared per share of common stock $ 0.39 $ 0.35 $ 0.78 $ 0.67 ======= ======= ======= ======= * As adjusted for the retrospective adoption of SFAS 160 (ASC 810). SEMPRA ENERGY Table B CONSOLIDATED BALANCE SHEETS June 30, December 31, (Dollars in millions) 2009 2008* ------------ ------------ (unaudited) Assets Current assets: Cash and cash equivalents $ 818 $ 331 Short-term investments - 176 Restricted cash 27 27 Accounts receivable, net 715 981 Due from unconsolidated affiliates 21 4 Income taxes receivable 114 195 Deferred income taxes 96 31 Inventories 169 320 Regulatory assets 88 121 Fixed-price contracts and other derivatives 100 160 Insurance receivable related to wildfire litigation 940 - Other 236 130 ------------ ------------ Total current assets 3,324 2,476 ------------ ------------ Investments and other assets: Regulatory assets arising from fixed-price contracts and other derivatives 252 264 Regulatory assets arising from pension and other postretirement benefit obligations 1,212 1,188 Other regulatory assets 558 534 Nuclear decommissioning trusts 580 577 Investment in RBS Sempra Commodities LLP 2,019 2,082 Other investments 1,470 1,166 Goodwill and other intangible assets 529 539 Sundry 565 709 ------------ ------------ Total investments and other assets 7,185 7,059 ------------ ------------ Property, plant and equipment, net 17,413 16,865 ------------ ------------ Total assets $ 27,922 $ 26,400 ============ ============ Liabilities and Equity Current liabilities: Short-term debt $ 291 $ 503 Accounts payable 616 856 Due to unconsolidated affiliates 31 38 Dividends and interest payable 183 156 Accrued compensation and benefits 186 280 Regulatory balancing accounts, net 602 335 Current portion of long-term debt 624 410 Fixed-price contracts and other derivatives 115 180 Customer deposits 149 170 Reserve for wildfire litigation 940 - Other 616 684 ------------ ------------ Total current liabilities 4,353 3,612 ------------ ------------ Long-term debt 6,723 6,544 ------------ ------------ Deferred credits and other liabilities: Due to unconsolidated affiliate 102 102 Customer advances for construction 154 155 Pension and other postretirement benefit obligations, net of plan assets 1,512 1,487 Deferred income taxes 1,152 946 Deferred investment tax credits 54 57 Regulatory liabilities arising from removal obligations 2,453 2,430 Asset retirement obligations 1,210 1,159 Other regulatory liabilities 209 219 Fixed-price contracts and other derivatives 347 392 Deferred credits and other 842 909 ------------ ------------ Total deferred credits and other liabilities 8,035 7,856 ------------ ------------ Preferred stock of subsidiary 79 79 ------------ ------------ Total Sempra Energy shareholders' equity 8,477 7,969 Preferred stock of subsidiaries 100 100 Other noncontrolling interests 155 240 ------------ ------------ Total equity 8,732 8,309 ------------ ------------ Total liabilities and equity $ 27,922 $ 26,400 ============ ============ * As adjusted for the retrospective adoption of SFAS 160 (ASC 810). SEMPRA ENERGY Table C CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS Six months ended June 30, -------------- (Dollars in millions) 2009 2008* ------ ------ (unaudited) Cash Flows from Operating Activities: Net income $ 514 $ 506 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 372 346 Deferred income taxes and investment tax credits 90 51 Equity earnings (327) (200) Gains on sale of assets (3) (114) Write-off of long-lived assets 132 - Fixed-price contracts and other derivatives (38) 47 Other 51 40 Net changes in other working capital components 364 226 Distributions from RBS Sempra Commodities LLP 375 - Changes in other assets 21 (10) Changes in other liabilities (26) (27) ------ ------ Net cash provided by operating activities 1,525 865 ------ ------ Cash Flows from Investing Activities: Expenditures for property, plant and equipment (938) (1,114) Proceeds from sale of assets, net of cash sold 179 2,071 Expenditures for investments (217) (2,180) Distributions from investments 9 16 Purchases of nuclear decommissioning and other trust assets (99) (173) Proceeds from sales by nuclear decommissioning and other trusts 93 177 Decrease in notes receivable from unconsolidated affiliate - 60 Other (14) (15) ------ ------ Net cash used in investing activities (987) (1,158) ------ ------ Cash Flows from Financing Activities: Common dividends paid (170) (166) Preferred dividends paid by subsidiaries (5) (5) Issuances of common stock 28 11 Repurchases of common stock - (1,002) (Decrease) increase in short-term debt, net (612) 496 Issuances of long-term debt 1,108 593 Payments on long-term debt (311) (73) Purchase of noncontrolling interest (94) - Other 5 1 ------ ------ Net cash used in financing activities (51) (145) ------ ------ Increase (decrease) in cash and cash equivalents 487 (438) Cash and cash equivalents, January 1 331 668 ------ ------ Cash and cash equivalents, June 30 $ 818 $ 230 ====== ====== * As adjusted for the retrospective adoption of SFAS 160 (ASC 810). SEMPRA ENERGY Table D BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS (Unaudited) Three months ended Six months ended June 30, June 30, ---------------- -------------------- (Dollars in millions) 2009 2008 2009 2008 ----- ----- ------- ------- Earnings (Losses) San Diego Gas & Electric $ 70 $ 61 $ 169 $ 135 Southern California Gas 65 56 124 113 Sempra Commodities(1) 85 130 199 189 Sempra Generation 33 23 76 68 Sempra Pipelines & Storage (27) 24 10 50 Sempra LNG (12) (28) (19) (37) Parent & Other (16) (22) (45) (32) ----- ----- ------- ------- Earnings $ 198 $ 244 $ 514 $ 486 ===== ===== ======= ======= (1) Results for 2009 and the second quarter 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 Six months ended June 30, June 30, ---------------- -------------------- (Dollars in millions) 2009 2008 2009 2008 ----- ----- ------- ------- Capital Expenditures and Investments(1) San Diego Gas & Electric $ 366(2) $ 194 $ 595(2) $ 665(2) Southern California Gas 115 126 227 242 Sempra Commodities - - - 37 Sempra Generation 10 2 13 13 Sempra Pipelines & Storage 227 93 328 302 Sempra LNG 71 152 142 249 Parent & Other 1 79(2) 2 261(2) Eliminations(2) (152) (75) (152) (75) ----- ----- ------- ------- Consolidated Capital Expenditures and Investments $ 638 $ 571 $ 1,155 $ 1,694 ===== ===== ======= ======= (1) Investments do not include the $1.6 billion contribution to RBS Sempra Commodities in the second quarter of 2008. (2) During the six months ended June 30, 2008, SDG&E and Parent & Other purchased $236 and $177, respectively, of SDG&E's industrial development bonds. As their cash flow needs changed, Parent & Other sold $152 of the bonds to SDG&E in the second quarter of 2009, and SDG&E sold $75 of the bonds to Parent & Other in the six-month period of 2008. SEMPRA ENERGY Table E OTHER OPERATING STATISTICS (Unaudited) Three months Six months ended ended June 30, June 30, ------------- --------------- SEMPRA UTILITIES 2009 2008 2009 2008 ----- ------- ------- ------- Revenues (Dollars in millions) SDG&E (excludes intercompany sales) $ 629 $ 752 $ 1,359 $ 1,494 SoCalGas (excludes intercompany sales) $ 687 $ 1,135 $ 1,599 $ 2,683 Gas Sales (Bcf) 80 81 211 225 Transportation and Exchange (Bcf) 123 136 251 274 ----- ------- ------- ------- Total Deliveries (Bcf) 203 217 462 499 ----- ------- ------- ------- Total Gas Customers (Thousands) 6,590 6,553 Electric Sales (Millions of kWhs) 3,968 4,021 8,132 8,296 Direct Access (Millions of kWhs) 750 750 1,490 1,515 ----- ------- ------- ------- Total Deliveries (Millions of kWhs) 4,718 4,771 9,622 9,811 ----- ------- ------- ------- Total Electric Customers (Thousands) 1,375 1,367 SEMPRA GENERATION ----- ------- ------- ------- Power Sold (Millions of kWhs) 5,482 5,506 11,209 11,118 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 83 81 148 152 Mexico 4 5 9 10 Mobile Gas 7 -* 16 -* Natural Gas Customers (Thousands) Argentina 1,693 1,637 Mexico 93 95 Mobile Gas 94 -* Electric Sales (Millions of kWhs) Peru 1,380 1,354 2,773 2,716 Chile 593 568 1,270 1,232 Electric Customers (Thousands) Peru 851 822 Chile 569 557 * 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 six months ended June 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 Six months ended months ended months ended RBS Sempra Commodities LLP - Joint June 30, June 30, June 30, Venture level margin* 2009 2008 2009 ------------ ------------ ------------ Geographical: North America $ 220 $ 522 $ 472 Europe/Asia 103 124 205 ------------ ------------ ------------ Total $ 323 $ 646 $ 677 ============ ============ ============ Product Line: Oil - Crude & Products $ 70 $ 92 $ 193 Power 94 174 187 Natural Gas 67 306 145 Metals 81 42 135 Other 11 32 17 ------------ ------------ ------------ Total $ 323 $ 646 $ 677 ============ ============ ============ Financial Information (in millions of US dollars) Three months Three months Six months RBS Sempra Commodities LLP ended ended ended June 30, 2009 June 30, 2008 June 30, 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 $ 323 $ 646 $ 677 Operating and other expenses (181) (312) (381) ------ ------ ------ Joint Venture distributable income $ 142 $ 334 $ 296 ====== ====== ====== Preferred return on capital $ 84 $ 60 $ 148 $ 60 $ 161 $ 119 1st allocation - 70% Sempra / 30% RBS*** 58 42 125 87 135 97 2nd allocation - 30% Sempra / 70% RBS - - 61 18 - - ------ ------ ------ ------ ------ ------ Distributable income $ 142 $ 102 $ 334 $ 165 $ 296 $ 216 ====== ====== ====== ====== ====== ====== Sempra Commodities Earnings Three Three Six months months months ended ended ended June 30, June 30, June 30, (in millions of US dollars) 2009 2008 2009 ------ ------ ------ Sempra share of distributable income - IFRS basis $ 102 $ 165 $ 216 U.S. GAAP conversion impact 24 (19) 63 ------ ------ ------ Sempra equity earnings before income taxes - U.S. GAAP basis 126 146 279 Income tax expense (39) (53) (76) ------ ------ ------ Sempra equity earnings from RBS Sempra Commodities LLP 87 93 203 Other segment activity after-tax, including after-tax gain in 2008 (2) 37 (4) ------ ------ ------ Sempra Commodities earnings $ 85 $ 130 $ 199 ====== ====== ====== * 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.
