Sempra Energy Reports First-Quarter 2012 Earnings - Company Reaffirms 2012 Earnings-per-share Guidance Range of $4 to $4.30

- Cameron LNG Export Project Development Advances

SAN DIEGO, May 3, 2012 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported first-quarter 2012 earnings of $236 million, or $0.97 per diluted share, compared with $254 million, or $1.05 per diluted share in the first quarter 2011.

Effective Jan. 1, the company changed its accounting treatment for investment tax credits related to solar-power projects from the flow-through method to the deferral method.  Sempra Energy's 2011 results have been restated to reflect this change in accounting method.   

As previously reported, the General Rate Cases for both Southern California Gas Co. (SoCalGas) and San Diego Gas & Electric (SDG&E) currently are in process at the California Public Utilities Commission (CPUC).  The revenue requirement established in these proceedings will be retroactive to Jan. 1, 2012.  Until the Commission reaches a final decision, both utilities are recording revenues based on 2011 authorized levels, as adjusted for the recovery of actual incremental wildfire insurance premiums.  When the final decision is reached, SoCalGas and SDG&E will record the cumulative change in revenues, retroactive to the beginning of the year.  

"Our solid first-quarter results put us on track to meet our 2012 earnings-per-share guidance range of $4 to $4.30," said Debra L. Reed, chief executive officer of Sempra Energy.  "We also made significant progress in developing a liquefied natural gas export facility at our Cameron LNG terminal."

Yesterday, Sempra Energy announced that its Cameron LNG subsidiary signed a third and final commercial development agreement with a subsidiary of GDF SUEZ Ltd. to develop a natural gas liquefaction export facility at the site of the Cameron LNG receipt terminal in Louisiana.  In April, Cameron LNG signed commercial development agreements with Mitsubishi Corporation and Mitsui & Co., Ltd.  The three agreements bind the parties to fund all development expenses, including design, permitting and engineering, as well as to negotiate 20-year tolling agreements, based on key terms outlined in the commercial development agreements. 

The completed liquefaction facility is expected to be comprised of three liquefaction trains with a total export capability of 12 million tonnes per annum of liquefied natural gas, or approximately 1.7 billion cubic feet per day.  Pending regulatory approvals and achievement of other key milestones, the company plans to start construction of the facility next year and begin operations in late 2016.

As announced previously, on Jan. 1, Sempra Energy consolidated Sempra Generation, Sempra Pipelines & Storage and Sempra LNG into two new operating units:  Sempra International and Sempra U.S. Gas & Power.   Beginning in the first quarter 2012, Sempra Energy began reporting financial results under the following segments:  San Diego Gas & Electric, Southern California Gas Co., Sempra South American Utilities, Sempra Mexico, Sempra Renewables and Sempra Natural Gas.

CALIFORNIA UTILITIES

San Diego Gas & Electric

First-quarter earnings for SDG&E increased to $105 million in 2012 from $89 million in 2011, primarily due to earnings from construction work in progress.

Southern California Gas Co.

Earnings for SoCalGas in the first quarter 2012 were $66 million, compared with $68 million in last year's first quarter.  

SEMPRA INTERNATIONAL

Sempra South American Utilities

Sempra South American Utilities recorded earnings of $40 million in the first quarter 2012, up from $22 million in the first quarter 2011.  The increase was primarily due to the acquisition of the controlling interests in Chilquinta Energía and Luz del Sur in April 2011.  

Sempra Mexico

Sempra Mexico recorded first-quarter earnings of $37 million in 2012, compared with $39 million last year.

A 20-year contract to sell SDG&E wind power from Sempra Mexico's 156-megawatt (MW) first phase of the Energia Sierra Juarez wind project under development in Baja California was approved by the CPUC March 22.  Pending receipt of all regulatory permits, construction on the project is expected to begin this year.

SEMPRA U.S. GAS & POWER

Sempra Renewables

Sempra Renewables recorded earnings of $10 million in the first quarter 2012, up from $4 million in the first quarter 2011.  The increase was primarily due to deferred income-tax benefits as a result of placing solar and wind generating assets in service in 2012.

Sempra Natural Gas

Sempra Natural Gas, which includes results from natural gas and gas-fired power operations in the U.S., recorded first-quarter earnings of $1 million in 2012, compared with $63 million in 2011.  The decrease in earnings was primarily due to the expiration of the 10-year California Department of Water Resources power-supply contract in September 2011.

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 website 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 4152078.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2011 revenues of $10 billion.  The Sempra Energy companies' 17,500 employees serve more than 31 million consumers worldwide.

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," "will," "would," "could," "should," "potential," "target," "outlook", "depends," "pursue" or similar expressions, or discussions of guidance, strategies, plans, goals, initiatives, objectives 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, Federal Energy Regulatory Commission, U.S. Department of Energy, Nuclear Regulatory Commission, California Energy Commission, California Air Resources Board, and other regulatory, governmental and environmental bodies in the United States and other countries where the company does business; capital market conditions, including the availability of credit and the liquidity of investments; inflation, interest and exchange rates; the impact of benchmark interest rates, generally the U.S. Treasury bond and Moody's A-rated utility bond yields, on the California utilities' cost of capital; the timing and success of business development efforts and construction, maintenance and capital projects, including risks inherent in the ability to obtain, and the timing of the granting of, permits, licenses, certificates and other authorizations; energy markets, including the timing and extent of changes and volatility in commodity prices; the availability of electric power, natural gas and liquefied natural gas, including disruptions caused by failures in the North American transmission grid, pipeline explosions and equipment failures; weather conditions, natural disasters, catastrophic accidents, and conservation efforts; risks inherent in nuclear power generation and radioactive materials storage, including catastrophic release of such materials; risks posed by decisions and actions of third parties who control the operations of investments in which the company does not have a controlling interest; wars, terrorist attacks and cyber security threats; business, regulatory, environmental and legal decisions and requirements; expropriation of assets by foreign governments and title and other property disputes; the status of deregulation of retail natural gas and electricity delivery; the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond 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 free-of-charge on the SEC's website, www.sec.gov, and on the company's website at www.sempra.com.

These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.

Sempra International, LLC, and Sempra U.S. Gas & Power, LLC, are not the same companies as San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas) and Sempra International and Sempra U.S. Gas & Power are not regulated by the California Public Utilities Commission. 

Note: Formerly known entities Sempra Generation, Sempra LNG and Sempra Pipelines & Storage have now been realigned under Sempra International and Sempra U.S. Gas & Power.

 

SEMPRA ENERGY

Table A











CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS








Three months ended



March 31,


(Dollars in millions, except per share amounts)

2012


2011(1)



(unaudited)


REVENUES





Utilities

$         2,091


$         1,946


Energy-related businesses

292


488


    Total revenues

2,383


2,434


EXPENSES AND OTHER INCOME





Utilities:





    Cost of natural gas

(431)


(642)


    Cost of electric fuel and purchased power

(388)


(171)


Energy-related businesses:





    Cost of natural gas, electric fuel and purchased power

(129)


(230)


    Other cost of sales

(33)


(23)


Operation and maintenance

(671)


(639)


Depreciation and amortization

(257)


(230)


Franchise fees and other taxes

(96)


(95)


Equity earnings, before income tax 

12


1


Other income, net

75


43


Interest income

5


3


Interest expense

(113)


(108)


Income before income taxes and equity earnings 





    of certain unconsolidated subsidiaries

357


343


Income tax expense

(117)


(114)


Equity earnings, net of income tax

11


31


Net income

251


260


Earnings attributable to noncontrolling interests

(13)


(4)


Preferred dividends of subsidiaries

(2)


(2)


Earnings

$            236


$            254







Basic earnings per common share

$           0.98


$           1.06


Weighted-average number of shares outstanding, basic (thousands)

240,566


240,128







Diluted earnings per common share

$           0.97


$           1.05


Weighted-average number of shares outstanding, diluted (thousands)

243,761


241,903


Dividends declared per share of common stock

$           0.60


$           0.48







(1) As adjusted for the retrospective effect of a change in accounting principle.










SEMPRA ENERGY

Table B








CONDENSED CONSOLIDATED BALANCE SHEETS












March 31,


December 31,

(Dollars in millions)

2012


2011(1)(2)





(unaudited)



Assets




Current assets:





Cash and cash equivalents

$               404


$               252


Restricted cash

23


24


Accounts receivable

1,239


1,345


Inventories

222


346


Regulatory balancing accounts – undercollected

71


38


Regulatory assets 

105


89


Fixed-price contracts and other derivatives

83


85


Settlement receivable related to wildfire litigation

5


10


Other

146


143




Total current assets

2,298


2,332








Investments and other assets:





Restricted cash

24


22


Regulatory assets arising from pension and other postretirement 





    benefit obligations

1,074


1,126


Regulatory assets arising from wildfire litigation costs

603


594


Other regulatory assets

1,070


1,060


Nuclear decommissioning trusts

865


804


Investments

1,722


1,671


Goodwill 

1,071


1,036


Other intangible assets

443


448


Sundry

799


691




Total investments and other assets

7,671


7,452

Property, plant and equipment, net

24,076


23,465

Total assets

$           34,045


$           33,249








Liabilities and Equity




Current liabilities:





Short-term debt

$               426


$               449


Accounts payable

1,013


1,107


Income taxes payable

53


5


Deferred income taxes

172


173


Dividends and interest payable

297


219


Accrued compensation and benefits

203


323


Regulatory balancing accounts – overcollected

240


105


Current portion of long-term debt

713


336


Fixed-price contracts and other derivatives

92


92


Customer deposits

148


142


Reserve for wildfire litigation

441


586


Other

682


615




Total current liabilities

4,480


4,152

Long-term debt

10,180


10,078








Deferred credits and other liabilities:





Customer advances for construction

143


142


Pension and other postretirement benefit obligations, net of plan assets

1,373


1,423


Deferred income taxes

1,601


1,520


Deferred investment tax credits

48


49


Regulatory liabilities arising from removal obligations

2,621


2,551


Asset retirement obligations

1,927


1,905


Other regulatory liabilities

80


87


Fixed-price contracts and other derivatives

281


301


Deferred credits and other 

862


784




Total deferred credits and other liabilities

8,936


8,762

Contingently redeemable preferred stock of subsidiary

79


79

Equity:





Total Sempra Energy shareholders' equity

9,952


9,775


Preferred stock of subsidiaries 

20


20


Other noncontrolling interests

398


383




Total equity

10,370


10,178

Total liabilities and equity

$           34,045


$           33,249








(1)

As adjusted for the retrospective effect of a change in accounting principle.

(2)

Derived from audited financial statements.














SEMPRA ENERGY

Table C







CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 










Three months ended
March 31,

(Dollars in millions)


2012


2011 (1)




(unaudited)

Cash Flows from Operating Activities





Net income


$     251


$     260

Adjustments to reconcile net income to net cash provided





  by operating activities:






Depreciation and amortization


257


230


Deferred income taxes and investment tax credits


31


82


Equity earnings


(23)


(32)


Fixed-price contracts and other derivatives


(12)


(9)


Other


14


(13)

Net change in other working capital components


168


297

Changes in other assets


12


(5)

Changes in other liabilities


1


(5)


Net cash provided by operating activities


699


805







Cash Flows from Investing Activities





Expenditures for property, plant and equipment


(811)


(607)

Expenditures for investments


(51)


(4)

Distributions from investments


8


21

Purchases of nuclear decommissioning and other trust assets


(134)


(45)

Proceeds from sales by nuclear decommissioning and other trusts


135


46

Decrease in restricted cash


39


160

Increase in restricted cash


(40)


(320)

Other 


(5)


(7)


Net cash used in investing activities


(859)


(756)







Cash Flows from Financing Activities





Common dividends paid


(115)


(94)

Preferred dividends paid by subsidiaries


(2)


(2)

Issuances of common stock


13


15

Repurchases of common stock


(16)


(18)

Issuances of debt (maturities greater than 90 days)


1,008


803

Payments on debt (maturities greater than 90 days)


(347)


(260)

Decrease in short-term debt, net


(224)


(192)

Other 


(7)


6


Net cash provided by financing activities


310


258







Effect of exchange rate changes on cash and cash equivalents


2


-







Increase in cash and cash equivalents


152


307

Cash and cash equivalents, January 1


252


912

Cash and cash equivalents, March 31


$     404


$   1,219







(1) As adjusted for the retrospective effect of a change in accounting principle.









SEMPRA ENERGY

Table D







SEGMENT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS 










Three months ended 




March 31,

(Dollars in millions)

2012


2011


    (unaudited)

Earnings (Losses) 




California Utilities:




San Diego Gas & Electric

$     105


$       89

Southern California Gas

66


68

Sempra International:




Sempra South American Utilities

40


22

Sempra Mexico

37


39

Sempra U.S. Gas & Power:




Sempra Renewables

10


4

Sempra Natural Gas

1


63

Parent and other

(23)


(31)

Earnings

$     236


$     254










 Three months ended  




March 31,

(Dollars in millions)

2012


2011




    (unaudited)

Capital Expenditures and Investments




California Utilities:




San Diego Gas & Electric

$     398


$     348

Southern California Gas

165


168

Sempra International:




Sempra South American Utilities

20


-

Sempra Mexico

5


3

Sempra U.S. Gas & Power:




Sempra Renewables

251


46

Sempra Natural Gas

22


46

Parent and other

1


-

Consolidated Capital Expenditures and Investments

$     862


$611







 

SEMPRA ENERGY

Table E








OTHER OPERATING STATISTICS (Unaudited)









Three months ended
March 31,

UTILITIES


2012


2011






California Utilities - SDG&E and SoCalGas





Gas Sales (bcf)(1)


134


138

Transportation (bcf)(1)


171


157

Total Deliveries (bcf)(1)


305


295

Total Gas Customers (Thousands)


6,660


6,639








Electric Sales (Millions of kWhs)(1)


4,089


4,148

Direct Access (Millions of kWhs)


752


786

Total Deliveries (Millions of kWhs)(1)


4,841


4,934

Total Electric Customers (Thousands)


1,395


1,388








Other Utilities(2)





Natural Gas Sales (bcf)






Argentina


73


70


Mexico


6


6


Mobile Gas


15


10

Natural Gas Customers (Thousands)






Argentina


1,819


1,766


Mexico


90


89


Mobile Gas


90


92

Electric Sales (Millions of kWhs)






Peru


1,690


1,594


Chile


745


661

Electric Customers (Thousands)






Peru


934


899


Chile


613


598








ENERGY-RELATED BUSINESSES












Sempra International





Power Sold (Millions of kWhs)






Sempra Mexico(3)


1,078


916








Sempra U.S. Gas & Power





Power Sold (Millions of kWhs)






Sempra Renewables(4)

273


122


Sempra Natural Gas


1,940


3,235









(1) Includes intercompany sales

(2) Represents 100% of the distribution operations of the subsidiary, although the subsidiary in Argentina is not consolidated within Sempra Energy and the related investments are accounted for under the equity method.  The subsidiaries in Peru and Chile were also accounted for under the equity method until April 6, 2011, when they became consolidated entities upon our acquisition of additional ownership interests.

(3) Sales to Sempra Natural Gas

(4) Includes 50% of total power sold related to wind projects in which Sempra Energy has a 50% ownership. These subsidiaries are not consolidated within Sempra Energy and the related investments are accounted for under the equity method.








 

         SEMPRA ENERGY

           Table F (Unaudited)



















Statement of Operations Data by Segment


































Three Months Ended March 31, 2012


































(Dollars in millions)


SDG&E


SoCalGas


Sempra South American Utilities


Sempra Mexico


Sempra Renewables


Sempra Natural Gas


Consolidating Adjustments, Parent & Other



Total



















Revenues


$          834


$          880


$          357


$          135


$             8


$          269


$            (100)



$       2,383



















Cost of Sales and Other Expenses


(544)


(674)


(281)


(77)


(9)


(245)


82



(1,748)



















Depreciation & Amortization


(112)


(87)


(13)


(15)


(3)


(23)


(4)



(257)



















Equity Earnings Recorded Before Income Tax


-


-


-


-


1


11


-



12



















Other Income, Net


30


4


2


4


-


-


35



75



















Income (Loss) Before Interest & Tax (1)


208


123


65


47


(3)


12


13



465



















Net Interest Expense (2)


(37)


(17)


(6)


(1)


(4)


(9)


(36)



(110)



















Income Tax (Expense) Benefit


(60)


(40)


(13)


(20)


17


(2)


1



(117)



















Equity Earnings Recorded Net of Income Tax


-


-


-


11


-


-


-



11



















Earnings Attributable to Noncontrolling Interests


(6)


-


(6)


-


-


-


(1)



(13)



















Earnings (Losses)


$          105


$           66


$           40


$           37


$           10


$             1


$             (23)



$          236





































Three Months Ended March 31, 2011


































(Dollars in millions)


SDG&E


SoCalGas


Sempra South American Utilities


Sempra Mexico


Sempra Renewables


Sempra Natural Gas


Consolidating Adjustments, Parent & Other



Total



















Revenues


$          840


$       1,056


$            -


$          207


$             4


$          449


$            (122)



$       2,434



















Cost of Sales and Other Expenses


(574)


(856)


(2)


(143)


(4)


(328)


107



(1,800)



















Depreciation & Amortization


(103)


(81)


-


(15)


(1)


(26)


(4)



(230)



















Equity Earnings (Losses) Recorded Before Income Tax


-


-


-


-


1


9


(9)



1



















Other Income, Net


16


3


-


4


-


-


20



43



















Income (Loss) Before Interest & Tax (1)


179


122


(2)


53


-


104


(8)



448



















Net Interest Expense (2)


(37)


(17)


-


(3)


(3)


(9)


(38)



(107)



















Income Tax Expense


(49)


(37)


-


(18)


7


(32)


15



(114)



















Equity Earnings Recorded Net of Income Tax


-


-


24


7


-


-


-



31



















Earnings Attributable to Noncontrolling Interests


(4)


-


-


-


-


-


-



(4)



















Earnings (Losses)


$           89


$           68


$           22


$           39


$             4


$           63


$             (31)



$          254





































(1)Management believes "Income (Loss) before Interest & Tax" is a useful measurement of our business units' performance because it can be used to evaluate the effectiveness of our 

operations exclusive of interest and income tax, neither of which is directly relevant to the efficiency of those operations.



















(2) Net Interest Expense includes Interest Income, Interest Expense and Preferred Dividends of Subsidiaries.




(Logo: http://photos.prnewswire.com/prnh/20110108/SEMPRAENERGYLOGO)

 

SOURCE Sempra Energy



RELATED LINKS
http://www.sempra.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.