Sempra Energy third-quarter earnings rise

Nov 9, 2009

Media Contact:
Doug Kline

Financial Contact:
Glen Donovan

Sempra Energy

Sempra Energy

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www.sempra.com

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        SAN DIEGO, Nov. 9, 2009 – Sempra Energy (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 (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) 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 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 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 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 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.  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, 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 http://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 and on the company’s Web site, at 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.


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