Sempra Energy’s Third-Quarter 2011 Earnings per Share Rise

- Quarterly Earnings per Share of $1.22 Reflect Strong Operating Results, Growth Across Businesses

- Company Reaffirms 2011 Earnings-per-Share Guidance of $4 to $4.30, Excluding Gain on South American Utility Acquisitions

Nov 3, 2011

SAN DIEGO, Nov. 3, 2011 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported third-quarter 2011 earnings of $296 million, or $1.22 per diluted share, up from $131 million, or $0.53 per diluted share, in the third quarter 2010.

Third-quarter 2010 results included an after-tax charge of $139 million, or $0.56 per diluted share, from the write-down of Sempra Energy’s investment in the RBS Sempra Commodities joint venture, which was sold last year.  

Sempra Energy’s earnings for the first nine months of 2011 were $1.1 billion, or $4.40 per diluted share, up from $459 million, or $1.84 per diluted share, in the same period last year.  Excluding a second-quarter 2011 gain of $277 million related to the South American utility acquisitions, Sempra Energy’s nine-month earnings in 2011 were $788 million, or $3.26 per diluted share.  

“Based on our excellent results in the third quarter and continued progress on our major projects, we expect to meet our financial and operational objectives for the year,” said Debra L. Reed, chief executive officer of Sempra Energy.

In September, Sempra Energy announced several key executive appointments.  Additionally, the company announced that, effective Jan. 1, 2012, its Sempra Generation, Sempra Pipelines & Storage and Sempra LNG subsidiaries will be consolidated into two new operating units:  Sempra International and Sempra U.S. Gas & Power.  

OPERATING HIGHLIGHTS

San Diego Gas & Electric

Earnings for San Diego Gas & Electric (SDG&E) increased to $113 million in the third quarter 2011 from $106 million in last year’s third quarter, due primarily to higher earnings for construction projects in progress, including the Sunrise Powerlink transmission line.  

For the first nine months of 2011, SDG&E’s earnings were $273 million, compared with $264 million in the first nine months of 2010.

Southern California Gas Co.

Southern California Gas Co. (SoCalGas) earnings were $81 million in the third quarter 2011, compared with $78 million in the third quarter 2010.

For the nine-month period, SoCalGas’ earnings were $208 million in 2011, compared with $212 million last year.  

Sempra Generation

In the third quarter 2011, Sempra Generation’s earnings were $49 million, compared with $59 million in the prior-year’s quarter, primarily due to lower earnings from the company’s natural gas-fired power plants, partially offset by an income-tax benefit.

For the first nine months of 2011, Sempra Generation’s earnings rose to $143 million from $60 million in the first nine months of 2010.   The nine-month results in 2010 included a charge of $86 million related to a litigation settlement.

Sempra Pipelines & Storage

Third-quarter earnings for Sempra Pipelines & Storage increased to $66 million in 2011 from $43 million last year, due primarily to the company’s increased ownership in the South American utilities and a foreign-currency gain in Chile.  

For the nine-month period, earnings for Sempra Pipelines & Storage rose to $457 million in 2011 from $120 million in 2010.   The nine-month earnings for 2011 included the second-quarter gain of $277 million related to the South American utility acquisitions.

Sempra LNG

Sempra LNG earned $24 million in the third quarter 2011, up from $5 million in last year’s third quarter, due primarily to additional revenues for contracted cargoes that were not delivered.  

In the first nine months of 2011, Sempra LNG earnings rose to $75 million from $50 million in the same period last year.

Earnings Outlook

Sempra Energy today reaffirmed its earnings-per-share guidance for 2011 of $4 to $4.30, excluding the gain related to the South American utility acquisitions in the second quarter 2011.  On a GAAP basis, the company’s earnings-per-share guidance for 2011 is $5.14 to $5.44.

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 1645521.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2010 revenues of $9 billion.  The Sempra Energy companies’ 17,500 employees serve more than 31 million consumers worldwide.

Non-GAAP Financial Measures

The 2011 nine-month earnings for Sempra Energy and Sempra Energy’s 2011 earnings-per-share guidance excluding the gain on the South American utility acquisitions are non-GAAP financial measures. Additional information regarding these non-GAAP financial measures is in the appendix on Table A of the third-quarter financial tables.

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,” “depends,” or similar expressions, or discussions of strategies, plans or intentions. These forward-looking statements represent our estimates and assumptions only as of the date of this news release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors. 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, 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 our investments; inflation, interest and exchange rates; 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; weather conditions, natural disasters, catastrophic accidents, and conservation efforts; wars, terrorist attacks and cybersecurity threats; 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 and construction, maintenance and capital projects; the inability or determination not to enter into long-term supply and sales agreements or long-term 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.

Sempra Generation, Sempra LNG and Sempra Pipelines & Storage are not the same company as the utility, San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra Generation, Sempra LNG and Sempra Pipelines & Storage 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)

2011

2010

2011

2010

(unaudited)

REVENUES

Utilities

$   2,065

$   1,609

$   5,933

$   5,150

Energy-related businesses

511

507

1,499

1,508

   Total revenues

2,576

2,116

7,432

6,658

EXPENSES AND OTHER INCOME

Utilities:

   Cost of natural gas

(322)

(305)

(1,367)

(1,489)

   Cost of electric fuel and purchased power

(408)

(203)

(976)

(480)

Energy-related businesses:

   Cost of natural gas, electric fuel and purchased power

(252)

(273)

(694)

(801)

   Other cost of sales

(68)

(22)

(123)

(67)

Litigation expense

(17)

(17)

(30)

(184)

Other operation and maintenance

(674)

(590)

(1,973)

(1,782)

Depreciation and amortization

(251)

(218)

(730)

(643)

Franchise fees and other taxes

(84)

(76)

(259)

(243)

Equity losses, before income tax

(12)

(273)

(4)

(266)

Remeasurement of equity method investments

-

-

277

-

Other income, net

12

66

86

82

Interest income

6

5

21

13

Interest expense

(118)

(111)

(344)

(323)

Income before income taxes and equity earnings (losses)

   of certain unconsolidated subsidiaries

388

99

1,316

475

Income tax (expense) benefit

(68)

32

(269)

(85)

Equity earnings (losses), net of income tax

6

(4)

45

42

Net income

326

127

1,092

432

(Earnings) losses attributable to noncontrolling interests

(29)

6

(21)

34

Preferred dividends of subsidiaries

(1)

(2)

(6)

(7)

Earnings

$      296

$      131

$   1,065

$      459

Basic earnings per common share

$     1.23

$     0.53

$     4.44

$     1.86

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

239,545

246,668

239,693

246,513

Diluted earnings per common share

$     1.22

$     0.53

$     4.40

$     1.84

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

241,880

249,811

241,955

249,773

Dividends declared per share of common stock

$     0.48

$     0.39

$     1.44

$     1.17

SEMPRA ENERGY

Table A (Continued)

RECONCILIATION OF SEMPRA ENERGY GAAP EARNINGS TO SEMPRA ENERGY ADJUSTED

EARNINGS AND 2011 EARNINGS PER SHARE GUIDANCE EXCLUDING GAIN FROM

REMEASUREMENT OF EQUITY METHOD INVESTMENTS (Unaudited)

Sempra Energy Adjusted Earnings and Adjusted Earnings Per Share in the nine months ended September 30, 2011 and 2011 earnings per share guidance excluding a $277 million gain from the remeasurement of equity method investments in Chilquinta Energía and Luz del Sur in the second quarter of 2011 are non-GAAP financial measures (GAAP represents accounting principles generally accepted in the United States). Adjusted Earnings and Adjusted Earnings Per Share in 2010 exclude a $139 million write-down of our investment in RBS Sempra Commodities in the third quarter and a $96 million charge for a litigation settlement in the first quarter. Statistics using these amounts, including percentage changes from period to period, also result in non-GAAP measures. Because of the significance and nature of these items, management believes that these non-GAAP financial measures provide a more meaningful comparison of the performance of Sempra Energy's business operations from 2011 to 2010 and to future periods. Accordingly, 2011 guidance of $4 to $4.30 per diluted share excludes the second quarter gain of $277 million, or $1.14 per diluted share, based on shares outstanding through September 30, 2011. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. The table below reconciles for historical periods these non-GAAP financial measures to Sempra Energy Earnings and Diluted Earnings Per Common Share, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.

Three months ended September 30,

Nine months ended September 30,

(Dollars in millions, except per share amounts)

2011

2010

2011

2010

Sempra Energy GAAP Earnings

$      296

$      131

$   1,065

$      459

Less: Remeasurement Gain in 2011

-

-

(277)

-

Add: Write-down of Joint Venture Investment in 2010

-

139

-

139

Add: Litigation Settlement Charge in 2010

-

-

-

96

Sempra Energy Adjusted Earnings

$      296

$      270

$      788

$      694

Diluted earnings per common share:

Sempra Energy GAAP Earnings

$     1.22

(1)  

$     0.53

$     4.40

(1)  

$     1.84

Sempra Energy Adjusted Earnings

$     1.22

(2)  

$     1.09

$     3.26

(2)  

$     2.78

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

241,880

249,811

241,955

249,773

(1) Percentage increases from third quarter and year-to-date 2010 earnings per share were 130% and 139%, respectively.

(2) Percentage increases from third quarter and year-to-date 2010 earnings per share were 12% and 17%, respectively.

SEMPRA ENERGY

Table B

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

December 31,

(Dollars in millions)

2011

2010(1)

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$              657

$             912

Restricted cash

133

131

Accounts receivable

1,097

1,032

Due from unconsolidated affiliates

-

34

Income taxes receivable

301

248

Deferred income taxes

-

75

Inventories

369

258

Regulatory assets

83

90

Fixed-price contracts and other derivatives

77

81

Settlement receivable related to wildfire litigation

-

300

Other

221

192

Total current assets

2,938

3,353

Investments and other assets:

Restricted cash

2

27

Regulatory assets arising from pension and other postretirement

   benefit obligations

824

869

Regulatory assets arising from wildfire litigation costs

500

364

Other regulatory assets

952

934

Nuclear decommissioning trusts

760

769

Investment in RBS Sempra Commodities LLP

322

787

Other investments

1,485

2,164

Goodwill

1,013

87

Other intangible assets

448

453

Sundry

669

600

Total investments and other assets

6,975

7,054

Property, plant and equipment, net

22,703

19,876

Total assets

$         32,616

$        30,283

Liabilities and Equity

Current liabilities:

Short-term debt

$              641

$             158

Accounts payable

1,008

864

Due to unconsolidated affiliates

-

36

Deferred income taxes

94

-

Dividends and interest payable

261

188

Accrued compensation and benefits

266

311

Regulatory balancing accounts, net

226

241

Current portion of long-term debt

137

349

Fixed-price contracts and other derivatives

86

106

Customer deposits

137

129

Reserve for wildfire litigation

507

639

Other

632

765

Total current liabilities

3,995

3,786

Long-term debt

10,033

8,980

Deferred credits and other liabilities:

Customer advances for construction

142

154

Pension and other postretirement benefit obligations, net of plan assets

1,085

1,105

Deferred income taxes

1,852

1,561

Deferred investment tax credits

47

50

Regulatory liabilities arising from removal obligations

2,658

2,630

Asset retirement obligations

1,510

1,449

Other regulatory liabilities

103

138

Fixed-price contracts and other derivatives

310

290

Deferred credits and other

818

823

Total deferred credits and other liabilities

8,525

8,200

Contingently redeemable preferred stock of subsidiary

79

79

Equity:

Total Sempra Energy shareholders' equity

9,630

9,027

Preferred stock of subsidiaries

20

100

Other noncontrolling interests

334

111

Total equity

9,984

9,238

Total liabilities and equity

$         32,616

$        30,283

(1)

Derived from audited financial statements.

SEMPRA ENERGY

Table C

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended
September 30,

(Dollars in millions)

2011

2010

(unaudited)

Cash Flows from Operating Activities:

Net income

$ 1,092

$   432

Adjustments to reconcile net income to net cash provided

 by operating activities:

Depreciation and amortization

730

643

Deferred income taxes and investment tax credits

224

133

Equity (earnings) losses

(41)

224

Remeasurement of equity method investments

(277)

-

Fixed-price contracts and other derivatives

(7)

19

Other

(43)

(24)

Net change in other working capital components

(108)

(77)

Distributions from RBS Sempra Commodities LLP

53

198

Changes in other assets

31

76

Changes in other liabilities

(11)

(22)

Net cash provided by operating activities

1,643

1,602

Cash Flows from Investing Activities:

Expenditures for property, plant and equipment

(2,031)

(1,354)

Expenditures for investments and acquisition of businesses, net of cash acquired

(696)

(385)

Distributions from RBS Sempra Commodities LLP

374

849

Distributions from other investments

47

259

Purchases of nuclear decommissioning and other trust assets

(399)

(261)

Proceeds from sales by nuclear decommissioning and other trusts

398

261

Decrease in restricted cash

473

55

Increase in restricted cash

(450)

(51)

Other

(20)

(6)

Net cash used in investing activities

(2,304)

(633)

Cash Flows from Financing Activities:

Common dividends paid

(325)

(269)

Redemption of subsidiary preferred stock

(80)

-

Preferred dividends paid by subsidiaries

(6)

(7)

Issuances of common stock

22

29

Repurchases of common stock

(18)

(502)

Issuances of debt (maturities greater than 90 days)

1,525

771

Payments on debt (maturities greater than 90 days)

(366)

(727)

(Decrease) increase in short-term debt, net

(300)

184

Purchase of noncontrolling interests

(43)

-

Other

(5)

(11)

Net cash provided by (used in) financing activities

404

(532)

Effect of exchange rate changes on cash and cash equivalents

2

-

(Decrease) increase in cash and cash equivalents

(255)

437

Cash and cash equivalents, January 1

912

110

Cash and cash equivalents, September 30

$    657

$   547

SEMPRA ENERGY

Table D

BUSINESS UNIT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS

Three months ended

Nine months ended

September 30,

September 30,

(Dollars in millions)

2011

2010

2011

2010

   (unaudited)

Earnings (Losses)

San Diego Gas & Electric

$ 113

$ 106

$    273

$    264

Southern California Gas

81

78

208

212

Sempra Generation

49

59

143

60

Sempra Pipelines & Storage

66

43

457

120

Sempra LNG

24

5

75

50

Parent & Other

(37)

(160)

(91)

(247)

Earnings

$ 296

$ 131

$ 1,065

$    459

Three months ended  

Nine months ended

September 30,

September 30,

(Dollars in millions)

2011

2010

2011

2010

   (unaudited)

Capital Expenditures and Investments

San Diego Gas & Electric

$ 448

$ 300

$ 1,162

$    822

Southern California Gas

174

121

499

337

Sempra Generation

92

27

168

32

Sempra Pipelines & Storage

102

75

887

535

Sempra LNG

3

5

9

9

Parent & Other

1

2

2

4

Consolidated Capital Expenditures and Investments

$ 820

$ 530

$ 2,727

$ 1,739

SEMPRA ENERGY

Table E

OTHER OPERATING STATISTICS (Unaudited)

Three months ended
September 30,

Nine months ended
September 30,

UTILITIES

2011

2010

2011

2010

Sempra Utilities - SDG&E and SoCalGas

Gas Sales (bcf)(1)

62

64

285

281

Transportation (bcf)(1)

171

171

465

465

Total Deliveries (bcf)(1)

233

235

750

746

Total Gas Customers (Thousands)

6,649

6,629

Electric Sales (Millions of kWhs)(1)

4,246

4,282

12,221

12,111

Direct Access (Millions of kWhs)

859

881

2,427

2,365

Total Deliveries (Millions of kWhs)(1)

5,105

5,163

14,648

14,476

Total Electric Customers (Thousands)

1,393

1,385

Sempra Pipelines & Storage - Utilities (2)

Natural Gas Sales (bcf)

Argentina

110

104

267

251

Mexico

5

5

16

16

Mobile Gas

10

9

29

27

Natural Gas Customers (Thousands)

Argentina

1,799

1,747

Mexico

89

89

Mobile Gas

90

90

Electric Sales (Millions of kWhs)

Peru

1,549

1,483

4,713

4,445

Chile

597

566

1,881

1,736

Electric Customers (Thousands)

Peru

917

884

Chile

      606

      589

(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.

ENERGY - RELATED BUSINESSES

Sempra Generation

Power Sold (Millions of kWhs)

 4,008

 5,350

 11,649

 15,272

SEMPRA ENERGY

Table F (Unaudited)

Statement of Operations Data by Business Unit

Three Months Ended September 30, 2011

(Dollars in millions)

SDG&E

SoCalGas

Generation

Pipelines & Storage

LNG

Consolidating
Adjustments,
Parent & Other

Total

Revenues

$  868

$      844

$        259

$        426

$ 207

$                       (28)

$ 2,576

Cost of Sales and Other Expenses

(540)

(624)

(188)

(324)

(146)

14

(1,808)

Litigation Expense

(10)

(2)

(2)

(1)

(2)

-

(17)

Depreciation & Amortization

(108)

(83)

(18)

(27)

(13)

(2)

(251)

Equity (Losses) Earnings Recorded Before Income Tax

-

-

(6)

11

-

(17)

(12)

Other Income (Expense), Net

26

3

-

19

(4)

(32)

12

Income (Loss) Before Interest & Tax (1)

236

138

45

104

42

(65)

500

Net Interest Expense (2)

(39)

(16)

(4)

(14)

(9)

(31)

(113)

Income Tax (Expense) Benefit

(63)

(41)

8

(23)

(9)

60

(68)

Equity Earnings Recorded Net of Income Tax

-

-

-

6

-

-

6

Earnings Attributable to Noncontrolling Interests

(21)

-

-

(7)

-

(1)

(29)

Earnings (Losses)

$  113

$        81

$          49

$          66

$   24

$                       (37)

$    296

Three Months Ended September 30, 2010

(Dollars in millions)

SDG&E

SoCalGas

Generation

Pipelines & Storage

LNG

Consolidating
Adjustments,
Parent & Other

Total

Revenues

$  811

$      776

$        293

$          77

$ 183

$                       (24)

$ 2,116

Cost of Sales and Other Expenses

(505)

(564)

(199)

(55)

(150)

4

(1,469)

Litigation Expense

(12)

-

(2)

-

(2)

(1)

(17)

Depreciation & Amortization

(96)

(78)

(16)

(11)

(13)

(4)

(218)

Equity (Losses) Earnings Recorded Before Income Tax

-

-

(1)

10

-

(282)

(3)

(273)

Other (Expense) Income, Net

(2)

2

2

55

2

7

66

Income (Loss) Before Interest & Tax (1)

196

136

77

76

20

(300)

205

Net Interest Expense (2)

(39)

(16)

2

(6)

(12)

(37)

(108)

Income Tax (Expense) Benefit

(56)

(42)

(20)

(23)

(3)

176

32

Equity Losses Recorded Net of Income Tax

-

-

-

(4)

-

-

(4)

Losses Attributable to Noncontrolling Interests

5

-

-

-

-

1

6

Earnings (Losses)

$  106

$        78

$          59

$          43

$     5

$                     (160)

$    131

(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.

(3) Includes $305 million related to the write-down of our investment in RBS Sempra Commodities.

        SEMPRA ENERGY

          Table F (Unaudited)

Statement of Operations Data by Business Unit

Nine Months Ended September 30, 2011

(Dollars in millions)

SDG&E

SoCalGas

Generation

Pipelines & Storage

LNG

Consolidating
Adjustments,
Parent & Other

Total

Revenues

$ 2,405

$   2,776

$        796

$        980

$ 552

$                           (77)

$ 7,432

Cost of Sales and Other Expenses

(1,588)

(2,170)

(559)

(728)

(371)

24

(5,392)

Litigation Expense

(15)

(3)

(4)

(1)

(6)

(1)

(30)

Depreciation & Amortization

(316)

(246)

(55)

(66)

(38)

(9)

(730)

Equity Earnings (Losses) Recorded Before Income Tax

-

-

(6)

30

-

(28)

(4)

Other Income (Expense), Net

55

9

1

296

(1)

(1)

3

363

Income (Loss) Before Interest & Tax (2)

541

366

173

511

136

(88)

1,639

Net Interest Expense (3)

(108)

(52)

(4)

(32)

(29)

(104)

(329)

Income Tax (Expense) Benefit

(154)

(106)

(26)

(52)

(32)

101

(269)

Equity Earnings Recorded Net of Income Tax

-

-

-

45

-

-

45

Earnings Attributable to Noncontrolling Interests

(6)

-

-

(15)

-

-

(21)

Earnings (Losses)

$    273

$      208

$        143

$        457

$   75

$                           (91)

$ 1,065

Nine Months Ended September 30, 2010

(Dollars in millions)

SDG&E

SoCalGas

Generation

Pipelines & Storage

LNG

Consolidating
Adjustments,
Parent & Other

Total

Revenues

$ 2,245

$   2,792

$        879

$        262

$ 554

$                           (74)

$ 6,658

Cost of Sales and Other Expenses

(1,468)

(2,175)

(649)

(187)

(409)

26

(4,862)

Litigation Expense

(12)

(1)

(143)

(1)

(4)

(23)

(184)

Depreciation & Amortization

(283)

(230)

(47)

(32)

(38)

(13)

(643)

Equity (Losses) Earnings Recorded Before Income Tax

-

-

(2)

32

-

(296)

(4)

(266)

Other (Expense) Income, Net

(18)

8

10

53

2

27

82

Income (Loss) Before Interest & Tax (2)

464

394

48

127

105

(353)

785

Net Interest Expense (3)

(103)

(50)

-

(13)

(36)

(115)

(317)

Income Tax (Expense) Benefit

(131)

(132)

12

(36)

(19)

221

(85)

Equity Earnings Recorded Net of Income Tax

-

-

-

42

-

-

42

Losses Attributable to Noncontrolling Interests

34

-

-

-

-

-

34

Earnings (Losses)

$    264

$      212

$          60

$        120

$   50

$                         (247)

$    459

(1) Includes gain of $277 million related to remeasurement of equity method investments.

(2) 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.

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

(4) Includes $305 million related to the write-down of our investment in RBS Sempra Commodities.

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

SOURCE Sempra Energy

For further information: Media, Doug Kline, Sempra Energy, 1-877-340-8875, www.sempra.com, or Financial, Scott Tomayko or Victor Vilaplana, Sempra Energy, 1-877-736-7727, investor@sempra.com


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