Sempra Energy Reports First-Quarter 2013 Earnings

- Successful Initial Public Offering of Mexican Subsidiary IEnova Completed

- California Utilities' Rate Case Advances With Issuance of Proposed Decision

- Cameron LNG Becomes First Pending LNG Export Project to Attain FERC Environmental Review Schedule

May 2, 2013

SAN DIEGO, May 2, 2013 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported first-quarter 2013 earnings of $178 million, or $0.72 per diluted share, compared with $236 million, or $0.97 per diluted share, in the first quarter 2012.  First-quarter 2013 earnings included a one-time charge for income tax expense of $63 million related to a reorganization in connection with the initial public offering of Sempra Energy's Mexican subsidiary.

"While our reported earnings declined in the first quarter, the performance of our businesses remains solid and we completed several key strategic milestones, including the sale of half of our ownership interest in our Arizona gas-fired power plant and the successful public offerings at our Sempra Mexico unit," said Debra L. Reed, chairman and CEO of Sempra Energy.  "During the quarter, we raised nearly $1 billion in external capital and attracted strong local ownership in our Mexican company, IEnova."

Additionally, Reed said that the company continues to make progress in permitting its proposed Cameron LNG export project in Louisiana.  Last month, the Federal Energy Regulatory Commission (FERC) issued a notice of its schedule for the environmental review of the project.  Cameron LNG is the first and only proposed LNG export application currently pending before the FERC to have reached this milestone in the permitting process.  Based on the published schedule, the FERC is expected to release the final Environmental Impact Statement for the project in November and issue its final ruling in early 2014.  The company expects to receive the other major permit for the project from the U.S. Department of Energy by the end of this year.  The project is slated to begin operations in 2017 and process up to 1.7 billion cubic feet per day of natural gas for export to international markets.

CALIFORNIA UTILITIES
On March 29, the California Public Utilities Commission (CPUC) issued a draft decision in the General Rate Case for San Diego Gas & Electric (SDG&E) and Southern California Gas Co. (SoCalGas).  Until the CPUC reaches a final decision, both utilities are recording revenues based on 2011 authorized levels, as adjusted for the recovery of incremental wildfire insurance premiums at SDG&E.  SoCalGas and SDG&E will record the cumulative change resulting from the decision, retroactive to the beginning of 2012, in the quarter a final decision is approved.   A final decision on the General Rate Case is expected in the second quarter.

Due to the delay in the final rate case decision, first-quarter 2013 earnings were lower for both SDG&E and SoCalGas.  The two utilities had higher operating expenses, including depreciation, with no increase in authorized revenue.

San Diego Gas & Electric
SDG&E had first-quarter earnings of $91 million in 2013, compared with $105 million in 2012.

Southern California Gas Co.
Earnings for SoCalGas in the first quarter 2013 were $46 million, compared with $66 million in last year's first quarter.

SEMPRA INTERNATIONAL
Sempra South American Utilities
Sempra South American Utilities recorded earnings of $37 million in the first quarter 2013, compared with $40 million in the first quarter 2012.  The decrease in earnings was due primarily to an impairment charge on its investment in Argentine utilities, partially offset by higher earnings in Chilean and Peruvian operations.       

Sempra Mexico
Sempra Mexico's earnings in the first quarter 2013 were $31 million, compared with $33 million in last year's first quarter.

During the first quarter 2013, Sempra Mexico completed separate debt and equity offerings raising nearly $1 billion of external capital.  The initial public offering – the first for an energy company in Mexico – sold nearly 19 percent of the equity in the company.  The Mexican operating company was renamed "IEnova."  

SEMPRA U.S. GAS & POWER
Sempra Renewables
Sempra Renewables had first-quarter earnings of $4 million in 2013, compared with $10 million in 2012, due to lower tax benefits from solar projects, partially reflecting the impact of the federal government's sequestration.

Sempra Natural Gas
Earnings for Sempra Natural Gas were $53 million in the first quarter 2013, up from $1 million in first quarter 2012, due primarily to a $44 million gain related to the sale of half of the Mesquite Power natural gas-fired power plant in February.

2013 EARNINGS EXPECTATIONS
Sempra Energy does not plan to update its previous 2013 earnings guidance until after the CPUC issues a final decision in the General Rate Case for SDG&E and SoCalGas.  If, however, the terms of the General Rate Case draft decision are adopted in the final decision, the company would expect earnings to be at the low end of the current per-share guidance range for 2013 of $4.30 to $4.80.

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 2913728.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2012 revenues of approximately $10 billion.  The Sempra Energy companies' nearly 17,000 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," "forecasts," "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 and the timing of 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 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, the disallowance of the recovery of the investment in, or operating costs of, the generation facility due to an extended outage, and increased regulatory oversight; 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 impact on reliability of SDG&E's electric transmission and distribution system due to increased power supply from renewable energy sources; the impact on competitive customer rates of the growth in distributed and local power generation and the corresponding decrease in demand for power delivered through our electric transmission and distribution system; 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, LLC and Sempra U.S. Gas & Power, LLC are not regulated by the California Public Utilities Commission. Sempra International's underlying entities include Sempra Mexico and Sempra South American Utilities. Sempra U.S. Gas & Power's underlying entities include Sempra Renewables and Sempra Natural Gas.

 

SEMPRA ENERGY

Table A

       
       

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

       
   
 

 Three months ended March 31,

(Dollars in millions, except per share amounts)

2013

 

2012

 

(unaudited)

REVENUES

     

Utilities

$  2,334

 

$  2,091

Energy-related businesses

316

 

292

    Total revenues

2,650

 

2,383

EXPENSES AND OTHER INCOME

     

Utilities:

     

    Cost of natural gas

(556)

 

(431)

    Cost of electric fuel and purchased power

(447)

 

(388)

Energy-related businesses:

     

    Cost of natural gas, electric fuel and purchased power

(111)

 

(129)

    Other cost of sales

(48)

 

(33)

Operation and maintenance

(724)

 

(671)

Depreciation and amortization

(295)

 

(257)

Franchise fees and other taxes

(106)

 

(96)

Gain on sale of asset

74

 

-

Equity earnings, before income tax

10

 

12

Other income, net

37

 

75

Interest income

6

 

5

Interest expense

(138)

 

(113)

Income before income taxes and equity earnings

     

    of certain unconsolidated subsidiaries

352

 

357

Income tax expense

(178)

 

(117)

Equity earnings, net of income tax

4

 

11

Net income

178

 

251

Losses (earnings) attributable to noncontrolling interests

2

 

(13)

Preferred dividends of subsidiaries

(2)

 

(2)

Earnings

$     178

 

$     236

       

Basic earnings per common share

$    0.73

 

$    0.98

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

243,294

 

240,566

       

Diluted earnings per common share

$    0.72

 

$    0.97

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

247,534

 

243,761

       

Dividends declared per share of common stock

$    0.63

 

$    0.60

 

 

 

SEMPRA ENERGY

Table B

             

CONDENSED CONSOLIDATED BALANCE SHEETS

             
       

March 31,

 

December 31,

(Dollars in millions)

2013

 

2012(1)

       

(unaudited)

   

Assets

     

Current assets:

     
 

Cash and cash equivalents

$    1,471

 

$           475

 

Restricted cash

57

 

46

 

Accounts receivable

1,329

 

1,299

 

Income taxes receivable

73

 

56

 

Deferred income taxes

28

 

148

 

Inventories

270

 

408

 

Regulatory balancing accounts – undercollected

411

 

395

 

Regulatory assets

42

 

62

 

Fixed-price contracts and other derivatives

88

 

95

 

U.S. Treasury grants receivable

236

 

258

 

Asset held for sale, power plant

-

 

296

 

Other

118

 

157

     

Total current assets

4,123

 

3,695

             

Investments and other assets:

     
 

Restricted cash

19

 

22

 

Regulatory assets arising from pension and other postretirement

     
 

    benefit obligations

1,167

 

1,151

 

Regulatory assets arising from wildfire litigation costs

360

 

364

 

Other regulatory assets

1,233

 

1,227

 

Nuclear decommissioning trusts

952

 

908

 

Investments

1,519

 

1,516

 

Goodwill

1,113

 

1,111

 

Other intangible assets

434

 

436

 

Sundry

895

 

878

     

Total investments and other assets

7,692

 

7,613

Property, plant and equipment, net

25,458

 

25,191

Total assets

$   37,273

 

$       36,499

             

Liabilities and Equity

     

Current liabilities:

     
 

Short-term debt

$       762

 

$           546

 

Accounts payable

990

 

1,110

 

Dividends and interest payable

323

 

266

 

Accrued compensation and benefits

217

 

337

 

Regulatory balancing accounts – overcollected

294

 

141

 

Current portion of long-term debt

1,381

 

725

 

Fixed-price contracts and other derivatives

71

 

77

 

Customer deposits

142

 

143

 

Reserve for wildfire litigation

221

 

305

 

Other

788

 

608

     

Total current liabilities

5,189

 

4,258

Long-term debt

10,680

 

11,621

             

Deferred credits and other liabilities:

     
 

Customer advances for construction

139

 

144

 

Pension and other postretirement benefit obligations, net of plan assets

1,466

 

1,456

 

Deferred income taxes

2,248

 

2,100

 

Deferred investment tax credits

46

 

46

 

Regulatory liabilities arising from removal obligations

2,783

 

2,720

 

Asset retirement obligations

2,056

 

2,033

 

Fixed-price contracts and other derivatives

254

 

252

 

Reserve for wildfire litigation

45

 

22

 

Deferred credits and other

1,027

 

1,085

     

Total deferred credits and other liabilities

10,064

 

9,858

Contingently redeemable preferred stock of subsidiary

79

 

79

Equity:

     
 

Total Sempra Energy shareholders' equity

10,423

 

10,282

 

Preferred stock of subsidiary

20

 

20

 

Other noncontrolling interests

818

 

381

     

Total equity

11,261

 

10,683

Total liabilities and equity

$   37,273

 

$       36,499

             

(1)

Derived from audited financial statements.

 

 

 

SEMPRA ENERGY

Table C

           

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

           
     

Three months ended
March 31,

(Dollars in millions)

 

2013

 

2012

     

(unaudited)

Cash Flows from Operating Activities

       

Net income

$

178

$

251

Adjustments to reconcile net income to net cash provided

       

  by operating activities:

       
 

Depreciation and amortization

 

295

 

257

 

Deferred income taxes and investment tax credits

 

252

 

31

 

Gain on sale of asset

 

(74)

 

      ―

 

Equity earnings

 

(14)

 

(23)

 

Fixed-price contracts and other derivatives

 

17

 

(12)

 

Other

 

6

 

14

Net change in other working capital components

 

149

 

168

Changes in other assets

 

17

 

12

Changes in other liabilities

 

9

 

1

 

Net cash provided by operating activities

 

835

 

699

           

Cash Flows from Investing Activities

       

Expenditures for property, plant and equipment

 

(531)

 

(811)

Expenditures for investments

 

(5)

 

(51)

Proceeds from sale of asset

 

371

 

      ―

Distributions from investments

 

15

 

8

Purchases of nuclear decommissioning and other trust assets

 

(136)

 

(134)

Proceeds from sales by nuclear decommissioning and other trusts

 

134

 

135

Decrease in restricted cash

 

52

 

39

Increase in restricted cash

 

(60)

 

(40)

Other

 

(2)

 

(5)

 

Net cash used in investing activities

 

(162)

 

(859)

           

Cash Flows from Financing Activities

       

Common dividends paid

 

(145)

 

(115)

Preferred dividends paid by subsidiaries

 

(2)

 

(2)

Issuances of common stock

 

15

 

13

Repurchases of common stock

 

(45)

 

(16)

Issuances of debt (maturities greater than 90 days)

 

608

 

1,008

Payments on debt (maturities greater than 90 days)

 

(645)

 

(347)

Proceeds from sale of noncontrolling interests, net of $25 in offering costs

 

574

 

      ―

Decrease in short-term debt, net

 

(43)

 

(224)

Distributions to noncontrolling interests

 

(1)

 

(3)

Other

 

4

 

(4)

 

Net cash provided by financing activities

 

320

 

310

           

Effect of exchange rate changes on cash and cash equivalents

 

3

 

2

           

Increase in cash and cash equivalents

 

996

 

152

Cash and cash equivalents, January 1

 

475

 

252

Cash and cash equivalents, March 31

$

1,471

$

404

           

 

 

 

SEMPRA ENERGY

Table D

           
           

SEGMENT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS 

           
     

Three months ended

     

March 31,

(Dollars in millions)

2013

 

2012

     

    (unaudited)

Earnings (Losses) 

 

California Utilities:

     

San Diego Gas & Electric

$   91

 

$ 105

Southern California Gas

46

 

66

Sempra International:

     

Sempra South American Utilities

37

 

40

Sempra Mexico

31

 

33

Sempra U.S. Gas & Power:

     

Sempra Renewables

4

 

10

Sempra Natural Gas

53

 

1

Parent and other

(84)

 

(19)

Earnings

$ 178

 

$ 236

           
     

 Three months ended 

     

March 31,

(Dollars in millions)

2013

 

2012

     

    (unaudited)

Capital Expenditures and Investments

     

California Utilities:

     

San Diego Gas & Electric

$ 237

 

$ 398

Southern California Gas

179

 

165

Sempra International:

     

Sempra South American Utilities

22

 

20

Sempra Mexico

61

 

5

Sempra U.S. Gas & Power:

     

Sempra Renewables

11

 

251

Sempra Natural Gas

26

 

22

Parent and other

-

 

1

Consolidated Capital Expenditures and Investments

$ 536

 

$ 862

           

 

 

 

 

SEMPRA ENERGY

Table E

             
             

OTHER OPERATING STATISTICS (Unaudited)

         
         
     

Three months ended March 31,

UTILITIES

 

2013

 

2012

         

California Utilities - SDG&E and SoCalGas

       

Gas Sales (bcf)(1)

 

140

 

134

Transportation (bcf)(1)

 

168

 

171

Total Deliveries (bcf)(1)

 

308

 

305

Total Gas Customers (Thousands)

 

6,685

 

6,660

             

Electric Sales (Millions of kWhs)(1)

 

4,024

 

4,089

Direct Access (Millions of kWhs)

 

835

 

752

Total Deliveries (Millions of kWhs)(1)

 

4,859

 

4,841

Total Electric Customers (Thousands)

 

1,403

 

1,395

             

Other Utilities(2)

       

Natural Gas Sales (bcf)

       
 

Argentina

 

64

 

73

 

Mexico

 

6

 

6

 

Mobile Gas

 

11

 

12

 

Willmut Gas(3)

 

1

 

-

Natural Gas Customers (Thousands)

       
 

Argentina

 

1,868

 

1,819

 

Mexico

 

94

 

90

 

Mobile Gas

 

89

 

90

 

Willmut Gas(3)

 

20

 

-

Electric Sales (Millions of kWhs)

       
 

Peru

 

1,746

 

1,690

 

Chile

 

761

 

745

Electric Customers (Thousands)

       
 

Peru

 

968

 

934

 

Chile

 

628

 

613

             

ENERGY-RELATED BUSINESSES

       
             

Sempra International

       

Power Sold (Millions of kWhs)

       
 

Sempra Mexico

 

1,044

 

1,078

             

Sempra U.S. Gas & Power

       

Power Sold (Millions of kWhs)

       
 

Sempra Renewables(4)

698

 

273

 

Sempra Natural Gas

 

1,132

 

1,940

             

(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.

(3) Acquired in May 2012.

(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, 2013

                         
                                   

(Dollars in millions)

 

SDG&E

 

SoCalGas

 

Sempra South American Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra Natural Gas

 

Consolidating Adjustments, Parent & Other

   

Total

                                   

Revenues

 

$   939

 

$      983

 

$     384

 

$  168

 

$          21

 

$        253

 

$           (98)

   

$2,650

                                   

Cost of Sales and Other Expenses

 

(637)

 

(800)

 

(301)

 

(113)

 

(13)

 

(220)

 

92

   

(1,992)

                                   

Gain on Sale of Asset

 

-

 

-

 

-

 

-

 

-

 

74

 

-

   

74

                                   

Depreciation & Amortization

 

(134)

 

(100)

 

(15)

 

(16)

 

(8)

 

(20)

 

(2)

   

(295)

                                   

Equity Earnings Recorded Before Income Tax

 

-

 

-

 

-

 

-

 

1

 

9

 

-

   

10

                                   

Other Income, Net

 

11

 

4

 

3

 

9

 

-

 

2

 

8

   

37

                                   

Income Before Interest & Tax (1)

 

179

 

87

 

71

 

48

 

1

 

98

 

-

   

484

                                   

Net Interest Expense (2)

 

(48)

 

(17)

 

(2)

 

(1)

 

(5)

 

(12)

 

(49)

   

(134)

                                   

Income Tax (Expense) Benefit

 

(51)

 

(24)

 

(17)

 

(26)

 

8

 

(33)

 

(35)

 (3)

 

(178)

                                   

Equity (Losses) Earnings Recorded Net of Income Tax

 

-

 

-

 

(7)

 

11

 

-

 

-

 

-

   

4

                                   

Losses (Earnings) Attributable to Noncontrolling Interests

 

11

 

-

 

(8)

 

(1)

 

-

 

-

 

-

   

2

                                   

Earnings (Losses)

 

$    91

 

$        46

 

$       37

 

$    31

 

$            4

 

$          53

 

$           (84)

   

$   178

                                   
                                   

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

 

$  136

 

$            8

 

$        269

 

$          (101)

   

$2,383

                                   

Cost of Sales and Other Expenses

 

(544)

 

(674)

 

(281)

 

(75)

 

(9)

 

(245)

 

80

   

(1,748)

                                   

Depreciation & Amortization

 

(112)

 

(87)

 

(13)

 

(16)

 

(3)

 

(23)

 

(3)

   

(257)

                                   

Equity Earnings Recorded Before Income Tax

 

-

 

-

 

-

 

-

 

1

 

11

 

-

   

12

                                   

Other Income, Net

 

30

 

4

 

2

 

15

 

-

 

-

 

24

   

75

                                   

Income (Loss) Before Interest & Tax (1)

 

208

 

123

 

65

 

60

 

(3)

 

12

 

-

   

465

                                   

Net Interest Expense (2)

 

(37)

 

(17)

 

(6)

 

(3)

 

(4)

 

(9)

 

(34)

   

(110)

                                   

Income Tax (Expense) Benefit

 

(60)

 

(40)

 

(13)

 

(35)

 

17

 

(2)

 

16

   

(117)

                                   

Equity Earnings Recorded Net of Income Tax

 

-

 

-

 

-

 

11

 

-

 

-

 

-

   

11

                                   

Earnings Attributable to Noncontrolling Interests

 

(6)

 

-

 

(6)

 

-

 

-

 

-

 

(1)

   

(13)

                                   

Earnings (Losses)

 

$   105

 

$        66

 

$       40

 

$    33

 

$          10

 

$            1

 

$           (19)

   

$   236

                                   
                                   
                                   

(1) Management believes "Income (Loss) Before Interest & Tax" is a useful measurement of our segments' 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 $63 million income tax expense resulting from a corporate reorganization in connection with the IEnova stock offerings.

 

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

SOURCE Sempra Energy

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