SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report
(Date of earliest event reported): January 25, 2001
-------------------
SEMPRA ENERGY
- ---------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 1-14201 33-0732627
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(State of incorporation (Commission (I.R.S. Employer
or organization) File Number) Identification No.
101 ASH STREET, SAN DIEGO, CALIFORNIA 92101
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(Address of principal executive offices) (Zip Code)
(619) 696-2034
Registrant's telephone number, including area code-------------------
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(Former name or former address, if changed since last report.)
FORM 8-K
Item 5. Other Events
On January 25, 2001 Sempra Energy announced consolidated net income of
$429 million, or $2.06 per diluted share of common stock, for the year
ended December 31, 2000.
Item 7. Financial Statements And Exhibits.
(c) Exhibits
99.1 January 25, 2001 Sempra Energy News Release (including
tables)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SEMPRA ENERGY
(Registrant)
Date: January 29, 2001 By: /s/ F. H. Ault
----------------- ---------------------------
F. H. Ault
Vice President and Controller
EXHIBIT 99.1
Media Contacts: Doug Kline/Michael Clark
Sempra Energy
(877) 866-2066
www.sempra.com
Analyst Contact: Karen Sedgwick
Sempra Energy
(877) 736-7727
SEMPRA ENERGY ANNOUNCES
INCREASED 2000 EARNINGS
New Businesses Continue to Grow,
SDG&E Files to Manage Undercollected Power Costs
SAN DIEGO, Jan. 25, 2001 - Sempra Energy (NYSE: SRE) today
reported unaudited 2000 earnings of $429 million, or $2.06 per
diluted share, compared with $394 million, or $1.66 per diluted
share, for the year 1999. Excluding business combination costs,
1999 earnings were $408 million, or $1.72 per diluted share.
Sempra Energy reported unaudited fourth-quarter 2000
earnings of $95 million, or $0.47 per diluted share, compared
with $105 million, or $0.44 per diluted share, for the fourth
quarter of 1999.
The higher earnings for the year were due primarily to
improved results in the company's energy trading, generation and
international operations. Earnings per share rose as a result of
this business growth and the tender-offer repurchase of 36
million shares in the first quarter of 2000. The weighted
average number of common shares outstanding (diluted) in 2000
decreased to 208.3 million from 237.6 million in 1999.
-more-
Revenues for Sempra Energy increased 30 percent to $7
billion in the full-year 2000, compared with $5.4 billion in
1999. Included, in 2000, $447 million of accrued but uncollected
revenue resulting from a temporary cap on electric rates of San
Diego Gas & Electric (SDG&E).
"These results demonstrate our continued success in
implementing our corporate strategy of growing our unregulated
energy-service businesses," said Stephen L. Baum, chairman,
president and chief executive officer of Sempra Energy. "These
businesses made an increasing contribution to earnings in 2000
and represent important long-term growth opportunities for Sempra
Energy.
"At the same time, our California regulated utilities and
their customers are facing higher wholesale electricity and
natural gas costs, and problems with California's flawed
deregulation plan, as well as the broken wholesale electricity
market."
Energy Delivery Services
Net income for SDG&E for the full year 2000 decreased to
$145 million, compared to $193 million in the previous year. The
primary reason for the decrease was an after-tax charge of 15
cents per share in the third quarter 2000, due to recent
legislative and regulatory actions.
For the fourth quarter 2000, SDG&E reported net income of
$38 million, compared to $35 million from the same period in
1999.
"State law currently subjects SDG&E to a retail rate cap,
under which it charges customers far less for power than it costs
the utility in the wholesale market, deferring the uncollected
balance for future recovery in customer rates," Baum said. "No
business can continue indefinitely under this formula."
Yesterday, SDG&E announced several measures intended to help
it preserve its financial health and manage the utility's growing
undercollection of the costs of purchasing electricity for
customers.
-more-
The measures included an application to the California
Public Utilities Commission (CPUC) yesterday to implement a 2.3-
cents-per-kilowatt-hour (kWh) surcharge on customer rates. If
approved, the surcharge would help the company avoid the
financial problems experienced by California's other two large
investor-owned electric utilities. The rate surcharge is
intended to manage the utility's growing undercollection of the
costs of purchasing electricity for customers and provide for the
amortization of these costs in customer rates.
Southern California Gas Company net income for the full-year
2000 rose to $206 million, compared with $200 million in 1999.
The increase was due primarily to the sale of shares of Plug
Power, a residential-fuel cell developer, and higher winter
heating demand by commercial and industrial customers. For the
fourth quarter 2000, Southern California Gas Company recorded net
income of $56 million, down from $59 million in the same period
in 1999.
Energy Trading
Sempra Energy Trading's net income grew to $155 million in
the full-year 2000, compared to $19 million in 1999.
In the fourth quarter 2000, Sempra Energy Trading's net
income increased to $52 million, compared with $10 million in the
year-earlier period. The increase was primarily due to improved
results in oil, natural gas and electricity trading in the United States
and Europe amidst volatile international commodity markets.
Twenty-one percent of Sempra Energy Trading's net trading
revenue came from trading power in the 11-state western region of
the United States.
Sempra Energy Trading's physical trading volumes of natural
gas were 8.9 billion cubic feet per day (bcfd) during 2000, compared with
5.8 bcfd in 1999. Trading volumes of crude oil and liquid
products remained constant at 2.1 million barrels per day (mbd)
in 2000. In the year 2000, the company traded 61.1 billion kWh
of electricity in the United States and Europe, compared to 19.8
billion kWh in 1999.
-more-
Independent Generation
Sempra Energy Resources, the wholesale power generation
subsidiary of Sempra Energy, reported net income of $33 million in
2000, up from $5 million in 1999. The subsidiary began operations at
its first power plant in 2000, a 480-megawatt facility near Las Vegas
jointly owned with Reliant Energy.
Fourth-quarter 2000 earnings from Sempra Energy Resources
were $14 million, compared with $1 million during the same
quarter last year.
During the fourth quarter 2000, Sempra Energy Resources
received key regulatory approvals for two new gas-fired power-
plant projects in California and Arizona. On Dec. 6, 2000, the
California Energy Commission unanimously approved the Elk Hills
Power Project, a 500-megawatt facility near Bakersfield, Calif.
The second power plant, called Mesquite Power, a 1,000-megawatt
facility near Phoenix, received approval from the Arizona
Corporation Commission on Nov. 28, 2000, and the Maricopa County
Board of Supervisors on Dec. 6, 2000. Both plants are expected
to be completed in 2003.
International Operations
Sempra Energy International's net income grew to $33 million
in 2000, compared to $2 million in 1999. The improvement was due
primarily to full-year results of Chilquinta Energia in Chile and
Luz del Sur in Peru, acquired in June and September 1999.
For the fourth quarter 2000, Sempra Energy International's
net income grew to $9 million, compared with $5 million during the
same quarter 1999.
Sempra Energy International passed a major regulatory hurdle
in Mexico in December 2000, when it received a permit from the Energy
Regulatory Commission to build the Mexican segment of the North
Baja Pipeline. The 215-mile pipeline will transport natural gas
from Arizona to power plants and industrial clients in Baja
California, Mexico. The pipeline is expected to be completed by
the third quarter 2002.
-more-
Retail Energy Services
Revenues from Sempra Energy's retail energy services
marketing operations in 2000 more than doubled to $596 million,
compared with $273 million in 1999. Overall, the retail
operations recorded a net loss of $23 million in 2000, compared
with a net loss of $11 million in 1999, due to ongoing start-up
costs. These operations are concentrated primarily in Sempra
Energy Solutions, which markets integrated energy services
solutions to commercial, industrial and institutional customers.
Sempra Energy Solutions won several significant contracts
during the quarter, including an agreement to supply fuel to the
Los Angeles County Metropolitan Transportation Authority,
operator of the world's largest natural-gas-powered bus fleet.
The first year of supply is valued at $15 million and the
contract is renewable for two additional years.
Sempra Energy Solutions also signed one-year, renewable
energy services contracts worth more than $6 million with the MGM
Grand Hotel and Casino and eight other MGM Mirage Properties in
Las Vegas. In addition, the company began a 15-year energy-savings-
performance contract for the Goodfellow Air Force Base near San Angelo,
Texas.
During the fourth quarter, Sempra Energy announced the sale
of its 72.5-percent stake in Energy America, a U.S.-based energy
marketing firm with nearly 400,000 residential and small-business
customers in six states, to Centrica plc for $56 million. The
transaction, which closed on Jan. 22, 2001, will generate cash
for reinvestment in other key areas of Sempra Energy's business
strategy and is expected to increase the company's 2001 earnings
by approximately 10 cents per share.
-more-
Earnings Outlook
Baum said the company's earnings-per-share outlook for 2001
is approximately $2.20. Regulatory and political developments,
particularly at the CPUC, Federal Energy Regulatory Commission
and California State Legislature, as well as energy prices and
volatility, could cause earnings to vary significantly from
current expectations, he said.
Internet Broadcast
Sempra Energy will broadcast a live discussion of its
earnings results over the Internet today at 1 p.m. Eastern Time
with Baum, Neal E. Schmale, executive vice president and chief
financial officer of Sempra Energy, and Frank H. Ault, vice
president and controller of Sempra Energy. For access, log onto
the Web site at www.sempra.com. For those unable to participate
in the live Webcast, the teleconference will be available on
replay a few hours after its conclusion by dialing (719) 457-0820
and entering passcode number 766925.
Sempra Energy (NYSE: SRE), based in San Diego, is a Fortune
500 energy services holding company with 12,000 employees and
revenues of $7 billion. Through its eight principal subsidiaries
- -- Southern California Gas Company, San Diego Gas & Electric,
Sempra Energy Solutions, Sempra Energy Trading, Sempra Energy
International, Sempra Energy Resources, Sempra Communications and
Sempra Energy Financial -- Sempra Energy serves more than 9
million customers in the United States, Europe, Canada, Mexico,
South America and Asia.
###
This press release contains statements that are not
historical fact and constitute forward-looking statements. When
we use words like "believes," "expects," "anticipates,"
"intends," "plans," "estimates," "may," "should" or similar
expressions, or when we discuss our strategy or plans, we are
making forward-looking statements. 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: national,
international, regional and local economic, competitive and
regulatory conditions and developments; actions by the California
Public Utilities Commission, the California State Legislature and
the Federal Energy Regulatory Commission; capital market
conditions, inflation rates and interest rates; energy markets,
including the timing and extent of changes in commodity prices;
weather conditions; business, regulatory and legal decisions; the
pace of deregulation of retail natural gas and electricity
delivery; technological developments; the timing and success of
business development efforts; and other uncertainties, all of
which are difficult to predict and many of which are beyond the
company's control. These risks and uncertainties are further
discussed in the company's reports filed with the Securities and
Exchange Commission that are available through the EDGAR system
without charge at its Web site, www.sec.gov.
SEMPRA ENERGY
TABLE A
CONSOLIDATED INCOME STATEMENT (Unaudited)
Three Months Twelve Months
Ended Ended
December 31 December 31
-----------------------------------
In Millions of Dollars, 2000 1999 2000 1999
Except Per Share Amounts
- ------------------------------------------------------------------
Revenues and Other Income
California utility revenues
Natural Gas $ 969 $ 889 $ 3,305 $ 2,911
Electric 717 375 2,184 1,818
Other operating revenues 593 202 1,548 631
Other income 42 - 106 50
-----------------------------------
Total 2,321 1,466 7,143 5,410
Expenses
Cost of natural gas 511 395 1,599 1,164
distributed
Electric fuel and net 485 145 1,326 536
purchased power
Operating Expenses 865 542 2,464 1,837
Depreciation and 143 130 563 879
decommissioning
Franchise payments and other 42 55 180 181
taxes
Preferred dividends / 7 2 26 11
distributions by subsidiaries
-----------------------------------
Total 2,053 1,269 6,158 4,608
-----------------------------------
Income Before Interest and 268 197 985 802
Income Taxes
Interest expense 70 44 286 229
-----------------------------------
Income Before Income Taxes 198 153 699 573
Income taxes 103 48 270 179
-----------------------------------
Net Income $ 95 $ 105 $ 429 $ 394
===================================
Weighted Average Shares 201,760 237,402 208,155 237,245
Outstanding (Basic)*
Weighted Average Shares 202,703 237,563 208,345 237,553
Outstanding (Diluted)*
Net Income Per Share of $ .47 $ .44 $ 2.06 $ 1.66
Common Stock (Basic)
Net Income Per Share of $ .47 $ .44 $ 2.06 $ 1.66
Common Stock (Diluted)
Dividends Declared Per Common $ .25 $ .39 $ 1.00 $ 1.56
Share
*In thousands of shares
KEY CONSOLIDATED BALANCE SHEET STATISTICS (Unaudited)
In Millions of Dollars, Expect Per December 31
Share Amounts
2000 1999
- --------------------------------------------------------
Debt $ 4,204 $3,239
Preferred Stock of Subsidiaries 204 204
Mandatorily Redeemable Trust
Preferred Securities 200 -
Common Equity 2,494 2,986
----------------
Total Capitalization $ 7,102 $6,429
================
Debt to Total Capitalization 59% 50%
Book Value per Share $ 12.35 $12.58
Cash and Cash Equivalents $ 637 $ 487
SEMPRA ENERGY
Table B
BUSINESS UNIT EARNINGS (Unaudited)
Three Months Twelve Month
Ended Ended
December 31 December 31
--------------- ----------------
2000 1999 Change 2000 1999 Change
- -----------------------------------------------------------------------
Delivery Services
SoCal Gas $ 56 $ 59 $ (3) $206 $200 $6
SDG&E 38 35 3 145 193 (48)
----------------------------------------------
Subtotal 94 94 - 351 393 (42)
Energy Trading 52 10 42 155 19 136
International 9 5 4 33 2 31
Resources 14 1 13 33 5 28
Retail Services (6) - (6) (23) (11) (12)
Technology Ventures (2) (3) 1 (11) (8) (3)
Financial 5 8 (3) 28 28 -
Parent and Other (71) (9) (62) (137) (20) (117)
----------------------------------------------
Subtotal 1 12 (11) 78 15 63
Business-Combination - (1) 1 - (14) 14
Costs
----------------------------------------------
Total Net Income $ 95 $ 105 $(10) $429 $394 $ 35
----------------------------------------------
Shares Outstanding 203 238 208 238
(diluted, in millions)
Earnings per Share $0.47 $ 0.44 $0.03 $ 2.06 $1.66 $0.40
Financial Highlights
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31 December 31
2000 1999 2000 1999
--------------------------------
Capital Expenditures (in
millions)
SoCalGas $ 68 $ 40 $ 198 $ 146
SDG&E $ 117 $ 80 $ 324 $ 245
Authorized Return on Common
Equity
SoCalGas - - 11.60% 11.60%
SDG&E - - 10.60% 11.10%
Achieved Return on Common
Equity
SoCalGas* - - 16.01% 15.18%
SDG&E* - - 12.22% 15.83%
Sempra* - - 15.66% 13.36%
* Excludes business-combination costs in 1999.
SEMPRA ENERGY
Table C
OPERATING STATISTICS (Unaudited)
Twelve Three Months
Months Ended Ended
December 31 December 31
2000 1999 2000 1999
- --------------------------------------------------------------
Delivery Services (California
Utilities)
- --------------------------------------------------------------
Revenues ($ Millions)
SDG&E 895 487 2,671 2,207
SoCalGas (excludes 791 777 2,818 2,522
intercompany sales)
Gas Sales (BCF) 116 106 391 436
Transportation and Exchange 190 181 740 582
(BCF)
-------------------------------
Total Deliveries (BCF) 306 287 1,131 1,018
-------------------------------
Total Gas Customers 5,807 5,725
(Thousands)
Electric Sales (Millions of 4,062 3,745 16,014 15,101
Kwhs)
Direct Access (Millions of 729 908 3,308 3,212
Kwhs)
Total Deliveries (Millions of 4,791 4,653 19,322 18,313
Kwhs)
Total Electric Customers 1,238 1,218
(Thousands)
Energy Trading
- --------------------------------------------------------------
Operating Margins ($ Millions)
North America 142 34 402 93
Europe / Asia 23 15 119 48
Natural Gas (Physical, BCF/Day) 10.9 7.2 8.9 5.8
Electrical (Physical, 18.2 4.4 61.1 19.8
Billions of Kwhs)
Oil & Liquid Products 2.1 2.2 2.1 2.1
(Physical, Millions Bbls/Day)
International (1)
- --------------------------------------------------------------
Revenues ($ Millions) 302 227 1,085 952
Natural Gas Sales (BCF)
Argentina 47 45 227 242
Mexico 26 4 39 12
Chile 7 5 26 13
Natural Gas Customers (Thousands)
Argentina 1,300 1,258
Mexico 45 16
Chile 29 16
Electric Sales (Millions of Kwhs)
Chile 382 340 1,528 1,392
Peru 646 909 3,306 3,446
Electric Customers (Thousands)
Chile 393 382
Peru 689 679
Retail Services
- --------------------------------------------------------------
Revenues ($ Millions)
Commercial and Industrial 145 49 380 162
Mass Market 80 44 216 111
(1) Represents 100 percent of these subsidiaries, although
all are less than 100 percent owned by Sempra