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): April 27, 2000
-------------------
SEMPRA ENERGY
- ---------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 1-14201 33-0732627
- ---------------------------------------------------------------------
(State of incorporation (Commission (I.R.S. Employer
or organization) File Number) Identification No.
101 ASH STREET, SAN DIEGO, CALIFORNIA 92101
- ---------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(619) 696-2034
Registrant's telephone number, including area code-------------------
- ---------------------------------------------------------------------
(Former name or former address, if changed since last report.)
FORM 8-K
Item 5. Other Events
On April 27, 2000 Sempra Energy announced consolidated net income of
$113 million, or 49 cents per diluted share of common stock, for the
three months ended March 31, 2000, representing a 14-percent increase
from consolidated net income of $99 million, or 42 cents per diluted
share, for the three months ended March 31, 1999.
Item 7. Financial Statements And Exhibits.
(c) Exhibits
99.1 April 27, 2000 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: April 27, 2000 By: /s/ F. H. Ault
----------------- ---------------------------
F. H. Ault
Vice President and Controller
EXHIBIT 99.1
Media Contact: Doug Kline
(877) 866-2066
www.sempra.com
Investor Relations Contact: Clem Teng
(877) 736-7727
SEMPRA ENERGY FIRST-QUARTER EARNINGS RISE 14 PERCENT
SAN DIEGO, April 27, 2000 - Based on increased profits at its
energy trading and international units, Sempra Energy (NYSE: SRE)
today reported unaudited consolidated net income of $113 million, or
49 cents per diluted share of common stock, for the first quarter of
2000, up 14 percent over last year's first-quarter net income of $99
million, or 42 cents per diluted share.
First-quarter revenues for Sempra Energy increased 25 percent to
$1.5 billion in 2000 from $1.2 billion in 1999.
"Our first-quarter results demonstrate that we are progressing
well in delivering compound earnings-per-share growth of 8 percent to
10 percent over the next three years and deriving one-third of our
earnings from our unregulated businesses by 2003," said Richard D.
Farman, chairman and chief executive officer of Sempra Energy.
"As we announced last month, we are concentrating on growth in
six business lines: regulated energy delivery services; energy
trading; international energy transmission and distribution;
competitive retail energy services for the commercial, industrial and
residential markets; wholesale electric generation; and technology
ventures," Farman said. "We are implementing a focused, integrated
business strategy to capitalize on opportunities in the $160 billion
retail energy services marketplace."
- -more-
"Our trading and international businesses are delivering strong
results - Sempra Energy Trading recorded its most profitable quarter
ever -- and our California utilities continue to exceed their
authorized rates of return, and provide substantial earnings and cash
flow to the corporation," said Stephen L. Baum, vice chairman,
president and chief operating officer of Sempra Energy.
Energy Delivery Services
During the quarter, revenues for Southern California Gas Company
(SoCalGas) and San Diego Gas & Electric (SDG&E) increased 9 percent
to $1.2 billion from $1.1 billion in 1999.
SoCalGas recorded net income of $50 million in the first quarter
2000, up from $47 million in 1999's first quarter, primarily due to
lower operating expense.
Net income for SDG&E in the first quarter was $52 million,
compared to $53 million for the same period in 1999. The decline in
net income was due primarily to regulatory changes effective in mid-
1999 related to California's electric industry restructuring, offset
by the elimination of a regulatory balancing account. With the
elimination of the balancing account, SDG&E's net income now
fluctuates with changes in natural gas demand, due to seasonal and
other factors. During the first quarter 2000, this resulted in a $14
million increase in net income. This was based on a timing
difference that likely will reverse later in the year.
Parent Company and New Business Activities
In the first quarter of 2000, net income for Sempra Energy's
non-utility and new-business operations -- including Sempra Energy
Trading, Sempra Energy International, Sempra Energy Solutions, Sempra
Energy Financial, Sempra Energy Resources and the parent company -
rose to $11 million from a loss of $1 million in the first quarter
1999.
The weighted average number of common shares outstanding
(diluted) for the first quarter was 228.4 million, down from 237.4
million for the same period in 1999. During the quarter, Sempra
Energy repurchased 36.1 million shares of common stock at $20 per
share through a Dutch Auction self-tender offer that closed Feb. 25,
2000, financed by $700 million of long-term debt and trust preferred
securities. In addition, following the Dutch Auction, Sempra
Energy's board of directors authorized the repurchase of as much as
$100 million in common shares on the open market or in privately
negotiated transactions; however, no shares have been repurchased yet
through this program.
- -more-
Energy Trading
Based on rapid growth in its new European trading operations and
price volatility in energy markets, Sempra Energy Trading's net
income grew to $18 million in the first quarter 2000 from $1 million
in the year-earlier period. Daily physical trading volumes increased
40 percent to 8.1 billion cubic feet (bcf) of natural gas during the
quarter, up from 5.8 bcf during the same period last year. The
company now is operating out of three offices in Europe -- London,
Dusseldorf, Germany, and Olso, Norway - and is a leading trader of
Brent crude oil.
International Operations
Sempra Energy International's net income grew to $5 million in
the first quarter 2000, from a loss of $6 million during the same
quarter last year, due primarily to the profit contributions of
Chilquinta Energia and Luz del Sur. Sempra Energy International
jointly acquired these two South American electric distribution
utilities with PSEG Global in mid-1999. In Mexico, where the company
is developing three gas distribution utilities and a gas transmission
pipeline, Sempra Energy International expanded its customer base by
18 percent during the quarter.
Retail Energy Services
Sempra Energy's retail energy service marketing operations
recorded a start-up loss of $6 million in the first quarter 2000,
compared to a loss of $4 million during the same period last year.
These operations are concentrated primarily in Sempra Energy
Solutions, which markets integrated solutions to commercial and
industrial customers, and Energy America, which sells gas and
electricity to residential and small-business customers. Sempra
Energy Solutions is narrowing its focus to four regional markets -
the Northeast, Upper Midwest, Gulf Coast and West - that have a
combined market potential of $80 billion for commercial and
industrial retail energy services.
During the quarter, Sempra Energy Solutions won a $25 million
contract to build and operate the central energy plant for Houston's
new Astrodomain sports complex, as well as a three-year,
multimillion-dollar contract to provide energy-efficiency services to
facilities associated with Premier Inc., a purchasing alliance
serving 1,800 non-profit hospitals and health-care systems
nationwide.
- -more-
Technology Ventures and Other Operations
Earlier this month, Sempra Energy launched its first communications
venture through Sempra Communications, a new subsidiary created to
capitalize on the convergence between the communications and energy
industries. Sempra Communications is part of a group of 12 pipeline
and communications companies that are investing in Aerie Networks, a
new, national broadband fiber-optic network. Sempra Communications
will acquire and contribute the communication rights needed to build
and operate portions of the network located in Southern California.
Sempra Energy Financial, which has tax-advantaged investments in
affordable-housing limited partnerships representing approximately
1,250 properties throughout the United States, Puerto Rico and the
Virgin Islands, had net income of $8 million in the first quarter
2000, compared to $7 million for the same period in 1999.
Sempra Energy (NYSE: SRE), based in San Diego, is a Fortune 500
energy services holding company with 12,000 employees and annual
revenues of $5.4 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 and South America.
# # #
This press release contains statements that are not historical
fact and constitute projections, forecasts or 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 projections, forecasts or forward-looking statements. These
statements are not guarantees of performance. They involve risks,
uncertainties and assumptions that could cause the company's future
results to differ materially from those expressed in these
statements. Many of the factors that will determine these results
are beyond the company's ability to control or predict. These
statements are necessarily based upon various assumptions involving
judgments with respect to the future. These risks and uncertainties,
include, among others: national, international, regional and local
economic, competitive and regulatory conditions and developments;
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 Annual Report on Form 10-K for the fiscal year ended Dec.
31, 1999, which has been filed with the Securities and Exchange
Commission and is available through the EDGAR system without charge
at its Web site, www.sec.gov.
SEMPRA ENERGY Table A
CONSOLIDATED INCOME STATEMENT (Unaudited)
Three Months Ended
March 31
------------------
In Millions of Dollars, Except Per-Share Amounts 2000 1999
- -----------------------------------------------------------------------
Revenues
Utility:
Natural Gas $ 821 $ 698
Electric 349 360
Other 296 133
------------------
Total 1,466 1,191
------------------
Expenses
Cost of natural gas distributed 390 291
Electric fuel and net purchased power 133 101
Operating expenses 499 389
Depreciation and amortization 134 142
Franchise payments and other taxes 51 45
Preferred dividends by subsidiaries 3 3
Trust preferred distributions by subsidiaries 2 -
------------------
Total 1,212 971
------------------
Income Before Interest and Income Taxes 254 220
Interest expense 73 58
------------------
Income Before Income Taxes 181 162
Income taxes 68 63
------------------
Net Income $ 113 $ 99
==================
Weighted-Average Shares Outstanding (Basic)* 228,291 237,065
==================
Weighted-Average Shares Outstanding (Diluted)* 228,371 237,408
==================
Net Income Per Share of Common Stock (Basic) $ 0.49 $ 0.42
==================
Net Income Per Share of Common Stock (Diluted) $ 0.49 $ 0.42
==================
Dividends Declared Per Common Share $ 0.25 $ 0.39
==================
*In thousands of shares
KEY CONSOLIDATED BALANCE SHEET STATISTICS (Unaudited)
March 31
------------------
In Millions of Dollars, Except Per-Share Amounts 2000 1999
- -----------------------------------------------------------------------
Short-Term Debt $ - $ 38
Current Portion of Long-Term Debt 153 349
Long-Term Debt 3,349 2,762
------------------
Total Debt 3,502 3,149
Preferred Stock of Subsidiaries 204 204
Mandatorily Redeemable Trust Preferred Securities 200 -
Common Equity 2,400 2,921
------------------
Total Capitalization $ 6,306 $ 6,274
==================
Debt to Total Capitalization 56% 50%
Book Value per Share $ 11.92 $ 12.32
Cash and Cash Equivalents $ 640 $ 622
SEMPRA ENERGY Table B
EARNINGS (Unaudited)
Three Months Ended
March 31
In Millions of Dollars, -------------------
Except Per-Share Amounts 2000 1999 Change
- -----------------------------------------------------------------
Delivery Services
SoCal Gas $ 50 $ 47 $ 3
SDG&E 52 53 (1)
-----------------------------
Subtotal 102 100 2
Energy Trading 18 1 17
International 5 (6) 11
Generation - 1 (1)
Retail Services (6) (4) (2)
Technology Ventures (2) (2) -
Financial 8 7 1
Parent and Other (12) 2 (14)
-----------------------------
Subtotal 11 (1) 12
-----------------------------
Total Net Income $ 113 $ 99 $ 14
=============================
Shares Outstanding (Diluted) 228,371 237,408
------------------
Earnings per Share $ 0.49 $ 0.42 $ 0.07
=============================
FINANCIAL HIGHLIGHTS (Unaudited)
Three Months Ended
March 31
-------------------
2000 1999
- -----------------------------------------------------------------
Utility Capital Expenditures (in millions)
SoCalGas $ 40 $ 32
SDG&E $ 65 $ 42
Authorized Return on Common Equity
SoCalGas 11.60% 11.60%
SDG&E 10.60% 11.60%
Achieved Return on Common Equity (annualized)
SoCalGas 15.60% 13.93%
SDG&E 16.76% 18.59%
Sempra 16.78% 13.58%