Energy Reports Higher 2011 Earnings, Raises Dividend 25 Percent
Adjusted Earnings per Share Increase 14 Percent
- All Businesses Deliver Strong 2011 Performance
to Increase to $2.40 per Share from $1.92 per Share, on Annualized Basis
Sets New 2012 Earnings-per-share Guidance Range of $4 to $4.30, Reflecting
Change in Accounting Method for Solar Tax Credits
DIEGO, Feb. 28, 2012 - Sempra Energy (NYSE: SRE) today reported 2011 earnings
of $1.4 billion, or $5.62 per diluted share, compared with earnings of $739
million, or $2.98 per diluted share, in 2010.
Energy's adjusted earnings in 2011 were $1.1 billion, or $4.47 per diluted
share, up approximately 14 percent from 2010 adjusted earnings of $974 million,
or $3.93 per diluted share. The company's 2011 adjusted earnings excluded a
second-quarter 2011 gain of $277 million related to the South American utility
acquisitions. In 2010, Sempra Energy's adjusted earnings excluded a $139
million charge for a write-down on the RBS Sempra Commodities investment and an
after-tax litigation charge of $96 million.
fourth quarter 2011, Sempra Energy's earnings were $292 million, or $1.21 per
diluted share, compared with $280 million, or $1.15 per diluted share, in the
prior year's quarter.
morning, Sempra Energy announced that the company's board of directors has
approved a 25-percent increase in the quarterly dividend on shares of the
company's common stock to $0.60 per share, or $2.40 per share on an annualized
basis, from $0.48 per share, or $1.92 per share on an annualized basis. While
this increase represents a higher payout target than the board previously
established, the board reaffirmed a target payout ratio of 45 percent to 50
percent over the long term. The first quarterly installment of the new dividend
is payable April 15, 2012, to shareholders of record on March 26, 2012.
extremely pleased with our 2011 financial results," said Debra L. Reed,
chief executive officer of Sempra Energy. "All of our businesses continue
to perform well. We exceeded our financial objectives for the year and, earlier
today, we announced a significant increase in our dividend to shareholders. We also
have restructured our organization to enhance the integration of our
On Jan. 1, as announced previously, Sempra Energy consolidated
Sempra Generation, Sempra Pipelines & Storage and Sempra LNG into two new
operating units: Sempra International and Sempra U.S. Gas & Power.
Beginning in the first quarter 2012 and going forward, Sempra Energy will
report earnings from its four principal operating units: San Diego Gas &
Electric (SDG&E), Southern California Gas Co. (SoCalGas), Sempra
International and Sempra U.S. Gas & Power.
Gas & Electric
Earnings for SDG&E increased to $431 million in 2011 from $369 million in
2010. SDG&E's fourth-quarter 2011 earnings were $158 million, up
from $105 million in 2010, primarily due to favorable resolution of regulatory
matters, earnings from construction projects in progress and higher authorized
margin. The higher authorized margin in the fourth quarter reflected the transfer
of the El Dorado Energy natural gas-fired power plant to SDG&E from Sempra
Generation in October 2011.
Southern California Gas Co.
SoCalGas earned $287 million in 2011, compared with $286 million in 2010. In
the fourth quarter 2011, SoCalGas earned $79 million, compared with $74 million
in the fourth quarter 2010.
Sempra Generation's 2011 earnings were $137 million, up from $103 million in
2010. Sempra Generation recorded a loss of $6 million in the fourth quarter
2011, compared with earnings of $43 million in the fourth quarter 2010, due
primarily to the expiration of the 10-year California Department of Water
Resources power-supply contract in September 2011.
In December 2011, the California Public Utilities Commission
approved a 25-year contract for Sempra Generation to sell 150 megawatts (MW) of
renewable power from its Copper Mountain Solar 2 project in Nevada to Pacific
Gas and Electric. Construction has begun on the 1,100-acre solar project and
the first 92 MW of solar panels are expected to be installed by the end of
Last month, Sempra U.S. Gas & Power announced an expansion of
its strategic relationship with BP Wind Energy to develop wind farms in
Pennsylvania and Kansas representing a combined investment by both companies of
more than $1 billion. The two wind farms are expected to be completed by the
end of 2012 and have a combined total output of 560 MW.
Sempra Pipelines & Storage
Earnings for Sempra Pipelines & Storage increased to $527 million in 2011
from $159 million in 2010. Sempra Pipelines & Storage recorded a $277
million gain in the second quarter 2011 from the South American utility
acquisitions. Fourth-quarter earnings for Sempra Pipelines & Storage were
$70 million, up from $39 million in 2010. The higher fourth-quarter earnings
were due primarily to additional earnings from Sempra Pipelines & Storage's
acquisition of the controlling interest in the South American utilities in
In 2011, Sempra LNG earnings increased to $99 million from $68 million in 2010.
In 2011, Sempra LNG benefited from marketing activities and additional revenues
from contracted cargoes that were not delivered.
In the fourth quarter 2011, Sempra LNG's earnings rose to $24
million from $18 million in the prior-year's fourth quarter.
Effective Jan. 1, Sempra Energy adopted the deferral accounting method for the
company's solar-generation projects. Previously, Sempra Energy employed
flow-through accounting for its solar projects, recognizing the tax benefits in
the year each project was placed into service. Now, the tax benefits will be
recognized over the life of the projects. This change in accounting will have
no impact on the economics of the projects and will result in a more even
Reflecting the impact of this accounting change, Sempra Energy
today announced a new 2012 earnings-per-share guidance range of $4.00 to $4.30.
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 passcode
Sempra Energy, based in San Diego, is a Fortune 500 energy
services holding company with 2011 revenues of $10 billion. The Sempra Energy
companies' 17,500 employees serve more than 31 million consumers worldwide.
Non-GAAP Financial Measures
Unless otherwise indicated, earnings discussions in this press release refer to
earnings that are calculated under generally accepted accounting principles
(GAAP) used in the U.S. The 2011 and 2010 full-year adjusted earnings and
earnings per share are non-GAAP financial measures. Additional information
regarding these non-GAAP financial measures is in the appendix on Table A of
the company's year-end financial tables.