Annualized Dividend Raised 8 Percent to $3.02 Per Share; Company Sets 2016 Adjusted Earnings-Per-Share Guidance Range at $4.80 to $5.20
East County News Service
February 27, 2016 (San Diego) – Sempra Energy on Friday reported 2015 earnings of $1.35 billion, or $5.37 per diluted share, up from $1.16 billion, or $4.63 per diluted share, in 2014.
Sempra Energy’s 2015 results included: a $36 million after-tax gain on the sale of the second block of Sempra U.S. Gas & Power’s Mesquite power facility; a benefit of $15 million after tax for San Diego Gas & Electric (SDG&E), due to a reduction in the loss related to the San Onofre Nuclear Generating Station (SONGS); and $10 million after tax in liquefied natural gas (LNG) liquefaction development expenses.
Sempra Energy’s 2014 results reflected $21 million after tax in charges related to SONGS. Excluding these items in both years, Sempra Energy’s adjusted earnings in 2015 were $1.31 billion, or $5.21 per diluted share, up from $1.18 billion, or $4.71 per diluted share, in 2014.
On Feb. 18, California state regulators confirmed that Southern California Gas Co. (SoCalGas) had permanently sealed the leaking well at its Aliso Canyon natural gas storage facility outside Los Angeles , the worse methane leak in U.S. history which resulted in temporary relocation of several thousand households.
“We are pleased SoCalGas was able to permanently stop the Aliso Canyon natural gas leak last week,” said Debra L. Reed, chairman and CEO of Sempra Energy. “We recognize the disruption the leak has caused to SoCalGas customers living in the neighborhoods adjacent to the Aliso Canyon facility. SoCalGas is committed to helping local residents return to their normal lives as quickly as possible and also will support forward-looking regulations to ensure the safety of natural gas storage operations going forward.
“Despite this operational challenge at SoCalGas, we produced strong financial results in 2015. We successfully grew operating earnings and outperformed our adjusted earnings guidance for the year. Looking forward, our key capital projects and initiatives are progressing well, and we are executing our five-year financial plan, which we expect will generate earnings growth at about twice the utility industry average.”
Sempra Energy’s fourth-quarter earnings increased to $369 million, or $1.47 per diluted share, in 2015 from $297 million, or $1.18 per diluted share, in 2014. Excluding SONGS-related items and LNG liquefaction development expenses, Sempra Energy’s adjusted earnings in the fourth quarter 2015 were $370 million, or $1.47 per diluted share, compared with $309 million, or $1.23 per diluted share, in the fourth quarter 2014.
Beginning in the first quarter 2015, SoCalGas adopted an order by the California Public Utilities Commission (CPUC) to recognize revenues from the utility’s core activities on a seasonally adjusted basis (seasonality). The application of seasonality to revenues results in substantially all of SoCalGas’ annual earnings being reported in the first and fourth quarters of the year, but did not affect full-year earnings or cash flow. Due to seasonality, Sempra Energy’s fourth-quarter 2015 earnings reflected $48 million higher earnings at SoCalGas, compared with the fourth quarter 2014, offsetting the net seasonality impact on earnings through the first three quarters of 2015.
Last week, Sempra Energy’s board of directors approved an 8-percent increase in the company’s annualized dividend to $3.02 per share from $2.80 per share.
San Diego Gas & Electric
SDG&E’s fourth-quarter earnings increased to $144 million in 2015 from $128 million in 2014. Excluding SONGS-related items in both years, SDG&E’s adjusted earnings were $142 million in the fourth quarter 2015, compared with $140 million in the fourth quarter 2014.
SDG&E’s full-year earnings were $587 million in 2015, up from $507 million in 2014, due primarily to increased earnings from electric transmission operations; higher CPUC base margin, net of operating expenses; and the favorable resolution of prior-years’ tax matters. Excluding SONGS-related items in both years, SDG&E’s adjusted earnings were $572 million in 2015, compared with $528 million in 2014.
Southern California Gas Co.
In the fourth quarter 2015, SoCalGas’ earnings were $143 million, up from $76 million in the fourth quarter 2014, due primarily to the impact of seasonality on revenues, which added $48 million of earnings during the most recent quarter, as well as higher CPUC base margin, net of operating expenses.
SoCalGas’ full-year earnings were $419 million in 2015, up from $332 million in 2014, due primarily to a lower effective tax rate, including favorable resolution of prior years’ income-tax matters. Additionally, in 2015, SoCalGas’ increased earnings were due to higher CPUC base margin, net of operating expenses; a retroactive rate base benefit approved by the CPUC in 2015; and higher regulatory earnings on projects under construction.
Sempra South American Utilities
In the fourth quarter 2015, Sempra South American Utilities’ earnings were $46 million, down from $63 million in the prior year’s fourth quarter, due primarily to lower income-tax expense in 2014 as a result of Peruvian tax reform.
In 2015, full-year earnings for Sempra South American Utilities were $175 million, compared with $172 million in 2014.
Sempra Mexico’s fourth-quarter earnings were $53 million in 2015, unchanged from 2014.
In 2015, Sempra Mexico’s earnings were $213 million, up from $192 million in 2014, primarily due to a full year of earnings from pipelines that were placed into service in the fourth quarter 2014.
SEMPRA U.S. GAS & POWER
Sempra Natural Gas
In the fourth quarter 2015, Sempra Natural Gas earned $1 million, down from $11 million in the fourth quarter 2014, primarily as a result of lower natural gas prices.
Sempra Natural Gas earned $44 million in 2015, down from $50 million in 2014.
Fourth-quarter earnings for Sempra Renewables were $16 million in 2015, down from $18 million in 2014.
In 2015, earnings for Sempra Renewables were $63 million, down from $81 million in 2014, due primarily to $24 million in gains in 2014 from the sale of 50-percent equity interests in the Copper Mountain Solar 3 and Broken Bow 2 Wind projects.
2016 ADJUSTED EARNINGS GUIDANCE
Sempra Energy today set its 2016 adjusted earnings-per-share guidance range at $4.80 to $5.20. The adjusted earnings guidance for 2016 excludes any gains or losses on potential acquisitions or asset sales. This adjusted guidance has been updated based on several new assumptions for 2016 with the inclusion of projected LNG development expenses, revised forecasts for natural gas prices and foreign currency effects, and estimates based on the multi-party settlement agreement filed in the California utilities’ 2016 General Rate Case, among other factors.
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2015 revenues of more than $10 billion. The Sempra Energy companies’ 17,000 employees serve more than 32 million consumers worldwide.