SAN DIEGO, June 30, 2020 /PRNewswire/ -- Sempra Energy
(NYSE: SRE) has completed its business exit from South America, following the recently
announced sale of its Chilean businesses, which generated
approximately $2.23 billion in total
cash proceeds, subject to post-closing adjustments. The completion
of the Chilean transactions concludes Sempra Energy's sales of its
South American businesses in both Chile and Peru, resulting in approximately $5.82 billion in combined total cash proceeds,
subject to customary post-closing adjustments. The company's
investments are now focused in top-tier markets in North
America.
"By successfully executing on a broad capital recycling program,
the past two years have proven to be transformational for our
company and have allowed us to efficiently concentrate our capital
program on the most attractive markets in North America," said Trevor I. Mihalik, executive vice president and
chief financial officer of Sempra Energy.
Completion of Multi-Year Capital Recycling Program
The
company is executing its mission to build North America's premier energy infrastructure
company by focusing on transmission and distribution (T&D)
energy infrastructure in the most attractive markets in
North America including
California, Texas, Mexico
and North America's liquefied
natural gas export market. Over the past two years, Sempra Energy
has repositioned its infrastructure portfolio through the
divestiture of non-core assets and is committed to invest a record
$32 billion in capital over its
2020-2024 five-year plan with a focus on T&D investments in its
Texas and California utilities.
In total, including the sale of the company's South American
businesses and the company's U.S. renewables business and
non-utility natural gas storage assets, which was completed in
2019, the company has generated approximately $8.3 billion in total cash proceeds from these
divestitures.
"These proceeds are being used to support our growth
initiatives, strengthen our balance sheet and return value to our
owners," said Mihalik.
Company Raises 2020 EPS Guidance Ranges
As a result of
enhanced visibility into earnings growth related to progress made
on the company's strategic plan, today Sempra Energy announced that
it is raising its full-year 2020 GAAP earnings-per-share (EPS)
guidance range to $12.38 to
$13.32, from $11.88 to $13.02.
The company's full-year 2020 adjusted EPS guidance range also has
been increased to $7.20 to
$7.80, from $6.70 to $7.50.
Non-GAAP Financial Measure
Sempra Energy's full-year
2020 adjusted EPS guidance is a non-GAAP financial measure (GAAP
represents accounting principles generally accepted in the United States of America). For a
reconciliation of this non-GAAP financial measure to its most
comparable GAAP financial measure, refer to the table at the end of
this document.
About Sempra Energy
Sempra Energy's mission is to
be North America's premier energy infrastructure company.
With more than $60 billion in total assets in 2019,
the San Diego-based company is the utility holding company
with the largest U.S. customer base. The Sempra Energy companies'
more than 18,000 employees deliver energy with purpose to over 35
million consumers. The company is focused on the most attractive
markets in North America,
including California, Texas, Mexico and the LNG
export market. Sempra Energy has been consistently recognized for
its leadership in sustainability, diversity and inclusion, and is a
member of the S&P 500 Utilities Index and the Dow Jones Utility
Index. The company was also named one of the "World's Most Admired
Companies" for 2020 by Fortune Magazine.
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. Forward-looking statements are based on assumptions with
respect to the future, involve risks and uncertainties, and are not
guarantees of performance. Future results may differ materially
from those expressed in the forward-looking statements. These
forward-looking statements represent our estimates and assumptions
only as of the date of this press release. We assume no obligation
to update or revise any forward-looking statement as a result of
new information, future events or other factors.
In this press release, forward-looking statements can be
identified by words such as "believes," "expects," "anticipates,"
"plans," "estimates," "projects," "forecasts," "should," "could,"
"would," "will," "confident," "may," "can," "potential,"
"possible," "proposed," "target," "pursue," "outlook," "maintain,"
or similar expressions, or when we discuss our guidance, strategy,
goals, vision, mission, opportunities, projections or
intentions.
Factors, among others, that could cause our actual results
and future actions to differ materially from those described in any
forward-looking statements include risks and uncertainties relating
to: California wildfires and the
risk that we may be found liable for damages regardless of fault
and the risk that we may not be able to recover any such costs from
insurance, the wildfire fund established by California Assembly
Bill 1054 or in rates from customers; decisions, investigations,
regulations, issuances of permits and other authorizations, renewal
of franchises, and other actions by the Comisión Federal de
Electricidad, California Public Utilities Commission, U.S.
Department of Energy, Public Utility Commission of Texas, regulatory and governmental bodies and
jurisdictions in the U.S. and other countries in which we operate;
the success of business development efforts, construction projects
and major acquisitions and divestitures, including risks in (i) the
ability to make a final investment decision and completing
construction projects on schedule and budget, (ii) obtaining the
consent of partners, (iii) counterparties' financial or other
ability to fulfill contractual commitments, (iv) the ability to
complete contemplated acquisitions and/or divestitures, and (v) the
ability to realize anticipated benefits from any of these efforts
once completed; the impact of the COVID-19 pandemic on our (i)
ability to commence and complete capital and other projects and
obtain regulatory approvals, (ii) supply chain and current and
prospective counterparties, contractors, customers, employees and
partners, (iii) liquidity, resulting from bill payment challenges
experienced by our customers, decreased stability and accessibility
of the capital markets and other factors, and (iv) ability to
sustain operations and satisfy compliance requirements due to
social distancing measures or if employee absenteeism were to
increase significantly; the resolution of civil and criminal
litigation, regulatory investigations and proceedings, and
arbitrations; actions by credit rating agencies to downgrade our
credit ratings or to place those ratings on negative outlook and
our ability to borrow at favorable interest rates; moves to reduce
or eliminate reliance on natural gas and the impact of the extreme
volatility and unprecedented decline of oil prices on our
businesses and development projects; weather, natural disasters,
accidents, equipment failures, computer system outages and other
events that disrupt our operations, damage our facilities and
systems, cause the release of harmful materials, cause fires and
subject us to liability for property damage or personal injuries,
fines and penalties, some of which may not be covered by insurance
(including costs in excess of applicable policy limits), may be
disputed by insurers or may otherwise not be recoverable through
regulatory mechanisms or may impact our ability to obtain
satisfactory levels of affordable insurance; the availability of
electric power and natural gas and natural gas storage capacity,
including disruptions caused by failures in the transmission grid,
limitations on the withdrawal or injection of natural gas from or
into storage facilities, and equipment failures; cybersecurity
threats to the energy grid, storage and pipeline infrastructure,
the information and systems used to operate our businesses, and the
confidentiality of our proprietary information and the personal
information of our customers and employees; expropriation of
assets, the failure of foreign governments and state-owned entities
to honor the terms of contracts, and property disputes; the impact
at San Diego Gas & Electric Company (SDG&E) on competitive
customer rates and reliability due to the growth in distributed
power generation and from departing retail load resulting from
customers transferring to Direct Access, Community Choice
Aggregation or other forms of distributed power generation and the
risk of nonrecovery for stranded assets and contractual
obligations; Oncor Electric Delivery Company LLC's (Oncor) ability
to eliminate or reduce its quarterly dividends due to regulatory
and governance requirements and commitments, including by actions
of Oncor's independent directors or a minority member director;
volatility in foreign currency exchange, interest and inflation
rates and commodity prices and our ability to effectively hedge the
risk of such volatility; changes in trade policies, laws and
regulations, including tariffs and revisions to or replacement of
international trade agreements, such as the North American Free
Trade Agreement, that may increase our costs or impair our ability
to resolve trade disputes; the impact of changes to federal and
state tax laws and our ability to mitigate adverse impacts; and
other uncertainties, some of which may be difficult to predict and
are beyond our control.
These risks and uncertainties are further discussed in the
reports that Sempra Energy has filed with the U.S. Securities and
Exchange Commission (SEC). 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, www.sempra.com. Investors should not rely
unduly on any forward-looking statements.
Sempra North American Infrastructure, Sempra LNG, Sempra
Mexico, Sempra Texas Utilities, Oncor and Infraestructura
Energética Nova, S.A.B. de C.V. (IEnova) are not the same companies
as the California utilities,
SDG&E or Southern California Gas Company, and Sempra North
American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas
Utilities, Oncor and IEnova are not regulated by the California
Public Utilities Commission.
RECONCILIATION OF
SEMPRA ENERGY 2020 ADJUSTED EPS GUIDANCE RANGE TO SEMPRA ENERGY
2020 GAAP EPS GUIDANCE RANGE
(Unaudited)
|
|
Sempra Energy 2020
Adjusted EPS Guidance Range of $7.20 to $7.80 excludes items (after
the effects of income taxes(1) and,
if applicable, noncontrolling interests) as follows:
- $(72) million from impacts associated with
Aliso Canyon natural gas storage facility litigation at Southern
California Gas Company,
net of $28 million income tax benefit
- $(100) million equity losses, on both a
pretax and after-tax basis, at RBS Sempra Commodities LLP, which
represents an
estimate of our obligations to settle pending tax matters and
related legal costs at our equity method investment at Parent and
Other
- approximately $1.7 billion to $1.8 billion
estimated after-tax gain on the sale of our South American
businesses, net of approximately
$1.2 billion of income tax expense.
|
|
Sempra Energy 2020
Adjusted EPS Guidance is a non-GAAP financial measure. Because of
the significance and/or nature of the excluded items, management
believes
that this non-GAAP
financial measure provides a meaningful comparison of the
performance of Sempra Energy's business operations to prior and
future periods. Sempra
Energy 2020 Adjusted
EPS Guidance should not be considered an alternative to Sempra
Energy 2020 GAAP EPS Guidance. Non-GAAP financial measures are
supplementary
information that
should be considered in addition to, but not as a substitute for,
the information prepared in accordance with GAAP. The table below
reconciles Sempra Energy
2020 Adjusted EPS
Guidance Range to Sempra Energy 2020 GAAP EPS Guidance Range, which
we consider to be the most directly comparable financial measure
calculated in
accordance with
GAAP.
|
|
|
|
Full-Year
2020
|
|
Sempra Energy GAAP
EPS Guidance
Range
|
$
12.38
|
to
|
$
13.32
|
Excluded
items:
|
|
|
|
Impacts associated with
Aliso Canyon
litigation
|
0.24
|
|
0.24
|
Losses from investment
in RBS Sempra Commodities
LLP
|
0.34
|
|
0.34
|
Estimated gain on sale
of South American
businesses
|
(5.76)
|
|
(6.10)
|
Sempra Energy
Adjusted EPS Guidance
Range
|
$
7.20
|
to
|
$
7.80
|
Weighted-average
common shares outstanding, diluted
(millions)
|
|
|
295(2)
|
|
|
(1)
|
Income taxes were
primarily calculated based on applicable statutory tax rates. We
did not record an income tax
benefit for the equity losses from our investment in RBS Sempra
Commodities LLP because, even though a portion of the liabilities may be deductible under
United Kingdom tax law, it is not probable that the
deduction will reduce United
Kingdom
taxes.
|
(2)
|
Weighted-average
common shares outstanding does not include the dilutive effect of
mandatory convertible preferred
stock as they are assumed to be antidilutive for full-year
2020.
If such mandatory convertible preferred stock were dilutive for the full year, the 2020 GAAP
EPS Guidance Range will differ from the range presented
above.
|
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SOURCE Sempra Energy