SAN DIEGO, March 24, 2020 /PRNewswire/ -- Today, Sempra
Energy's (NYSE: SRE) senior management team is providing an update
on the company's business strategy on an Investor Day conference
call, including details on the company's five-year capital plan,
projected rate base growth, segment-level earnings guidance and
planned improvements to balance sheet strength.
"In the midst of a global health crisis, our first obligation is
to the health and safety of our employees and the communities we
serve," said Jeffrey W. Martin,
chairman and CEO of Sempra Energy. "Building resilience into our
business model and investing in safe and reliable infrastructure is
at the core of our strategy."
"At Sempra Energy, our five-year capital plan – the most robust
in our company's history – gives us great visibility into
sustainable earnings growth that should help create long-term value
for our stakeholders," added Martin. "Our strategy also focuses our
investments within the most attractive markets in North America, with a sharp focus on the
portion of the energy value chain where we believe we can create
the most attractive risk-adjusted returns."
Sempra Energy reiterated its five-year capital plan of
approximately $32 billion, primarily
focused on investments at the company's U.S. utilities – San Diego
Gas & Electric Co. (SDG&E), Southern California Gas Co.
(SoCalGas) and Oncor Electric Delivery Co. LLC. These investments
support safety, reliability and sustainability for the benefit of
customers and all stakeholders. The capital plan results in a
projected 9% rate base compound annual growth rate (CAGR) for 2019
to 2024, and a projected combined rate base of more than
$51 billion in 2024.
Sempra Energy's full-year 2020 GAAP earnings-per-share (EPS)
guidance range is $12.78 to
$14.26 and includes the estimated
gain on the sale of the company's South American businesses. Today,
the company reaffirmed its full-year 2020 adjusted EPS guidance
range of $6.70 to $7.50 and 2021 guidance range of $7.50 to $8.10.
Additionally, Sempra Energy continues to focus on strengthening
its balance sheet to create financial flexibility and fund future
growth. Across its consolidated family of companies, Sempra Energy
has approximately $6.4 billion in
liquidity, including cash and available credit capacity. In
addition, Oncor has $2.3 billion in
liquidity, including cash and available credit capacity dedicated
to their operations. In connection with its financial plan, Sempra
Energy does not have current plans for equity offerings.
In 2019, Sempra Energy announced two agreements that would
conclude the company's planned sale of its South American
businesses for expected combined after-tax cash proceeds of
approximately $4.55 to $4.85 billion, subject to adjustments and
satisfaction of closing conditions. Both of the company's South
American sale transactions, one to sell Sempra Energy's equity
interests in its Peruvian businesses and the other to sell its
equity interests in its Chilean businesses, continue to advance and
are expected to be completed in the next three to six weeks. The
expected sale proceeds will be used to strengthen the company's
balance sheet and help fund future growth.
Across Sempra Energy's liquefied natural gas (LNG) business, the
company continues to target portfolio returns above those of its
U.S. utility businesses and continues to advance its development
projects with a disciplined approach.
Phase 1 of the Cameron LNG liquefaction-export project in
Hackberry, Louisiana, is nearing
completion. Once complete, Sempra Energy's share of full-year
run-rate earnings from Phase 1, which includes the first three
trains, are projected to be between $400
million and $450 million
annually under Cameron LNG's tolling agreements. Sempra Energy
indirectly owns 50.2% of Cameron LNG. Cameron LNG is jointly owned
by affiliates of Sempra LNG, Total S.A., Mitsui & Co., Ltd.,
and Japan LNG Investment, LLC, a company jointly owned by
Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha.
Phase 1 of the Energía Costa
Azul (ECA) LNG liquefaction-export project, under
development in Baja California,
Mexico, continues to move forward. Earlier this month, ECA
LNG signed a fixed-price, lump-sum, turn-key engineering,
procurement and construction (EPC) contract with Technip FMC. ECA
LNG is targeting a final investment decision in the second quarter
of 2020.
Additionally, earlier this month, Port Arthur LNG, LLC and
Bechtel Oil, Gas, and Chemicals, Inc., signed a fixed-price EPC
contract for the Port Arthur LNG liquefaction project under
development in Port Arthur, Texas,
and site preparation work continues.
While the majority of Sempra Energy's businesses are considered
critical by the federal government and are currently operating
without material disruptions, the fast-evolving global health
crisis adds more uncertainty to the projections contained in this
press release and the projections planned for the company's
Investor Day conference call.
Non-GAAP Financial Measure
This press release includes Sempra Energy's 2020 adjusted EPS
guidance range, which is a non-GAAP financial measure. See the
appendix for additional information regarding this non-GAAP
financial measure.
About Sempra Energy
Sempra Energy's mission is to be North
America's premier energy infrastructure company. With more
than $65 billion in total assets
reported 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
20,000 employees deliver energy with purpose to over 40 million
consumers worldwide. 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 diversity and inclusion, and
sustainability, 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 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; the impact of the novel coronavirus on (i) our
ability to commence and complete capital projects and obtain
regulatory approvals, (ii) our current and prospective
counterparties, customers and partners, and (iii) the stability of
the capital markets; 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 South American Utilities, 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 South American Utilities, Sempra
North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra
Texas Utilities, Oncor and IEnova are not regulated by the
California Public Utilities Commission.
APPENDIX
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 $6.70 to $7.50
excludes approximately $1.8 billion
to $2.0 billion estimated after-tax
gain on the sale of our South American businesses, net of
approximately $1.2 billion of income
tax expense, which was calculated primarily based on applicable
statutory tax rates.
Sempra Energy 2020 Adjusted EPS Guidance is a non-GAAP financial
measure. Because of the significance and/or nature of the excluded
item, 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
|
$
|
12.78
|
to
|
$
|
14.26
|
Excluded
item:
|
|
|
|
Estimated gain on sale
of South American businesses
|
(6.08)
|
|
(6.76)
|
Sempra Energy
Adjusted EPS Guidance Range
|
$
|
6.70
|
to
|
$
|
7.50
|
Weighted-average
common shares outstanding, diluted (millions)
|
|
|
295
|
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SOURCE Sempra Energy