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Press release from PR Newswire

Sempra Energy Reports Second-Quarter 2012 Financial Results

Thursday, August 02, 2012

Sempra Energy Reports Second-Quarter 2012 Financial Results09:00 EDT Thursday, August 02, 2012- SDG&E Energizes Sunrise Powerlink Transmission Line - Company Records $179 Million Non-cash, After-tax Charge on Rockies Express Pipeline Investment - 2012 Earnings-per-share Guidance Range of $4 to $4.30 Reaffirmed, Excluding Rockies Express Pipeline ChargeSAN DIEGO, Aug. 2, 2012 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported second-quarter 2012 earnings of $62 million, or $0.25 per diluted share, compared with earnings of $503 million, or $2.09 per diluted share, in the second quarter 2011.Second-quarter 2012 earnings included a $179 million non-cash charge related to a write-down on the company's investment in the Rockies Express Pipeline.  Last year's second-quarter earnings included a gain of $277 million, reflecting the write-up in the value of the company's original investments in Chile and Peru as a result of the acquisition of a controlling interest in those utilities.Excluding these unusual items in both years, adjusted second-quarter earnings increased to $241 million, or $0.98 per diluted share, in 2012 from $226 million, or $0.94 per diluted share, in 2011.Sempra Energy's earnings through the first six months of 2012 were $298 million, or $1.21 per diluted share, compared with $757 million, or $3.14 per diluted share, in the first six months of 2011.  Excluding the Rockies Express Pipeline charge, adjusted earnings for the first six months were $477 million, or $1.94 per diluted share, compared with adjusted earnings of $480 million, or $1.99 per diluted share, in the same period last year.  "We are pleased with our operating results during the quarter and, after adjusting for the impairment charge, remain on course to meet our 2012 earnings guidance," said Debra L. Reed, chief executive officer of Sempra Energy.  "Our utilities continue to make progress with their major infrastructure projects.   In June, SDG&E energized its Sunrise Powerlink transmission line.  The 117-mile line will help meet summer power demand and improve reliability of the regional electric grid.  The line also will serve as a critical link to developing renewable energy projects in California's Imperial Valley and provide significant economic benefits for the region."As announced previously, on Jan. 1, Sempra Energy consolidated Sempra Generation, Sempra Pipelines & Storage and Sempra LNG into two new operating units: Sempra International and Sempra U.S. Gas & Power. Sempra International is comprised of two new reporting segments:  Sempra South American Utilities and Sempra Mexico.  Sempra U.S. Gas & Power also is comprised of two new reporting segments:  Sempra Renewables and Sempra Natural Gas. Beginning in the first quarter 2012, in addition to San Diego Gas & Electric and Southern California Gas Co., Sempra Energy began reporting financial results under each of the above segments.CALIFORNIA UTILITIESSan Diego Gas & Electric In the second quarter 2012, earnings for San Diego Gas & Electric (SDG&E) increased to $95 million from $71 million in last year's second quarter, due primarily to higher earnings related to the Sunrise Powerlink transmission line project.For the first six months of 2012, SDG&E earned $200 million, up from $160 million in the first six months of 2011.In addition to energizing the Sunrise Powerlink, SDG&E received approval in June from the California Public Utilities Commission to proceed with construction of the new East County electric substation project.  The $435 million project will help bolster electric reliability and support transmission of renewable energy along the Sunrise Powerlink.  The project, which involves development of a new substation and modernization of a nearby older substation, is expected to be completed in 2014. Southern California Gas Co.Second-quarter earnings for Southern California Gas Co. (SoCalGas) were $53 million in 2012, compared with $59 million in 2011.  SoCalGas' earnings in the first half of 2012 were $119 million, compared with $127 million during the same period last year.SEMPRA INTERNATIONALSempra South American UtilitiesIn the second quarter 2012, Sempra South American Utilities had earnings of $38 million, compared with $314 million in the second quarter 2011. For the first six months of 2012, earnings for Sempra South American Utilities were $78 million, compared with $336 million in the first six months of 2011.  Six-month and quarterly earnings in 2011 were higher due to the $277 million second-quarter gain from the write-up in value of the company's South American utility investments.Sempra MexicoSempra Mexico recorded second-quarter earnings of $43 million in 2012, up from $35 million last year.For the first six months of 2012, Sempra Mexico had earnings of $80 million, compared with $74 million during the first six months of 2011.SEMPRA U.S. GAS & POWERSempra RenewablesSecond-quarter earnings for Sempra Renewables rose to $24 million in 2012 from $4 million last year, due primarily to an increase in solar and wind assets.During the first six months of 2012, earnings for Sempra Renewables were $34 million, up from $8 million in the same period of 2011.Sempra Natural GasSempra Natural Gas posted a second-quarter loss of $193 million in 2012, which included the $179 million charge related to the Rockies Express Pipeline.  Excluding this charge, Sempra Natural Gas recorded a $14 million loss in the second quarter 2012, compared with earnings of $47 million in last year's second quarter. For the first six months of 2012, Sempra Natural Gas recorded a loss of $192 million, including the Rockies Express Pipeline charge.  Excluding the charge, Sempra Natural Gas had a $13 million loss in the first half of 2012, compared with $110 million in earnings for the first six months last year.Kinder Morgan, a 50-percent owner of Rockies Express Pipeline, is in the process of selling its interest in the pipeline. As a result of this sales process, Sempra Energy has re-evaluated the fair value of the company's 25-percent interest in the pipeline.  Although the pipeline is contracted through late 2019, the impairment charge reflects the impact of the existing weak market conditions on the pipeline's value.Excluding the Rockies Express Pipeline charge, both the quarterly and six-month results for Sempra Natural Gas were impacted by lower natural gas and power prices, including the expiration of the 10-year California Department of Water Resources power-supply contract in September 2011.PARENT & OTHERDuring the second quarter 2012, Sempra Energy had earnings of $2 million at the parent company, compared with a loss of $27 million in the year-ago quarter.  The most recent quarter included a deferred tax benefit related to life-insurance contracts.EARNINGS GUIDANCESempra Energy today reaffirmed its earnings-per-share guidance for 2012 of $4 to $4.30, excluding the Rockies Express Pipeline charge (a $0.73-per-share negative impact) and the tax benefit at the parent company (a $0.19-per-share positive impact).  On a GAAP basis, Sempra Energy's 2012 earnings-per-share guidance is $3.46 to $3.76.INTERNET BROADCASTSempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. EDT with senior management of the company.  Access is available by logging onto the website 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 1897304.NON-GAAP FINANCIAL MEASURESAdjusted earnings for 2012 and 2011, and 2012 earnings-per-share guidance, are non-GAAP financial measures.  Additional information regarding these non-GAAP measures is in the appendix on Table A of the second-quarter financial tables.  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.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.  These statements can be identified by words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "will," "would," "could," "should," "potential," "target," "outlook," "depends," "pursue" or similar expressions, or discussions of guidance, strategies, plans, goals, initiatives, objectives or intentions.  Forward-looking statements are not guarantees of performance.  They involve risks, uncertainties and assumptions.  Future results may differ materially from those expressed in the forward-looking statements.  Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, California State Legislature, Federal Energy Regulatory Commission, U.S. Department of Energy, Nuclear Regulatory Commission, California Energy Commission, California Air Resources Board, and other regulatory, governmental and environmental bodies in the United States and other countries where the company does business; capital market conditions, including the availability of credit and the liquidity of investments; inflation, interest and exchange rates; the impact of benchmark interest rates, generally the U.S. Treasury bond and Moody's A-rated utility bond yields, on the California utilities' cost of capital; the timing and success of business development efforts and construction, maintenance and capital projects, including risks inherent in the ability to obtain, and the timing of the granting of, permits, licenses, certificates and other authorizations; energy markets, including the timing and extent of changes and volatility in commodity prices; the availability of electric power, natural gas and liquefied natural gas, including disruptions caused by failures in the North American transmission grid, pipeline explosions and equipment failures; weather conditions, natural disasters, catastrophic accidents, and conservation efforts; risks inherent in nuclear power generation and radioactive materials storage, including catastrophic release of such materials, the disallowance of the recovery of the investment in, or operating costs of, the generation facility due to an extended outage, and increased regulatory oversight; risks posed by decisions and actions of third parties who control the operations of investments in which the company does not have a controlling interest; wars, terrorist attacks and cyber security threats; business, regulatory, environmental and legal decisions and requirements; expropriation of assets by foreign governments and title and other property disputes; the status of deregulation of retail natural gas and electricity delivery; the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company.  These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the Securities and Exchange Commission.  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 at www.sempra.com.These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.Sempra International, LLC, and Sempra U.S. Gas & Power, LLC, are not the same companies as San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas) and Sempra International, LLC and Sempra U.S. Gas & Power, LLC are not regulated by the California Public Utilities Commission. Sempra International's underlying entities include Sempra Mexico and Sempra South American Utilities. Sempra U.S. Gas & Power's underlying entities include Sempra Renewables and Sempra Natural Gas. SEMPRA ENERGYTable ACONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSThree months endedSix months endedJune 30,June 30,(Dollars in millions, except per share amounts)20122011(1)20122011(1)(unaudited)REVENUESUtilities$  1,838$  1,922$  3,929$  3,868Energy-related businesses251500543988    Total revenues2,0892,4224,4724,856EXPENSES AND OTHER INCOMEUtilities:    Cost of natural gas(221)(403)(652)(1,045)    Cost of electric fuel and purchased power(349)(397)(737)(568)Energy-related businesses:    Cost of natural gas, electric fuel and purchased power(81)(212)(210)(442)    Other cost of sales(41)(32)(74)(55)Operation and maintenance(720)(673)(1,391)(1,312)Depreciation and amortization(266)(248)(523)(478)Franchise fees and other taxes(79)(80)(175)(175)Equity (losses) earnings, before income tax:     Rockies Express Pipeline LLP(290)10(279)19    Other (3)(3)(2)(11)Remeasurement of equity method investments-277-277Other income, net18319374Interest income412915Interest expense(113)(118)(226)(226)(Losses) income before income taxes and equity earnings     of certain unconsolidated subsidiaries(52)586305929Income tax benefit (expense)118(100)1(214)Equity earnings, net of income tax881939Net income74494325754(Earnings) losses attributable to noncontrolling interests(11)12(24)8Preferred dividends of subsidiaries(1)(3)(3)(5)Earnings$      62$     503$     298$     757Basic earnings per common share$    0.26$    2.10$    1.24$    3.16Weighted-average number of shares outstanding, basic (thousands)241,141239,415240,853239,769Diluted earnings per common share$    0.25$    2.09$    1.21$    3.14Weighted-average number of shares outstanding, diluted (thousands)246,260240,761245,766241,154Dividends declared per share of common stock$    0.60$    0.48$    1.20$    0.96(1) As adjusted for the retrospective effect of a change in accounting principle. SEMPRA ENERGYTable A (Continued)RECONCILIATION OF SEMPRA ENERGY GAAP EARNINGS TO SEMPRA ENERGY ADJUSTED EARNINGS EXCLUDING IMPAIRMENT CHARGE AND GAIN FROM REMEASUREMENT OFEQUITY METHOD INVESTMENTS (Unaudited)Sempra Energy Adjusted Earnings and Adjusted Earnings Per Share excluding a $179 million impairment charge on our investment in Rockies Express LLC in the second quarter of 2012 and a $277 million gain from the remeasurement of equity method investments in Chilquinta Energía and Luz del Sur in the second quarter of 2011 are non-GAAP financial measures (GAAP represents accounting principles generally accepted in the United States). Because of the significance and nature of these items, management believes that these non-GAAP financial measures provide a more meaningful comparison of the performance of Sempra Energy's business operations from 2012 to 2011 and to future periods. Also, 2012 guidance of $4 to $4.30 per diluted share excludes the $179 million impairment loss, or $0.73 per diluted share, as well as a $47 million tax benefit from a change in the expected holding period of life insurance contracts, or $0.19 per diluted share, for the six months ended June 30, 2012, based on shares outstanding through June 30, 2012. Management believes that excluding the impact of the impairment loss and tax benefit from current guidance provides a more meaningful measure of Sempra Energy's expected financial performance in 2012 in comparison to previously issued guidance. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. The table below reconciles for historical periods these non-GAAP financial measures to Sempra Energy Earnings and Diluted Earnings Per Common Share, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.Three months ended June 30,Six months ended June 30,(Dollars in millions, except per share amounts)2012201120122011Sempra Energy GAAP Earnings$      62$     503$     298$     757Add: Impairment Charge in 2012179-179-Less: Remeasurement Gain in 2011-(277)-(277)Sempra Energy Adjusted Earnings$     241$     226$     477$     480Diluted earnings per common share:Sempra Energy GAAP Earnings$    0.25$    2.09$    1.21$    3.14Sempra Energy Adjusted Earnings$    0.98$    0.94$    1.94$    1.99Weighted-average number of shares outstanding, diluted (thousands)246,260240,761245,766241,154 SEMPRA ENERGYTable BCONDENSED CONSOLIDATED BALANCE SHEETSJune 30,December 31,(Dollars in millions)20122011(1)(2)(unaudited)AssetsCurrent assets:Cash and cash equivalents$       221$           252Restricted cash2124Accounts receivable9851,345Income taxes receivable37-Inventories249346Regulatory balancing accounts ? undercollected11438Regulatory assets 10189Fixed-price contracts and other derivatives7585Settlement receivable related to wildfire litigation-10Other237143Total current assets2,0402,332Investments and other assets:Restricted cash1822Regulatory assets arising from pension and other postretirement     benefit obligations1,0501,126Regulatory assets arising from wildfire litigation costs668594Other regulatory assets1,1231,060Nuclear decommissioning trusts847804Investments1,6391,671Goodwill 1,0671,036Other intangible assets441448Sundry712691Total investments and other assets7,5657,452Property, plant and equipment, net24,59723,465Total assets$   34,202$       33,249Liabilities and EquityCurrent liabilities:Short-term debt$       713$           449Accounts payable1,0121,107Income taxes payable-5Deferred income taxes163173Dividends and interest payable256219Accrued compensation and benefits222323Regulatory balancing accounts ? overcollected270105Current portion of long-term debt698336Fixed-price contracts and other derivatives9192Customer deposits145142Reserve for wildfire litigation305586Other559615Total current liabilities4,4344,152Long-term debt10,31510,078Deferred credits and other liabilities:Customer advances for construction148142Pension and other postretirement benefit obligations, net of plan assets1,3451,423Deferred income taxes1,5441,520Deferred investment tax credits4849Regulatory liabilities arising from removal obligations2,6142,551Asset retirement obligations1,9471,905Other regulatory liabilities6887Fixed-price contracts and other derivatives285301Reserve for wildfire litigation17110Deferred credits and other 911774Total deferred credits and other liabilities9,0818,762Contingently redeemable preferred stock of subsidiary7979Equity:Total Sempra Energy shareholders' equity9,8799,775Preferred stock of subsidiaries 2020Other noncontrolling interests394383Total equity10,29310,178Total liabilities and equity$   34,202$       33,249(1)As adjusted for the retrospective effect of a change in accounting principle.(2)Derived from audited financial statements.  SEMPRA ENERGYTable CCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six months endedJune 30,(Dollars in millions)20122011(1)(unaudited)Cash Flows from Operating ActivitiesNet income$  325$  754Adjustments to reconcile net income to net cash provided  by operating activities:Depreciation and amortization523478Deferred income taxes and investment tax credits(53)138Equity losses (earnings)262(47)Remeasurement of equity method investments-(277)Fixed-price contracts and other derivatives1(2)Other1(23)Net change in other working capital components2875Distributions from RBS Sempra Commodities LLP-53Changes in other assets132Changes in other liabilities52(12)Net cash provided by operating activities1,1521,139Cash Flows from Investing ActivitiesExpenditures for property, plant and equipment(1,517)(1,225)Expenditures for investments and acquisition of businesses, net of cash acquired(303)(682)Proceeds from sale of joint venture interest9-Distributions from RBS Sempra Commodities LLP-276Distributions from other investments3129Purchases of nuclear decommissioning and other trust assets(327)(97)Proceeds from sales by nuclear decommissioning and other trusts32994Decrease in restricted cash68388Increase in restricted cash(61)(420)Other (10)(16)Net cash used in investing activities(1,781)(1,653)Cash Flows from Financing ActivitiesCommon dividends paid(260)(210)Redemption of subsidiary preferred stock-(80)Preferred dividends paid by subsidiaries(3)(5)Issuances of common stock4520Repurchases of common stock(16)(18)Issuances of debt (maturities greater than 90 days)1,167870Payments on debt (maturities greater than 90 days)(559)(270)Increase (decrease) in short-term debt, net241(319)Other (21)10Net cash provided by (used in) financing activities594(2)Effect of exchange rate changes on cash and cash equivalents 4(4)Decrease in cash and cash equivalents(31)(520)Cash and cash equivalents, January 1252912Cash and cash equivalents, June 30$  221$  392(1) As adjusted for the retrospective effect of a change in accounting principle.  SEMPRA ENERGYTable DSEGMENT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS Three months ended Six months endedJune 30,June 30,(Dollars in millions)2012201120122011    (unaudited)Earnings (Losses) California Utilities:San Diego Gas & Electric$  95$     71$   200$   160Southern California Gas5359119127Sempra International:Sempra South American Utilities3831478336Sempra Mexico43358074Sempra U.S. Gas & Power:Sempra Renewables244348Sempra Natural Gas(193)47(192)110Parent and other2(27)(21)(58)Earnings$  62$   503$   298$   757Three months ended Six months endedJune 30,June 30,(Dollars in millions)2012201120122011    (unaudited)Capital Expenditures and InvestmentsCalifornia Utilities:San Diego Gas & Electric$331$   366$   729$   714Southern California Gas151157316325Sempra International:Sempra South American Utilities39(214)(1)59(214)(1)Sempra Mexico4497Sempra U.S. Gas & Power:Sempra Renewables343959455Sempra Natural Gas90121112167Parent and other-853(1)1853(1)Consolidated Capital Expenditures and Investments$958$1,296$1,820$1,907(1) The $611 million of net cash used to fund the purchase of controlling interests in our investments in Chile and Peru in the second quarter of 2011 is recorded as a net expenditure of $852 million at Parent and Other, partially offset by $241 million of cash acquired in the purchase, which is recorded at Sempra South American Utilities. SEMPRA ENERGYTable EOTHER OPERATING STATISTICS (Unaudited)Three months ended June 30,Six months ended June 30,UTILITIES2012201120122011California Utilities - SDG&E and SoCalGasGas Sales (bcf)(1)8385217223Transportation (bcf)(1)174137345294Total Deliveries (bcf)(1)257222562517Total Gas Customers (Thousands)6,6656,644Electric Sales (Millions of kWhs)(1)3,8273,8277,9167,975Direct Access (Millions of kWhs)8207821,5721,568Total Deliveries (Millions of kWhs)(1)4,6474,6099,4889,543Total Electric Customers (Thousands)1,3971,390Other Utilities(2)Natural Gas Sales (bcf)Argentina8787160157Mexico651211Mobile Gas892319Willmut Gas(3)4-4-Natural Gas Customers (Thousands)Argentina1,8331,781Mexico9189Mobile Gas8890Willmut Gas(3)20-Electric Sales (Millions of kWhs)Peru1,6691,5703,3593,164Chile6386041,3831,265Electric Customers (Thousands)Peru941907Chile617603ENERGY-RELATED BUSINESSESSempra InternationalPower Sold (Millions of kWhs)Sempra Mexico(4)8946121,9721,528Sempra U.S. Gas & PowerPower Sold (Millions of kWhs)Sempra Renewables(5)253155526277Sempra Natural Gas1,4592,8093,3996,044(1) Includes intercompany sales(2) Represents 100% of the distribution operations of the subsidiary, although the subsidiary in Argentina is not consolidated within Sempra Energy and the related investments are accounted for under the equity method. The subsidiaries in Peru and Chile were also accounted for under the equity method until April 6, 2011, when they became consolidated entities upon our acquisition of additional ownership interests.(3) Acquired in May 2012.(4) Sales to Sempra Natural Gas.(5) Includes 50% of total power sold related to wind projects in which Sempra Energy has a 50% ownership. These subsidiaries are not consolidated within Sempra Energy and the related investments are accounted for under the equity method.          SEMPRA ENERGY           Table F (Unaudited)Statement of Operations Data by SegmentThree Months Ended June 30, 2012(Dollars in millions)SDG&ESoCalGasSempra SouthAmericanUtilitiesSempra MexicoSempra RenewablesSempraNatural GasConsolidatingAdjustments,Parent & OtherTotalRevenues$   780$      720$     348$  118$          14$        198$           (89)$2,089Cost of Sales and Other Expenses(492)(535)(270)(63)(1)(196)66(1,491)Depreciation & Amortization(119)(90)(14)(16)(3)(22)(2)(266)Equity Losses Recorded Before Income Tax----(2)(290)(1)(1)(293)Other Income (Expense), Net244-(2)--(8)18Income (Loss) Before Interest & Tax(2)1939964378(310)(34)57Net Interest (Expense) Income (3)(40)(18)(2)1(2)(11)(38)(110)Income Tax (Expense) Benefit(53)(28)(17)(3)1812873118Equity Earnings Recorded Net of Income Tax---8---8(Earnings) Losses Attributable to Noncontrolling Interests(5)-(7)---1(11)Earnings (Losses)$    95$        53$       38$    43$          24$       (193)$              2$     62Three Months Ended June 30, 2011(Dollars in millions)SDG&ESoCalGasSempra SouthAmericanUtilitiesSempra MexicoSempra RenewablesSempraNatural GasConsolidatingAdjustments,Parent & OtherTotalRevenues$   697$      876$     361$  171$            6$        436$          (125)$2,422Cost of Sales and Other Expenses(479)(691)(287)(114)(3)(320)97(1,797)Depreciation & Amortization(105)(82)(13)(16)(2)(27)(3)(248)Equity (Losses) Earnings Recorded Before Income Tax----(1)10(2)7Other Income, Net133276(4)2--14308Income (Loss) Before Interest & Tax(2)12610633743-99(19)692Net Interest Expense(3)(32)(19)(2)(4)(2)(14)(36)(109)Income Tax (Expense) Benefit(42)(28)(12)(13)6(38)27(100)Equity (Losses) Earnings Recorded Net of Income Tax--(1)9---8Losses (Earnings) Attributable to Noncontrolling Interests19-(8)---112Earnings (Losses)$    71$        59$     314$    35$            4$          47$           (27)$   503(1) Includes impairment loss of $300 million related to our investment in Rockies Express Pipeline LLC.(2) Management believes "Income (Loss) before Interest & Tax" is a useful measurement of our segments' performance because it can be used to evaluate the effectiveness of our operations exclusive of interest and income tax, neither of which is directly relevant to the efficiency of those operations.(3) Net Interest (Expense) Income includes Interest Income, Interest Expense and Preferred Dividends of Subsidiaries.(4) Includes gain of $277 million related to remeasurement of equity method investments.           SEMPRA ENERGY           Table F (Unaudited)Statement of Operations Data by SegmentSix Months Ended June 30, 2012(Dollars in millions)SDG&ESoCalGasSempra SouthAmericanUtilitiesSempra MexicoSempra RenewablesSempraNatural GasConsolidatingAdjustments,Parent & OtherTotalRevenues$1,614$   1,600$     705$  253$          22$        467$            (189)$4,472Cost of Sales and Other Expenses(1,036)(1,209)(551)(140)(10)(441)148(3,239)Depreciation & Amortization(231)(177)(27)(31)(6)(45)(6)(523)Equity Losses Recorded Before Income Tax----(1)(279)(1)(1)(281)Other Income, Net54822--2793Income (Loss) Before Interest & Tax (2)401222129845(298)(21)522Net Interest Expense (3)(77)(35)(8)-(6)(20)(74)(220)Income Tax (Expense) Benefit(113)(68)(30)(23)35126741Equity Earnings Recorded Net of Income Tax---19---19Earnings Attributable to Noncontrolling Interests(11)-(13)----(24)Earnings (Losses)$   200$      119$       78$    80$          34$       (192)$              (21)$   298Six Months Ended June 30, 2011(Dollars in millions)SDG&ESoCalGasSempra SouthAmericanUtilitiesSempra MexicoSempra RenewablesSempraNatural GasConsolidating Adjustments, Parent & OtherTotalRevenues$1,537$   1,932$     361$  378$          10$        885$            (247)$4,856Cost of Sales and Other Expenses(1,053)(1,547)(289)(257)(7)(648)204(3,597)Depreciation & Amortization(208)(163)(13)(31)(3)(53)(7)(478)Equity (Losses) Earnings Recorded Before Income Tax-----19(11)8Other Income, Net296276(4)6--34351Income (Loss) Before Interest & Tax (2)30522833596-203(27)1,140Net Interest Expense (3)(69)(36)(2)(7)(5)(23)(74)(216)Income Tax (Expense) Benefit(91)(65)(12)(31)13(70)42(214)Equity Earnings Recorded Net of Income Tax--2316---39Losses (Earnings) Attributable to Noncontrolling Interests15-(8)---18Earnings (Losses)$   160$      127$     336$    74$            8$        110$              (58)$   757(1) Includes impairment loss of $300 million related to our investment in Rockies Express Pipeline LLC.(2) Management believes "Income (Loss) before Interest & Tax" is a useful measurement of our segments' performance because it can be used to evaluate the effectiveness of our operations exclusive of interest and income tax, neither of which is directly relevant to the efficiency of those operations.(3) Net Interest (Expense) Income includes Interest Income, Interest Expense and Preferred Dividends of Subsidiaries.(4) Includes gain of $277 million related to remeasurement of equity method investments.(Logo: http://photos.prnewswire.com/prnh/20110108/SEMPRAENERGYLOGO)SOURCE Sempra EnergyFor further information: Media, Doug Kline, 1-877-340-8875, or Financial, Victor Vilaplana, 1-877-736-7727, investor@sempra.com, both of Sempra Energy