What was Sempra Energy's financial performance in the first quarter of 2009?

Sempra Energy reported a net income of $316 million, or $1.29 per diluted share, for the first quarter of 2009. This represents a significant increase from $242 million, or $0.92 per diluted share, reported in the same period of 2008. The improvement was primarily driven by higher equity earnings from its joint venture, RBS Sempra Commodities, and favorable results from SDG&E.

How did the company manage its liquidity and capital resources?

Sempra Energy maintained a strong liquidity position, with $720 million in unrestricted cash and cash equivalents and $2.9 billion in available unused credit facilities as of March 31, 2009. The company expects its operating cash flows, distributions from equity investments, and potential security issuances to adequately fund its capital expenditures, dividends, and other obligations.

What are the key risks or contingencies the company is facing?

A significant contingency is the $900 million reserve established by SDG&E for wildfire litigation related to the 2007 wildfires. While this reserve is fully offset by an insurance receivable, the ultimate liability and potential for recovery in utility rates are still subject to regulatory and legal processes. Additionally, the company's Sempra Global businesses, particularly Sempra Pipelines & Storage's Liberty Gas Storage project, face construction delays and potential charges, and Sempra Generation's reliance on a major contract ending in late 2011 poses a future revenue risk.

How did the adoption of new accounting standards impact the financial statements?

Sempra Energy adopted SFAS 160, 'Noncontrolling Interests in Consolidated Financial Statements,' effective January 1, 2009. This standard changed the presentation and disclosure of noncontrolling interests but had no material impact on the company's financial condition, results of operations, or cash flows. The primary impact was on Sempra Energy and SDG&E, notably concerning the noncontrolling interest in Otay Mesa VIE.

SRE/SREA 10-Q Quarterly Report Q1 FY2009 — Revenue, Net Income, EPS

Summary

Sempra Energy (SRE) reported strong first-quarter 2009 results, with net income of $316 million, or $1.29 per diluted share, a significant increase from $242 million, or $0.92 per diluted share, in the prior year. This growth was driven by higher earnings from the Sempra Commodities segment, largely due to the company's equity earnings from its joint venture, RBS Sempra Commodities, and improved performance at SDG&E, supported by higher authorized margins. The company's balance sheet shows total assets of $27.3 billion and total equity of $8.5 billion as of March 31, 2009. While the company generated substantial cash flow from operations ($1.14 billion), it also maintained a strong liquidity position with $720 million in unrestricted cash and cash equivalents and $2.9 billion in available unused credit. A significant item impacting the balance sheet is the establishment of a $900 million reserve for wildfire litigation by SDG&E, which was fully offset by a receivable from insurance, thus having no immediate impact on earnings or cash flows.

Key Highlights

1Net income for the first quarter of 2009 was $316 million ($1.29 per diluted share), a 31% increase from $242 million ($0.92 per diluted share) in the first quarter of 2008.
2Total revenues decreased to $2.11 billion in Q1 2009 from $3.27 billion in Q1 2008, primarily due to lower natural gas prices and volumes, and the sale of commodities marketing businesses.
3Operating cash flow was robust at $1.14 billion, an increase from $731 million in the prior year, bolstered by a $305 million distribution from RBS Sempra Commodities.
4SDG&E established a $900 million reserve for wildfire litigation, fully offset by an insurance receivable, resulting in no impact on current earnings or cash flows.
5The company maintained strong liquidity with $720 million in unrestricted cash and cash equivalents and $2.9 billion in available unused credit as of March 31, 2009.
6Capital expenditures for 2009 are projected at $2.5 billion, with a significant portion allocated to utility infrastructure and advanced metering projects ($1.3 billion) and global energy projects ($1.2 billion).
7The company declared a quarterly common stock dividend of $0.39 per share, an increase of 11% from the previous year.

SEMPRA Quarterly Report for Q1 Ended Mar 31, 2009

Summary

Key Highlights

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