SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report
(Date of earliest event reported): January 26, 2000
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SEMPRA ENERGY
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(Exact name of registrant as specified in its charter)
CALIFORNIA 1-14201 33-0732627
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(State of incorporation (Commission (I.R.S. Employer
or organization) File Number) Identification No.
101 ASH STREET, SAN DIEGO, CALIFORNIA 92101
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(Address of principal executive offices) (Zip Code)
(619) 696-2034
Registrant's telephone number, including area code-------------------
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(Former name or former address, if changed since last report.)
<PAGE>
FORM 8-K/A
Item 5. Other Events
Sempra Energy simultaneously reported earnings for the year ended
December 31, 1999 and announced a tender offer to purchase up to 36 million
shares, or approximately 15 percent, of outstanding common shares, and a
dividend reduction. The press release describing the tender offer and
dividend reduction is attached as Exhibit 99.1
Item 7. Financial Statements And Exhibits.
(c) Exhibits
99.1 Press Release issued January 26, 2000(amended to include a
full copy of the press release).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SEMPRA ENERGY
(Registrant)
Date: February 8, 2000 By: /s/ F. H. Ault
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F. H. Ault
Vice President and Controller
SEMPRA ENERGY ANNOUNCES INCREASED 1999
EARNINGS, SELF-TENDER OFFER, DIVIDEND REDUCTION
Financial Initiatives to Enhance Financial Flexibility, EPS Growth Rate
SAN DIEGO, Jan. 26, 2000 - Sempra Energy (NYSE: SRE) today
simultaneously reported increased 1999 earnings and announced
a tender offer and dividend reduction designed to further
accelerate earnings growth and enhance the company's
competitive position.
Sempra Energy reported unaudited 1999 earnings of $394 million,
or $1.66 per diluted share, up 34 percent from $294 million, or
$1.24 per diluted share, for the year 1998. Unaudited earnings,
excluding nonrecurring items, in 1999 rose to $408 million, or
$1.72 per diluted share, up nearly 8 percent, from $379 million, or
$1.60 per diluted share, in 1998.
Sempra Energy has commenced a "Dutch Auction" self-tender
offer to purchase up to 36 million shares, or approximately 15
percent, of outstanding common shares at a premium to the
closing price of Sempra Energy's common stock on Tuesday, Jan.
25, 2000. The company intends to finance substantially all of the
repurchase by issuing a combination of senior notes and trust
preferred securities.
Sempra Energy also plans to reduce the quarterly dividend
payable on shares of its common stock to $0.25 per share ($1.00
annualized rate) from its previous level of $0.39 per share ($1.56
annualized rate).
"These financial initiatives give us increased financial flexibility to
invest in our growing domestic and international businesses, bring
our dividend payout ratio in line with our industry peers and help us
achieve our goal of increasing our compound average growth rate
in earnings per share to 8 percent to 10 percent over the next three
years," said Richard D. Farman, chairman and chief executive
officer of Sempra Energy. "These initiatives are consistent with our
strategies and our objective of being a focused, flexible and
competitive energy services company.
"Today's actions return capital to shareholders while maintaining a
solid balance sheet, excellent cash flow and strong
investment-grade credit ratings," Farman added.
"We've successfully delivered on our primary performance
objectives since Sempra Energy's creation 18 months ago," said
Stephen L. Baum, vice chairman, chief operating officer and
president of Sempra Energy. "We exceeded our earnings goal in
1999 and achieved profitability in our unregulated businesses one
year ahead of target. We're on track to meet our objective to
generate one-third of our earnings from these units by the end of
2003. We're particularly pleased with the progress of our energy
trading and our international businesses. We've also produced
returns from our California regulated utility operations that exceed
their authorized rates of return on equity.
"Going forward, we will intensify development of our growth
businesses, including retail energy services, international utilities,
trading and technology ventures," Baum said. "At the same time,
we'll continue to enhance the competitive position and returns from
our regulated delivery services in California and to add generation
capacity in selected markets to support our retail businesses."
Dividend Reduction
The company plans to reduce the quarterly dividend payable on
shares of its common stock to $0.25 per share ($1.00 annualized
rate) from its previous $0.39 per share ($1.56 annualized rate)
commencing with the dividend payable in the second quarter of
2000. Reducing the dividend rate improves the company's
financial flexibility, increases cash flow available for investment in
higher-growth businesses, and brings the company's dividend
payout ratio in line with industry peers. This move positions
Sempra Energy's common stock for increased growth in earnings
per share and market value.
1999 Earnings
Sempra Energy reported unaudited fourth-quarter 1999 earnings
of $105 million, or $0.44 per diluted share, up 24 percent from $85
million, or $0.36 per diluted share, for the fourth quarter of 1998
(or, excluding nonrecurring items, up 18 percent from $89 million,
or $0.38 per diluted share, in 1998).
Revenues for Sempra Energy increased 8.8 percent to $5.5 billion
in the full-year 1999, compared to $5.0 billion in 1998.
The weighted average number of common shares outstanding
(diluted) in 1999 increased to 237.6 million, versus 237.1 million in
1998.
The following results from Sempra Energy's business units are
exclusive of non-recurring costs:
Southern California Gas Company recorded net income of $201
million in 1999, up from $193 million during the previous year,
primarily due to increased sales to commercial and industrial
customers, lower operating costs and 1998 regulatory contract
settlements. Net income for San Diego Gas & Electric in 1999
was $192 million, down from $220 million in 1998, primarily due to
reductions in its authorized rate of return and generation rate base,
as well as to increased interest expense, all related to California's
electric industry restructuring.
For the full-year 1999, non-utility and new-business operations,
including Sempra Energy Solutions, Sempra Energy Trading,
Sempra Energy International, Sempra Energy Resources, Sempra
Energy Financial and the parent company, recorded net income of
$15 million, compared to a net loss of $34 million last year. The
improvement in results for this group of companies was due
primarily to a $32 million net income increase by Sempra Energy
Trading, a $14 million rise in net income by Sempra Energy
International and an additional $8 million earnings contribution
from Sempra Energy Financial. Sempra Energy Trading's profits
rose due to a 37-percent increase in physical natural gas trading
volumes and a successful entry into European markets. Sempra
Energy International's earnings growth was generated primarily by
its South American utilities, two of which - Chilquinta Energia and
Luz del Sur - were acquired in 1999.
Stock Repurchase Plan
Sempra Energy plans to repurchase up to 36 million shares of its
common stock at a single, per-share price within a price range of
$17.50 to $20.00 per share. Under the company's Dutch Auction
tender offer, shareholders will have the opportunity to tender all --
or a portion of -- their shares at a price within this specified price
range. The closing price of Sempra Energy's common stock on
Tuesday, Jan. 25, 2000, was $17.25 per share. Based on the
number of shares tendered and the prices specified by the
tendering shareholders, the company will determine the single,
per-share price within the range that will allow it to buy 36 million
shares (or the lesser number of shares that are properly tendered
at a price within the range). Shareholders whose shares are
purchased in the offer will be paid the set purchase price net in
cash, without interest, after expiration of the offer period.
Neither Sempra Energy nor its board of directors makes any
recommendation to shareholders as to whether to tender or refrain
from tendering their shares. Shareholders must decide how many
shares they will tender, if any, and the price within the stated range
at which they will offer their shares for purchase.
The tender offer will expire Feb. 25, 2000, at 5 p.m., EST, unless
the company elects to extend the offer. The offer is subject to
various conditions, including the company's obtaining financing
through the issuance of senior notes and trust preferred securities
on satisfactory terms and conditions.
Shareholders shortly will receive more detailed information about
the repurchase plan through the tender offer mailing. The dealer
manager for the offer is Goldman, Sachs & Co. The information
agent is D.F. King & Co., Inc. Copies of the Offer to Purchase and
related materials, dated Jan. 26, 2000, will be mailed to all
shareholders. The terms of the offer and procedures for tendering
are explained in detail in these materials. Shareholders are urged
to carefully read these materials prior to making any decision with
respect to the offer. Additional information or assistance may be
obtained from the information agent by calling (800) 431-9645 (toll
free) or (212) 269-5550 (call collect).
Sempra Energy, based in San Diego, is a Fortune 500 energy
services holding company with 12,000 employees and annual
revenues of $5.5 billion. Through its seven principal subsidiaries -
Southern California Gas Company, San Diego Gas & Electric,
Sempra Energy Solutions, Sempra Energy Trading, Sempra
Energy International, Sempra Energy Resources and Sempra
Energy Financial - Sempra Energy serves 9 million customers in
the United States, Europe, Canada, Mexico, and South America.
This press release contains statements that are not historical fact and
constitute "forward-looking statements" within the meaning of Section 21E
of the Securities Exchange Act of 1934,as amended (the "Exchange Act").
It has not been judicially determined that the safe harbor provided by
Section 21E of the Exchange Act applies to forward-looking statements
in a press release by an issuer regarding the issuer's business which also
contains information relating to a tender offer. Some sentences may
receive the benefit of the safe harbor, while others may not. When we use
words like "believes," "expects," "anticipates," "intends," "plans,"
"estimates," "may," "should" or similar expressions, or when we discuss
our strategy or plans, we are making forward-looking statements.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions that could cause the Company's
future results to differ materially from those expressed in these
forward-looking statements. Many of the factors that will determine these
results are beyond the Company's ability to control or predict. These
statements are necessarily based upon various assumptions involving
judgments with respect to the future. These risks and uncertainties,
include, among others: national, international, regional and local
economic, competitive
and regulatory conditions and developments; capital market conditions,
inflation rates and interest rates; energy markets, including the timing and
extent of changes in commodity prices; weather conditions; business,
regulatory and legal decisions; the pace of deregulation of retail natural
gas and electricity delivery; technological developments; the timing and
success of business development efforts; and other uncertainties, all of
which are difficult to predict and many of which are beyond the Company's
control. These risks and uncertainties are further discussed in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998.
SEMPRA ENERGY
<TABLE>
CONSOLIDATED INCOME STATEMENT (Unaudited)
<CAPTION>
Three Months Ended Twelve Months Ended
December 31 December 31
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In Millions of Dollars, Except Per Share Amounts 1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Revenues and Other Income
Utility Revenues:
Gas $ 902 $ 774 $ 2,924 $ 2,772
Electric 375 411 1,818 1,865
Other Operating Revenues 203 113 632 344
Other Income 25 10 93 44
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Total 1,505 1,308 5,467 5,025
Expenses
Cost of natural gas distributed 395 270 1,164 954
Purchased power - net 140 63 467 260
Electric fuel 5 40 69 177
Operating expenses 541 557 1,854 1,872
Depreciation and decomissioning 130 171 879 929
Franchise payments and other taxes 62 43 188 182
Preferred dividends of subsidiaries 2 3 11 12
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Total 1,275 1,147 4,632 4,386
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Income Before Interest and Income Taxes 230 161 835 639
Interest expense 62 46 247 207
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Income Before Income Taxes 168 115 588 432
Income taxes 63 30 194 138
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Net Income $ 105 $ 85 $ 394 $ 294
======== ======== ========= =========
Weighted Average Shares Outstanding (Basic)* 237,402 236,937 237,245 236,423
Weighted Average Shares Outstanding (Diluted)* 237,563 237,649 237,553 237,124
Net Income Per Share of Common Stock (Basic) $ 0.44 $ 0.36 $ 1.66 $ 1.24
======== ======== ========= =========
Net Income Per Share of Common Stock (Diluted) $ 0.44 $ 0.36 $ 1.66 $ 1.24
======== ======== ========= =========
Dividends Declared Per Common Share $ 0.39 $ 0.39 $ 1.56 $ 1.56
======== ======== ========= =========
*In thousands of shares
</TABLE>
KEY CONSOLIDATED BALANCE SHEET STATISTICS (Unaudited)
December 31
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In Millions of Dollars, Except Per Share Amounts 1999 1998
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Short-Term Debt $ 182 $ 43
Current Portion of Long-Term Debt 167 330
Long-Term Debt 2,890 2,795
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Total Debt 3,239 3,168
Preferred Stock of Subsidiaries 204 204
Common Equity 2,986 2,913
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Total Capitalization $ 6,429 $ 6,285
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Debt to Total Capitalization 50% 50%
Book Value per Share $ 12.58 $ 12.29
Cash and Cash Equivalents $ 492 $ 424
