SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report
(Date of earliest event reported): March 30, 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.)
FORM 8-K
Item 5. Other Events
At an analyst conference held today, Sempra Energy outlined a
series of strategic initiatives aimed at enhancing shareholder
value. The company said that it would focus on an integrated
business model comprising six core businesses and aimed at
competing in the growing market for retail energy services.
These initiatives, which follow the company's announcement
in January that it was reducing its quarterly common dividend to
$0.25 and repurchasing approximately 15 percent of its
outstanding common shares, were described at a meeting of
securities analysts hosted by the company in San Diego.
"We are implementing a more focused and integrated business
strategy designed to respond directly to the changing needs of
our energy services customers and to create additional,
sustainable value for our shareholders," said Richard D. Farman,
chairman and chief executive officer of Sempra Energy.
"Our goal is to become a leading integrated energy services
company and one of the best-performing companies in our
industry," said Stephen L. Baum, vice chairman, president and
chief operating officer of Sempra energy. Baum will assume the
position of chief executive officer in June 2000, and add the
title of chairman when Farman retires in September 2000. "Our
business has the potential to produce returns on equity
approaching 20 percent over the next decade and compound annual
growth in earnings per share in the range of 8 percent to 10
percent over the next four years.
"To get there, our strategy is to grow our business in
retail energy service for the commercial, industrial and
residential sectors; focus our regulated California utilities on
the delivery of energy; export our traditional utility expertise
to faster growing and more profitable international markets;
build on our emerging position as a global leader in energy
trading; develop generation capacity selectively; and capitalize
on emerging technologies."
Growth Strategy
Sempra Energy's integrated energy services strategy is
built around six core businesses. These include:
- -- Retail services - Sempra Energy Solutions will house all of
the existing commercial and industrial retail capabilities of
Sempra Energy's retail commodity, energy services and
facilities-management businesses. The company will target the
four regions of the United States with the highest concentration
of energy demand - the West, Upper Midwest, Northeast and Gulf
Coast. Sempra Energy Solutions' goal is to grow its revenues to
$2 billion by the end of 2003 from the $200 million generated in
1999. Mass-market activities initially will be conducted through
Energy America, which already has enrolled 400,000 U.S.
residential and small-commercial customers in six states.
- -- Generation - Over the next decade Sempra Energy Resources
will develop or acquire between 5,000 and 10,000 megawatts of
additional generation capacity required to enable Sempra
Energy's retail energy services business. Most commercial and
industrial customers demand access to physical generation
resources as a natural hedge against fluctuation in market
prices of energy.
- -- Energy Trading - Sempra Energy Trading will continue to build
and enhance its existing electricity, oil and natural gas
trading capabilities throughout North America and Europe, with
future expansion into Asia.
- -- International - Sempra Energy International will continue to
invest in electric and natural gas distribution systems located
principally in high-growth developing markets in Mexico, South
America and Canada.
- -- Technology Ventures - A new subsidiary - Sempra
communications - will pursue opportunities in the convergence of
the energy and telecommunications industries. Sempra Energy also
is developing other technology ventures and strategic alliances
that enable the company's retail strategy, enhance its core
business operations and generate incremental earnings.
- -- Delivery Services - The Company's regulated California
utilities, SDG&E and SoCalGas, will focus on providing world-
class energy-delivery services. The two utilities also will
actively encourage an open and competitive retail energy
services market in California.
Farman and Baum said that Sempra Energy has no plans to
pursue a large-scale transaction, such as acquiring or merging
with other U.S. energy utilities. Instead, they said the company
will focus on smaller acquisitions and alliances to accelerate
its retail strategy.
Financial Objectives
Management also broadly outlined its financial objectives
for each of its six core businesses for the period extending
through 2003:
Capital Spending (in aggregate) through 2003: Delivery
services - $2 billion; retail - $700 million; international -
$700 million; generation - $400 million, technology - $200
million; parent and other - $200 million.
Net Income in 2003: Total - $480 million to $520 million,
approximately one-third of which will come from businesses
outside of the California utilities: trading - $40 million to
$55 million; international - $40 million $60 million; generation
- - $10 million to $20 million; retail - $30 million to $70
million; technology - $15 million to $30 million; Sempra Energy
Financial - $30 million to $35 million; parent company - a loss
of $5 million; and $30 million to $40 million of interest
incurred by unregulated businesses.
Earnings Per Share in 2003: $2.38 to $2.57
Item 7. Financial Statements And Exhibits.
None.
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: March 30, 2000 By: /s/ F. H. Ault
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F. H. Ault
Vice President and Controller