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$SRE General Update: SRE announced that its BoD has authorized it to pursue formation and IPO of publicly traded partnership to be called Sempra Partners, LP, expected to be listed on the New York Stock Exchange under the ticker symbol "SREP."
Electricity utility company $SRE has commenced separate offerings of $2.5Bil of its common shares and $1.5Bil of its Series-A Convertible Preferred Stock. Sempra intends to use the net proceeds from the offerings and the related sale of shares to finance, in part, its proposed merger with Energy Future Holdings Corp. and related costs and expenses.
The Federal Energy Regulatory Commission has granted approval for the acquisition of Energy Future Holdings Corp., which owns majority stake in Oncor Electric Delivery Company, by $SRE. The closure of the transaction is subject to various regulatory approvals. The company did not reveal the financial terms of the deal.
$SRE lowered its 2017 EPS guidance to $4.13-4.43 from $4.95-5.25, resulting from the impairment in 3Q17 related to San Diego Gas & Electric's cost recovery for the 2007 San Diego wildfires. The company said it expects its 2017 adjusted EPS to be at the upper end of its guidance range of $5.00-5.30.
$SRE said earnings for Sempra Mexico were $66MM in 3Q17, down from $332MM last year. In last year, Sempra Mexico's results included remeasurement gain related to the GdC acquisition. In 3Q17, Sempra LNG & Midstream recorded a net loss of $4MM, compared to profit of $77MM last year, which included gain from the sale of EnergySouth.
$SRE said San Diego Gas & Electric recorded a net loss of $28MM in 3Q17, compared with earnings of $183MM in 3Q16. This is due primarily to impairment related to cost recovery for 2007 San Diego wildfires, as it has determined that its regulatory asset no longer meets the probability threshold for recovery under applicable accounting guidance.
$SRE reported a plunge in 3Q17 earnings due to impairment of wildfire regulatory asset and last year's remeasurement gain of equity method investment in IEnova Pipelines. Net income fell to $57MM or $0.22 per share from $622MM or $2.46 per share last year. Revenue grew 6% to $2.7Bil. Adjusted EPS increased 2% to $1.04.
Oncor Electric Delivery Co. and $SRE expect to jointly file a Change-in-Control application on Oct. 5, 2017 with the Public Utility Commission of Texas (PUCT). This filing represents a key step in the regulatory review process for $SRE's agreement to buy Energy Future Holdings Corp. (EFH), the indirect owner of about 80% of Oncor.
$SRE said that the US Bankruptcy Court for District of Delaware has approved the merger deal that it entered into with Energy Future Holdings Corp on Aug 21, 2017. This is an important step in Sempra Energy's proposal to acquire Energy Future's 80% ownership interest in Oncor Electric Delivery Company. $SRE will pay approx $9.45Bil for the deal.
$SRE has agreed to acquire Energy Future Holdings Corp. for approx $9.45Bil in cash. The transaction, which is anticipated to close in 1H18, is expected to add to $SRE's earnings beginning in 2018. $SRE will fund the transaction using its own debt and equity, third-party equity, and investment-grade debt at the reorganized holding company.
$SRE's subsidiary Southern California Gas Co. declared regular quarterly dividends of $0.375 per share on its preferred stock and preferred stock, Series A. The dividends are payable on October 15, 2017, to shareholders of record on September 10, 2017.
$SRE's subsidiary Southern California Gas Co. has declared regular quarterly dividends of $0.375 per share for both its Preferred Stock and Preferred Stock, Series A. The dividends are payable on July 15, 2017, to shareholders of record on June 10, 2017.
On the Cameron LNG liquefaction expansion project, $SRE said it, along with its partners and contractors, is fully committed on finishing the project and get into operations on time. The company and its partners are currently building the first three liquefaction trains in Hackberry, Louisiana.