Sempra Energy Announces 2016 Earnings

- 2017 Earnings-Per-Share Guidance Range Raised to $4.85 to $5.25

- Dividend Increased 9 Percent to Annualized $3.29 Per Share

- California Utilities Reach Proposed Settlement on Two-Year Extension in Cost-of-Capital Proceeding

Feb 28, 2017

SAN DIEGO, Feb. 28, 2017 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported 2016 earnings of $1.37 billion, or $5.46 per diluted share, compared with 2015 earnings of $1.35 billion, or $5.37 per diluted share.

These results reflect certain significant items, as described on an after-tax basis in the following table of GAAP earnings, reconciled to adjusted earnings, for the fourth quarter and full year of 2016 and 2015.

 

                   
     

 Three months ended 

 

 Years ended 

     

December 31,

 

December 31,

(Dollars, except EPS, and shares, in millions)

 

2016

 

2015

 

2016

 

2015

     

 (Unaudited) 

       
               

GAAP Earnings

 

$  379

 

$  369

 

$ 1,370

 

$ 1,349

                   

Gain in Connection with Gasoductos de Chihuahua Acquisition

 

-

 

-

 

(350)

 

-

                   

Gain on Sale of EnergySouth

 

-

 

-

 

(78)

 

-

                   

Permanent Releases of Pipeline Capacity

 

-

 

-

 

123

 

-

                   

Losses Related to Termoeléctrica de Mexicali Held For Sale

 

4

 

-

 

95

 

-

                   

Tax Repairs Adjustments Related to General Rate Case 

 

-

 

-

 

80

 

-

                   

Loss Related to Sale of Investment in Rockies Express Pipeline

 

-

 

-

 

27

 

-

                   

Adjustment to Loss on SONGS Plant Closure

 

-

 

(2)

 

-

 

(15)

                   

Gain on Sale of Mesquite Power Block 2

 

-

 

-

 

-

 

(36)

                   

Adjusted Earnings(1)

 

$  383

 

$  367

 

$ 1,267

 

$ 1,298

                   
                   

Diluted Weighted-Average Shares Outstanding

 

252

 

251

 

251

 

251

                   

GAAP Earnings Per Share (EPS)

 

$ 1.51

 

$ 1.47

 

$   5.46

 

$   5.37

                   

Adjusted EPS(1)

 

$ 1.52

 

$ 1.46

 

$   5.05

 

$   5.17

                   
   

(1)

Sempra Energy adjusted earnings and adjusted EPS are non-GAAP financial measures and are shown after-tax, and if applicable, after noncontrolling interests. See Table A in the appendix for information regarding non-GAAP financial measures and descriptions of adjustments above. Adjusted earnings and adjusted EPS for the three months and year ended Dec. 31, 2015, have been revised to include after-tax LNG development expenses of $3 million and $10 million, respectively, for consistency with the comparable periods in 2016. LNG development expenses are included in adjusted earnings and adjusted EPS in 2016.

Sempra Energy's fourth-quarter earnings increased to $379 million, or $1.51 per diluted share, in 2016 from $369 million, or $1.47 per diluted share, in 2015. Sempra Energy's adjusted earnings in the fourth quarter 2016 were $383 million, or $1.52 per diluted share, compared with $367 million, or $1.46 per diluted share, in the fourth quarter 2015.

Last week, Sempra Energy's board of directors approved a 9-percent increase in the company's annualized dividend to $3.29 per share from $3.02 per share.

"In 2016, we met our key financial targets and executed well on our strategic plan, positioning ourselves for strong performance in 2017 and enabling us to raise our 2017 earnings guidance," said Debra L. Reed, chairman and CEO of Sempra Energy. "In the past year, we received regulatory approval of our California utilities' General Rate Case, so they have more revenue certainty through 2018. Our utilities also received regulatory approval to proceed with several major reliability projects. Additionally, in 2016, our Mexican subsidiary, IEnova, completed a successful $1.6 billion equity offering to raise capital and we completed the divestiture of several non-strategic assets."  

Sempra Energy has reorganized its subsidiaries under two new operating groups. The Sempra Utilities group includes the company's utility operations: Southern California Gas Co. (SoCalGas), San Diego Gas & Electric (SDG&E) and Sempra South American Utilities. The Sempra Infrastructure group includes the company's energy infrastructure development activities, investments and operations: Sempra Mexico, Sempra LNG & Midstream and Sempra Renewables.

SEMPRA UTILITIES

San Diego Gas & Electric

SDG&E's fourth-quarter earnings increased to $151 million in 2016 from $144 million in 2015, due primarily to higher California Public Utilities Commission (CPUC) base margin and lower operating expenses, partially offset by lower regulatory rewards and lower earnings associated with an income-tax tracking mechanism in the utility's final General Rate Case (GRC) decision in 2016. The 2016 GRC final decision requires tracking of tax differences from rate-case-authorized levels.

SDG&E's full-year earnings were $570 million in 2016, compared with $587 million in 2015.

Southern California Gas Co.

In the fourth quarter 2016, SoCalGas' earnings rose to $151 million from $143 million in the fourth quarter 2015, due primarily to higher CPUC base margin and lower operating expenses, as well as higher earnings from the pipeline safety and advanced meter programs. These items were partially offset by lower earnings associated with an income-tax tracking mechanism in SoCalGas' final GRC decision in 2016 and lower regulatory rewards. The 2016 GRC final decision requires tracking of tax differences from rate-case-authorized levels.

SoCalGas' full-year earnings were $349 million in 2016, compared with $419 million in 2015.

Earlier this month, SoCalGas and SDG&E announced that they have entered into a Memorandum of Understanding (MOU) with other parties for a two-year extension through 2018 and 2019 for the utilities to file their next applications in the Cost-of-Capital proceeding at the CPUC. The MOU terms are materially consistent with the Cost-of-Capital assumptions provided for SDG&E and SoCalGas in the five-year financial plan at Sempra Energy's 2016 Analyst Conference. The MOU is subject to approval by the CPUC.

Sempra South American Utilities

In the fourth quarter 2016, Sempra South American Utilities earnings were $29 million, compared with $46 million in the year-ago quarter, due primarily to a $14 million increase in deferred income-tax expense related to Peruvian tax reform. 

In 2016, full-year earnings for Sempra South American Utilities were $156 million, compared with $175 million in 2015.

SEMPRA INFRASTRUCTURE

Sempra Mexico

Sempra Mexico's fourth-quarter 2016 earnings increased to $56 million from $53 million in the fourth quarter 2015.

Sempra Mexico's full-year earnings increased to $463 million in 2016 from $213 million in 2015, due primarily to the $350 million after-tax remeasurement gain in the third quarter 2016 on the Gasoductos de Chihuahua acquisition, offset by $95 million in after-tax losses related to the planned sale of the Termoeléctrica de Mexicali plant, and a lower favorable impact from foreign currency and inflation effects.

In December, Sempra Energy's Mexican operating subsidiary, IEnova, completed its acquisition of the Ventika wind complex in Mexico. The Ventika complex is Mexico's largest wind farm, with generating capacity of 252 megawatts (MW).

Sempra Renewables

Fourth-quarter earnings for Sempra Renewables were $12 million in 2016, compared with $16 million in 2015, primarily due to a $5 million gain on the sale of the Rosamond Solar project in the fourth quarter 2015. 

In 2016, full-year earnings for Sempra Renewables were $55 million, compared with $63 million in 2015.

Sempra Renewables placed three solar facilities and one wind farm into operation in December, representing 422 MW of clean energy from expansions of the company's Mesquite Solar complex in Arizona and Copper Mountain Solar complex in Nevada, as well as commissioning of the Black Oak Getty wind farm in Minnesota.

Sempra LNG & Midstream

Sempra LNG & Midstream recorded a loss of $3 million in the fourth quarter 2016, compared with earnings of $1 million in the fourth quarter 2015.

For the full year, Sempra LNG & Midstream recorded a loss of $107 million in 2016, compared with earnings of $44 million in 2015, due primarily to losses on the permanent release of pipeline capacity contracts.

2017 EARNINGS GUIDANCE

Sempra Energy today increased its 2017 earnings-per-share guidance range to $4.85 to $5.25 from the prior range of $4.80 to $5.20

NON-GAAP FINANCIAL MEASURES

Non-GAAP financial measures for Sempra Energy include fourth-quarter and full-year 2016 and 2015 adjusted earnings and adjusted earnings per share. Additional information regarding these non-GAAP financial measures is in the appendix on Table A of the fourth-quarter 2016 financial tables.

INTERNET BROADCAST

Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. EST 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 5358106.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2016 revenues of more than $10 billion.  The Sempra Energy companies' more than 16,000 employees serve approximately 32 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," "plans," "estimates,"  "projects," "forecasts," "contemplates,"  "assumes," "depends," "should," "could," "would," "will," "confident," "may," "potential," "possible,"  "proposed,"  "target," "pursue,"  "outlook," "maintain," or similar expressions or discussions of guidance, strategies, plans, goals, opportunities, projections, 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. 

Factors, among others, that could cause actual results and future actions to differ materially from those described in forward-looking statements include: actions and the timing of actions, including decisions, new regulations, and issuances of permits and other authorizations by the California Public Utilities Commission, U.S. Department of Energy, California Division of Oil, Gas, and Geothermal Resources, Federal Energy Regulatory Commission, U.S. Environmental Protection Agency, Pipeline and Hazardous Materials Safety Administration, Los Angeles County Department of Public Health, states, cities and counties, and other regulatory and governmental bodies in the United States and other countries in which we operate; the timing and success of business development efforts and construction projects, including risks in obtaining or maintaining permits and other authorizations on a timely basis, risks in completing construction projects on schedule and on budget, and risks in obtaining the consent and participation of partners; the resolution of civil and criminal litigation and regulatory investigations; deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and ratepayers; modifications of settlements; and delays in, or disallowance or denial of, regulatory agency authorizations to recover costs in rates from customers (including with respect to regulatory assets associated with the San Onofre Nuclear Generating Station facility and 2007 wildfires) or regulatory agency approval for projects required to enhance safety and reliability; the availability of electric power, natural gas and liquefied natural gas, and natural gas pipeline and storage capacity, including disruptions caused by failures in the transmission grid, moratoriums on the withdrawal or injection of natural gas from or into storage facilities, and equipment failures; changes in energy markets; volatility in commodity prices; moves to reduce or eliminate reliance on natural gas; and the impact on the value of our investment in natural gas storage and related assets from low natural gas prices, low volatility of natural gas prices and the inability to procure favorable long-term contracts for storage services; risks posed by actions of third parties who control the operations of our investments, and risks that our partners or counterparties will be unable or unwilling to fulfill their contractual commitments; weather conditions, natural disasters, accidents, equipment failures, explosions, terrorist attacks and other events that disrupt our operations, damage our facilities and systems, cause the release of greenhouse gases, radioactive materials and harmful emissions, cause wildfires and subject us to third-party liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits) or may be disputed by insurers; cybersecurity threats to the energy grid, storage and pipeline infrastructure, the information and systems used to operate our businesses and the confidentiality of our proprietary information and the personal information of our customers and employees; the ability to win competitively bid infrastructure projects against a number of strong and aggressive competitors; capital markets and economic conditions, including the availability of credit and the liquidity of our investments; fluctuations in inflation, interest and currency exchange rates and our ability to effectively hedge the risk of such fluctuations; changes in the tax code as a result of potential federal tax reform, such as the elimination of the deduction for interest and non-deductibility of all, or a portion of, the cost of imported materials, equipment and commodities; changes in foreign and domestic trade policies and laws, including border tariffs, revisions to favorable international trade agreements, and changes that make our exports less competitive or otherwise restrict our ability to  export; expropriation of assets by foreign governments and title and other property disputes; the impact on reliability of San Diego Gas & Electric Company's (SDG&E) electric transmission and distribution system due to increased amount and variability of power supply from renewable energy sources; the impact on competitive customer rates due to the growth in distributed and local power generation and the corresponding decrease in demand for power delivered through SDG&E's electric transmission and distribution system and from possible departing retail load resulting from customers transferring to Direct Access and Community Choice Aggregation; and other uncertainties, some of which may be difficult to predict and are beyond our control.

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. Investors should not rely unduly on any forward-looking statements.  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 South American Utilities, Sempra Infrastructure, Sempra LNG & Midstream, Sempra Renewables, Sempra Mexico and IEnova are not the same as the California utilities, San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and are not regulated by the California Public Utilities Commission.

 

 
                                   

SEMPRA ENERGY

Table A

                 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

             
   

Three months ended
December 31,

 

Years ended
December 31,

(Dollars in millions, except per share amounts)

 

2016

 

2015

 

2016

 

2015

   

(unaudited)

       

REVENUES

               

Utilities

 

$

2,561

   

$

2,486

   

$

9,261

   

$

9,254

 

Energy-related businesses

 

309

   

215

   

922

   

977

 

Total revenues

 

2,870

   

2,701

   

10,183

   

10,231

 
                 

EXPENSES AND OTHER INCOME

               

Utilities:

               

Cost of electric fuel and purchased power

 

(508)

   

(491)

   

(2,188)

   

(2,136)

 

Cost of natural gas

 

(365)

   

(348)

   

(1,067)

   

(1,134)

 

Energy-related businesses:

               

Cost of natural gas, electric fuel and purchased power

 

(64)

   

(73)

   

(277)

   

(335)

 

Other cost of sales

 

(29)

   

(37)

   

(322)

   

(148)

 

Operation and maintenance

 

(861)

   

(814)

   

(2,970)

   

(2,886)

 

Depreciation and amortization

 

(342)

   

(325)

   

(1,312)

   

(1,250)

 

Franchise fees and other taxes

 

(111)

   

(109)

   

(426)

   

(423)

 

Impairment losses

 

1

   

(9)

   

(153)

   

(9)

 

Plant closure adjustment

 

   

5

   

   

26

 

Gain on sale of assets

 

3

   

8

   

134

   

70

 

Equity earnings, before income tax

 

2

   

25

   

6

   

104

 

Remeasurement of equity method investment

 

   

   

617

   

 

Other income, net

 

34

   

38

   

132

   

126

 

Interest income

 

7

   

6

   

26

   

29

 

Interest expense

 

(132)

   

(145)

   

(553)

   

(561)

 

Income before income taxes and equity earnings of certain unconsolidated subsidiaries

 

505

   

432

   

1,830

   

1,704

 

Income tax expense

 

(105)

   

(65)

   

(389)

   

(341)

 

Equity earnings, net of income tax

 

9

   

21

   

78

   

85

 

Net income

 

409

   

388

   

1,519

   

1,448

 

Earnings attributable to noncontrolling interests

 

(30)

   

(19)

   

(148)

   

(98)

 

Preferred dividends of subsidiary

 

   

   

(1)

   

(1)

 

Earnings

 

$

379

   

$

369

   

$

1,370

   

$

1,349

 
                 

Basic earnings per common share

 

$

1.51

   

$

1.48

   

$

5.48

   

$

5.43

 

Weighted-average number of shares outstanding, basic (thousands)

 

250,645

   

248,722

   

250,217

   

248,249

 
                 

Diluted earnings per common share

 

$

1.51

   

$

1.47

   

$

5.46

   

$

5.37

 

Weighted-average number of shares outstanding, diluted (thousands)

 

251,611

   

251,450

   

251,155

   

250,923

 
                 

Dividends declared per share of common stock

 

$

0.75

   

$

0.70

   

$

3.02

   

$

2.80

 
                 

 

SEMPRA ENERGY

Table A (Continued)

 

RECONCILIATION OF SEMPRA ENERGY GAAP EARNINGS TO SEMPRA ENERGY ADJUSTED EARNINGS (Unaudited)

 

Sempra Energy Adjusted Earnings and Adjusted Earnings Per Share exclude items (after the effects of taxes and, if applicable, noncontrolling interests) in 2016 and 2015 as follows:

 

Three months ended December 31, 2016:

$(4) million deferred income tax expense related to our decision to hold Termoeléctrica de Mexicali (TdM) for sale

Three months ended December 31, 2015:

$2 million reduction in the plant closure loss at San Diego Gas & Electric (SDG&E) related to the San Onofre Nuclear Generating Station (SONGS) for the shareholder portion of a settlement agreement with Nuclear Electric Insurance Limited to resolve all of SONGS' insurance claims arising out of the failures of replacement steam generators

   

Year ended December 31, 2016:

$350 million noncash gain from the remeasurement of our equity method investment in GdC

$78 million gain on the sale of EnergySouth

$(123) million losses from the permanent release of pipeline capacity at Sempra LNG & Midstream

$(80) million adjustments related to tax repairs deductions reallocated to ratepayers as a result of the 2016 General Rate Case Final Decision (2016 GRC FD) at the California Utilities

$(27) million impairment charge related to Sempra LNG & Midstream's investment in Rockies Express Pipeline LLC (Rockies Express)

$(90) million impairment of TdM assets held for sale

$(5) million deferred income tax expense related to our decision to hold TdM for sale

   

Year ended December 31, 2015:

$36 million gain on the sale of the remaining block of Sempra LNG & Midstream's Mesquite Power plant

$15 million reduction in the plant closure loss related to SONGS, $13 million of which is due to California Public Utilities Commission approval of a compliance filing related to SDG&E's authorized recovery of its investment in SONGS

 

Sempra Energy Adjusted Earnings and Adjusted Earnings Per Share are non-GAAP financial measures (GAAP represents accounting principles generally accepted in the United States of America). Because of the significance and nature of these items, management believes that these non-GAAP financial measures provide a meaningful comparison of the performance of Sempra Energy's business operations from 2016 to 2015 and to future periods, and also as a base for projection of future earnings-per-share compound annual growth rate (EPS CAGR) from 2016 to 2020. 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. 

 

 

 
                                                       
   

Pretax
amount

Income tax
expense
(benefit)(1)

Non-
controlling
interests

Earnings

 

Pretax
amount

Income tax
expense(1)

Non-
controlling
interests

Earnings

 

(Dollars in millions, except per share amounts)

Three months ended December 31, 2016

 

Three months ended December 31, 2015

 

Sempra Energy GAAP Earnings

     

$

379

         

$

369

   

Exclude:

                   

   Deferred income tax expense associated with TdM

$

 

$

7

 

$

(3)

 

4

   

$

 

$

 

$

 

   

   SONGS plant closure adjustment

 

 

 

   

(5)

 

3

 

 

(2)

   

Sempra Energy Adjusted Earnings

     

$

383

         

$

367

 

(2) 

                       

Diluted earnings per common share:

                   

   Sempra Energy GAAP Earnings

     

$

1.51

         

$

1.47

   

   Sempra Energy Adjusted Earnings

     

$

1.52

         

$

1.46

 

(2) 

Weighted-average number of shares outstanding, diluted (thousands)

     

251,611

         

251,450

   
                       
   

Year ended December 31, 2016

 

Year ended December 31, 2015

 

Sempra Energy GAAP Earnings

     

$

1,370

         

$

1,349

   

Exclude:

                   

   Remeasurement gain in connection with GdC

$

(617)

 

$

185

 

$

82

 

(350)

   

$

 

$

 

$

 

   

   Gain on sale of EnergySouth

(130)

 

52

 

 

(78)

   

 

 

 

   

   Permanent release of pipeline capacity

206

 

(83)

 

 

123

   

 

 

 

   

   SDG&E tax repairs adjustments related to 2016 GRC FD

52

 

(21)

 

 

31

   

 

 

 

   

   SoCalGas tax repairs adjustments related to 2016 GRC FD

83

 

(34)

 

 

49

   

 

 

 

   

   Impairment of investment in Rockies Express

44

 

(17)

 

 

27

   

 

 

 

   

Impairment of TdM assets held for sale

131

 

(20)

 

(21)

 

90

   

 

 

 

   

   Deferred income tax expense associated with TdM

 

8

 

(3)

 

5

   

 

 

 

   

   Gain on sale of Mesquite Power block 2

 

 

 

   

(61)

 

25

 

 

(36)

   

   SONGS plant closure adjustment

 

 

 

   

(26)

 

11

 

 

(15)

   

Sempra Energy Adjusted Earnings

     

$

1,267

         

$

1,298

 

(2) 

                       

Diluted earnings per common share:

                   

   Sempra Energy GAAP Earnings

     

$

5.46

         

$

5.37

   

   Sempra Energy Adjusted Earnings

     

$

5.05

         

$

5.17

 

(2) 

Weighted-average number of shares outstanding, diluted (thousands)

     

251,155

         

250,923

   

(1)

Income taxes were calculated based on applicable statutory tax rates, except for adjustments that are solely income tax. Income taxes on the impairment of TdM were calculated based on the applicable statutory tax rate, including translation from historic to current exchange rates.

(2)

Adjusted earnings and adjusted earnings per share for the three months and year ended December 31, 2015 have been revised to include after-tax LNG development expenses of $3 million and $10 million, respectively, for consistency with the comparable periods in 2016. LNG development expenses are included in adjusted earnings and diluted earnings per common share in 2016.

 

 
                     

SEMPRA ENERGY

Table B

             

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

December 31,
2016

 

December 31,
2015

       

Assets

     

Current assets:

     

  Cash and cash equivalents

$

349

   

$

403

 

  Restricted cash

66

   

27

 

  Accounts receivable, net

1,554

   

1,473

 

  Due from unconsolidated affiliates

26

   

6

 

  Income taxes receivable

43

   

30

 

  Inventories

258

   

298

 

  Regulatory balancing accounts - undercollected

259

   

307

 

  Fixed-price contracts and other derivatives

83

   

80

 

  Assets held for sale

201

   

 

  Other

271

   

267

 

  Total current assets

3,110

   

2,891

 
       

Other assets:

     

  Restricted cash

10

   

20

 

  Due from unconsolidated affiliates

201

   

186

 

  Regulatory assets

3,414

   

3,273

 

  Nuclear decommissioning trusts

1,026

   

1,063

 

  Investments

2,097

   

2,905

 

  Goodwill

2,364

   

819

 

  Other intangible assets

548

   

404

 

  Dedicated assets in support of certain benefit plans

430

   

464

 

  Insurance receivable for Aliso Canyon costs

606

   

325

 

  Deferred income taxes

234

   

120

 

  Sundry

815

   

641

 

  Total other assets

11,745

   

10,220

 

Property, plant and equipment, net

32,931

   

28,039

 

Total assets

$

47,786

   

$

41,150

 
       

Liabilities and Equity

     

Current liabilities:

     

  Short-term debt

$

1,779

   

$

622

 

  Accounts payable

1,476

   

1,275

 

  Due to unconsolidated affiliates

11

   

14

 

  Dividends and interest payable

319

   

303

 

  Accrued compensation and benefits

409

   

423

 

  Regulatory balancing accounts - overcollected

122

   

34

 

  Current portion of long-term debt

913

   

907

 

  Fixed-price contracts and other derivatives

83

   

56

 

  Customer deposits

158

   

153

 

  Reserve for Aliso Canyon costs

53

   

274

 

  Liabilities held for sale

47

   

 

  Other

557

   

551

 

  Total current liabilities

5,927

   

4,612

 

Long-term debt

14,429

   

13,134

 
       

Deferred credits and other liabilities:

     

  Customer advances for construction

152

   

149

 

  Pension and other postretirement benefit plan obligations, net of plan assets

1,208

   

1,152

 

  Deferred income taxes

3,745

   

3,157

 

  Deferred investment tax credits

28

   

32

 

  Regulatory liabilities arising from removal obligations

2,697

   

2,793

 

  Asset retirement obligations

2,431

   

2,126

 

  Fixed-price contracts and other derivatives

405

   

240

 

  Deferred credits and other

1,523

   

1,176

 

  Total deferred credits and other liabilities

12,189

   

10,825

 

Equity:

     

  Total Sempra Energy shareholders' equity

12,951

   

11,809

 

  Preferred stock of subsidiary

20

   

20

 

  Other noncontrolling interests

2,270

   

750

 

  Total equity

15,241

   

12,579

 

Total liabilities and equity

$

47,786

   

$

41,150

 

 

 
                   

SEMPRA ENERGY

Table C

           

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

           
     

Years ended December 31,

(Dollars in millions)

 

2016

 

2015

     

Cash Flows from Operating Activities

       

Net income

 

$

1,519

   

$

1,448

 

Adjustments to reconcile net income to net cash provided by operating activities:

       

  Depreciation and amortization

 

1,312

   

1,250

 

  Deferred income taxes and investment tax credits

 

217

   

239

 

  Impairment losses

 

153

   

9

 

  Plant closure adjustment

 

   

(26)

 

  Gain on sale of assets

 

(134)

   

(70)

 

  Equity earnings

 

(84)

   

(189)

 

  Remeasurement of equity method investment

 

(617)

   

 

  Fixed-price contracts and other derivatives

 

21

   

(10)

 

  Other

 

63

   

66

 

Net change in other working capital components

 

(59)

   

699

 

Insurance receivable for Aliso Canyon costs

 

(281)

   

(325)

 

Changes in other assets

 

56

   

(162)

 

Changes in other liabilities

 

153

   

(24)

 

  Net cash provided by operating activities

 

2,319

   

2,905

 
         

Cash Flows from Investing Activities

       

Expenditures for property, plant and equipment

 

(4,214)

   

(3,156)

 

Expenditures for investments and acquisition of businesses, net of cash and cash equivalents acquired

 

(1,582)

   

(200)

 

Proceeds from sale of assets, net of cash sold

 

763

   

373

 

Distributions from investments

 

25

   

15

 

Purchases of nuclear decommissioning and other trust assets

 

(1,034)

   

(531)

 

Proceeds from sales by nuclear decommissioning and other trusts

 

1,134

   

577

 

Increases in restricted cash

 

(139)

   

(100)

 

Decreases in restricted cash

 

175

   

93

 

Advances to unconsolidated affiliates

 

(25)

   

(31)

 

Repayments of advances to unconsolidated affiliates

 

11

   

74

 

Other

 

   

1

 

  Net cash used in investing activities

 

(4,886)

   

(2,885)

 
         

Cash Flows from Financing Activities

       

Common dividends paid

 

(686)

   

(628)

 

Preferred dividends paid by subsidiary

 

(1)

   

(1)

 

Issuances of common stock

 

51

   

52

 

Repurchases of common stock

 

(56)

   

(74)

 

Issuances of debt (maturities greater than 90 days)

 

2,951

   

2,992

 

Payments on debt (maturities greater than 90 days)

 

(2,057)

   

(1,854)

 

Increase (decrease) in short-term debt, net

 

692

   

(622)

 

Proceeds from sale of noncontrolling interests, net of $40 in offering costs

 

1,692

   

 

Net distributions to noncontrolling interests

 

(63)

   

(73)

 

Tax benefit related to share-based compensation

 

   

52

 

Other

 

(10)

   

(17)

 

  Net cash provided by (used in) financing activities

 

2,513

   

(173)

 

Effect of exchange rate changes on cash and cash equivalents

 

   

(14)

 
         

Decrease in cash and cash equivalents

 

(54)

   

(167)

 

Cash and cash equivalents, January 1

 

403

   

570

 

Cash and cash equivalents, December 31

 

$

349

   

$

403

 

 

 
                                   

SEMPRA ENERGY

Table D

               

SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES, INVESTMENTS AND ACQUISITION OF BUSINESSES

               
 

Three months ended
December 31,

 

Years ended
December 31,

(Dollars in millions)

2016

 

2015

 

2016

 

2015

 

    (unaudited)

       

Earnings (Losses)

             

Sempra Utilities:

             

  San Diego Gas & Electric

$

151

   

$

144

   

$

570

   

$

587

 

  Southern California Gas

151

   

143

   

349

   

419

 

  Sempra South American Utilities

29

   

46

   

156

   

175

 

Sempra Infrastructure:

             

  Sempra Mexico

56

   

53

   

463

   

213

 

  Sempra Renewables

12

   

16

   

55

   

63

 

  Sempra LNG & Midstream

(3)

   

1

   

(107)

   

44

 

Parent and other

(17)

   

(34)

   

(116)

   

(152)

 

Earnings

$

379

   

$

369

   

$

1,370

   

$

1,349

 
               
               
 

Three months ended
December 31,

 

Years ended
December 31,

(Dollars in millions)

2016

 

2015

 

2016

 

2015

 

    (unaudited)

       

Capital Expenditures, Investments and Acquisition of Businesses

             

Sempra Utilities:

             

  San Diego Gas & Electric

$

440

   

$

298

   

$

1,399

   

$

1,133

 

  Southern California Gas

370

   

406

   

1,319

   

1,352

 

  Sempra South American Utilities

61

   

49

   

194

   

154

 

Sempra Infrastructure:

             

  Sempra Mexico

452

   

117

   

1,818

   

302

 

  Sempra Renewables

140

   

38

   

879

   

105

 

  Sempra LNG & Midstream

28

   

38

   

164

   

261

 

Parent and other

6

   

   

23

   

49

 

Consolidated Capital Expenditures, Investments and Acquisition of Businesses

$

1,497

   

$

946

   

$

5,796

   

$

3,356

 
               

 

 

SEMPRA ENERGY

Table E

 

OTHER OPERATING STATISTICS (Unaudited)

 
 

Three months ended
December 31,

 

Years ended or at
December 31,

UTILITIES

2016

 

2015

 

2016

 

2015

               

SDG&E and SoCalGas

             

Gas Sales (Bcf)(1)

92

   

102

   

334

   

329

 

Transportation (Bcf)(1)

164

   

169

   

641

   

669

 

Total Deliveries (Bcf)(1)

256

   

271

   

975

   

998

 
               

Total Gas Customers (Thousands)

       

6,808

   

6,774

 
               

Electric Sales (Millions of kWhs)(1)

3,987

   

4,314

   

15,649

   

16,264

 

Direct Access (Millions of kWhs)

942

   

969

   

3,515

   

3,652

 

Total Deliveries (Millions of kWhs)(1)

4,929

   

5,283

   

19,164

   

19,916

 
               

Total Electric Customers (Thousands)

       

1,434

   

1,426

 
               

Other Utilities

             

Natural Gas Sales (Bcf)

             

  Sempra Mexico

7

   

6

   

29

   

25

 

  Mobile Gas(2) (3)

   

12

   

33

   

47

 

  Willmut Gas(3)

   

1

   

2

   

3

 

Natural Gas Customers (Thousands)

             

  Sempra Mexico

       

119

   

113

 

  Mobile Gas(2) (3)

       

   

85

 

  Willmut Gas(3)

       

   

19

 

Electric Sales (Millions of kWhs)

             

  Peru

1,780

   

1,854

   

7,387

   

7,549

 

  Chile

739

   

715

   

2,900

   

2,887

 

Electric Customers (Thousands)

             

  Peru

       

1,078

   

1,053

 

  Chile

       

688

   

672

 
               

ENERGY-RELATED BUSINESSES

             
               

Sempra Infrastructure

             

Power Sold (Millions of kWhs)

             

  Sempra Mexico(4)

826

   

1,088

   

3,173

   

3,956

 

  Sempra Renewables(5)

815

   

740

   

2,956

   

2,851

 

  Sempra LNG & Midstream(6)

383

   

806

   

1,230

   

3,129

 
   

(1)

Includes intercompany sales.

(2)

Includes transportation.

(3)

On September 12, 2016, Sempra LNG & Midstream completed the sale of the parent company of Mobile Gas and Willmut Gas.

(4)

Includes power sold at the Termoeléctrica de Mexicali natural gas-fired power plant and the Ventika wind power generation facilities. Also includes 50 percent of total power sold at the Energía Sierra Juárez wind power generation facility, in which Sempra Energy has a 50-percent ownership interest. Energía Sierra Juárez is not consolidated within Sempra Energy, and the related investment is accounted for under the equity method.

(5)

Includes 50 percent of total power sold related to solar and wind projects in which Sempra Energy has a 50-percent ownership interest. These subsidiaries are not consolidated within Sempra Energy, and the related investments are accounted for under the equity method.

(6)

Includes power sold from marketing activities and from the remaining 625-megawatt block of the Mesquite Power natural gas-fired power plant before its sale in April 2015.

 

 

         SEMPRA ENERGY

           Table F (Unaudited)

STATEMENT OF OPERATIONS DATA BY SEGMENT

                   
                                 

Three months ended December 31, 2016

                       

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra
South
American
Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra
LNG &
Midstream

 

Consolidating
Adjustments,
Parent &
 Other

   

Total

                                   

Revenues

$

1,061

   

$

1,135

   

$

386

   

$

244

   

$

9

   

$

124

   

$

(89)

     

$

2,870

 

Cost of sales and other expenses

(632)

   

(779)

   

(318)

   

(124)

   

(16)

   

(127)

   

58

     

(1,938)

 

Depreciation and amortization

(168)

   

(121)

   

(8)

   

(30)

   

(2)

   

(10)

   

(3)

     

(342)

 

Adjustment to impairment losses

   

1

   

   

   

   

   

     

1

 

(Loss) gain on sale of assets

   

   

(1)

   

   

4

   

   

     

3

 

Equity earnings (losses), before income tax

   

   

   

   

4

   

(2)

   

     

2

 

Other income (expense), net

12

   

8

   

11

   

6

   

1

   

1

   

(5)

     

34

 

Income (loss) before interest and tax (1)

273

   

244

   

70

   

96

   

   

(14)

   

(39)

     

630

 

Net interest (expense) income (2)

(50)

   

(25)

   

(3)

   

1

   

(1)

   

9

   

(56)

     

(125)

 

Income tax (expense) benefit

(76)

   

(68)

   

(34)

   

(18)

   

9

   

3

   

79

     

(105)

 

Equity earnings, net of income tax

   

   

   

9

   

   

   

     

9

 

Losses (earnings) attributable to noncontrolling interests

4

   

   

(4)

   

(32)

   

4

   

(1)

   

(1)

     

(30)

 

Earnings (losses)

$

151

   

$

151

   

$

29

   

$

56

   

$

12

   

$

(3)

   

$

(17)

     

$

379

 
                                   

Three months ended December 31, 2015

                         

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra
South
American
Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra
LNG &
Midstream

 

Consolidating
Adjustments,
Parent &
Other

   

Total

                                   

Revenues

$

1,051

   

$

1,041

   

$

393

   

$

161

   

$

6

   

$

141

   

$

(92)

     

$

2,701

 

Cost of sales and other expenses

(649)

   

(706)

   

(309)

   

(101)

   

(15)

   

(153)

   

61

     

(1,872)

 

Depreciation and amortization

(158)

   

(119)

   

(13)

   

(18)

   

(1)

   

(13)

   

(3)

     

(325)

 

Impairment losses

   

(9)

   

   

   

   

   

     

(9)

 

Plant closure adjustment

5

   

   

   

   

   

   

     

5

 

Gain on sale of asset

   

   

   

   

8

   

   

     

8

 

Equity earnings (losses), before income tax

   

   

   

   

4

   

25

   

(4)

     

25

 

Other income, net

10

   

5

   

4

   

9

   

1

   

   

9

     

38

 

Income (loss) before interest and tax (1)

259

   

212

   

75

   

51

   

3

   

   

(29)

     

571

 

Net interest (expense) income (2)

(49)

   

(22)

   

(5)

   

(3)

   

1

   

   

(61)

     

(139)

 

Income tax (expense) benefit

(67)

   

(47)

   

(17)

   

(4)

   

12

   

1

   

57

     

(65)

 

Equity earnings, net of income tax

   

   

   

21

   

   

   

     

21

 

Losses (earnings) attributable to noncontrolling interests

1

   

   

(7)

   

(12)

   

   

   

(1)

     

(19)

 

Earnings (losses)

$

144

   

$

143

   

$

46

   

$

53

   

$

16

   

$

1

   

$

(34)

     

$

369

 
   

(1)

Management believes Income (Loss) Before Interest and 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.

   

(2)

Includes interest income, interest expense and preferred dividends of subsidiary.

 

 

         SEMPRA ENERGY

           Table F (Unaudited)

                                   

STATEMENT OF OPERATIONS DATA BY SEGMENT

                         
                                   

Year ended December 31, 2016

                           

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra
South
American
Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra
LNG &
Midstream

 

Consolidating
Adjustments,
Parent &
Other

   

Total

                                   

Revenues

$

4,253

   

$

3,471

   

$

1,556

   

$

725

   

$

34

   

$

508

   

$

(364)

     

$

10,183

 

Cost of sales and other expenses

(2,617)

   

(2,416)

   

(1,255)

   

(413)

   

(56)

   

(780)

   

287

     

(7,250)

 

Depreciation and amortization

(646)

   

(476)

   

(49)

   

(77)

   

(6)

   

(47)

   

(11)

     

(1,312)

 

Impairment losses

   

(22)

   

   

(131)

   

   

   

     

(153)

 

Gain on sale of assets

   

   

   

   

4

   

130

   

     

134

 

Equity earnings (losses), before income tax

   

   

   

   

34

   

(28)

   

     

6

 

Remeasurement of equity method investment

   

   

   

617

   

   

   

     

617

 

Other income (expense), net

50

   

32

   

21

   

(5)

   

2

   

3

   

29

     

132

 

Income (loss) before interest and tax (1)

1,040

   

589

   

273

   

716

   

12

   

(214)

   

(59)

     

2,357

 

Net interest (expense) income (2)

(195)

   

(97)

   

(17)

   

(7)

   

1

   

28

   

(241)

     

(528)

 

Income tax (expense) benefit

(280)

   

(143)

   

(80)

   

(188)

   

38

   

80

   

184

     

(389)

 

Equity earnings, net of income tax

   

   

3

   

75

   

   

   

     

78

 

Losses (earnings) attributable to noncontrolling interests

5

   

   

(23)

   

(133)

   

4

   

(1)

   

     

(148)

 

Earnings (losses)

$

570

   

$

349

   

$

156

   

$

463

   

$

55

   

$

(107)

   

$

(116)

     

$

1,370

 
                                 

Year ended December 31, 2015

                               

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra
South
American
Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra
LNG &
Midstream

 

Consolidating
Adjustments,
Parent &
Other

   

Total

                                   

Revenues

$

4,219

   

$

3,489

   

$

1,544

   

$

669

   

$

36

   

$

653

   

$

(379)

     

$

10,231

 

Cost of sales and other expenses

(2,583)

   

(2,411)

   

(1,232)

   

(415)

   

(51)

   

(681)

   

311

     

(7,062)

 

Depreciation and amortization

(604)

   

(461)

   

(50)

   

(70)

   

(6)

   

(49)

   

(10)

     

(1,250)

 

Impairment losses

   

(9)

   

   

   

   

   

     

(9)

 

Plant closure adjustment

26

   

   

   

   

   

   

     

26

 

Gain on sale of assets

   

   

1

   

   

8

   

61

   

     

70

 

Equity earnings (losses), before income tax

   

   

   

   

24

   

84

   

(4)

     

104

 

Other income, net

36

   

30

   

22

   

20

   

2

   

   

16

     

126

 

Income (loss) before interest and tax (1)

1,094

   

638

   

285

   

204

   

13

   

68

   

(66)

     

2,236

 

Net interest (expense) income (2)

(204)

   

(81)

   

(13)

   

(16)

   

1

   

3

   

(223)

     

(533)

 

Income tax (expense) benefit

(284)

   

(138)

   

(67)

   

(11)

   

49

   

(28)

   

138

     

(341)

 

Equity (losses) earnings, net of income tax

   

   

(4)

   

89

   

   

   

     

85

 

(Earnings) losses attributable to noncontrolling interests

(19)

   

   

(26)

   

(53)

   

   

1

   

(1)

     

(98)

 

Earnings (losses)

$

587

   

$

419

   

$

175

   

$

213

   

$

63

   

$

44

   

$

(152)

     

$

1,349

 
   

(1)

Management believes Income (Loss) Before Interest and 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.

   

(2)

Includes interest income, interest expense and preferred dividends of subsidiary.

 

 

[SRE-F]

 

 

SOURCE Sempra Energy

For further information: Media Contact: Doug Kline, Sempra Energy, (877) 340-8875, www.sempra.com; Financial Contact: Patrick Billings, Sempra Energy, (877) 736-7727, investor@sempra.com


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