Sempra News

Sempra News

Sempra Energy's Second-Quarter 2017 Earnings Rise

- Strong Performance Drives Increase in 2017 Earnings Guidance

- Company Affirms 2018 Earnings-Per-Share Guidance Range of $5.30 to $5.80

- Positive Regulatory Developments Include Approval of Two-Year Cost-of-Capital Extension, Resumption of Injections at Aliso Canyon Natural Gas Storage Facility

Aug 4, 2017

SAN DIEGO, Aug. 4, 2017 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported second-quarter 2017 earnings of $259 million, or $1.03 per diluted share, up from $16 million, or $0.06 per diluted share, in the second-quarter 2016. On an adjusted basis, Sempra Energy's second-quarter 2017 earnings increased to $276 million, or $1.10 per diluted share, from $200 million, or $0.79 per diluted share, in last year's second quarter.

"Increased operating earnings in our utility and infrastructure businesses through the first half of the year allow us to raise our 2017 earnings guidance," said Debra L. Reed, chairman, president and CEO of Sempra Energy. "Strong operating results were coupled with positive regulatory outcomes, including the final regulatory decision in the Cost-of-Capital proceeding, which provides greater visibility to earnings at our California utilities over the next two years. Earlier this week, Southern California Gas Co. was able to resume limited injections at the Aliso Canyon natural gas storage facility after receiving regulatory approval in mid-July. Additionally, our Mexican business continues to expand, taking an important step forward in developing infrastructure for the promising new liquids market in Mexico."

Sempra Energy's earnings for the first six months of 2017 were $700 million, or $2.77 per diluted share, compared with $369 million, or $1.47 per diluted share, in the first six months of 2016. Adjusted earnings for the first six months of 2017 were $714 million, or $2.83 per diluted share, compared with $625 million, or $2.48 per diluted share, in the first six months of 2016.

These results reflect certain significant items as described in the following table of GAAP earnings, reconciled to adjusted earnings, for the second quarter and first six months of 2017 and 2016:

                               
       

 Three months 

                 
       

 ended June 30, 

 

 Six months ended June 30, 

 
       

2017

 

2016

 

2017

 

2016

 
 

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

             

As Recast

 

Adjustment
for Share-
Based
Comp.(1)

 

As
Originally
Reported

 
                               
 

GAAP Earnings

 

$ 259

 

$    16

 

$    700

 

$       369

 

$        (34)

 

$     335

 
                               
 

Losses Related to Termoeléctrica de Mexicali (TdM) Held For Sale

 

45

 

2

 

42

 

26

 

-

 

26

 
                               
 

(Recoveries) Losses Related to Permanent Releases of Pipeline Capacity

 

(28)

 

123

 

(28)

 

123

 

-

 

123

 
                               
 

Tax Repairs Adjustments Related to General Rate Case (GRC)

 

-

 

80

 

-

 

80

 

-

 

80

 
                               
 

Retroactive Q1-16 GRC Benefit

 

-

 

(21)

 

-

 

-

 

-

 

-

 
                               
 

Loss Related to Rockies Express Pipeline

 

-

 

-

 

-

 

27

 

-

 

27

 
                               
 

Adjusted Earnings(2)

 

$ 276

 

$ 200

 

$    714

 

$       625

 

$        (34)

 

$     591

 
                               
                               
 

Diluted weighted-average shares outstanding

 

253

 

252

 

253

 

252

 

252

 

252

 
                               
 

GAAP EPS

 

$1.03

 

$0.06

 

$   2.77

 

$      1.47

 

$     (0.14)

 

$    1.33

 
                               
 

Adjusted EPS(2)

 

$1.10

 

$0.79

 

$   2.83

 

$      2.48

 

$     (0.14)

 

$    2.35

 
                               
 

(1) Reflects adoption of Accounting Standards Update 2016-09 as of Jan. 1, 2016. For more information, refer to Sempra Energy's Form 10-Q.

(2) Sempra Energy adjusted earnings and adjusted EPS are non-GAAP financial measures. See Table A in the appendix for information regarding non-GAAP financial measures and descriptions of adjustments above.

SEMPRA UTILITIES
On July 13, the California Public Utilities Commission (CPUC) issued a final ruling approving a two-year extension through 2019 for San Diego Gas & Electric (SDG&E) and Southern California Gas Co. (SoCalGas) to file their next applications in the Cost-of-Capital proceeding at the CPUC. The CPUC decision, which is consistent with the Cost-of-Capital assumptions provided for SDG&E and SoCalGas in the five-year financial plan at Sempra Energy's 2017 Analyst Conference, adopts an authorized return on equity of 10.2 percent and 10.05 percent for SDG&E and SoCalGas, respectively, through 2019.

San Diego Gas & Electric
Second-quarter 2017 earnings for SDG&E were $149 million, compared with $100 million in the second quarter 2016, due primarily to higher CPUC base margin and lower operating costs. In last year's second quarter, due to the final 2016-18 General Rate Case decision, SDG&E recorded a $31 million after-tax refund to ratepayers of benefits from tax repairs deductions, offset by a $9 million after-tax retroactive benefit for first-quarter 2016 earnings.  

For the first six months of 2017, SDG&E's earnings were $304 million, compared with $236 million in the same period last year.

Southern California Gas Co.
In the second quarter 2017, SoCalGas had earnings of $58 million, compared with a net loss of $1 million in last year's second quarter, due primarily to an after-tax impairment of $13 million in the second quarter 2016 based on the CPUC's decision related to the proposed North-South pipeline project. Additionally, in last year's second quarter, due to the final 2016-18 General Rate Case decision, SoCalGas recorded a $49 million after-tax refund to ratepayers of benefits from tax repairs deductions, offset by a $12 million after-tax retroactive benefit for first-quarter 2016 earnings.

In the first half of 2017, SoCalGas' earnings were $261 million, up from $198 million in the first half of 2016.

On July 31, SoCalGas resumed limited injections at the Aliso Canyon natural gas storage facility after receiving regulatory approval earlier in the month from the CPUC and California's Division of Oil, Gas, and Geothermal Resources (DOGGR). The regulatory agencies certified that SoCalGas had met the conditions of the state's rigorous safety review.

Sempra South American Utilities
In the second quarter 2017, Sempra South American Utilities had earnings of $45 million, compared with $43 million in the second quarter 2016.   

For the first six months of 2017, earnings for Sempra South American Utilities were $92 million, compared with $81 million in the first six months last year.

SEMPRA INFRASTRUCTURE

Sempra Mexico
Sempra Mexico recorded a net loss of $9 million in the second quarter 2017, compared with earnings of $57 million in the second quarter 2016, due primarily to a $47 million impairment the company recorded on the Termoélectrica de Mexicali power plant, which is being held for sale, as well as unfavorable foreign-currency and inflation effects. 

For the first six months of 2017, Sempra Mexico had earnings of $39 million, compared with $75 million in the same period last year.

Yesterday, Mexican subsidiary IEnova announced several U.S.-dollar-denominated, long-term capacity agreements with Valero to develop three new liquids terminals – in Mexico City, Puebla and the Port of Veracruz. These projects represent IEnova's first ventures in Mexico's emerging $10 billion liquids market.

Sempra Renewables
Second-quarter 2017 earnings for Sempra Renewables were $23 million, up from $12 million in 2016, due primarily to higher earnings for solar assets placed into service during 2016.

In the first half of 2017, earnings for Sempra Renewables were $34 million, compared with $26 million in the first half of 2016. 

Sempra LNG & Midstream
In the second quarter 2017, Sempra LNG & Midstream recorded earnings of $27 million, compared with a net loss of $149 million in the second quarter 2016. Sempra LNG & Midstream recorded a $28 million after-tax recovery in 2017 related to last year's permanent releases of pipeline capacity, compared with a related $123 million after-tax loss in 2016.

For the first six months of 2017, Sempra LNG & Midstream recorded earnings of $28 million, compared with a net loss of $181 million in the first six months of 2016.

The company announced today that, based on several factors, it believes it is reasonable to expect that the Cameron LNG liquefaction-export project's first liquefaction train could be delayed into 2019, with the other two trains following throughout 2019 and with no earnings expected in 2018. Despite the revisions in the schedule, the company does not expect any material impact on the long-term economics of the project and anticipates earnings from the project of $300 million to $350 million in 2020.

2017 EARNINGS GUIDANCE
Today, Sempra Energy raised its GAAP 2017 earnings-per-share guidance range to $4.95 to $5.25 and its adjusted 2017 earnings-per-share guidance range to $5 to $5.30, both from the previous earnings-per-share range of $4.85 to $5.25. The company also affirmed its previous 2018 earnings-per-share guidance range of $5.30 to $5.80.

INTERNET BROADCAST
Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. EDT 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 4175144.

NON-GAAP FINANCIAL MEASURES
Non-GAAP financial measures include Sempra Energy's 2017 adjusted earnings guidance, and adjusted earnings and adjusted earnings per share for both the second quarter and first six months of 2017 and 2016. Information regarding these non-GAAP financial measures is in the appendix on Table A of the second-quarter financial tables.

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," "can," "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; 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 or limitations 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; 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, computer system outages, 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; 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; the ability to win competitively bid infrastructure projects against a number of strong and aggressive competitors; 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 or other forms of distributed and local power generation, and the potential risk of nonrecovery for stranded assets and contractual obligations; 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 Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) are not the same as the California Utilities, San Diego Gas & Electric Company (SDG&E) or Southern California Gas Company (SoCalGas), and are not regulated by the California Public Utilities Commission.

[SRE-F]

SEMPRA ENERGY

Table A

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
 

Three months ended
June 30,

 

Six months ended
June 30,

(Dollars in millions, except per share amounts)

2017

 

2016(1)

 

2017

 

2016(1)

 

(unaudited)

REVENUES

             

Utilities

$

2,197

   

$

1,994

   

$

4,895

   

$

4,436

 

Energy-related businesses

336

   

162

   

669

   

342

 

Total revenues

2,533

   

2,156

   

5,564

   

4,778

 
               

EXPENSES AND OTHER INCOME

             

Utilities:

             

Cost of electric fuel and purchased power

(553)

   

(561)

   

(1,080)

   

(1,076)

 

Cost of natural gas

(228)

   

(183)

   

(713)

   

(494)

 

Energy-related businesses:

             

Cost of natural gas, electric fuel and purchased power

(62)

   

(62)

   

(129)

   

(118)

 

Other cost of sales

38

   

(226)

   

16

   

(261)

 

Operation and maintenance

(731)

   

(706)

   

(1,445)

   

(1,406)

 

Depreciation and amortization

(368)

   

(314)

   

(728)

   

(642)

 

Franchise fees and other taxes

(101)

   

(96)

   

(211)

   

(207)

 

Impairment losses

(71)

   

(21)

   

(71)

   

(22)

 

Equity earnings (losses), before income tax

18

   

14

   

21

   

(8)

 

Other income, net

91

   

23

   

260

   

72

 

Interest income

8

   

6

   

14

   

12

 

Interest expense

(159)

   

(142)

   

(328)

   

(285)

 

Income (loss) before income taxes and equity earnings (losses) of certain unconsolidated subsidiaries

415

   

(112)

   

1,170

   

343

 

Income tax (expense) benefit

(167)

   

106

   

(462)

   

(2)

 

Equity earnings (losses), net of income tax

   

33

   

(8)

   

50

 

Net income

248

   

27

   

700

   

391

 

Losses (earnings) attributable to noncontrolling interests

12

   

(10)

   

1

   

(21)

 

Preferred dividends of subsidiary

(1)

   

(1)

   

(1)

   

(1)

 

Earnings

$

259

   

$

16

   

$

700

   

$

369

 
               

Basic earnings per common share

$

1.03

   

$

0.06

   

$

2.79

   

$

1.48

 

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

251,447

   

250,096

   

251,290

   

249,915

 
               

Diluted earnings per common share

$

1.03

   

$

0.06

   

$

2.77

   

$

1.47

 

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

252,822

   

252,036

   

252,609

   

251,775

 
               

Dividends declared per share of common stock

$

0.83

   

$

0.75

   

$

1.65

   

$

1.51

 
   

(1)

As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.

 

SEMPRA ENERGY

Table A (Continued)

 

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

 

Sempra Energy Adjusted Earnings and Adjusted Earnings Per Share exclude items (after the effects of taxes and, if applicable, noncontrolling interests) in 2017 and 2016 as follows:

 

Three months ended June 30, 2017:

$(47) million impairment of Sempra Mexico's Termoeléctrica de Mexicali (TdM) assets held for sale

$2 million deferred income tax benefit on the TdM assets held for sale

$28 million of recoveries related to 2016 permanent release of pipeline capacity

 

Three months ended June 30, 2016:

$(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

$21 million incremental revenue increases for the first quarter of 2016 from the retroactive application of the 2016 GRC FD at the California Utilities

$(2) million deferred income tax expense on the TdM assets held for sale

 

Six months ended June 30, 2017:

$(47) million impairment of TdM assets held for sale

$5 million deferred income tax benefit on the TdM assets held for sale

$28 million of recoveries related to 2016 permanent release of pipeline capacity

 

Six months ended June 30, 2016:

$(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 GRC FD at the California Utilities

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

$(26) million deferred income tax expense on the TdM assets held for sale

 

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/or nature of the excluded items, management believes that these non-GAAP financial measures provide a meaningful comparison of the performance of Sempra Energy's business operations from 2017 to 2016 and to future periods. 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
(benefit)
expense(1)

Non-
controlling
interests

Earnings

 

Pretax
amount

Income tax
expense
(benefit)(1)

Non-
controlling
interests

Earnings

 

(Dollars in millions, except per share amounts)

Three months ended June 30, 2017

 

Three months ended June 30, 2016(2)

 

Sempra Energy GAAP Earnings

     

$

259

         

$

16

   

Excluded items:

                   

Impairment of TdM assets held for sale

$

71

 

$

 

$

(24)

 

47

   

$

 

$

 

$

 

   

Deferred income tax (benefit) expense associated with TdM

 

(3)

 

1

 

(2)

   

 

3

 

(1)

 

2

   

Recoveries related to 2016 permanent release of pipeline capacity

(47)

 

19

 

 

(28)

   

 

 

 

   

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

   

SDG&E retroactive impact of 2016 GRC FD for Q1 2016

 

 

 

   

(15)

 

6

 

 

(9)

   

SoCalGas retroactive impact of 2016 GRC FD for Q1 2016

 

 

 

   

(20)

 

8

 

 

(12)

   

Sempra Energy Adjusted Earnings

       

$

276

         

$

200

   
                       

Diluted earnings per common share:

                   

Sempra Energy GAAP Earnings

     

$

1.03

         

$

0.06

   

Sempra Energy Adjusted Earnings

     

$

1.10

         

$

0.79

   

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

     

252,822

         

252,036

   
                         
   

Six months ended June 30, 2017

 

Six months ended June 30, 2016(2)

 

Sempra Energy GAAP Earnings

     

$

700

         

$

369

   

Excluded items:

                   

Impairment of TdM assets held for sale

$

71

 

$

 

$

(24)

 

47

   

$

 

$

 

$

 

   

Deferred income tax (benefit) expense associated with TdM

 

(8)

 

3

 

(5)

   

 

32

 

(6)

 

26

   

Recoveries related to 2016 permanent release of pipeline capacity

(47)

 

19

 

 

(28)

   

 

 

 

   

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

   

Sempra Energy Adjusted Earnings

     

$

714

         

$

625

   
                       

Diluted earnings per common share:

                   

   Sempra Energy GAAP Earnings

     

$

2.77

         

$

1.47

   

   Sempra Energy Adjusted Earnings

     

$

2.83

         

$

2.48

   

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

     

252,609

         

251,775

   

(1)

Income taxes were calculated based on applicable statutory tax rates, except for adjustments that are solely income tax. Income taxes associated with TdM were calculated based on the applicable statutory tax rate, including translation from historic to current exchange rates. An income tax benefit of $12 million associated with the 2017 TdM impairment has been fully reserved.

(2)

Reflects the adoption of ASU 2016-09 as of January 1, 2016.

 

SEMPRA ENERGY

Table A (Continued)

 

RECONCILIATION OF SEMPRA ENERGY 2017 ADJUSTED EARNINGS-PER-SHARE GUIDANCE RANGE TO SEMPRA ENERGY 2017 GAAP EARNINGS-PER-SHARE GUIDANCE RANGE (Unaudited)

 

Sempra Energy 2017 Adjusted Earnings-Per-Share Guidance Range of $5.00 to $5.30 excludes items (after the effects of taxes and, if applicable, noncontrolling interests) as follows:

$(47) million impairment of Sempra Mexico's TdM assets held for sale

$5 million deferred income tax benefit on the TdM assets held for sale

$28 million of recoveries related to 2016 permanent release of pipeline capacity

 

Sempra Energy 2017 Adjusted Earnings-Per-Share Guidance is a non-GAAP financial measure. Because of the significance and/or nature of the excluded items, management believes this non-GAAP financial measure provides additional clarity into the ongoing results of the business and the comparability of such results to prior and future periods and also as a base for projected earnings-per-share compound annual growth rate. Sempra Energy 2017 Adjusted Earnings-Per-Share Guidance should not be considered an alternative to Earnings-Per-Share Guidance determined in accordance with GAAP. The table below reconciles Sempra Energy 2017 Adjusted Earnings-Per-Share Guidance Range to Sempra Energy 2017 GAAP Earnings-Per-Share Guidance Range, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP.

 

 

Full-Year 2017

Sempra Energy GAAP Earnings-Per-Share Guidance Range

$

4.95

 

to

$

5.25

Excluded items(1):

     
 

Impairment of TdM assets held for sale

0.18

   

0.18

 

Deferred income tax benefit associated with TdM

(0.02)

   

(0.02)

 

Recoveries related to 2016 permanent release of pipeline capacity

(0.11)

   

(0.11)

Sempra Energy Adjusted Earnings-Per-Share Guidance Range

$

5.00

 

to

$

5.30

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

   

254,000

(1)

The effects of taxes and noncontrolling interests for excluded items are provided above in the reconciliation of Sempra Energy GAAP Earnings to Sempra Energy Adjusted Earnings.

 

SEMPRA ENERGY

Table B

             

CONDENSED CONSOLIDATED BALANCE SHEETS

       

(Dollars in millions)

June 30,
2017

 

December 31,
2016(1)

 

(unaudited)

   

Assets

     

Current assets:

     

  Cash and cash equivalents

$

223

   

$

349

 

  Restricted cash

70

   

66

 

  Accounts receivable, net

1,304

   

1,554

 

  Due from unconsolidated affiliates

26

   

26

 

  Income taxes receivable

110

   

43

 

  Inventories

239

   

258

 

  Regulatory balancing accounts – undercollected

261

   

259

 

  Fixed-price contracts and other derivatives

186

   

83

 

  Assets held for sale

109

   

201

 

Other

239

   

271

 

Total current assets

2,767

   

3,110

 
       

Other assets:

     

  Restricted cash

17

   

10

 

  Due from unconsolidated affiliates

373

   

201

 

  Regulatory assets

3,569

   

3,414

 

  Nuclear decommissioning trusts

1,029

   

1,026

 

  Investments

2,134

   

2,097

 

  Goodwill

2,379

   

2,364

 

  Other intangible assets

541

   

548

 

  Dedicated assets in support of certain benefit plans

427

   

430

 

  Insurance receivable for Aliso Canyon costs

554

   

606

 

  Deferred income taxes

166

   

234

 

  Sundry

859

   

815

 

Total other assets

12,048

   

11,745

 

Property, plant and equipment, net

34,561

   

32,931

 

Total assets

$

49,376

   

$

47,786

 
       

Liabilities and Equity

     

Current liabilities:

     

  Short-term debt

$

1,826

   

$

1,779

 

  Accounts payable

1,167

   

1,476

 

  Due to unconsolidated affiliates

11

   

11

 

  Dividends and interest payable

339

   

319

 

  Accrued compensation and benefits

314

   

409

 

  Regulatory balancing accounts – overcollected

204

   

122

 

  Current portion of long-term debt

1,287

   

913

 

  Fixed-price contracts and other derivatives

109

   

83

 

  Customer deposits

158

   

158

 

  Reserve for Aliso Canyon costs

63

   

53

 

  Liabilities held for sale

47

   

47

 

  Other

538

   

557

 

  Total current liabilities

6,063

   

5,927

 

Long-term debt

15,000

   

14,429

 
       

Deferred credits and other liabilities:

     

  Customer advances for construction

146

   

152

 

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

1,240

   

1,208

 

  Deferred income taxes

4,191

   

3,745

 

  Deferred investment tax credits

27

   

28

 

  Regulatory liabilities arising from removal obligations

2,746

   

2,697

 

  Asset retirement obligations

2,469

   

2,431

 

  Fixed-price contracts and other derivatives

330

   

405

 

  Deferred credits and other

1,559

   

1,523

 

 Total deferred credits and other liabilities

12,708

   

12,189

 

Equity:

     

  Total Sempra Energy shareholders' equity

13,332

   

12,951

 

  Preferred stock of subsidiary

20

   

20

 

  Other noncontrolling interests

2,253

   

2,270

 

 Total equity

15,605

   

15,241

 

Total liabilities and equity

$

49,376

   

$

47,786

 
 

(1)

Derived from audited financial statements.

 

SEMPRA ENERGY

Table C

             

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

             
       

Six months ended June 30,

(Dollars in millions)

 

2017

 

2016(1)

   

(unaudited)

Cash Flows from Operating Activities

       

Net income

 

$

700

   

$

391

 

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

       

  Depreciation and amortization

 

728

   

642

 

  Deferred income taxes and investment tax credits

 

411

   

(76)

 

  Impairment losses

 

71

   

22

 

  Equity earnings, net

 

(13)

   

(42)

 

  Fixed-price contracts and other derivatives

 

(142)

   

41

 

  Other

 

(19)

   

45

 

Net change in other working capital components

 

138

   

167

 

Insurance receivable for Aliso Canyon costs

 

52

   

(354)

 

Changes in other assets

 

(88)

   

(67)

 

Changes in other liabilities

 

51

   

147

 

  Net cash provided by operating activities

 

1,889

   

916

 
         

Cash Flows from Investing Activities

       

Expenditures for property, plant and equipment

 

(1,802)

   

(2,006)

 

Expenditures for investments

 

(97)

   

(46)

 

Proceeds from sale of assets

 

4

   

443

 

Distributions from investments

 

18

   

12

 

Purchases of nuclear decommissioning and other trust assets

 

(823)

   

(206)

 

Proceeds from sales by nuclear decommissioning and other trusts

 

823

   

204

 

Increases in restricted cash

 

(194)

   

(32)

 

Decreases in restricted cash

 

185

   

44

 

Advances to unconsolidated affiliates

 

(183)

   

(9)

 

Repayments of advances to unconsolidated affiliates

 

2

   

9

 

Other

 

   

(6)

 

Net cash used in investing activities

 

(2,067)

   

(1,593)

 
         

Cash Flows from Financing Activities

       

Common dividends paid

 

(368)

   

(335)

 

Preferred dividends paid by subsidiary

 

(1)

   

(1)

 

Issuances of common stock

 

28

   

29

 

Repurchases of common stock

 

(14)

   

(54)

 

Issuances of debt (maturities greater than 90 days)

 

1,932

   

1,384

 

Payments on debt (maturities greater than 90 days)

 

(1,006)

   

(986)

 

(Decrease) increase in short-term debt, net

 

(493)

   

865

 

Net distributions to noncontrolling interests

 

(25)

   

(10)

 

Other

 

(9)

   

(10)

 

  Net cash provided by financing activities

 

44

   

882

 
         

Effect of exchange rate changes on cash and cash equivalents

 

8

   

8

 
         

(Decrease) increase in cash and cash equivalents

 

(126)

   

213

 

Cash and cash equivalents, January 1

 

349

   

403

 

Cash and cash equivalents, June 30

 

$

223

   

$

616

 
 

(1)

As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.

 

SEMPRA ENERGY

Table D

               

SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES AND INVESTMENTS

               
 

Three months ended
June 30,

 

Six months ended
June 30,

(Dollars in millions)

2017

 

2016

 

2017

 

2016(1)

 

(unaudited)

Earnings (Losses)

             

Sempra Utilities:

             

  San Diego Gas & Electric

$

149

   

$

100

   

$

304

   

$

236

 

  Southern California Gas

58

   

(1)

   

261

   

198

 

  Sempra South American Utilities

45

   

43

   

92

   

81

 

Sempra Infrastructure:

             

  Sempra Mexico

(9)

   

57

   

39

   

75

 

  Sempra Renewables

23

   

12

   

34

   

26

 

  Sempra LNG & Midstream

27

   

(149)

   

28

   

(181)

 

Parent and other

(34)

   

(46)

   

(58)

   

(66)

 

Earnings

$

259

   

$

16

   

$

700

   

$

369

 
               
               
 

Three months ended
June 30,

 

Six months ended
June 30,

(Dollars in millions)

2017

 

2016

 

2017

 

2016

 

(unaudited)

Capital Expenditures and Investments

             

Sempra Utilities:

             

  San Diego Gas & Electric

$

345

   

$

273

   

$

763

   

$

602

 

  Southern California Gas

325

   

310

   

682

   

650

 

  Sempra South American Utilities

34

   

39

   

77

   

82

 

Sempra Infrastructure:

             

  Sempra Mexico

87

   

100

   

227

   

140

 

  Sempra Renewables

31

   

279

   

100

   

478

 

  Sempra LNG & Midstream

22

   

45

   

37

   

92

 

Parent and other

4

   

5

   

13

   

8

 

Consolidated Capital Expenditures and Investments

$

848

   

$

1,051

   

$

1,899

   

$

2,052

 
 

(1)

As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.

 

SEMPRA ENERGY

Table E

 

OTHER OPERATING STATISTICS (Unaudited)

 
 

Three months ended
June 30,

 

Six months ended
June 30,

UTILITIES

2017

 

2016

 

2017

 

2016

               

SDG&E and SoCalGas

             

Gas Sales (Bcf)(1)

71

   

73

   

197

   

186

 

Transportation (Bcf)(1)

148

   

144

   

304

   

292

 

Total Deliveries (Bcf)(1)

219

   

217

   

501

   

478

 
               

Total Gas Customers (Thousands)

       

6,825

   

6,789

 
               

Electric Sales (Millions of kWhs)(1)

3,565

   

3,512

   

7,329

   

7,285

 

Direct Access (Millions of kWhs)

786

   

772

   

1,573

   

1,606

 

Total Deliveries (Millions of kWhs)(1)

4,351

   

4,284

   

8,902

   

8,891

 
               

Total Electric Customers (Thousands)

       

1,438

   

1,429

 
               

Other Utilities

             

Natural Gas Sales (Bcf)

             

Sempra Mexico

7

   

7

   

15

   

15

 

Mobile Gas(2) (3)

   

11

   

   

24

 

Willmut Gas(3)

   

1

   

   

2

 

Natural Gas Customers (Thousands)

             

Sempra Mexico

       

120

   

116

 

Mobile Gas(2) (3)

       

   

85

 

Willmut Gas(3)

       

   

19

 

Electric Sales (Millions of kWhs)

             

Peru

1,780

   

1,887

   

3,674

   

3,836

 

Chile

691

   

682

   

1,502

   

1,481

 

Electric Customers (Thousands)

             

Peru

       

1,086

   

1,065

 

Chile

       

696

   

679

 
               

ENERGY-RELATED BUSINESSES

             
               

Sempra Infrastructure

             

Power Sold (Millions of kWhs)

             

Sempra Mexico(4)

650

   

665

   

1,705

   

1,245

 

Sempra Renewables(5)

1,192

   

725

   

2,206

   

1,492

 

Sempra LNG & Midstream

229

   

243

   

494

   

464

 
   

(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 in 2017, at the Ventika wind power generation facilities acquired in December 2016. 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. These subsidiaries are not consolidated within Sempra Energy, and the related investments are accounted for under the equity method.

 

SEMPRA ENERGY

 Table F (Unaudited)

STATEMENTS OF OPERATIONS DATA BY SEGMENT

         
                                 

Three months ended June 30, 2017

         

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra
South
American
Utilities

 

Sempra
Mexico

 

Sempra
Renewables

 

Sempra
LNG &
Midstream

 

Consolidating
Adjustments,
Parent &
Other

   

Total

                                   

Revenues

$

1,058

   

$

770

   

$

381

   

$

273

   

$

26

   

$

122

   

$

(97)

     

$

2,533

 

Cost of sales and other expenses

(651)

   

(549)

   

(294)

   

(130)

   

(20)

   

(71)

   

78

     

(1,637)

 

Depreciation and amortization

(166)

   

(126)

   

(13)

   

(37)

   

(10)

   

(11)

   

(5)

     

(368)

 

Impairment loss

   

   

   

(71)

   

   

   

     

(71)

 

Equity earnings, before income tax

   

   

   

   

16

   

2

   

     

18

 

Other income, net

15

   

9

   

2

   

60

   

1

   

   

4

     

91

 

Income (loss) before interest and tax (1)

256

   

104

   

76

   

95

   

13

   

42

   

(20)

     

566

 

Net interest (expense) income (2)

(49)

   

(27)

   

(5)

   

(17)

   

(2)

   

3

   

(55)

     

(152)

 

Income tax (expense) benefit

(54)

   

(19)

   

(20)

   

(102)

   

5

   

(18)

   

41

     

(167)

 

(Earnings) losses attributable to noncontrolling interests

(4)

   

   

(6)

   

15

   

7

   

   

     

12

 

Earnings (losses)

$

149

   

$

58

   

$

45

   

$

(9)

   

$

23

   

$

27

   

$

(34)

     

$

259

 
                                   

Three months ended June 30, 2016

                   

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra
South
American
Utilities

 

Sempra
Mexico

 

Sempra
Renewables

 

Sempra
LNG &
Midstream

 

Consolidating
Adjustments,
Parent &
Other

   

Total

                                   

Revenues

$

992

   

$

617

   

$

385

   

$

147

   

$

6

   

$

90

   

$

(81)

     

$

2,156

 

Cost of sales and other expenses

(664)

   

(495)

   

(306)

   

(86)

   

(13)

   

(336)

   

66

     

(1,834)

 

Depreciation and amortization

(158)

   

(112)

   

(14)

   

(15)

   

(2)

   

(12)

   

(1)

     

(314)

 

Impairment loss

   

(21)

   

   

   

   

   

     

(21)

 

Equity earnings, before income tax

   

   

   

   

11

   

3

   

     

14

 

Other income (expense), net

13

   

6

   

5

   

(15)

   

1

   

1

   

12

     

23

 

Income (loss) before interest and tax (1)

183

   

(5)

   

70

   

31

   

3

   

(254)

   

(4)

     

24

 

Net interest (expense) income (2)

(48)

   

(25)

   

(6)

   

(3)

   

   

7

   

(62)

     

(137)

 

Income tax (expense) benefit

(48)

   

29

   

(15)

   

12

   

9

   

99

   

20

     

106

 

Equity earnings, net of income tax

   

   

   

33

   

   

   

     

33

 

Losses (earnings) attributable to noncontrolling interests

13

   

   

(6)

   

(16)

   

   

(1)

   

     

(10)

 

Earnings (losses)

$

100

   

$

(1)

   

$

43

   

$

57

   

$

12

   

$

(149)

   

$

(46)

     

$

16

 
   

(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)

                                   

STATEMENTS OF OPERATIONS DATA BY SEGMENT

             
                                   

Six months ended June 30, 2017

               

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra
South
American
Utilities

 

Sempra
Mexico

 

Sempra
Renewables

 

Sempra
LNG &
Midstream

 

Consolidating
Adjustments,
Parent &
Other

   

Total

                                   

Revenues

$

2,115

   

$

2,011

   

$

793

   

$

537

   

$

48

   

$

254

   

$

(194)

     

$

5,564

 

Cost of sales and other expenses

(1,267)

   

(1,349)

   

(620)

   

(251)

   

(35)

   

(199)

   

159

     

(3,562)

 

Depreciation and amortization

(329)

   

(252)

   

(26)

   

(73)

   

(19)

   

(21)

   

(8)

     

(728)

 

Impairment loss

   

   

   

(71)

   

   

   

     

(71)

 

Equity earnings, before income tax

   

   

   

   

18

   

3

   

     

21

 

Other income, net

33

   

20

   

5

   

187

   

1

   

1

   

13

     

260

 

Income (loss) before interest and tax (1)

552

   

430

   

152

   

329

   

13

   

38

   

(30)

     

1,484

 

Net interest (expense) income (2)

(98)

   

(52)

   

(9)

   

(47)

   

(5)

   

9

   

(113)

     

(315)

 

Income tax (expense) benefit

(144)

   

(117)

   

(39)

   

(244)

   

16

   

(19)

   

85

     

(462)

 

Equity earnings (losses), net of income tax

   

   

1

   

(9)

   

   

   

     

(8)

 

(Earnings) losses attributable to noncontrolling interests

(6)

   

   

(13)

   

10

   

10

   

   

     

1

 

Earnings (losses)

$

304

   

$

261

   

$

92

   

$

39

   

$

34

   

$

28

   

$

(58)

     

$

700

 
                                   

Six months ended June 30, 2016

             

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra
South
American
Utilities

 

Sempra
Mexico

 

Sempra
Renewables

 

Sempra
LNG &
Midstream

 

Consolidating
Adjustments,
Parent &
Other

   

Total

                                   

Revenues

$

1,983

   

$

1,650

   

$

785

   

$

285

   

$

13

   

$

220

   

$

(158)

     

$

4,778

 

Cost of sales and other expenses

(1,260)

   

(1,111)

   

(635)

   

(168)

   

(26)

   

(490)

   

128

     

(3,562)

 

Depreciation and amortization

(317)

   

(234)

   

(27)

   

(32)

   

(3)

   

(25)

   

(4)

     

(642)

 

Impairment losses

   

(22)

   

   

   

   

   

     

(22)

 

Equity earnings (losses), before income tax

   

   

   

   

18

   

(26)

   

     

(8)

 

Other income (expense), net

27

   

16

   

7

   

(4)

   

1

   

1

   

24

     

72

 

Income (loss) before interest and tax (1)

433

   

299

   

130

   

81

   

3

   

(320)

   

(10)

     

616

 

Net interest (expense) income (2)

(96)

   

(47)

   

(10)

   

(5)

   

1

   

11

   

(128)

     

(274)

 

Income tax (expense) benefit (3)

(113)

   

(54)

   

(29)

   

(28)

   

22

   

128

   

72

     

(2)

 

Equity earnings, net of income tax

   

   

2

   

48

   

   

   

     

50

 

Losses (earnings) attributable to noncontrolling interests

12

   

   

(12)

   

(21)

   

   

   

     

(21)

 

Earnings (losses) (3)

$

236

   

$

198

   

$

81

   

$

75

   

$

26

   

$

(181)

   

$

(66)

     

$

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.

(3)

As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.

 

Sempra Energy Logo. (PRNewsFoto/Sempra Energy)

 

 

SOURCE Sempra Energy

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


https://sempra.mediaroom.com/index.php?s=19080&item=137328

https://sempra.mediaroom.com/index.php?s=19080&item=137328