Sempra Energy Reports Second-Quarter 2019 Earnings

- Sempra Energy Grows Transmission and Distribution Footprint in Texas

- Recent California Legislation Reduces SDG&E Wildfire Risk

- Four Commissioning Cargoes Sent from Cameron LNG to Global Markets to Date

Aug 2, 2019

SAN DIEGO, Aug. 2, 2019 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported second-quarter 2019 earnings of $354 million, or $1.26 per diluted share, compared to second-quarter 2018 losses of $561 million, or $2.11 per diluted share. On an adjusted basis, the company's second-quarter 2019 earnings were $309 million, or $1.10 per diluted share, compared to $361 million, or $1.35 per diluted share, in the second quarter 2018.

"We're pleased with the financial and operational progress we've made so far this year," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "We've set a clear mission to be North America's premier energy infrastructure company and I am proud of the steps we've taken to capitalize on the once-in-a-generation opportunity created by the need to develop energy infrastructure that supports the trend toward cleaner energy and greater exports of North America's energy."

Sempra Energy's earnings for the first six months of 2019 were $795 million, or $2.85 per diluted share, compared with losses of $214 million, or $0.82 per diluted share, in the first six months of 2018. Adjusted earnings for the first six months of 2019 were $843 million, or $3.03 per diluted share, compared with $733 million, or $2.78 per diluted share, in the first six months of 2018.

These financial 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 second quarter and first six months of 2019 and 2018.















 Three months ended 


 Six months ended 





 June 30 


 June 30 



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


2019


2018


2019


2018












GAAP Earnings (Losses)


$  354


$              (561)


$  795


$              (214)














Gain on Sale of U.S. Wind Assets

(45)


-


(45)


-














Tax Impacts from Expected Sale of South American Businesses(1)

-


-


93


-














Impairment of Non-utility U.S. Natural Gas Storage Assets


-


755


-


755














Impairment of U.S. Wind Equity Method Investments


-


145


-


145














Impacts Associated with Aliso Canyon Litigation


-


22


-


22














Impact from the Tax Cuts and Jobs Act of 2017

-


-


-


25














Adjusted Earnings(2)


$  309


$                361


$  843


$                733

























Diluted Weighted-Average Common Shares Outstanding


280


268


278


264














GAAP Earnings (Losses) Per Diluted Common Share


$ 1.26


 $         (2.11)(3)


$ 2.85


 $         (0.82)(3)














Adjusted Earnings Per Diluted Common Share(2)


$ 1.10


$              1.35


$ 3.03


$              2.78















1)

$103 million increase to adjusted earnings due to change in indefinite reinvestment assertion of basis differences in discontinued operations, partially offset by $10 million reduction in tax valuation allowance against certain net operating loss carryforwards at Parent & Other.

2)

Sempra Energy Adjusted Earnings and Adjusted Earnings per Common Share (Adjusted EPS) are non-GAAP financial measures. See Table A for information regarding non-GAAP financial measures and descriptions of the adjustments above.

3)

Weighted-average common shares outstanding for the three months and six months ended June 30, 2018 used to calculate EPS exclude common stock equivalents as they are antidilutive given the net loss in these periods.

OPERATING HIGHLIGHTS

San Diego Gas & Electric (SDG&E) recently elected to contribute approximately $452 million to a wildfire recovery fund that was created as a result of the efforts of Gov. Gavin Newsom and the California Legislature. The legislation helps to reduce SDG&E's exposure to wildfire risk by addressing issues related to catastrophic wildfires in the state of California, including greater clarity of cost recovery standards and requirements, additional wildfire mitigation, establishment of a wildfire recovery fund, a cap on liability, and the formation of the California Wildfire Safety Advisory Board.

SDG&E and Southern California Gas Co. expect a proposed decision in the coming weeks for their 2019 General Rate Case from the California Public Utilities Commission. A final decision is expected by year end.

Sempra Energy expects substantial completion of the first liquefaction train of the Cameron LNG export project in Hackberry, La., in the coming days, with commercial operations to begin in mid-August. This follows the first commissioning cargo of liquefied natural gas (LNG) from Train 1, which was announced in May.

Sempra Energy's LNG development projects are continuing to advance, including a heads of agreement (HOA) signed between Sempra LNG and Aramco Services Company in May. The HOA anticipates the negotiation and finalization of a definitive 20-year LNG sale-and-purchase agreement for 5 million tonnes per annum of LNG offtake from the Port Arthur LNG export project under development.

Sempra Energy continued to grow its transmission and distribution footprint in Texas through Oncor Electric Delivery Company LLC's acquisition of InfraREIT, Inc., and Sempra Energy's acquisition of an indirect 50% limited-partnership interest in Sharyland Utilities, L.L.C. These acquisitions were completed in May and funded with a portion of the proceeds from Sempra Energy's completed sales of its U.S. solar, wind and certain non-utility natural gas storage assets.

The sales process of Sempra Energy's equity interests in its South American businesses, including its 83.6% stake in Luz del Sur S.A.A. in Peru and 100% stake in Chilquinta Energía S.A. in Chile, continues to make good progress.

2019 EARNINGS GUIDANCE

Sempra Energy today affirmed its 2019 adjusted earnings-per-share guidance range of $5.70 to $6.30.

NON-GAAP FINANCIAL MEASURES

Non-GAAP financial measures include Sempra Energy's adjusted earnings and adjusted earnings per common share for both the second quarter and first six months of 2019 and 2018, and 2019 adjusted earnings-per-share guidance. See Table A for additional information regarding these non-GAAP financial measures.

INTERNET BROADCAST

Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. ET 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 7726556.

Sempra Energy's mission is to be North America's premier energy infrastructure company. With 2018 reported revenues of more than $11.6 billion, the San Diego- based company is the utility holding company with the largest U.S. customer base. The Sempra Energy companies' more than 20,000 employees are focused on delivering energy with purpose to approximately 40 million consumers worldwide. Sempra Energy has been consistently recognized for its leadership in diversity and inclusion, and social responsibility, and is a member of the S&P 500 Utilities Index and the Dow Jones Utility Index.

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 such as "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 when we discuss  our guidance, strategy, plans, goals, vision, mission, 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 our actual results and future actions to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: the greater degree and prevalence of wildfires in California in recent years and the risk that we may be found liable for damages regardless of fault, such as where inverse condemnation applies, and risk that we may not be able to recover any such costs in rates from customers in California or otherwise, including due to insufficient amounts in the wildfire fund; actions and the timing of actions, including decisions, investigations, new regulations and issuances of permits and other authorizations and renewal of franchises by the Comisión Federal de Electricidad (CFE), California Public Utilities Commission, U.S. Department of Energy, California Department of Conservation's Division of Oil, Gas, and Geothermal Resources, Los Angeles County Department of Public Health, U.S. Environmental Protection Agency, Federal Energy Regulatory Commission, Pipeline and Hazardous Materials Safety Administration, Public Utility Commission of Texas, states, cities and counties, and other regulatory and governmental bodies in the U.S. and other countries in which we operate; the success of business development efforts, construction projects, and major acquisitions, divestitures and internal structural changes, including risks in (i) obtaining or maintaining authorizations; (ii) completing construction projects on schedule and budget; (iii) obtaining the consent of partners; (iv) counterparties' ability to fulfill contractual commitments; (v) winning competitively bid infrastructure projects; (vi) the ability to complete contemplated acquisitions and/or divestitures and the disruptions caused by such efforts; and (vii) the ability to realize anticipated benefits from any of these efforts once completed; the resolution of civil and criminal litigation, regulatory investigations and proceedings, and arbitrations; actions by credit rating agencies to downgrade our credit ratings or those of our subsidiaries or to place those ratings on negative outlook and our ability to borrow at favorable interest rates; deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and ratepayers; denial of approvals of proposed settlements; delays in, or denial of, regulatory agency authorizations to recover costs in rates from customers or regulatory agency approval for projects required to enhance safety and reliability; and moves to reduce or eliminate reliance on natural gas; the availability of electric power and natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid, limitations on the withdrawal or injection of natural gas from or into storage facilities, and equipment failures; expropriation of assets, the failure to honor the terms of contracts by foreign governments and state-owned entities such as the CFE, and other property disputes; risks posed by actions of third parties who control the operations of our investments; 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 harmful materials, cause fires 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), may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance; 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; actions of activist shareholders, which could impact the market price of our securities and disrupt our operations as a result of, among other things, requiring significant time by management and our board of directors; changes in capital markets, energy markets and economic conditions, including the availability of credit; volatility in currency exchange, interest and inflation rates and commodity prices and our ability to effectively hedge the risk of such volatility; the impact of federal or state tax reform and our ability to mitigate adverse impacts; changes in foreign and domestic trade policies and laws, including border tariffs and revisions to or replacement of international trade agreements, such as the North American Free Trade Agreement, that may increase our costs or impair our ability to resolve trade disputes; the impact at San Diego Gas & Electric Company on competitive customer rates and reliability of electric transmission and distribution systems due to the growth in distributed and local power generation 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; Oncor Electric Delivery Company LLC's (Oncor) ability to eliminate or reduce its quarterly dividends due to regulatory capital requirements and other regulatory and governance commitments, including the determination by a majority of Oncor's independent directors or a minority member director to retain such amounts to meet future requirements; 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 U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov. 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 North American Infrastructure, Sempra LNG, Sempra Renewables, Sempra Mexico, Sempra Texas Utilities, Oncor Electric Delivery Company LLC (Oncor) and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) are not the same companies as the California utilities, San Diego Gas & Electric Company (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra South American Utilities, Sempra North American Infrastructure, Sempra LNG, Sempra Renewables, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova are not regulated by the California Public Utilities Commission.

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; shares in thousands)

2019


2018(1)


2019


2018(1)


(unaudited)

REVENUES








Utilities

$

1,895



$

1,820



$

4,410



$

4,010


Energy-related businesses

335



355



718



701


Total revenues

2,230



2,175



5,128



4,711










EXPENSES AND OTHER INCOME








Utilities:








Cost of natural gas

(136)



(179)



(667)



(527)


Cost of electric fuel and purchased power

(263)



(320)



(519)



(591)


Energy-related businesses cost of sales

(63)



(70)



(171)



(139)


Operation and maintenance

(838)



(742)



(1,670)



(1,483)


Depreciation and amortization

(389)



(377)



(772)



(749)


Franchise fees and other taxes

(112)



(104)



(242)



(221)


Impairment losses



(1,300)





(1,300)


Gain on sale of assets

66





66




Other income (expense), net

28



(56)



110



96


Interest income

21



18



42



47


Interest expense

(258)



(228)



(518)



(434)


Income (loss) from continuing operations before income taxes
and equity earnings (losses)

286



(1,183)



787



(590)


Income tax (expense) benefit

(47)



602



(89)



360


Equity earnings (losses)

118



(4)



219



(25)


Income (loss) from continuing operations, net of income tax

357



(585)



917



(255)


Income from discontinued operations, net of income tax

78



55



36



83


Net income (loss)

435



(530)



953



(172)


(Earnings) losses attributable to noncontrolling interests

(45)



(5)



(86)



12


Mandatory convertible preferred stock dividends

(35)



(25)



(71)



(53)


Preferred dividends of subsidiary

(1)



(1)



(1)



(1)


Earnings (losses) attributable to common shares

$

354



$

(561)



$

795



$

(214)










Basic earnings (losses) per common share:








Earnings (losses) from continuing operations attributable to common shares

$

1.03



$

(2.29)



$

2.82



$

(1.08)


Earnings from discontinued operations attributable to common shares

$

0.26



$

0.18



$

0.07



$

0.26


Earnings (losses) attributable to common shares

$

1.29



$

(2.11)



$

2.89



$

(0.82)


Weighted-average common shares outstanding

274,987



265,837



274,831



261,906










Diluted earnings (losses) per common share:








Earnings (losses) from continuing operations attributable to common shares

$

1.01



$

(2.29)



$

2.78



$

(1.08)


Earnings from discontinued operations attributable to common shares

$

0.25



$

0.18



$

0.07



$

0.26


Earnings (losses) attributable to common shares

$

1.26



$

(2.11)



$

2.85



$

(0.82)


Weighted-average common shares outstanding

279,619



265,837



278,424



261,906





(1) 

Amounts have been retrospectively adjusted for discontinued operations.

SEMPRA ENERGY
Table A (Continued)

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

Sempra Energy Adjusted Earnings and Adjusted Earnings Per Common Share (Adjusted EPS) exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2019 and 2018 as follows:

Three months ended June 30, 2019:

  • $45 million gain on the sale of certain Sempra Renewables assets

Three months ended June 30, 2018:

  • $(755) million impairment of certain non-utility natural gas storage assets in the southeast U.S. at Sempra LNG
  • $(145) million other-than-temporary impairment of certain U.S. wind equity method investments at Sempra Renewables
  • $(22) million impacts associated with Aliso Canyon litigation at Southern California Gas Company (SoCalGas)

Six months ended June 30, 2019:

  • $45 million gain on the sale of certain Sempra Renewables assets

Associated with holding the South American businesses for sale:

  • $(103) million income tax expense from outside basis differences in our South American businesses primarily related to the change in our indefinite reinvestment assertion from our decision in January 2019 to hold these businesses for sale
  • $10 million income tax benefit from a reduction in a valuation allowance against certain net operating loss (NOL) carryforwards as a result of our decision to sell our South American businesses

Six months ended June 30, 2018:

  • $(755) million impairment of certain non-utility natural gas storage assets at Sempra LNG
  • $(145) million other-than-temporary impairment of certain U.S. wind equity method investments at Sempra Renewables
  • $(22) million impacts associated with Aliso Canyon litigation at SoCalGas
  • $(25) million income tax expense to adjust Tax Cuts and Jobs Act of 2017 (TCJA) provisional amounts

Sempra Energy Adjusted Earnings and Adjusted EPS 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 business operations to prior and 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 GAAP Earnings (Losses) and GAAP EPS, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.


Pretax
amount

Income tax
expense
(benefit)(1)

Earnings


Pretax
amount

Income tax
(benefit)
expense(1)

Non-
controlling
interests

(Losses)
earnings


(Dollars in millions, except per share amounts; shares in thousands)

Three months ended June 30, 2019


Three months ended June 30, 2018


Sempra Energy GAAP Earnings (Losses)



$

354






$

(561)



Excluded items:










Gain on sale of certain Sempra Renewables assets

$

(61)


$

16


(45)



$


$


$




Impairment of non-utility natural gas storage assets





1,300


(499)


(46)


755



Impairment of U.S. wind equity method investments





200


(55)



145



Impacts associated with Aliso Canyon litigation





1


21



22



Sempra Energy Adjusted Earnings



$

309






$

361













Diluted earnings (losses) per common share:










Sempra Energy GAAP EPS



$

1.26






$

(2.11)


(2) 

Sempra Energy Adjusted EPS



$

1.10






$

1.35



Weighted-average common shares outstanding, diluted – GAAP



279,619






267,536


(2) 












Six months ended June 30, 2019


Six months ended June 30, 2018


Sempra Energy GAAP Earnings (Losses)



$

795






$

(214)



Excluded items:










Gain on sale of certain Sempra Renewables assets

$

(61)


$

16


(45)



$


$


$




Associated with holding the South American businesses for sale:











Change in indefinite reinvestment assertion of basis differences in discontinued operations


103


103








Reduction in tax valuation allowance against certain NOL carryforwards


(10)


(10)








Impairment of non-utility natural gas storage assets





1,300


(499)


(46)


755



Impairment of U.S. wind equity method investments





200


(55)



145



Impacts associated with Aliso Canyon litigation





1


21



22



Impact from the TCJA






25



25



Sempra Energy Adjusted Earnings



$

843






$

733













Diluted earnings (losses) per common share:










Sempra Energy GAAP EPS



$

2.85






$

(0.82)


(2) 

Sempra Energy Adjusted EPS



$

3.03






$

2.78



Weighted-average common shares outstanding, diluted – GAAP



278,424






263,584


(2) 



(1) 

Except for adjustments that are solely income tax and tax related to outside basis differences, income taxes on pretax amounts were primarily calculated based on applicable statutory tax rates.



(2) 

In both the three months and six months ended June 30, 2018, total weighted-average potentially dilutive securities of 1.7 million were not included in the computation of GAAP losses per common share since to do so would have decreased the loss per share.

SEMPRA ENERGY
Table A (Continued)

SEMPRA ENERGY 2019 ADJUSTED EPS GUIDANCE RANGE (Unaudited)

Sempra Energy 2019 Adjusted EPS Guidance Range of $5.70 to $6.30 excludes:

  • $103 million income tax expense from outside basis differences in our South American businesses primarily related to the change in our indefinite reinvestment assertion from our decision in January 2019 to hold these businesses for sale.
  • $10 million income tax benefit from a reduction in a valuation allowance against certain NOL carryforwards as a result of our decision to sell our South American businesses.
  • $45 million after-tax gain related to the April 2019 sale of the remaining U.S. renewables assets and investments to American Electric Power Company, Inc.
  • any potential charge from San Diego Gas & Electric Company's (SDG&E) $322.5 million initial contribution in September 2019 and annual contributions of $12.9 million in each of the next 10 years to the California wildfire fund pursuant to the wildfire legislation that was recently signed into law. We are evaluating the accounting and tax treatment of the initial and annual contributions.
  • any potential gain from the planned sale of our South American businesses. Because the sale process for the planned divestiture of our South American businesses initiated in January 2019 is ongoing, the terms and structure of any potential sale transaction(s) are unknown, including the terms that would impact the final income tax expense resulting from the expected change in our assertion regarding indefinite reinvestment of foreign undistributed earnings, including timing and amounts of repatriation of such earnings.

Sempra Energy 2019 Adjusted EPS Guidance is a non-GAAP financial measure. Because of the significance and nature of the excluded items, management believes that this non-GAAP financial measure provides a meaningful comparison of the performance of business operations to prior and future periods. Sempra Energy 2019 Adjusted EPS Guidance should not be considered an alternative to GAAP EPS Guidance. 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. Due to the uncertainty surrounding the accounting and tax treatment of SDG&E's contributions to the California wildfire fund and the terms and structure of any potential transaction(s) associated with the planned sale of our South American businesses, 2019 GAAP EPS Guidance, the most directly comparable financial measure calculated in accordance with GAAP, is inestimable.

SEMPRA ENERGY

Table B








CONDENSED CONSOLIDATED BALANCE SHEETS





(Dollars in millions)

June 30,
2019


December
31,
2018(1)


(unaudited)



Assets




Current assets:




Cash and cash equivalents

$

168



$

102


Restricted cash

50



35


Accounts receivable, net

1,242



1,535


Due from unconsolidated affiliates

23



37


Income taxes receivable

106



60


Inventories

214



258


Regulatory assets

195



138


Greenhouse gas allowances

61



59


Assets held for sale



713


Assets held for sale in discontinued operations

445



459


Other

279



249


Total current assets

2,783



3,645






Other assets:




Restricted cash

21



21


Due from unconsolidated affiliates

710



644


Regulatory assets

1,780



1,589


Nuclear decommissioning trusts

1,044



974


Investment in Oncor Holdings

10,930



9,652


Other investments

2,082



2,320


Goodwill

1,602



1,602


Other intangible assets

219



224


Dedicated assets in support of certain benefit plans

409



416


Insurance receivable for Aliso Canyon costs

381



461


Deferred income taxes

150



141


Greenhouse gas allowances

416



289


Right-of-use assets – operating leases

600




Assets held for sale in discontinued operations

3,453



3,259


Sundry

865



962


Total other assets

24,662



22,554


Property, plant and equipment, net

35,282



34,439


Total assets

$

62,727



$

60,638



(1) 

Derived from audited financial statements, which have been retrospectively adjusted for discontinued operations.

 

SEMPRA ENERGY

Table B (Continued)








CONDENSED CONSOLIDATED BALANCE SHEETS





(Dollars in millions)

June 30,
2019


December
31,
2018(1)


(unaudited)



Liabilities and Equity




Current liabilities:




Short-term debt

$

2,395



$

2,024


Accounts payable, net

1,200



1,298


Due to unconsolidated affiliates

9



10


Dividends and interest payable

490



480


Accrued compensation and benefits

299



440


Regulatory liabilities

349



105


Current portion of long-term debt and finance leases

2,156



1,644


Reserve for Aliso Canyon costs

46



160


Greenhouse gas obligations

61



59


Liabilities held for sale in discontinued operations

336



368


Other

836



935


Total current liabilities

8,177



7,523






Long-term debt and finance leases

21,199



20,903






Deferred credits and other liabilities:




Due to unconsolidated affiliates

38



37


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

1,135



1,143


Deferred income taxes

2,626



2,321


Deferred investment tax credits

23



24


Regulatory liabilities

4,026



4,016


Asset retirement obligations

2,815



2,786


Greenhouse gas obligations

225



131


Liabilities held for sale in discontinued operations

1,090



1,013


Deferred credits and other

1,939



1,493


Total deferred credits and other liabilities

13,917



12,964


Equity:




Sempra Energy shareholders' equity

17,440



17,138


Preferred stock of subsidiary

20



20


Other noncontrolling interests

1,974



2,090


Total equity

19,434



19,248


Total liabilities and equity

$

62,727



$

60,638



(1) Derived from audited financial statements, which have been retrospectively adjusted for discontinued operations.

 

SEMPRA ENERGY

Table C








CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS












Six months ended June 30,

(Dollars in millions)


2019


2018(1)



(unaudited)

Cash Flows from Operating Activities





Net income (loss)


$

953



$

(172)


Less: Income from discontinued operations, net of income tax


(36)



(83)


Income (loss) from continuing operations, net of income tax


917



(255)


Adjustments to reconcile net income (loss) to net cash provided by operating activities:





Depreciation and amortization


772



749


Deferred income taxes and investment tax credits


(12)



(432)


Impairment losses




1,300


Gain on sale of assets


(66)




Equity (earnings) losses


(219)



25


Share-based compensation expense


39



33


Fixed-price contracts and other derivatives


(28)



(9)


Other


(4)



45


Intercompany activities with discontinued operations, net


64



42


Net change in other working capital components


84



268


Insurance receivable for Aliso Canyon costs


80



(84)


Changes in other noncurrent assets and liabilities, net


(104)



(157)


Net cash provided by continuing operations


1,523



1,525


Net cash provided by discontinued operations


181



148


Net cash provided by operating activities


1,704



1,673







Cash Flows from Investing Activities





Expenditures for property, plant and equipment


(1,651)



(1,834)


Expenditures for investments and acquisition


(1,391)



(9,823)


Proceeds from sale of assets


902



1


Purchases of nuclear decommissioning trust assets


(497)



(487)


Proceeds from sales of nuclear decommissioning trust assets


497



487


Advances to unconsolidated affiliates


(16)



(81)


Repayments of advances to unconsolidated affiliates


9



1


Intercompany activities with discontinued operations, net


(2)



(8)


Other


13



39


Net cash used in continuing operations


(2,136)



(11,705)


Net cash used in discontinued operations


(131)



(112)


Net cash used in investing activities


(2,267)



(11,817)







Cash Flows from Financing Activities





Common dividends paid


(483)



(416)


Preferred dividends paid


(71)



(28)


Preferred dividends paid by subsidiary


(1)



(1)


Issuances of mandatory convertible preferred stock, net of $32 in offering costs




1,693


Issuances of common stock, net of $38 in offering costs in 2018


20



2,090


Repurchases of common stock


(18)



(20)


Issuances of debt (maturities greater than 90 days)


2,630



7,328


Payments on debt (maturities greater than 90 days) and finance leases


(871)



(1,799)


(Decrease) increase in short-term debt, net


(444)



1,265


Proceeds from sale of noncontrolling interest, net of $1 in offering costs




85


Purchases of and distributions to noncontrolling interests


(31)



(9)


Intercompany activities with discontinued operations, net




70


Other


(37)



(104)


Net cash provided by continuing operations


694



10,154


Net cash used in discontinued operations


(83)



(44)


Net cash provided by financing activities


611



10,110







Effect of exchange rate changes in continuing operations





Effect of exchange rate changes in discontinued operations




(3)


Effect of exchange rate changes on cash, cash equivalents and restricted cash




(3)







Increase (decrease) in cash, cash equivalents and restricted cash, including discontinued operations


48



(37)


Cash, cash equivalents and restricted cash, including discontinued operations, January 1


246



364


Cash, cash equivalents and restricted cash, including discontinued operations, June 30


$

294



$

327



(1) 

Amounts have been retrospectively adjusted for discontinued operations.     

 

SEMPRA ENERGY

Table D







SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES, INVESTMENTS AND ACQUISITIONS









Three months ended
June 30,


Six months ended
June 30,

(Dollars in millions)


2019


2018(1)


2019


2018(1)


(unaudited)

Earnings (Losses) Attributable to Common Shares






SDG&E


$

143



$

146



$

319



$

316


SoCalGas


30



33



294



258


Sempra Texas Utilities


113



114



207



129


Sempra Mexico


73



97



130



117


Sempra Renewables


46



(109)



59



(88)


Sempra LNG


6



(764)



11



(780)


Parent and other


(127)



(126)



(244)



(235)


Discontinued operations


70



48



19



69


Total


$

354



$

(561)



$

795



$

(214)
















Three months ended
June 30,


Six months ended
June 30,

(Dollars in millions)


2019


2018(1)


2019


2018(1)


(unaudited)

Capital Expenditures, Investments and Acquisitions






SDG&E


$

352



$

376



$

708



$

851


SoCalGas


335



380



659



783


Sempra Texas Utilities


1,226



117



1,282



9,278


Sempra Mexico


157



81



242



168


Sempra Renewables


2



6



2



37


Sempra LNG


90



91



146



137


Parent and other


3



10



3



403


Total


$

2,165



$

1,061



$

3,042



$

11,657




(1) 

Amounts have been retrospectively adjusted for discontinued operations.

 

SEMPRA ENERGY

Table E






OTHER OPERATING STATISTICS (Unaudited)











Three months ended
June 30,


Six months ended
June 30,

UTILITIES

2019


2018


2019


2018









SDG&E and SoCalGas









Gas sales (Bcf)(1)

75



76



214



189



Transportation (Bcf)(1)

124



137



268



284



Total deliveries (Bcf)(1)

199



213



482



473











Total gas customer meters (thousands)





6,902



6,865











SDG&E









Electric sales (millions of kWhs)(1)

3,244



3,394



6,826



7,000



Direct Access and Community Choice Aggregation (millions of kWhs)

848



926



1,688



1,671



Total deliveries (millions of kWhs)(1)

4,092



4,320



8,514



8,671











Total electric customer meters (thousands)





1,463



1,453










Oncor(2)









Total deliveries (millions of kWhs)

31,516



32,658



61,628



39,313



Total electric customer meters (thousands)





3,655



3,590










Ecogas









Natural gas sales (Bcf)

1





2



6



Natural gas customer meters (thousands)





126



121










ENERGY-RELATED BUSINESSES
















Power generated and sold (millions of kWhs)








Sempra Mexico









Termoeléctrica de Mexicali (TdM)

693



824



1,830



1,777



Wind and solar(3)

445



351



690



619



(1) 

Includes intercompany sales.



(2) 

Includes 100 percent of the electric deliveries and customer meters of Oncor Electric Delivery Company LLC (Oncor), in which we hold an 80.25-percent interest through our March 2018 acquisition of our equity method investment in Oncor Electric Delivery Holdings Company LLC (Oncor Holdings). Total deliveries for the six months ended June 30, 2018 only include volumes from the March 9, 2018 acquisition date.



(3) 

Includes 50 percent of the total power generated and 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.

 

SEMPRA ENERGY

 Table F (Unaudited)

STATEMENTS OF OPERATIONS DATA BY SEGMENT


































Three months ended June 30, 2019

















(Dollars in millions)

SDG&E


SoCalGas


Sempra
Texas
Utilities


Sempra
Mexico


Sempra
Renewables


Sempra
LNG


Consolidating
Adjustments,
Parent &
Other



Total



















Revenues

$

1,094



$

806



$



$

318



$

3



$

86



$

(77)




$

2,230


Cost of sales and other expenses

(642)



(599)





(130)



(9)



(88)



56




(1,412)


Depreciation and amortization

(189)



(148)





(46)





(3)



(3)




(389)


Gain on sale of assets









61





5




66


Other income (expense), net

19



1





17







(9)




28


Income (loss) before interest and tax(1)

282



60





159



55



(5)



(28)




523


Net interest (expense) income

(101)



(33)





(10)



1



13



(107)




(237)


Income tax (expense) benefit

(35)



4





(44)



(14)



(2)



44




(47)


Equity earnings (losses), net





113



4



2





(1)




118


(Earnings) losses attributable to noncontrolling interests

(3)







(36)



2








(37)


Preferred dividends



(1)











(35)




(36)


Earnings (losses) from continuing operations

$

143



$

30



$

113



$

73



$

46



$

6



$

(127)




284


Earnings from discontinued operations
















70


Earnings attributable to common shares
















$

354




















Three months ended June 30, 2018(2)

















(Dollars in millions)

SDG&E


SoCalGas


Sempra
Texas
Utilities


Sempra
Mexico


Sempra
Renewables


Sempra
LNG


Consolidating
Adjustments,
Parent &
Other



Total



















Revenues

$

1,051



$

772



$



$

310



$

40



$

79



$

(77)




$

2,175


Cost of sales and other expenses

(667)



(565)





(123)



(23)



(91)



54




(1,415)


Depreciation and amortization

(169)



(138)





(43)



(14)



(11)



(2)




(377)


Impairment losses











(1,300)






(1,300)


Other income (expense), net

25



13





(95)







1




(56)


Income (loss) before interest and tax(1)

240



82





49



3



(1,323)



(24)




(973)


Net interest (expense) income

(52)



(25)





(14)



(3)



6



(122)




(210)


Income tax (expense) benefit

(42)



(23)





55



58



506



48




602


Equity earnings (losses), net





114



71



(187)



1



(3)




(4)


(Earnings) losses attributable to noncontrolling interests







(64)



20



46






2


Preferred dividends



(1)











(25)




(26)


Earnings (losses) from continuing operations

$

146



$

33



$

114



$

97



$

(109)



$

(764)



$

(126)




(609)


Earnings from discontinued operations
















48


Losses attributable to common shares
















$

(561)



(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) 

Amounts have been retrospectively adjusted for discontinued operations.

 

SEMPRA ENERGY

Table F (Unaudited)

STATEMENTS OF OPERATIONS DATA BY SEGMENT



































Six months ended June 30, 2019

















(Dollars in millions)

SDG&E


SoCalGas


Sempra
Texas
Utilities


Sempra
Mexico


Sempra
Renewables


Sempra
LNG


Consolidating
Adjustments,
Parent &
Other



Total



















Revenues

$

2,239



$

2,167



$



$

701



$

10



$

227



$

(216)




$

5,128


Cost of sales and other expenses

(1,339)



(1,512)





(322)



(20)



(230)



154




(3,269)


Depreciation and amortization

(375)



(295)





(90)





(5)



(7)




(772)


Gain on sale of assets









61





5




66


Other income, net

41



17





36







16




110


Income (loss) before interest and tax(1)

566



377





325



51



(8)



(48)




1,263


Net interest (expense) income

(203)



(67)





(21)



8



23



(216)




(476)


Income tax (expense) benefit

(40)



(15)





(116)



(4)



(6)



92




(89)


Equity earnings (losses), net





207



6



5



2



(1)




219


Earnings attributable to noncontrolling interests

(4)







(64)



(1)








(69)


Preferred dividends



(1)











(71)




(72)


Earnings (losses) from continuing operations

$

319



$

294



$

207



$

130



$

59



$

11



$

(244)




776


Earnings from discontinued operations
















19


Earnings attributable to common shares
















$

795




















Six months ended June 30, 2018(2)

















(Dollars in millions)

SDG&E


SoCalGas


Sempra
Texas
Utilities


Sempra
Mexico


Sempra
Renewables


Sempra
LNG


Consolidating
Adjustments,
Parent &
Other



Total



















Revenues

$

2,106



$

1,898



$



$

618



$

65



$

183



$

(159)




$

4,711


Cost of sales and other expenses

(1,308)



(1,278)





(252)



(44)



(193)



114




(2,961)


Depreciation and amortization

(335)



(273)





(86)



(27)



(22)



(6)




(749)


Impairment losses











(1,300)






(1,300)


Other income (expense), net

53



46





(2)







(1)




96


Income (loss) before interest and tax(1)

516



393





278



(6)



(1,332)



(52)




(203)


Net interest (expense) income

(103)



(52)





(29)



(6)



11



(208)




(387)


Income tax (expense) benefit

(98)



(82)





(100)



65



494



81




360


Equity earnings (losses), net





129



30



(182)



1



(3)




(25)


Losses (earnings) attributable to noncontrolling interests

1







(62)



41



46






26


Preferred dividends



(1)











(53)




(54)


Earnings (losses)

$

316



$

258



$

129



$

117



$

(88)



$

(780)



$

(235)




(283)


Earnings from discontinued operations
















69


Losses attributable to common shares
















$

(214)




(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)

Amounts have been retrospectively adjusted for discontinued operations.

 

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SOURCE Sempra Energy

For further information: Media Contact: Amber Albrecht, Sempra Energy, (877) 340-8875, media@sempra.com OR Financial Contact: Lindsay Gartner, Sempra Energy, (877) 736-7727, investor@sempra.com