Sempra Energy Reports Higher Third-Quarter 2018 Earnings
SAN DIEGO, Nov. 7, 2018 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported third-quarter 2018 earnings of $274 million, or $0.99 per diluted share, up from $57 million, or $0.22 per diluted share, in the third quarter 2017.
On an adjusted basis, Sempra Energy's third-quarter 2018 earnings increased to $339 million, or $1.23 per diluted share, from $265 million, or $1.04 per diluted share, in the third quarter 2017.
"The most recent quarter was very strong - credit goes to our employees," said Jeffrey W. Martin, CEO of Sempra Energy. "All of our businesses contributed to our third-quarter operating results. We are building momentum, successfully executing on several major initiatives to advance our strategic vision of becoming North America's premier energy infrastructure company. Our agreement to sell our U.S. solar assets is important. We expect to utilize capital from our solar asset sales to significantly expand our regulated Texas utility platform through Oncor's acquisition of InfraREIT and our acquisition of a 50-percent interest in Sharyland. We also have made significant progress toward our goal of becoming a market leader in North American liquefied natural gas (LNG) exports, recently securing preliminary commercial agreements for development of several LNG export projects."
For the first nine months of 2018, Sempra Energy's earnings were $60 million, or $0.22 per diluted share, compared with $757 million, or $2.99 per diluted share, in the first nine months last year. Adjusted earnings for the first nine months of 2018 were $1.07 billion, or $4 per diluted share, compared with $979 million, or $3.87 per diluted share, in the first nine months of 2017.
These results reflect certain significant items as described in the following table of GAAP earnings reconciled to adjusted earnings (on an after-tax basis) for the third quarter and first nine months of 2018 and 2017:
Three months ended
Nine months ended
September 30,
September 30,
(Unaudited;
dollars,
except EPS,
and shares,
in millions) 2018 2017 2018 2017
GAAP
Earnings(1) $274 $57 $60 $757
Impairment of
Non-Utility
Natural Gas
Storage
Assets 755
Impairment of
U.S. Wind
Equity Method
Investments 145
Impairment of
Investment in
RBS Sempra
Commodities 65 65
Impact from
the Tax Cuts
and Jobs Act
of 2017 25
Impacts
Associated
with Aliso
Canyon
Litigation 22
Write-off of
Wildfire
Regulatory
Asset 208 208
Adjustments
Related to
Termoeléctrica
de Mexicali
(TdM) 42
Recoveries
Related to
2016
Permanent
Release of
Pipeline
Capacity (28)
Adjusted
Earnings(1) $339 $265 $1,072 $979
Diluted
weighted-
average
shares
outstanding 276 253 268 253
GAAP Earnings
Per Diluted
Share(1) $0.99 $0.22 $0.22 $2.99
Adjusted
Earnings Per
Diluted
Share(1) $1.23 $1.04 $4.00 $3.87
1) Attributable to common shares.
Sempra Energy adjusted
earnings and adjusted earnings
per share are non-GAAP
financial measures. See Table
A for information regarding
non-GAAP financial measures
and descriptions of
adjustments above.
OPERATING HIGHLIGHTS
Earlier today, Sempra Energy announced that its IEnova and Sempra LNG & Midstream subsidiaries have signed three Heads of Agreements (HOAs) with affiliates of Total S.A., Mistui & Co., Ltd., and Tokyo Gas Co., Ltd., for the full export capacity of Phase 1 of the Energia Costa Azul (ECA) LNG liquefaction project located in Baja California, Mexico. The HOAs contemplate the parties negotiating and finalizing definitive 20-year LNG sales-and-purchase agreements, with each of the companies purchasing approximately 0.8 million tonnes per annum (Mtpa) of LNG. ECA LNG Phase 1 is expected to include one liquefaction train capable of producing approximately 2.4 Mtpa of LNG.
Earlier this week, Sempra Energy announced a Memorandum of Understanding (MOU) with Total S.A. that contemplates Total potentially contracting for up to 9 Mtpa of LNG offtake from Sempra Energy's LNG export development projects, including the approximately 0.8 Mtpa at ECA LNG Phase 1, as described above, and at Cameron LNG Phase 2. On Nov. 2, Sempra Energy announced that Cameron LNG has initiated the commissioning process for the first liquefaction train of Phase 1 of the Louisiana joint-venture export project. Commissioning is the last step before the start-up process, when the liquefaction trains become fully operational and LNG can be exported from the facility. The first three liquefaction trains that comprise Cameron LNG Phase 1 are expected to be producing LNG in 2019.
On Oct. 18, Sempra Energy announced that it and Oncor have entered into agreements under which Oncor will acquire 100 percent of the equity interests of InfraREIT, Inc. for $1.275 billion, excluding certain transaction costs, and Sempra Energy will acquire a 50-percent limited-partnership interest in a holding company that will own Sharyland Utilities, LP, for approximately $98 million. Sempra Energy expects to utilize approximately $1.12 billion, excluding certain transaction costs, from the company's pending solar asset sales to help fund the transaction, which is slated for completion in mid-2019, subject to regulatory approvals, lender consents and customary closing conditions.
On Sept. 20, Sempra Renewables entered into an agreement to sell all of its U.S. operating solar assets, one U.S. wind generation facility, and its solar and battery storage development projects to a subsidiary of Consolidated Edison for $1.54 billion, subject to regulatory approvals and customary closing conditions. The sales process for the other announced asset sales - U.S. wind and U.S. non-utility natural gas storage assets - is ongoing.
Sempra Energy's Mexican subsidiary IEnova continues to expand its liquids business with the recent acquisition of a 51-percent equity interest in the Manzanillo marine terminal development project. IEnova will build the terminal, which is estimated to cost approximately $200 million, of which IEnova's share would be approximately $100 million. The project is expected to commence commercial operations in late 2020 and 50 percent of the terminal's capacity already is contracted to Trafigura Mexico, S.A. de C.V. In recent months, IEnova also announced new capacity agreements for the Baja Refinados and Topolobampo liquids terminals, both of which are now fully contracted.
EARNINGS GUIDANCE
Today, Sempra Energy reaffirmed its 2018 GAAP earnings-per-share guidance range of $2.83 to $3.44 and 2018 adjusted earnings-per-share guidance range of $5.30 to $5.80.
NON-GAAP FINANCIAL MEASURES
Non-GAAP financial measures include Sempra Energy's adjusted earnings and adjusted earnings per share for the third-quarter and nine-month periods in 2018 and 2017, as well as the adjusted 2018 earnings-per-share guidance range. Additional information regarding these non-GAAP financial measures is in Table A of the third-quarter financial tables.
INTERNET BROADCAST
Sempra Energy will webcast a live discussion of its earnings results 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 9587918.
Sempra Energy, a San Diego-based energy services holding company with 2017 revenues of more than $11 billion, is the utility holding company with the largest U.S. customer base. The Sempra Energy companies' approximately 20,000 employees serve more than 40 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 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, 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: 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 Department of Conservation's 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, 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 timing and success of business development efforts, major acquisitions such as our interest in Oncor, and construction projects, including risks in (i) timely obtaining or maintaining permits and other authorizations, (ii) completing construction projects on schedule and on budget, (iii) obtaining the consent and participation of partners and counterparties and their ability to fulfill contractual commitments, and (iv) not realizing anticipated benefits; 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; denial of approvals of proposed settlements; and delays in, or disallowance 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 greater degree and prevalence of wildfires in California in recent years and 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; 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; 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 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), 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; our ability to successfully execute our plan to divest certain non-utility assets within the anticipated timeframe, if at all, or that such plan may not yield the anticipated benefits; actions of activist shareholders, which could impact the market price of our equity and debt securities and disrupt our operations as a result of, among other things, requiring significant time and attention by management and our board of directors; changes in capital markets, energy markets and economic conditions, including the availability of credit and the liquidity of our investments; and volatility in inflation, interest and currency exchange rates and commodity prices and our ability to effectively hedge the risk of such volatility; the impact of recent federal tax reform and uncertainty as to how it may be applied, and our ability to mitigate adverse impacts; 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; 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 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'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 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 commitments, or the determination by 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 & Midstream, Sempra Renewables, Sempra Mexico, Sempra Texas Utility, 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 & Midstream, Sempra Renewables, Sempra Mexico, Sempra Texas Utility, Oncor and IEnova are not regulated by the California Public Utilities Commission.
SEMPRA ENERGY
Table A
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
Nine months ended
September 30,
September 30,
---
(Dollars in millions,
except per share
amounts) 2018 2017(1) 2018 2017(1)
--- ---
(unaudited)
REVENUES
Utilities $
2,460 $
2,277 $
7,248 $
7,172
Energy-related
businesses 480 402 1,218 1,071
Total revenues 2,940 2,679 8,466 8,243
EXPENSES AND OTHER INCOME
Utilities:
Cost of electric fuel
and purchased power (675) (650) (1,778) (1,730)
Cost of natural gas (255) (190) (782) (903)
Energy-related businesses:
Cost of natural gas,
electric fuel and
purchased power (119) (97) (257) (226)
Other cost of sales (17) (21) (54) (5)
Operation and
maintenance (819) (759) (2,383) (2,226)
Depreciation and
amortization (380) (378) (1,158) (1,106)
Franchise fees and
other taxes (131) (114) (352) (325)
Write-off of wildfire
regulatory asset - (351) (351)
Impairment losses (4) (1) (1,304) (72)
Other income, net 97 40 196 322
Interest income 22 12 76 26
Interest expense (232) (165) (685) (493)
Income (loss) before
income taxes and
equity earnings of
unconsolidated
subsidiaries 427 5 (15) 1,154
Income tax (expense)
benefit (167) 84 127 (378)
Equity earnings 74 13 50 26
Net income 334 102 162 802
Earnings attributable
to noncontrolling
interests (24) (45) (12) (44)
Mandatory convertible
preferred stock
dividends (36) (89)
Preferred dividends of
subsidiary - (1) (1)
Earnings attributable
to common shares $
274 $
57 $
60 $
757
Basic earnings per
common share $
1.00 $
0.23 $
0.23 $
3.01
Weighted-average
number of shares
outstanding, basic
(thousands) 273,944 251,692 265,963 251,425
Diluted earnings per
common share $
0.99 $
0.22 $
0.22 $
2.99
Weighted-average
number of shares
outstanding, diluted
(thousands) 275,907 253,364 267,644 252,987
(1) As adjusted for the retrospective
adoption of Accounting Standards
Update (ASU) 2017-07 and a
reclassification to conform to
current year presentation.
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 Common Share exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2018 and 2017 as follows:
Three months ended September 30, 2018:
-- $(65) million impairment of RBS Sempra Commodities LLP (RBS Sempra
Commodities) equity method investment at Parent and other
Three months ended September 30, 2017:
-- $(208) million write-off of wildfire regulatory asset at San Diego Gas &
Electric Company (SDG&E)
Nine months ended September 30, 2018:
-- $(65) million impairment of RBS Sempra Commodities equity method
investment
-- $(755) million impairment of certain non-utility natural gas storage
assets in the southeast U.S. at Sempra LNG & Midstream
-- $(145) million other-than-temporary impairment of certain U.S. wind
equity method investments at Sempra Renewables
-- $(22) million impacts associated with Aliso Canyon natural gas storage
facility litigation at Southern California Gas Company (SoCalGas)
-- $(25) million income tax expense to adjust the Tax Cuts and Jobs Act of
2017 (TCJA) provisional amounts
Nine months ended September 30, 2017:
-- $(208) million write-off of wildfire regulatory asset at SDG&E
-- $(47) million impairment of Termoeléctrica de Mexicali (TdM) assets
that were held for sale until June 2018 at Sempra Mexico
-- $5 million deferred income tax benefit on the TdM assets that were held
for sale
-- $28 million of recoveries related to 2016 permanent release of pipeline
capacity at Sempra LNG & Midstream
Sempra Energy Adjusted Earnings and Adjusted Earnings Per Common 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 2018 to 2017 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 GAAP Earnings and GAAP Diluted Earnings Per Common Share, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.
Pretax Income tax Non- Earnings Pretax Income tax Non- Earnings
amount (benefit) controlling amount (benefit) controlling
expense(1) interests expense(1) interests
(Dollars in millions,
except per share
amounts)
Three months ended September 30, 2018
Three months ended September 30, 2017
---
Sempra Energy GAAP
Earnings $
274 $
57
Excluded items:
Impairment of
investment in RBS
Sempra Commodities $
65
$
$ 65
$
$
$
Write-off of wildfire
regulatory asset 351 (143) 208
Sempra Energy Adjusted
Earnings $
339 $
265
Diluted earnings per
common share:
Sempra Energy GAAP
Earnings $
0.99 $
0.22
Sempra Energy Adjusted
Earnings $
1.23 $
1.04
Weighted-average
number of shares
outstanding, diluted
(thousands) 275,907 253,364
---
Nine months ended September 30, 2018
Nine months ended September 30, 2017
Sempra Energy GAAP
Earnings $
60 $
757
Excluded items:
Impairment of
investment in RBS
Sempra Commodities $
65
$
$ 65
$
$
$
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
Write-off of wildfire
regulatory asset 351 (143) 208
Impairment of TdM
assets held for sale 71 (24) 47
Deferred income tax
benefit associated
with TdM (8) 3 (5)
Recoveries related to
2016 permanent release
of pipeline capacity (47) 19 (28)
Sempra Energy Adjusted
Earnings $
1,072 $
979
Diluted earnings per
common share:
Sempra Energy GAAP
Earnings $
0.22 $
2.99
Sempra Energy Adjusted
Earnings $
4.00 $
3.87
Weighted-average
number of shares
outstanding, diluted
(thousands) 267,644 252,987
---
(1) Except for
adjustments
that are
solely
income tax
and tax
related to
outside
basis
differences,
income taxes
were
primarily
calculated
based on
applicable
statutory
tax rates.
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.
SEMPRA ENERGY
Table A (Continued)
RECONCILIATION OF SEMPRA ENERGY 2018 ADJUSTED EARNINGS-PER-SHARE GUIDANCE RANGE TO SEMPRA ENERGY 2018 GAAP EARNINGS-PER-SHARE GUIDANCE RANGE (Unaudited)
Sempra Energy 2018 Adjusted Earnings-Per-Share Guidance Range of $5.30 to $5.80 excludes items (after the effects of income taxes and, if applicable, noncontrolling interests) as follows:
-- $(965) million in impairments of certain assets and equity method
investments
-- $(22) million impacts associated with Aliso Canyon natural gas storage
facility litigation
-- $(25) million income tax expense to adjust the TCJA provisional amounts
-- $340 million - $370 million estimated gain on sale, net of $128 million
- $139 million((1)) income tax expense, of the Sempra Renewables
operating solar assets, Broken Bow 2 wind generation facility and its
solar and battery storage development projects (the Renewables Sale)
that is expected to close near the end of 2018
Sempra Energy 2018 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 2018 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 2018 Adjusted Earnings-Per-Share Guidance Range to Sempra Energy 2018 GAAP Earnings-Per-Share Guidance Range, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP.
Full-Year 2018
Sempra Energy GAAP Earnings-Per-Share Guidance Range $
2.83 to $
3.44
Excluded items:
Impairments of certain assets and equity method investments 3.55 3.55
Impacts associated with Aliso Canyon litigation 0.08 0.08
Impact from the TCJA 0.09 0.09
Estimated gain on the Renewables Sale (1.25) (1.36)
Sempra Energy Adjusted Earnings-Per-Share Guidance Range $
5.30 to $
5.80
Weighted-average number of shares outstanding, diluted (millions) 272
---
(1) Income taxes on estimated
gain were calculated based
on applicable statutory tax
rates.
SEMPRA ENERGY
Table B
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions) September 30, December 31,
2018 2017(1)
--- ---
(unaudited)
Assets
Current assets:
Cash and cash equivalents $
212 $
288
Restricted cash 73 62
Accounts receivable, net 1,663 1,584
Due from unconsolidated affiliates 43 37
Income taxes receivable 99 110
Inventories 345 307
Regulatory assets 92 325
Fixed-price contracts and other derivatives 96 66
Greenhouse gas allowances 339 299
Assets held for sale 1,881 127
Other 202 136
Total current assets 5,045 3,341
Other assets:
Restricted cash 3 14
Due from unconsolidated affiliates 682 598
Regulatory assets 1,469 1,517
Nuclear decommissioning trusts 1,042 1,033
Investment in Oncor Holdings 9,553
Other investments 2,561 2,527
Goodwill 2,363 2,397
Other intangible assets 229 596
Dedicated assets in support of certain benefit plans 443 455
Insurance receivable for Aliso Canyon costs 474 418
Deferred income taxes 116 170
Greenhouse gas allowances 275 93
Sundry 852 792
Total other assets 20,062 10,610
Property, plant and equipment, net 35,498 36,503
Total assets $
60,605 $
50,454
(1) Derived from
audited
financial
statements.
SEMPRA ENERGY
Table B (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions) September 30, December 31,
2018 2017(1)
--- ---
(unaudited)
Liabilities and Equity
Current liabilities:
Short-term debt $
2,897 $
1,540
Accounts payable 1,375 1,523
Due to unconsolidated
affiliates 7 7
Dividends and interest
payable 495 342
Accrued compensation and
benefits 356 439
Regulatory liabilities 284 109
Current portion of long-
term debt 1,464 1,427
Fixed-price contracts
and other derivatives 63 109
Customer deposits 172 162
Reserve for Aliso Canyon
costs 161 84
Greenhouse gas
obligations 339 299
Liabilities held for sale 156 49
Other 722 545
Total current liabilities 8,491 6,635
Long-term debt 21,335 16,445
Deferred credits and other liabilities:
Customer advances for
construction 146 150
Due to unconsolidated
affiliates 36 35
Pension and other
postretirement benefit
plan obligations, net of
plan assets 1,052 1,148
Deferred income taxes 2,231 2,767
Deferred investment tax
credits 25 28
Regulatory liabilities 3,974 3,922
Asset retirement
obligations 2,750 2,732
Fixed-price contracts
and other derivatives 235 316
Greenhouse gas
obligations 102
Deferred credits and
other 1,117 1,136
Total deferred credits
and other liabilities 11,668 12,234
Equity:
Sempra Energy
shareholders' equity 16,617 12,670
Preferred stock of
subsidiary 20 20
Other noncontrolling
interests 2,474 2,450
Total equity 19,111 15,140
Total liabilities and
equity $
60,605 $
50,454
(1) Derived from audited financial
statements.
SEMPRA ENERGY
Table C
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30,
(Dollars in millions) 2018
2017(1)
---
(unaudited)
Cash Flows from Operating Activities
Net income $
162 $
802
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,158 1,106
Deferred income taxes and investment tax credits (289) 302
Write-off of wildfire regulatory asset 351
Impairment losses 1,304 72
Equity earnings (50) (26)
Fixed-price contracts and other derivatives (44) (142)
Other 139 18
Net change in other working capital components 444 229
Insurance receivable for Aliso Canyon costs (56) 64
Changes in other noncurrent assets and liabilities, net (177) (72)
Net cash provided by operating activities 2,591 2,704
Cash Flows from Investing Activities
Expenditures for property, plant and equipment (2,815) (2,880)
Expenditures for investments and acquisitions (9,921) (110)
Proceeds from sale of assets 7 12
Distributions from investments 9 25
Purchases of nuclear decommissioning trust assets (703) (1,082)
Proceeds from sales of nuclear decommissioning trust assets 703 1,082
Advances to unconsolidated affiliates (84) (321)
Repayments of advances to unconsolidated affiliates 71 8
Other 29 6
Net cash used in investing activities (12,704) (3,260)
Cash Flows from Financing Activities
Common dividends paid (645) (561)
Preferred dividends paid (53)
Preferred dividends paid by subsidiary (1) (1)
Issuances of mandatory convertible preferred stock, net of $41 in offering costs 2,259
Issuances of common stock, net of $41 in offering costs in 2018 2,261 37
Repurchases of common stock (20) (15)
Issuances of debt (maturities greater than 90 days) 8,628 2,395
Payments on debt (maturities greater than 90 days) (2,967) (1,829)
Increase in short-term debt, net 707 475
Proceeds from sales of noncontrolling interest, net of $1 in offering costs 90
Net distributions to noncontrolling interests (101) (109)
Settlement of cross-currency swaps (33)
Other (80) (11)
Net cash provided by financing activities 10,045 381
Effect of exchange rate changes on cash, cash equivalents and restricted cash (8) 11
Decrease in cash, cash equivalents and restricted cash (76) (164)
Cash, cash equivalents and restricted cash, January 1 364 425
Cash, cash equivalents and restricted cash, September 30 $
288 $
261
(1) As adjusted for the retrospective
adoption of ASU 2016-15 and ASU
2016-18.
SEMPRA ENERGY
Table D
SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES, INVESTMENTS AND ACQUISITIONS
Three months ended
Nine months ended
September 30,
September 30,
---
(Dollars in millions) 2018 2017 2018 2017
--- ---
(unaudited)
Earnings (Losses)
SDG&E $
205 $
(28) $
521 $
276
SoCalGas (14) 7 244 268
Sempra Texas Utility 154 283
Sempra South American
Utilities 50 42 140 134
Sempra Mexico 44 66 161 105
Sempra Renewables 34 15 (54) 49
Sempra LNG & Midstream 16 (4) (764) 24
Parent and other (215) (41) (471) (99)
Total $
274 $
57 $
60 $
757
Three months ended
Nine months ended
September 30,
September 30,
---
(Dollars in millions) 2018 2017 2018 2017
--- ---
(unaudited)
Capital Expenditures, Investments and
Acquisitions
SDG&E $
343 $
359 $
1,194 $
1,122
SoCalGas 344 351 1,127 1,033
Sempra Texas Utility 9,278
Sempra South American
Utilities 54 62 161 139
Sempra Mexico 152 38 320 265
Sempra Renewables 9 261 46 361
Sempra LNG & Midstream 65 16 202 53
Parent and other 5 4 408 17
Total $
972 $
1,091 $
12,736 $
2,990
SEMPRA ENERGY
Table E
OTHER OPERATING STATISTICS (Unaudited)
Three months ended Nine months ended
September 30,
September 30,
---
UTILITIES 2018 2017 2018 2017
--- ---
SDG&E and SoCalGas
Gas sales (Bcf)(1) 55 56 244 253
Transportation (Bcf)(1) 163 184 447 488
Total deliveries (Bcf)(1) 218 240 691 741
Total gas customer meters (thousands) 6,874 6,835
SDG&E
Electric sales (millions of kWhs)(1) 4,493 4,443 11,493 11,772
Direct Access and Community Choice Aggregation (millions of kWhs) 1,009 957 2,680 2,530
Total deliveries (millions of kWhs)(1) 5,502 5,400 14,173 14,302
Total electric customer meters (thousands) 1,456 1,440
Oncor
(2)
Total deliveries (millions of kWhs) 38,163 77,476
Total electric customer meters (thousands) 3,607
Ecogas
Natural gas sales (Bcf) 1 7 7 22
Natural gas customer meters (thousands) 121 120
Chilquinta Energía
Electric sales (millions of kWhs) 701 699 2,209 2,201
Tolling (millions of kWhs) 75 26 218 70
Total deliveries (millions of kWhs) 776 725 2,427 2,271
Electric customer meters (thousands) 718 700
Luz Del Sur
Electric sales (millions of kWhs) 1,641 1,647 5,099 5,321
Tolling (millions of kWhs) 595 478 1,736 1,384
Total deliveries (millions of kWhs) 2,236 2,125 6,835 6,705
Electric customer meters (thousands) 1,125 1,093
ENERGY-RELATED BUSINESSES
---
Power generated and sold (millions of kWhs)
Sempra Mexico
(3) 1,450 1,327 3,846 3,032
Sempra Renewables
(4) 1,189 894 3,763 3,100
(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 nine
months ended September 30, 2018
only include volumes from the
March 9, 2018 acquisition date.
(3) Includes power generated and sold
at the TdM natural gas-fired
power plant and the Ventika wind
power generation facilities. Also
includes 50 percent of 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.
(4) Includes 50 percent of total power
generated and 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. On June 25, 2018, our board
of directors approved a plan to
sell all U.S. wind and solar assets
and investments.
SEMPRA ENERGY
Table F (Unaudited)
STATEMENTS OF OPERATIONS DATA BY SEGMENT
Three months ended September 30, 2018
(Dollars in
millions) SDG&E SoCalGas Sempra Sempra Sempra Sempra Sempra Consolidating Total
Texas South Mexico Renewables LNG & Adjustments,
Utility American Midstream Parent &
Utilities Other
--- ---
Revenues $
1,299 $
802
$ $
375 $
410 $
38 $
147 $
(131) $
2,940
Cost of sales and
other expenses (825) (656) (277) (201) (24) (131) 98 (2,016)
Depreciation and
amortization (174) (141) (14) (45) (2) (4) (380)
Impairment losses - (4) (4)
Other income, net 24 3 1 66 3 97
Income (loss) before
interest and tax(1) 324 8 85 226 14 14 (34) 637
Net interest
(expense) income (55) (29) (4) (13) (3) 7 (113) (210)
Income tax (expense)
benefit (53) 7 (23) (126) 2 (6) 32 (167)
Equity earnings
(losses), net - 154 (28) 12 (64) 74
(Earnings) losses
attributable to
noncontrolling
interests (11) (8) (15) 9 1 (24)
Preferred dividends - (36) (36)
Earnings (losses) $
205 $
(14) $
154 $
50 $
44 $
34 $
16 $
(215) $
274
Three months ended September 30, 2017
(Dollars in
millions) SDG&E SoCalGas Sempra Sempra Sempra Sempra Sempra Consolidating Total
Texas South Mexico Renewables LNG & Adjustments,
Utility American Midstream Parent &
Utilities Other
--- ---
Revenues $
1,236 $
684
$ $
376 $
336 $
26 $
152 $
(131) $
2,679
Cost of sales and
other expenses(2) (773) (547) (295) (152) (22) (154) 112 (1,831)
Depreciation and
amortization (170) (132) (14) (41) (9) (10) (2) (378)
Impairment losses (351) (1) (352)
Other income, net(2) 20 13 2 3 1 1 40
(Loss) income before
interest and
tax(1)(3) (38) 18 69 145 (5) (11) (20) 158
Net interest
(expense) income (53) (25) (4) (14) (2) 5 (60) (153)
Income tax benefit
(expense) 72 14 (18) (34) 9 2 39 84
Equity earnings,
net(3) - 1 2 7 3 13
(Earnings) losses
attributable to
noncontrolling
interests (9) (6) (33) 6 (3) (45)
(Losses) earnings $
(28) $
7
$ $
42 $
66 $
15 $
(4) $
(41) $
57
(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) As adjusted for the retrospective
adoption of ASU 2017-07.
(3) As adjusted for a reclassification to
conform to current year presentation.
SEMPRA ENERGY
Table F (Unaudited)
STATEMENTS OF OPERATIONS DATA BY SEGMENT
Nine months ended September 30, 2018
(Dollars in
millions) SDG&E SoCalGas Sempra Sempra Sempra Sempra Sempra Consolidating Total
Texas South Mexico Renewables LNG & Adjustments,
Utility American Midstream Parent &
Utilities Other
--- ---
Revenues $
3,405 $
2,700
$ $
1,190 $
1,028 $
103 $
330 $
(290) $
8,466
Cost of sales and
other expenses (2,133) (1,934) (915) (453) (68) (324) 221 (5,606)
Depreciation and
amortization (509) (414) (43) (131) (27) (24) (10) (1,158)
Impairment losses - (4) (1,300) (1,304)
Other income, net 77 49 4 64 2 196
Income (loss) before
interest and tax(1) 840 401 236 504 8 (1,318) (77) 594
Net interest
(expense) income (158) (81) (11) (42) (9) 18 (326) (609)
Income tax (expense)
benefit (151) (75) (64) (226) 67 488 88 127
Equity earnings
(losses), net - 283 1 2 (170) 1 (67) 50
(Earnings) losses
attributable to
noncontrolling
interests (10) (22) (77) 50 47 (12)
Preferred dividends - (1) (89) (90)
Earnings (losses) $
521 $
244 $
283 $
140 $
161 $
(54) $
(764) $
(471) $
60
Nine months ended September 30, 2017
(Dollars in
millions) SDG&E SoCalGas Sempra Sempra Sempra Sempra Sempra Consolidating Total
Texas South Mexico Renewables LNG & Adjustments,
Utility American Midstream Parent &
Utilities Other
--- ---
Revenues $
3,351 $
2,695
$ $
1,169 $
873 $
74 $
406 $
(325) $
8,243
Cost of sales and
other expenses(2) (2,048) (1,914) (915) (403) (57) (353) 275 (5,415)
Depreciation and
amortization (499) (384) (40) (114) (28) (31) (10) (1,106)
Impairment losses (351) (72) (423)
Other income, net(2) 61 51 7 190 1 2 10 322
Income (loss) before
interest and
tax(1)(3) 514 448 221 474 (10) 24 (50) 1,621
Net interest
(expense) income (151) (76) (13) (61) (7) 14 (173) (467)
Income tax (expense)
benefit (72) (103) (57) (278) 25 (17) 124 (378)
Equity earnings
(losses), net(3) - 2 (7) 25 6 26
(Earnings) losses
attributable to
noncontrolling
interests (15) (19) (23) 16 (3) (44)
Preferred dividends - (1) (1)
Earnings (losses) $
276 $
268
$ $
134 $
105 $
49 $
24 $
(99) $
757
(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) As adjusted for the retrospective
adoption of ASU 2017-07.
(3) As adjusted for a reclassification to
conform to current year presentation.
[SRE-F]
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SOURCE Sempra Energy
