Sempra Energy's 2018 Earnings Rise On Strong Operating Results
SAN DIEGO, Feb. 26, 2019 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported its 2018 full-year earnings increased to $924 million, or $3.42 per diluted share, from $256 million, or $1.01 per diluted share, in 2017. On an adjusted basis, the company's 2018 earnings were $1.5 billion, or $5.57 per diluted share, up from $1.37 billion, or $5.42 per diluted share, in 2017.
"Our strong 2018 operational and financial results confirm that we're on track to fulfill our mission to become North America's premier energy infrastructure company," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "Over the past year, we made significant strides in all aspects of our business. We expanded our Texas regulated utility platform with the acquisition of our majority interest in Oncor. Also, we delivered outstanding safety, reliability and customer service at our California utilities, while advancing our role in North America's liquefied natural gas (LNG) export market. Moreover, we executed our strategy to realign our portfolio to support our core mission. These results are a testament to our team's ability to deliver value to our owners."
In the fourth quarter 2018, Sempra Energy reported earnings of $864 million, or $3.03 per diluted share, compared with a loss of $501 million, or $1.99 per diluted share, in 2017. Sempra Energy's adjusted earnings in the fourth quarter 2018 increased to $431 million, or $1.56 per diluted share, from $389 million, or $1.54 per diluted share in 2017.
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 fourth quarter and full year 2018 and 2017.
Three months ended
Years ended
Dec. 31
Dec. 31
(Dollars, except earnings per share, and shares, in
millions) 2018 2017 2018 2017
(Unaudited)
GAAP Earnings (Losses)(1) $864 $(501) $924 $256
Gain on Sale of Certain
Sempra Renewables Assets (367) (367)
Impairment of Investment in RBS Sempra Commodities 65
(Adjustment)/Impairment of Non-Utility U.S. Natural Gas
Storage Assets (126) 629
Impairment of U.S. Wind Equity Method Investments 145
Impacts Associated With
Aliso Canyon Litigation 20 22 20
Impact From Tax Cuts and Jobs Act of 2017 60 870 85 870
Write-Off of Wildfire Regulatory Asset 208
Adjustments Related to
Termoeléctrica de
Mexicali (TdM) Held for
Sale 42
Recoveries Related to
Permanent Releases of
Pipeline Capacity (28)
Adjusted Earnings(1) $431 $389 $1,503 $1,368
GAAP Diluted Weighted-Average Shares Outstanding 296 252 270 252
GAAP Earnings (Losses) per Diluted Share(1)
$3.03(2) $(1.99) $3.42 $1.01
Adjusted Diluted Weighted-Average Shares Outstanding(1) 276 253 270 252
Adjusted Earnings per Diluted Share(1) $1.56 $1.54 $5.57 $5.42
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.
2) Due to the dilutive effect of
the mandatory convertible
preferred stock for GAAP
earnings, the numerator used
to calculate GAAP earnings per
share includes an add-back of
$36 million of mandatory
preferred stock dividends
declared in the quarter.
Last week, Sempra Energy's board of directors approved an approximate 8-percent increase in the company's dividend to $3.87 per common share from $3.58 per common share, on an annualized basis. This marks the ninth consecutive year that the company has raised its common dividend.
OPERATING HIGHLIGHTS
In 2018, Sempra Energy achieved several significant milestones in advancing its mission to become North America's premier energy infrastructure company.
Earlier this month, Sempra Energy announced an agreement to complete the divestiture of its U.S. renewables business by selling its remaining wind operating and development assets. When complete, the sales of the company's U.S. solar, wind and non-utility natural gas storage assets are expected to generate approximately $2.5 billion in cash proceeds for Sempra Energy. The proceeds will be used to support Sempra Energy's focus on North America and strengthen its balance sheet.
Additionally, in January, Sempra Energy announced that it would sell its equity interests in its South American businesses, including Luz del Sur S.A.A. in Peru and Chilquinta Energía S.A. in Chile. While Luz del Sur and Chilquinta Energía have made significant contributions to Sempra Energy over the past two decades and offer exciting future growth opportunities, the planned sale supports Sempra Energy's refocusing of capital investments in North America. Sempra Energy will launch the formal sale process in March.
Sempra Energy also announced several LNG agreements with commercial parties in the fourth quarter 2018 with respect to the company's LNG facilities in development: Port Arthur LNG in Jefferson County, Texas; Cameron LNG Phase 2 in Hackberry, La.; and Energía Costa Azul LNG Phases 1 and 2 in Mexico. The agreements support Sempra Energy's goal to become one of the largest U.S. exporters of LNG, targeting the export of 45 million tons per annum to global markets.
In November 2018, Cameron LNG initiated the commissioning process for the first of three liquefaction trains of Phase 1 of the project. Sempra Energy expects Cameron LNG to begin generating earnings in mid-2019.
Last month, Sempra Energy was added to the Dow Jones Utility Average, a 15-stock, price-weighted index measuring the performance of some of the largest U.S. companies within the utilities sector. Stocks are selected for the index based on reputation, demonstration of sustained financial growth and interest to a large number of investors.
Additionally, in 2018, the Wall Street Journal ranked Sempra Energy as the top company in the utility sector in the Journal's first "Management Top 250" list.
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 for Sempra Energy include fourth-quarter and full-year 2018 and 2017 adjusted earnings and adjusted earnings per share and 2019 adjusted earnings-per-share guidance. Additional information regarding these non-GAAP financial measures is in the appendix on Table A of the fourth-quarter 2018 financial tables.
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 2787825.
Sempra Energy's mission is to become North America's premier energy infrastructure company. With 2018 revenues of more than $11.5 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, social responsibility and investment value.
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: 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; actions and the timing of actions, including decisions, new regulations and issuances of 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; 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; the success of business development efforts, construction projects, 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) disruption caused by the announcement of contemplated acquisitions and/or divestitures or internal structural changes; (vii) the ability to complete contemplated acquisitions and/or divestitures; and (viii) the ability to realize anticipated benefits from any of these efforts once completed; the resolution of civil and criminal litigation and regulatory investigations and proceedings; 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; 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; and 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 recent federal 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; expropriation of assets by foreign governments and title and other property disputes; the impact at San Diego Gas & Electric (SDG&E) 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 & 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
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
Years ended
December 31, December 31,
(Dollars in millions, except per share amounts; shares in thousands) 2018 2017(1) 2018 2017(1)
---
(unaudited)
REVENUES
Utilities $
2,798 $
2,604 $
10,046 $
9,776
Energy-related businesses 423 360 1,641 1,431
Total revenues 3,221 2,964 11,687 11,207
EXPENSES AND OTHER INCOME
Utilities:
Cost of electric fuel and purchased power (545) (551) (2,323) (2,281)
Cost of natural gas (426) (287) (1,208) (1,190)
Energy-related businesses:
Cost of natural gas, electric fuel and purchased power (98) (113) (355) (339)
Other cost of sales (24) (19) (78) (24)
Operation and maintenance (916) (868) (3,309) (3,096)
Depreciation and amortization (391) (384) (1,549) (1,490)
Franchise fees and other taxes (120) (111) (472) (436)
Write-off of wildfire regulatory asset (351)
Impairment losses 182 (1,122) (72)
Gain on sale of assets 514 1 524 3
Other (expense) income, net (124) (89) 72 233
Interest income 28 20 104 46
Interest expense (240) (166) (925) (659)
Income before income taxes and equity earnings of unconsolidated entities 1,061 397 1,046 1,551
Income tax expense (223) (898) (96) (1,276)
Equity earnings 126 50 176 76
Net income (loss) 964 (451) 1,126 351
Earnings attributable to noncontrolling interests (64) (50) (76) (94)
Mandatory convertible preferred stock dividends (36) (125)
Preferred dividends of subsidiary (1) (1)
Earnings (losses) attributable to common shares $
864 $
(501) $
924 $
256
BASIC EARNINGS PER COMMON SHARE
Numerator:
Earnings (losses) attributable to common shares $
864 $
(501) $
924 $
256
Denominator:
Weighted-average shares outstanding, basic 274,331 251,902 268,072 251,545
Basic earnings (losses) per common share $
3.15 $
(1.99) $
3.45 $
1.02
DILUTED EARNINGS PER COMMON SHARE
Numerator:
Earnings (losses) attributable to common shares $
864 $
(501) $
924 $
256
Add back dividends for dilutive mandatory convertible preferred stock 36 N/A N/A N/A
Total $
900 $
(501) $
924 $
256
Denominator:
Weighted-average shares outstanding, basic 274,331 251,902 268,072 251,545
Dilutive effect of stock options, RSAs and RSUs 905 919 755
Dilutive effect of common shares sold forward 994 861
Dilutive effect of mandatory convertible preferred stock 20,199
Weighted-average shares outstanding, diluted(2) 296,429 251,902 269,852 252,300
Diluted earnings (losses) per common share(2) $
3.03 $
(1.99) $
3.42 $
1.01
(1) As adjusted for
the
retrospective
adoption of
Accounting
Standards
Update (ASU)
2017-07 and a
reclassification
to conform to
current year
presentation.
(2) For the three months ended December
31, 2017, the total weighted-average
potentially dilutive securities was
823 shares. However, these securities
were not included in the computation
of GAAP EPS since to do so would have
decreased the loss per share.
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 2018 and 2017 as follows:
Three months ended December 31, 2018:
-- $367 million gain on the sale of certain Sempra Renewables assets
-- $126 million reduction in the impairment of certain non-utility natural
gas storage assets in the southeast U.S. at Sempra LNG & Midstream
-- $(60) million income tax expense in 2018 to adjust the Tax Cuts and Jobs
Act of 2017 (TCJA) provisional amounts recorded in 2017
Three months ended December 31, 2017:
-- $(870) million income tax expense from the impact of the TCJA
-- $(20) million associated with Aliso Canyon litigation reserves at
Southern California Gas Company (SoCalGas)
Year ended December 31, 2018:
-- $367 million gain on the sale of certain Sempra Renewables assets
-- $(65) million impairment of RBS Sempra Commodities LLP (RBS Sempra
Commodities) equity method investment at Parent and Other
-- $(629) million impairment of certain non-utility natural gas storage
assets 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 SoCalGas
-- $(85) million income tax expense in 2018 to adjust the TCJA provisional
amounts recorded in 2017
Year ended December 31, 2017:
-- $(870) million income tax expense from the impact of the TCJA
-- $(208) million write-off of wildfire regulatory asset at San Diego Gas &
Electric Company (SDG&E)
-- $(47) million impairment of Termoeléctrica de Mexicali (TdM) assets
that were held for sale until June 2018 at Sempra Mexico
-- $(20) million associated with Aliso Canyon litigation reserves at
SoCalGas
-- $5 million deferred income tax benefit on the TdM assets that were held
for sale
-- $28 million of recoveries related to 2016 permanent releases of pipeline
capacity at Sempra LNG & Midstream
Sempra Energy Adjusted Earnings, Weighted-Average Shares Outstanding - Adjusted 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 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 (Losses), Weighted-Average Shares Outstanding - GAAP and GAAP Diluted Earnings (Losses) Per Common Share (GAAP EPS), which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.
SEMPRA ENERGY
Table A (Continued)
Pretax Income tax Non- Earnings Pretax Income tax Non- (Losses)
amount expense controlling amount expense controlling earnings
(benefit)(1) interests (benefit)(1) interests
(Dollars in millions,
except per share
amounts; shares in
thousands)
Three months ended December 31, 2018
Three months ended December 31, 2017
--- ---
Sempra Energy GAAP Earnings (Losses) $
864 $
(501)
Excluded items:
Gain on sale of certain
Sempra Renewables assets $
(513) $
146
$ (367)
$
$
$
Reduction of impairment
of non-utility natural
gas storage assets (183) 47 10 (126)
Impact from the TCJA - 60 60 870 870
Aliso Canyon litigation
reserves - 20 20
Sempra Energy Adjusted Earnings $
431 $
389
Diluted earnings (losses) per common
share(2):
Sempra Energy GAAP Earnings
(Losses) $
900(3) $
(501)
Weighted-average shares
outstanding, diluted - GAAP 296,429 251,902
Sempra Energy GAAP EPS $
3.03(3) $
(1.99)
Sempra Energy Adjusted Earnings $
431 $
389
Weighted-average shares
outstanding, diluted -
Adjusted 276,230(4) 252,725(5)
Sempra Energy Adjusted EPS $
1.56(4) $
1.54(5)
Year ended December 31, 2018
Year ended December 31, 2017
Sempra Energy GAAP Earnings $
924 $
256
Excluded items:
Gain on sale of certain
Sempra Renewables assets $
(513) $
146
$ (367)
$
$
$
Impairment of investment
in RBS Sempra
Commodities 65 65
Impairment of non-
utility natural gas
storage assets 1,117 (452) (36) 629
Impairment of U.S. wind
equity method
investments 200 (55) 145
Impacts associated with
Aliso Canyon litigation 1 21 22
Impact from the TCJA - 85 85 870 870
Write-off of wildfire
regulatory asset - 351 (143) 208
Impairment of TdM assets
held for sale - 71 (24) 47
Aliso Canyon litigation
reserves - 20 20
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 $
1,503 $
1,368
Diluted earnings per common share:
Sempra Energy GAAP EPS $
3.42 $
1.01
Sempra Energy Adjusted EPS $
5.57 $
5.42
Weighted-average shares outstanding,
diluted 269,852 252,300
---
(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.
(2) For the three
months ended
December 31,
2018, the
assumed
conversion
of the
mandatory
convertible
preferred
stock is
dilutive for
GAAP
earnings,
but
antidilutive
for the
lower
adjusted
earnings.
(3) Due to the
dilutive
effect of
the
mandatory
convertible
preferred
stock, the
numerator
used to
calculate
GAAP EPS
includes an
add-back of
$36 million
of mandatory
convertible
preferred
stock
dividends
declared in
that
quarter.
(4) Due to the
antidilutive
effect of
the
mandatory
convertible
preferred
stock, the
denominator
used to
calculate
Adjusted EPS
excludes
20,199
shares of
mandatory
convertible
preferred
stock.
(5) The
denominator
used to
calculate
Adjusted EPS
includes 823
shares of
potentially
dilutive
securities,
which were
excluded
from GAAP
EPS because
to include
them 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:
-- an approximate $35 million after-tax((1)) (approximately $50 million
pretax) gain, plus working capital and other customary adjustments,
related to our agreement to sell the remaining U.S. renewables assets
and investments to American Electric Power
-- any potential gain from the planned sale, as well as income tax expense
related to an expected change in our indefinite reinvestment assertions,
resulting from our decision in January 2019 to hold our South American
businesses for sale
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 measure provides better clarity into the ongoing results of the business and the comparability of such results 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. Because the sale process for the planned divestiture of our South American businesses was only recently initiated in January 2019, the terms and structure of any potential sale transaction or transactions are unknown, including terms that would impact income tax expense resulting from an expected change in our assertion regarding indefinite reinvestment of foreign undistributed earnings, including the timing and amounts of repatriation of such earnings.
(1) Income taxes were estimated
based on statutory tax
rates.
SEMPRA ENERGY
Table B
CONSOLIDATED BALANCE SHEETS
(Dollars in millions) December 31, 2018 December 31, 2017
--- ---
Assets
Current assets:
Cash and cash equivalents $
190 $
288
Restricted cash 35 62
Accounts receivable, net 1,850 1,584
Due from unconsolidated
affiliates 39 37
Income taxes receivable 68 110
Inventories 296 307
Regulatory assets 138 325
Greenhouse gas allowances 59 299
Assets held for sale 713 127
Other 257 202
Total current assets 3,645 3,341
Other assets:
Restricted cash 21 14
Due from unconsolidated
affiliates 688 598
Regulatory assets 1,589 1,517
Nuclear decommissioning
trusts 974 1,033
Investment in Oncor
Holdings 9,652
Other investments 2,337 2,527
Goodwill 2,373 2,397
Other intangible assets 272 596
Dedicated assets in support
of certain benefit plans 416 455
Insurance receivable for
Aliso Canyon costs 461 418
Deferred income taxes 151 170
Greenhouse gas allowances 289 93
Sundry 974 792
Total other assets 20,197 10,610
Property, plant and
equipment, net 36,796 36,503
Total assets $
60,638 $
50,454
SEMPRA ENERGY
Table B (Continued)
CONSOLIDATED BALANCE SHEETS
(Dollars in millions) December 31, 2018 December 31, 2017
--- ---
Liabilities and Equity
Current liabilities:
Short-term debt $
2,079 $
1,540
Accounts payable 1,474 1,523
Due to unconsolidated
affiliates 10 7
Dividends and interest
payable 499 342
Accrued compensation
and benefits 469 439
Regulatory liabilities 105 109
Current portion of
long-term debt 1,673 1,427
Reserve for Aliso
Canyon costs 160 84
Greenhouse gas
obligations 59 299
Liabilities held for
sale 25 49
Other 970 816
Total current
liabilities 7,523 6,635
Long-term debt 21,611 16,445
Deferred credits and other liabilities:
Due to unconsolidated
affiliates 37 35
Pension and other
postretirement
benefit plan
obligations, net of
plan assets 1,161 1,148
Deferred income taxes 2,571 2,767
Deferred investment
tax credits 24 28
Regulatory liabilities 4,016 3,922
Asset retirement
obligations 2,787 2,732
Greenhouse gas
obligations 131
Deferred credits and
other 1,529 1,602
Total deferred credits
and other liabilities 12,256 12,234
Equity:
Sempra Energy
shareholders' equity 17,138 12,670
Preferred stock of
subsidiary 20 20
Other noncontrolling
interests 2,090 2,450
Total equity 19,248 15,140
Total liabilities and
equity $
60,638 $
50,454
SEMPRA ENERGY
Table C
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31,
(Dollars in millions) 2018 2017
---
Cash Flows from Operating Activities
Net income $
1,126 $
351
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,549 1,490
Deferred income taxes and investment
tax credits (182) 1,160
Write-off of wildfire regulatory
asset 351
Impairment losses 1,122 72
Gain on sale of assets (524) (3)
Equity earnings, net (176) (76)
Share-based compensation expense 83 82
Fixed-price contracts and other
derivatives (10) 7
Other 315 67
Net change in other working capital
components 173 57
Insurance receivable for Aliso
Canyon costs (43) 188
Changes in other noncurrent assets
and liabilities, net 14 (121)
Net cash provided by operating
activities 3,447 3,625
Cash Flows from Investing Activities
Expenditures for property, plant and
equipment (3,784) (3,949)
Expenditures for investments and
acquisitions, net of cash and (10,376) (270)
cash equivalents acquired
Proceeds from sale of assets, net of
cash and restricted cash sold 1,593 17
Distributions from investments 10 26
Purchases of nuclear decommissioning
trust assets (890) (1,314)
Proceeds from sales by nuclear
decommissioning trust assets 890 1,314
Advances to unconsolidated
affiliates (102) (531)
Repayments of advances to
unconsolidated affiliates 71 9
Other 31 (2)
Net cash used in investing
activities (12,557) (4,700)
Cash Flows from Financing Activities
Common dividends paid (877) (755)
Preferred dividends paid (89)
Preferred dividends paid by
subsidiary (1) (1)
Issuances of mandatory convertible
preferred stock, net of $42 in
offering costs in 2018 2,258
Issuances of common stock, net of
$41 in offering costs in 2018 2,272 47
Repurchases of common stock (21) (15)
Issuances of debt (maturities
greater than 90 days) 9,174 4,509
Payments on debt (maturities greater
than 90 days) (3,510) (2,800)
Decrease in short-term debt, net (124) (36)
Advances from unconsolidated
affiliates 35
Proceeds from sale of noncontrolling
interests, net of $1 and $3 in
offering costs, respectively 90 196
Net distributions to noncontrolling
interests (43) (130)
Settlement of cross-currency swaps (33)
Other (90) (43)
Net cash provided by financing
activities 9,006 1,007
Effect of exchange rate changes on
cash, cash equivalents and
restricted cash (14) 7
Decrease in cash, cash equivalents
and restricted cash (118) (61)
Cash, cash equivalents and
restricted cash, January 1 364 425
Cash, cash equivalents and
restricted cash, December 31 $
246 $
364
SEMPRA ENERGY
Table D
SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES, INVESTMENTS AND ACQUISITIONS
Three months ended
Years ended
December 31, December 31,
---
(Dollars in millions) 2018 2017 2018 2017
--- ---
(unaudited)
Earnings (Losses)
San Diego Gas &
Electric $
148 $
131 $
669 $
407
Southern California
Gas 156 128 400 396
Sempra Texas Utility 88 371
Sempra South American
Utilities 59 52 199 186
Sempra Mexico 76 64 237 169
Sempra Renewables 382 203 328 252
Sempra LNG & Midstream 147 126 (617) 150
Parent and other (192) (1,205) (663) (1,304)
Total $
864 $
(501) $
924 $
256
Three months ended
Years ended
December 31, December 31,
---
(Dollars in millions) 2018 2017 2018 2017
--- ---
(unaudited)
Capital Expenditures, Investments and
Acquisitions
San Diego Gas &
Electric $
348 $
433 $
1,542 $
1,555
Southern California
Gas 411 334 1,538 1,367
Sempra Texas Utility 179 9,457
Sempra South American
Utilities 287 106 448 245
Sempra Mexico 148 202 468 467
Sempra Renewables 10 136 56 497
Sempra LNG & Midstream 104 15 306 68
Parent and other (63) 3 345 20
Capital Expenditures,
Investments and
Acquisitions $
1,424 $
1,229 $
14,160 $
4,219
SEMPRA ENERGY
Table E
OTHER OPERATING STATISTICS (Unaudited)
Three months ended Years ended or at
December 31, December 31,
---
UTILITIES 2018 2017 2018 2017
--- ---
SDG&E and SoCalGas
Gas sales (Bcf)(1) 93 88 337 341
Transportation (Bcf)(1) 134 150 581 638
Total deliveries
(Bcf)(1) 227 238 918 979
Total gas customer meters
(thousands) 6,885 6,846
SDG&E
Electric sales
(millions of kWhs)(1) 3,643 3,845 15,125 15,617
Direct Access and
Community Choice
Aggregation (millions
of kWhs) 947 864 3,628 3,394
Total deliveries
(millions of kWhs)(1) 4,590 4,709 18,753 19,011
Total electric customer meters
(thousands) 1,459 1,446
Oncor
(2)
Total deliveries
(millions of kWhs) 29,800 107,276
Total electric customer meters
(thousands) 3,621
Ecogas
Natural gas sales (Bcf) 7 7 29
Natural gas customer meters
(thousands) 123 120
Chilquinta Energía
Electric Sales
(Millions of kWhs) 739 735 2,948 2,936
Tolling (Millions of
kWhs) 85 27 303 98
Total Deliveries
(Millions of kWhs) 824 762 3,251 3,034
Electric customer meters
(thousands) 722 704
Luz del Sur
Electric Sales
(Millions of kWhs) 1,661 1,678 6,760 6,999
Tolling (Millions of
kWhs) 649 539 2,385 1,922
Total Deliveries
(Millions of kWhs) 2,310 2,217 9,145 8,921
Electric customer meters
(thousands) 1,134 1,102
ENERGY-RELATED BUSINESSES
---
Power generated and sold (millions
of kWhs)
Sempra Mexico
(3) 1,404 1,305 5,250 4,337
Sempra Renewables
(4) 1,036 1,075 4,799 4,175
(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 year
ended December 31, 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) We include 50 percent of total power
generated and sold related to U.S.
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. For assets and
investments sold in December 2018,
we include their power generated
and sold up to the date of the
sale.
SEMPRA ENERGY
Table F (Unaudited)
STATEMENT OF OPERATIONS DATA BY SEGMENT
Three months ended December 31, 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 $
1,163 $
1,262
$ $
395 $
348 $
21 $
142 $
(110) $
3,221
Cost of sales and
other expenses (737) (882) (293) (175) (26) (122) 106 (2,129)
Depreciation and
amortization (179) (142) (15) (44) (2) (9) (391)
Write-off and
reduction in
impairment losses - 183 (1) 182
Gain (loss) on sale
of assets - 1 1 (1) 513 514
Other (expense)
income, net (21) (34) 10 (63) 1 (17) (124)
Income (loss) before
interest and tax(1) 226 205 98 65 509 201 (31) 1,273
Net interest
(expense) income (59) (32) 2 (13) 2 10 (122) (212)
Income tax (expense)
benefit (22) (17) (31) 41 (138) (53) (3) (223)
Equity earnings
(losses), net - 88 38 1 (1) 126
Losses (earnings)
attributable to
noncontrolling
interests 3 (10) (55) 8 (10) (64)
Preferred dividends - (36) (36)
Earnings (losses) $
148 $
156 $
88 $
59 $
76 $
382 $
147 $
(192) $
864
Three months ended December 31, 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 $
1,125 $
1,090
$ $
398 $
323 $
20 $
134 $
(126) $
2,964
Cost of sales and
other expenses(2) (698) (729) (312) (165) (19) (136) 111 (1,948)
Depreciation and
amortization (171) (131) (14) (42) (10) (11) (5) (384)
Other income
(expense), net(2) 9 (20) 6 (85) 1 1 (1) (89)
Income (loss) before
interest and
tax(1)(3) 265 210 78 31 (8) (12) (21) 543
Net interest
(expense) income (52) (25) 3 (13) (1) 3 (61) (146)
Income tax (expense)
benefit (83) (57) (23) 51 201 136 (1,123) (898)
Equity earnings
(losses), net(3) - 2 45 4 (1) 50
Losses (earnings)
attributable to
noncontrolling
interests 1 (8) (50) 7 (50)
Earnings (losses) $
131 $
128
$ $
52 $
64 $
203 $
126 $
(1,205) $
(501)
(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)
STATEMENT OF OPERATIONS DATA BY SEGMENT
Year ended December 31, 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 $
4,568 $
3,962
$ $
1,585 $
1,376 $
124 $
472 $
(400) $
11,687
Cost of sales and
other expenses (2,870) (2,816) (1,218) (628) (94) (446) 327 (7,745)
Depreciation and
amortization (688) (556) (58) (175) (27) (26) (19) (1,549)
Write-off and
impairment losses - (4) (1,117) (1) (1,122)
Gain (loss) on sale
of assets - 1 11 (1) 513 524
Other income
(expense), net 56 15 14 1 1 (15) 72
Income (loss) before
interest and tax(1) 1,066 606 334 569 517 (1,117) (108) 1,867
Net interest
(expense) income (217) (113) (9) (55) (7) 28 (448) (821)
Income tax (expense)
benefit (173) (92) (95) (185) (71) 435 85 (96)
Equity earnings
(losses), net - 371 1 40 (169) (67) 176
(Earnings) losses
attributable to
noncontrolling
interests (7) (32) (132) 58 37 (76)
Preferred dividends - (1) (125) (126)
Earnings (losses) $
669 $
400 $
371 $
199 $
237 $
328 $
(617) $
(663) $
924
Year ended December 31, 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 $
4,476 $
3,785
$ $
1,567 $
1,196 $
94 $
540 $
(451) $
11,207
Cost of sales and
other expenses(2) (2,746) (2,643) (1,227) (568) (76) (489) 386 (7,363)
Depreciation and
amortization (670) (515) (54) (156) (38) (42) (15) (1,490)
Write-off and
impairment losses (351) (72) (423)
Other income
(expense), net(2) 70 31 13 105 2 3 9 233
Income (loss) before
interest and
tax(1)(3) 779 658 299 505 (18) 12 (71) 2,164
Net interest
(expense) income (203) (101) (10) (74) (8) 17 (234) (613)
Income tax (expense)
benefit (155) (160) (80) (227) 226 119 (999) (1,276)
Equity earnings
(losses), net(3) - 4 38 29 5 76
(Earnings) losses
attributable to
noncontrolling
interests (14) (27) (73) 23 (3) (94)
Preferred dividends - (1) (1)
Earnings (losses) $
407 $
396
$ $
186 $
169 $
252 $
150 $
(1,304) $
256
(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
