Sempra Energy Reports Second-Quarter 2019 Earnings
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
Six months ended
June 30,
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 286 (1,183) 787 (590)
and equity earnings (losses)
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 Income tax Earnings Pretax Income tax Non- (Losses)
amount expense amount (benefit) controlling earnings
(benefit)(1) expense(1) interests
(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, December
2019 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, December
2019 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
Six months ended
June 30, 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
Six months ended
June 30, 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 Six months ended
June 30, 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 Sempra Sempra Sempra Consolidating Total
Texas Mexico Renewables LNG Adjustments,
Utilities Parent &
Other
--- ---
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 Sempra Sempra Sempra Consolidating Total
Texas Mexico Renewables LNG Adjustments,
Utilities Parent &
Other
--- ---
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 Sempra Sempra Sempra Consolidating Total
Texas Mexico Renewables LNG Adjustments,
Utilities Parent &
Other
--- ---
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 Sempra Sempra Sempra Consolidating Total
Texas Mexico Renewables LNG Adjustments,
Utilities Parent &
Other
--- ---
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
