Sempra Energy Reports Third-Quarter 2020 Earnings Results
SAN DIEGO, Nov. 5, 2020 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported third-quarter 2020 earnings of $351 million, or $1.21 per diluted share, compared to third-quarter 2019 earnings of $813 million, or $2.84 per diluted share. On an adjusted basis, the company's third-quarter 2020 earnings were $380 million, or $1.31 per diluted share, compared to $425 million, or $1.50 per diluted share, in the third quarter of 2019. Sempra Energy's earnings for the first nine months of 2020 were $3.35 billion, or $11.43 per diluted share, compared with earnings of $1.61 billion, or $5.74 per diluted share, in the first nine months of 2019. Adjusted earnings for the first nine months of 2020 were $1.8 billion, or $6.10 per diluted share, compared to $1.46 billion, or $5.23 per diluted share, in the first nine months of 2019.
"We are excited to advance our leadership position in the most attractive markets in North America - California, Texas, Mexico and the LNG export market - with an unrelenting commitment to safety and operational excellence. Our investments in critical new energy infrastructure support economic prosperity, community wellbeing and the energy transition," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "Our strategy of investing in a high-growth infrastructure platform supports long-term, stable cash flows, attractive economic returns and improved earnings visibility."
The reported 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 third quarter and first nine months of 2020 and 2019.
Three months ended
Nine months ended
September 30,
September 30,
(Dollars, except EPS, and shares,
in millions) 2020 2019 2020 2019
(Unaudited)
GAAP Earnings $351 $813 $3,350 $1,608
Loss (Gain) on Sale of South
American Businesses 7 (1,747)
Losses from Investment in RBS
Sempra Commodities LLP 100
Impacts Associated with Aliso
Canyon Litigation and Regulatory
Matters 22 94
Tax Impacts from Holding the
South American Businesses for
Sale (192) (99)
Gain on Sale of U.S. Wind Assets (45)
SDG&E Retroactive Impact of 2019
GRC FD for first half of 2019 (66)
SoCalGas Retroactive Impact of
2019 GRC FD for first half of
2019 (130)
Adjusted Earnings(1) $380 $425 $1,797 $1,464
GAAP Diluted Weighted-Average
Common Shares Outstanding 291 296 293 280
GAAP Earnings Per Diluted Common
Share(2) $1.21 $2.84 $11.43 $5.74
Adjusted Diluted Weighted-
Average Common Shares
Outstanding(1) 291 283 307 280
Adjusted Earnings Per Diluted
Common Share(1),(3) $1.31 $1.50 $6.10 $5.23
1) Represents a non-GAAP
financial measure. See Table
A for information regarding
non-GAAP financial measures.
2) To calculate Q3-2019 GAAP EPS,
preferred dividends of $26
million are added back to
GAAP Earnings because of the
dilutive effect of Series A
mandatory convertible
preferred stock.
3) To calculate YTD-2020
Adjusted EPS, preferred
dividends of $78 million are
added back to Adjusted
Earnings because of the
dilutive effect of Series A
mandatory convertible
preferred stock.
Advancing Critical Energy Infrastructure in North America
In August, Phase 1 of the Cameron LNG export facility in Hackberry, Louisiana, reached full commercial operations under Cameron LNG's tolling agreements. This marked the start of full run-rate earnings and cash flows. Sempra Energy's share of full run-rate earnings from the Phase 1 project is expected to be between $400 million and $450 million annually, with no commodity or volumetric exposure. Due to the structure of the tolling agreements at Cameron LNG, Sempra Energy does not expect any earnings impact as a result of the recent outages due to Hurricanes Laura and Delta on the U.S. Gulf Coast.
Sempra Energy continues to work closely with local authorities as well as the highest levels of the Mexican government to advance the export permit process for Energía Costa Azul (ECA) LNG Phase 1. The company expects to reach a final investment decision in the fourth quarter of 2020.
Phase 1 of ECA LNG's project is planned to be built and operated by Sempra LNG and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova), Sempra Energy's subsidiary in Mexico, as a single-train liquefaction facility. Last year, ECA LNG received authorization from the U.S. Department of Energy to export U.S.-produced natural gas to Mexico and to re-export liquefied natural gas (LNG) to countries that do not have a free-trade agreement with the U.S.
ECA LNG has successfully secured definitive 20-year sale-and-purchase agreements with Mitsui & Co., Ltd. and an affiliate of Total SE for the purchase of approximately 2.5 Mtpa of LNG from Phase 1 of the project.
In another development, the U.S. Department of Energy extended the terms of the export authorizations for Phase 1 of the proposed Port Arthur LNG export project through Dec. 31, 2050.
Additionally, IEnova is advancing construction of its Gulf of Mexico network of fuel terminals. All three terminals are backed by take-or-pay contracts with Valero Energy Corp. and, once completed, should contribute nearly 3.4 million barrels of combined refined products storage capacity, while improving Mexico's energy security. Notably, the Veracruz terminal is situated in the largest Mexican port on the Gulf Coast and is expected to be one of the largest terminals in Mexico.
Executing Capital Plans and Driving Sustainability at U.S. Utilities
Oncor Electric Delivery Company LLC (Oncor) today announced its 2021-2025 capital plan of $12.2 billion. This is a $300 million increase over Oncor's previous 2020-2024 capital plan and is a result of new growth capital required across the system, increased maintenance on the transmission system, including investments to enhance the safety and reliability of service, and continued investment in technology and innovation. Additionally, Oncor recently issued its inaugural sustainable bond with proceeds expected to finance or refinance expenditures with minority- and women-owned business suppliers.
San Diego Gas & Electric Co. (SDG&E) and Southern California Gas Co. (SoCalGas) continue to execute on their record five-year capital investment plans. These plans are centered on enhancing safety, improving system reliability, and reducing energy-related emissions. Further, SDG&E has announced a new sustainability strategy that includes a commitment to place two green hydrogen projects into service by 2022, aiming to offer long-duration energy storage, increased system resiliency and reduced carbon intensity. In addition, SoCalGas has announced its participation in three research and development projects that are designed to advance fuel cell technology for trucking and transit and near-zero emissions natural gas technology for rail locomotives.
Investing in a High-Performing Culture
Sempra Energy is committed to creating long-term value by managing environmental, social and governance risks and opportunities. The company has a long-standing history of prioritizing diversity and inclusion to advance its high-performance culture and is continuing to build upon those efforts.
Last month, Sempra Energy received three awards recognizing its leadership position in diversity, inclusion and sustainability. Forbes and JUST Capital named Sempra Energy to the Forbes JUST 100 list, which is intended to recognize companies that are doing right by all their stakeholders, including employees, customers, communities, the environment and shareholders.
Additionally, Sempra Energy received the National Association of Corporate Directors' NXT Award, recognizing boards for their excellence in utilizing diversity and inclusion as a strategy for building long-term value for their companies. The National Organization on Disability also recently recognized Sempra Energy as a 2020 Leading Disability Employer for adopting exemplary employment practices for people with disabilities.
Earnings Guidance
As a result of the company's strong execution and financial results, Sempra Energy is reaffirming and guiding to the high end of both its full-year 2020 GAAP earnings-per-common-share (EPS) guidance range of $12.50 to $13.10 and adjusted EPS guidance range of $7.20 to $7.80. Additionally, Sempra Energy is reaffirming its full-year 2021 EPS guidance range of $7.50 to $8.10.
Non-GAAP Financial Measures
Non-GAAP financial measures include Sempra Energy's adjusted earnings and adjusted EPS for the third quarters and first nine months of 2020 and 2019, adjusted diluted weighted-average common shares outstanding for the first nine months of 2020 and third quarter of 2019, and full-year 2020 adjusted EPS guidance range. 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 on to the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 8857186.
About Sempra Energy
Sempra Energy's mission is to be North America's premier energy infrastructure company. With more than $60 billion in total assets at the end of 2019, the San Diego-based company is the utility holding company with the largest U.S. customer base. The Sempra Energy companies' more than 18,000 employees deliver energy with purpose to over 35 million consumers. The company is focused on the most attractive markets in North America, including California, Texas, Mexico and the LNG export market. Sempra Energy has been consistently recognized for its leadership in sustainability, and diversity and inclusion, and is a member of the S&P 500 Utilities Index and the Dow Jones Utility Index. The company was also named one of the "World's Most Admired Companies" for 2020 by Fortune Magazine.
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed in the forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.
In this press release, forward-looking statements can be identified by words such as "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "target," "pursue," "outlook," "maintain," or similar expressions, or when we discuss our guidance, strategy, goals, vision, mission, opportunities, projections or intentions.
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: California wildfires, including the risk that we may be found liable for damages regardless of fault and the risk that we may not be able to recover any such costs from insurance, the wildfire fund established by California Assembly Bill 1054 or in rates from customers; decisions, investigations, regulations, issuances of permits and other authorizations, renewals of franchises, and other actions by (i) the Comisión Federal de Electricidad, California Public Utilities Commission (CPUC), U.S. Department of Energy, Public Utility Commission of Texas, and other regulatory and governmental bodies and (ii) states, counties, cities and other jurisdictions in the U.S., Mexico and other countries in which we operate or do business; the success of business development efforts, construction projects and major acquisitions and divestitures, including risks in (i) the ability to make a final investment decision, (ii) completing construction projects on schedule and budget, (iii) the ability to realize anticipated benefits from any of these efforts once completed, and (iv) obtaining the consent of partners; the impact of the COVID-19 pandemic on our (i) ability to commence and complete capital and other projects and obtain regulatory approvals, (ii) supply chain and current and prospective counterparties, contractors, customers, employees and partners, (iii) liquidity, resulting from bill payment challenges experienced by our customers, including in connection with a CPUC-ordered suspension of service disconnections, decreased stability and accessibility of the capital markets and other factors, and (iv) ability to sustain operations and satisfy compliance requirements due to social distancing measures or if employee absenteeism were to increase significantly; the resolution of civil and criminal litigation, regulatory inquiries, investigations and proceedings, and arbitrations; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow at favorable interest rates; moves to reduce or eliminate reliance on natural gas and the impact of the extreme volatility of oil prices on our businesses and development projects; weather, natural disasters, accidents, equipment failures, computer system outages and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires and subject us to 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; 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 of natural gas from storage facilities, and equipment failures; 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; expropriation of assets, the failure of foreign governments and state-owned entities to honor the terms of contracts, and property disputes; the impact at San Diego Gas & Electric Company (SDG&E) on competitive customer rates and reliability due to the growth in distributed and local power generation, including from departing retail load resulting from customers transferring to Direct Access, Community Choice Aggregation or other forms of distributed or local power generation, and the 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 and governance requirements and commitments, including by actions of Oncor's independent directors or a minority member director; volatility in foreign currency exchange, interest and inflation rates and commodity prices and our ability to effectively hedge the risk of such volatility; changes in tax and trade policies, laws and regulations, including tariffs and revisions to or replacement of international trade agreements, such as the United States-Mexico-Canada Agreement, that may increase our costs or impair our ability to resolve trade disputes; 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, and on the company's website, www.sempra.com. Investors should not rely unduly on any forward-looking statements.
Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) are not the same companies as the California utilities, SDG&E or Southern California Gas Company, and Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.
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;
shares in
thousands) 2020 2019 2020 2019
(unaudited)
REVENUES
Utilities $
2,301 $
2,398 $
7,199 $
6,808
Energy-related
businesses 343 360 1,000 1,078
Total revenues 2,644 2,758 8,199 7,886
EXPENSES AND OTHER INCOME
Utilities:
Cost of natural gas (114) (122) (582) (789)
Cost of electric
fuel and purchased
power (429) (410) (918) (929)
Energy-related
businesses cost of
sales (90) (94) (200) (265)
Operation and
maintenance (1,044) (845) (2,893) (2,515)
Depreciation and
amortization (418) (402) (1,242) (1,174)
Franchise fees and
other taxes (139) (127) (397) (369)
Impairment losses (1) (43) (1) (43)
(Loss) gain on sale
of assets - (3) 63
Other income
(expense), net 29 (7) (163) 103
Interest income 27 22 76 64
Interest expense (264) (279) (818) (797)
Income from
continuing
operations before
income taxes and
equity earnings 201 448 1,061 1,235
Income tax expense (99) (61) (60) (150)
Equity earnings 326 266 822 485
Income from
continuing
operations, net of
income tax 428 653 1,823 1,570
(Loss) income from
discontinued
operations, net of
income tax (7) 256 1,850 292
Net income 421 909 3,673 1,862
Earnings
attributable to
noncontrolling
interests (22) (60) (201) (146)
Preferred dividends (48) (36) (121) (107)
Preferred dividends
of subsidiary - (1) (1)
Earnings
attributable to
common shares $
351 $
813 $
3,350 $
1,608
Basic earnings per common share
(EPS):
Earnings $
1.21 $
2.93 $
11.48 $
5.83
Weighted-average
common shares
outstanding 289,490 277,360 291,771 275,684
Diluted EPS:
Earnings $
1.21 $
2.84 $
11.43 $
5.74
Weighted-average
common shares
outstanding 290,582 295,789 292,935 279,809
SEMPRA ENERGY
Table A (Continued)
RECONCILIATION OF SEMPRA ENERGY ADJUSTED EARNINGS TO SEMPRA ENERGY GAAP EARNINGS (Unaudited)
Sempra Energy Adjusted Earnings and Adjusted EPS exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2020 and 2019 as follows:
Three months ended September 30, 2020:
-- $(22) million from impacts associated with Aliso Canyon natural gas
storage facility litigation and regulatory matters at Southern
California Gas Company (SoCalGas)
-- $(7) million reduction to the gain on sale of our Chilean businesses as
a result of post-closing adjustments
Three months ended September 30, 2019:
-- $196 million incremental revenue increases for the first six months of
2019 from the retroactive application of the final decision in the 2019
General Rate Case (GRC FD) at the California Utilities
Associated with holding the South American businesses for sale:
-- $192 million income tax benefit associated with outside basis
differences in our South American businesses primarily related to a
change in the anticipated structure of the sale of those businesses
Nine months ended September 30, 2020:
-- $(94) million from impacts associated with Aliso Canyon natural gas
storage facility litigation and regulatory matters at SoCalGas
-- $(100) million equity losses at RBS Sempra Commodities LLP, which
represent an estimate of our obligations to settle pending tax matters
and related legal costs at our equity method investment at Parent and
Other
-- $1,747 million gain on the sale of our South American businesses
Nine months ended September 30, 2019:
-- $45 million gain on the sale of certain Sempra Renewables assets
Associated with holding the South American businesses for sale:
-- $89 million income tax benefit 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 those businesses for sale and a change in the anticipated structure
of the sale
-- $10 million income tax benefit to reduce a valuation allowance against
certain net operating loss (NOL) carryforwards as a result of our
decision to sell our South American businesses
Sempra Energy Adjusted Earnings, Weighted-Average Common 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 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, Weighted-Average Common Shares Outstanding - GAAP and GAAP EPS, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.
SEMPRA ENERGY
Table A (Continued)
Pretax amount Income tax Pretax Income tax
(benefit) amount expense
expense(1) Earnings Earnings
(benefit)(1)
(Dollars in millions, except per
share amounts; shares in
thousands) Three months ended September 30, 2020 Three months ended September 30, 2019
--- ---
Sempra Energy GAAP Earnings $
351 $
813
Excluded items:
Impacts
associated
with Aliso
Canyon
litigation
and
regulatory
matters $
27 $
(5) 22
$
$
Reduction to
gain on sale
of Chilean
businesses 16 (9) 7
SDG&E
retroactive
impact of
2019 GRC FD
for first
half of 2019 (92) 26 (66)
SoCalGas
retroactive
impact of
2019 GRC FD
for first
half of 2019 (181) 51 (130)
Associated
with holding
the South
American
businesses
for sale:
Change in
indefinite
reinvestment
assertion of
basis
differences
and
structure of
sale of
discontinued
operations (192) (192)
Sempra Energy
Adjusted
Earnings $
380 $
425
Diluted EPS:
Sempra Energy
GAAP Earnings $
351 $
813
Add back
dividends for
dilutive
series A
preferred
stock 26
Sempra Energy
GAAP Earnings
for GAAP EPS $
351 $
839
Weighted-
average
common shares
outstanding,
diluted -
GAAP 290,582 295,789
Sempra Energy
GAAP EPS $
1.21 $
2.84
Sempra Energy
Adjusted
Earnings for
Adjusted EPS $
380 $
425
Weighted-
average
common shares
outstanding,
diluted -
Adjusted(2) 290,582 282,551
Sempra Energy
Adjusted EPS $
1.31 $
1.50
Nine months ended September 30, 2020
Nine months ended September 30, 2019
Sempra Energy GAAP Earnings $
3,350 $
1,608
Excluded items:
Impacts
associated
with Aliso
Canyon
litigation
and
regulatory
matters $
127 $
(33) 94
$
$
Losses from
investment in
RBS Sempra
Commodities
LLP 100 100
Gain on sale
of South
American
businesses (2,899) 1,152 (1,747)
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
and
structure of
sale of
discontinued
operations (89) (89)
Reduction in
tax valuation
allowance
against
certain NOL (10) (10)
carryforwards
Sempra Energy Adjusted Earnings $
1,797 $
1,464
Diluted EPS:
Sempra Energy
GAAP Earnings $
3,350 $
1,608
Weighted-
average
common shares
outstanding,
diluted -
GAAP 292,935 279,809
Sempra Energy
GAAP EPS $
11.43 $
5.74
Sempra Energy
Adjusted
Earnings $
1,797 $
1,464
Add back
dividends for
dilutive
series A
preferred
stock 78
Sempra Energy
Adjusted
Earnings for
Adjusted EPS $
1,875 $
1,464
Weighted-
average
common shares
outstanding,
diluted -
Adjusted(3) 307,405 279,809
Sempra Energy
Adjusted EPS $
6.10 $
5.23
(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. We did not
record an income tax benefit for
the equity losses from our
investment in RBS Sempra
Commodities LLP because, even
though a portion of the
liabilities may be deductible
under United Kingdom tax law, it
is not probable that the deduction
will reduce United Kingdom taxes.
(2) In the three months ended September
30, 2019, because the assumed
conversion of the series A
preferred stock is antidilutive
for Adjusted Earnings, 13,238
series A preferred stock shares
are excluded from the denominator
used to calculate Adjusted EPS.
(3) In the nine months ended September
30, 2020, because the assumed
conversion of the series A
preferred stock is dilutive for
Adjusted Earnings, 14,470 series A
preferred stock shares are added
back to the denominator used to
calculate Adjusted EPS.
SEMPRA ENERGY
Table A (Continued)
RECONCILIATION OF SEMPRA ENERGY 2020 ADJUSTED EPS GUIDANCE RANGE TO SEMPRA ENERGY 2020 GAAP EPS GUIDANCE RANGE (Unaudited)
Sempra Energy 2020 Adjusted EPS Guidance Range of $7.20 to $7.80 excludes items (after the effects of income taxes and, if applicable, noncontrolling interests) as follows:
-- $(94) million from impacts associated with Aliso Canyon natural gas
storage facility litigation and regulatory matters at SoCalGas
-- $(100) million equity losses at RBS Sempra Commodities LLP, which
represent an estimate of our obligations to settle pending tax matters
and related legal costs at our equity method investment at Parent and
Other
-- $1,747 million gain on the sale of our South American businesses
Sempra Energy 2020 Adjusted EPS Guidance is a non-GAAP financial measure. Because of the significance and/or nature of the excluded items, management believes that this non-GAAP financial measure provides a meaningful comparison of the performance of Sempra Energy's business operations to prior and future periods. Sempra Energy 2020 Adjusted EPS Guidance should not be considered an alternative to Sempra Energy 2020 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. The table below reconciles Sempra Energy 2020 Adjusted EPS Guidance Range to Sempra Energy 2020 GAAP EPS Guidance Range, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP.
Full-Year 2020
Sempra Energy GAAP EPS Guidance Range(1) $
12.50 to $
13.10
Excluded items:
0.32 0.32
Impacts associated with Aliso Canyon litigation and regulatory matters
0.34 0.34
Losses from investment in RBS Sempra Commodities LLP
(5.96) (5.96)
Gain on sale of South American businesses
Sempra Energy Adjusted EPS Guidance Range $
7.20 to $
7.80
Weighted-average common shares outstanding, diluted (millions)(2) 293
---
(1) Sempra Energy's prior GAAP EPS
guidance range for full-year
2020 has been updated to reflect
additional impacts associated
with the Aliso Canyon natural
gas storage facility litigation
and regulatory matters, and
post-closing adjustments with
respect to the sale of our
Chilean businesses.
(2) Weighted-average common shares
outstanding does not include
the dilutive effect of
mandatory convertible preferred
stock, as they are assumed to
be antidilutive for full-year
2020. If such mandatory
convertible preferred stock
were dilutive for the full
year, the 2020 GAAP EPS
Guidance Range would differ
from the range presented above.
SEMPRA ENERGY
Table B
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions) September 30, December 31,
2020
2019(1)
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $
3,515 $
108
Restricted cash 28 31
Accounts receivable - trade, net 1,067 1,261
Accounts receivable - other, net 418 455
Due from unconsolidated affiliates 46 32
Income taxes receivable 152 112
Inventories 309 277
Regulatory assets 386 222
Greenhouse gas allowances 66 72
Assets held for sale in discontinued operations 445
Other current assets 407 324
Total current assets 6,394 3,339
Other assets:
Restricted cash 3 3
Due from unconsolidated affiliates 617 742
Regulatory assets 1,740 1,930
Nuclear decommissioning trusts 1,057 1,082
Investment in Oncor Holdings 11,962 11,519
Other investments 1,455 2,103
Goodwill 1,602 1,602
Other intangible assets 205 213
Dedicated assets in support of certain benefit
plans 469 488
Insurance receivable for Aliso Canyon costs 504 339
Deferred income taxes 199 155
Greenhouse gas allowances 598 470
Right-of-use assets - operating leases 563 591
Wildfire fund 371 392
Assets held for sale in discontinued operations 3,513
Other long-term assets 699 732
Total other assets 22,044 25,874
Property, plant and equipment, net 38,784 36,452
Total assets $
67,222 $
65,665
(1) Derived from audited financial
statements.
SEMPRA ENERGY
Table B (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions) September 30, December 31,
2020
2019(1)
(unaudited)
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $
772 $
3,505
Accounts payable - trade 1,129 1,234
Accounts payable - other 163 179
Due to unconsolidated
affiliates 6 5
Dividends and interest
payable 563 515
Accrued compensation and
benefits 412 476
Regulatory liabilities 373 319
Current portion of long-
term debt and finance
leases 2,890 1,526
Reserve for Aliso Canyon
costs 268 9
Greenhouse gas
obligations 66 72
Liabilities held for sale
in discontinued
operations - 444
Other current liabilities 993 866
Total current liabilities 7,635 9,150
Long-term debt and
finance leases 21,770 20,785
Deferred credits and other liabilities:
Due to unconsolidated
affiliates 271 195
Pension and other
postretirement benefit
plan obligations, net of
plan assets 999 1,067
Deferred income taxes 2,696 2,577
Deferred investment tax
credits 22 21
Regulatory liabilities 3,410 3,741
Asset retirement
obligations 2,961 2,923
Greenhouse gas
obligations 456 301
Liabilities held for sale
in discontinued
operations - 1,052
Deferred credits and
other 2,146 2,048
Total deferred credits
and other liabilities 12,961 13,925
Equity:
Sempra Energy
shareholders' equity 23,228 19,929
Preferred stock of
subsidiary 20 20
Other noncontrolling
interests 1,608 1,856
Total equity 24,856 21,805
Total liabilities and
equity $
67,222 $
65,665
(1) Derived from audited financial
statements.
SEMPRA ENERGY
Table C
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30,
(Dollars in millions) 2020 2019
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $
3,673 $
1,862
Less: Income from
discontinued operations,
net of income tax (1,850) (292)
Income from continuing
operations, net of income
tax 1,823 1,570
Adjustments to reconcile
net income to net cash
provided by operating
activities 692 741
Intercompany activities
with discontinued
operations, net - 184
Net change in other working
capital components (137) (200)
Distributions from
investments 429 163
Insurance receivable for
Aliso Canyon costs (165) 107
Wildfire fund, current and
noncurrent - (323)
Changes in other noncurrent
assets and liabilities,
net 38 (413)
Net cash provided by
continuing operations 2,680 1,829
Net cash (used in) provided
by discontinued operations (1,051) 289
Net cash provided by
operating activities 1,629 2,118
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property,
plant and equipment (3,313) (2,590)
Expenditures for
investments and
acquisitions (229) (1,449)
Proceeds from sale of
assets 22 899
Distributions from
investments 761 9
Purchases of nuclear
decommissioning trust
assets (1,091) (728)
Proceeds from sales of
nuclear decommissioning
trust assets 1,091 728
Advances to unconsolidated
affiliates (32) (16)
Repayments of advances to
unconsolidated affiliates 7 12
Intercompany activities
with discontinued
operations, net - (257)
Other 13 16
Net cash used in continuing
operations (2,771) (3,376)
Net cash provided by (used
in) discontinued
operations 5,186 (63)
Net cash provided by (used
in) investing activities 2,415 (3,439)
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid (872) (734)
Preferred dividends paid (107) (107)
Issuances of preferred
stock 890
Issuances of common stock 10 757
Repurchases of common stock (565) (23)
Issuances of debt
(maturities greater than
90 days) 5,934 3,269
Payments on debt
(maturities greater than
90 days) and finance
leases (4,387) (2,500)
(Decrease) increase in
short-term debt, net (1,871) 888
Advances from
unconsolidated affiliates 64
Purchases of noncontrolling
interests (178) (30)
Contributions from
noncontrolling interests,
net of distributions - 171
Intercompany activities
with discontinued
operations, net - (128)
Other (29) (37)
Net cash (used in) provided
by continuing operations (1,111) 1,526
Net cash provided by
discontinued operations 401 49
Net cash (used in) provided
by financing activities (710) 1,575
Effect of exchange rate
changes in continuing
operations (2)
Effect of exchange rate
changes in discontinued
operations (3) (3)
Effect of exchange rate
changes on cash, cash
equivalents and restricted
cash (5) (3)
Increase in cash, cash
equivalents and restricted
cash, including
discontinued operations 3,329 251
Cash, cash equivalents and
restricted cash, including
discontinued operations,
January 1 217 246
Cash, cash equivalents and
restricted cash, including
discontinued operations,
September 30 $
3,546 $
497
SEMPRA ENERGY
Table D
SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES, INVESTMENTS AND ACQUISITIONS
Three months ended September
30, Nine months ended September 30,
(Dollars in millions) 2020 2019 2020 2019
---
(unaudited)
Earnings (Losses)
Attributable to Common
Shares
SDG&E $
178 $
263 $
633 $
582
SoCalGas (24) 143 425 437
Sempra Texas Utilities 209 212 458 419
Sempra Mexico 50 84 302 214
Sempra Renewables 59
Sempra LNG 71 2 207 13
Parent and other (126) (139) (515) (383)
Discontinued operations (7) 248 1,840 267
Total $
351 $
813 $
3,350 $
1,608
Three months ended September
30, Nine months ended September 30,
(Dollars in millions) 2020 2019 2020 2019
---
(unaudited)
Capital Expenditures,
Investments and
Acquisitions
SDG&E $
473 $
363 $
1,323 $
1,071
SoCalGas 460 360 1,345 1,019
Sempra Texas Utilities 86 56 225 1,338
Sempra Mexico 122 178 443 420
Sempra Renewables 2
Sempra LNG 63 37 200 183
Parent and other 3 6 6
Total $
1,204 $
997 $
3,542 $
4,039
SEMPRA ENERGY
Table E
OTHER OPERATING STATISTICS (Unaudited)
Three months ended Nine months ended
September 30, September 30,
2020 2019 2020 2019
UTILITIES
SDG&E and SoCalGas
Gas sales (Bcf)(1) 57 57 257 271
Transportation (Bcf)(1) 174 156 451 424
Total deliveries (Bcf)(1) 231 213 708 695
Total gas customer meters
(thousands) 6,953 6,912
SDG&E
Electric sales (millions
of kWhs)(1) 4,063 3,970 10,647 10,796
Direct Access and
Community Choice
Aggregation (millions of
kWhs) 914 952 2,530 2,640
Total deliveries (millions
of kWhs)(1) 4,977 4,922 13,177 13,436
Total electric customer meters
(thousands) 1,480 1,468
Oncor
(2)
Total deliveries (millions
of kWhs) 39,084 40,834 100,542 102,462
Total electric customer meters
(thousands) 3,744 3,673
Ecogas
Natural gas sales (Bcf) - 2 2
Natural gas customer meters
(thousands) 137 129
ENERGY-RELATED BUSINESSES
Power generated and sold
Sempra Mexico
Termoeléctrica de Mexicali
(TdM) (millions of kWhs) 893 1,032 2,176 2,862
Wind and solar (millions
of kWhs)(3) 432 419 1,304 1,109
(1) Include intercompany sales.
(2) Includes 100% of the electric
deliveries and customer meters of
Oncor Electric Delivery Company
LLC (Oncor), in which we hold an
indirect 80.25% interest through
our investment in Oncor Electric
Delivery Holdings Company LLC.
(3) Includes 50% of the total power
generated and sold at the Energía
Sierra Juárez wind power
generation facility, in which
Sempra Energy has a 50% ownership
interest.
SEMPRA ENERGY
Table F (Unaudited)
STATEMENTS OF OPERATIONS DATA BY SEGMENT
Three months ended September 30, 2020
(Dollars in SDG&E SoCalGas Sempra Texas Sempra Mexico Sempra LNG Consolidating
millions) Utilities Adjustments,
Parent &
Other Total
Revenues $
1,472 $
842
$ $
351 $
63 $
(84) $
2,644
Cost of sales and
other expenses (957) (661) (160) (105) 66 (1,817)
Depreciation and
amortization (200) (165) (47) (2) (4) (418)
Other (expense)
income, net (2) (7) 36 2 29
Income (loss) before
interest and tax(1) 313 9 180 (44) (20) 438
Net interest
(expense) income (102) (39) (17) 17 (96) (237)
Income tax (expense)
benefit (33) 6 (92) (18) 38 (99)
Equity earnings, net - 209 1 116 326
Earnings
attributable to
noncontrolling
interests - (22) (22)
Preferred dividends - (48) (48)
Earnings (losses)
from continuing
operations $
178 $
(24) $
209 $
50 $
71 $
(126) 358
Losses from discontinued
operations(2) (7)
Earnings attributable to common
shares $
351
Three months ended September 30, 2019
(Dollars in SDG&E SoCalGas Sempra Texas Sempra Mexico Sempra LNG Consolidating
millions) Utilities Adjustments,
Parent &
Other Total
Revenues $
1,427 $
975
$ $
357 $
100 $
(101) $
2,758
Cost of sales and
other expenses (802) (571) (174) (120) 69 (1,598)
Depreciation and
amortization (196) (154) (46) (2) (4) (402)
Impairment losses (6) (37) (43)
Loss on sale of
assets - (3) (3)
Other income
(expense), net 19 1 (30) 3 (7)
Income (loss) before
interest and tax(1) 442 214 107 (22) (36) 705
Net interest
(expense) income (105) (36) (10) 4 (110) (257)
Income tax (expense)
benefit (71) (35) 2 43 (61)
Equity earnings, net - 212 37 17 266
(Earnings) losses
attributable to
noncontrolling
interests (3) (50) 1 (52)
Preferred dividends - (36) (36)
Earnings (losses)
from continuing
operations $
263 $
143 $
212 $
84 $
2 $
(139) 565
Earnings from discontinued
operations 248
Earnings attributable to common
shares $
813
(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) Represents post-closing
adjustments related to the sale of
our equity interests in our
Chilean businesses.
SEMPRA ENERGY
Table F (Unaudited)
STATEMENTS OF OPERATIONS DATA BY SEGMENT
Nine months ended September 30, 2020
(Dollars in SDG&E SoCalGas Sempra Texas Sempra Mexico Sempra Sempra LNG Consolidating
millions) Utilities Renewables Adjustments,
Parent &
Other Total
Revenues $
3,976 $
3,247
$ $
935
$ $
255 $
(214) $
8,199
Cost of sales and
other expenses (2,326) (2,144) (408) (266) 153 (4,991)
Depreciation and
amortization (598) (486) (141) (7) (10) (1,242)
Other income
(expense), net 47 21 (211) (20) (163)
Income (loss) before
interest and tax(1) 1,099 638 175 (18) (91) 1,803
Net interest
(expense) income (305) (117) (48) 26 (298) (742)
Income tax (expense)
benefit (161) (95) 161 (59) 94 (60)
Equity earnings
(losses), net - 458 207 257 (100) 822
(Earnings) losses
attributable to
noncontrolling
interests - (193) 1 1 (191)
Preferred dividends - (1) (121) (122)
Earnings (losses)
from continuing
operations $
633 $
425 $
458 $
302
$ $
207 $
(515) 1,510
Earnings from discontinued
operations(2) 1,840
Earnings attributable to common
shares $
3,350
Nine months ended September 30, 2019
(Dollars in SDG&E SoCalGas Sempra Texas Sempra Mexico Sempra Sempra LNG Consolidating
millions) Utilities Renewables Adjustments,
Parent &
Other Total
Revenues $
3,666 $
3,142
$ $
1,058 $
10 $
327 $
(317) $
7,886
Cost of sales and
other expenses (2,141) (2,083) (496) (20) (350) 223 (4,867)
Depreciation and
amortization (571) (449) (136) (7) (11) (1,174)
Impairment losses (6) (37) (43)
Gain on sale of
assets - 61 2 63
Other income, net 60 18 6 19 103
Income (loss) before
interest and tax(1) 1,008 591 432 51 (30) (84) 1,968
Net interest
(expense) income (308) (103) (31) 8 27 (326) (733)
Income tax (expense)
benefit (111) (50) (116) (4) (4) 135 (150)
Equity earnings
(losses), net - 419 43 5 19 (1) 485
(Earnings) losses
attributable to
noncontrolling
interests (7) (114) (1) 1 (121)
Preferred dividends - (1) (107) (108)
Earnings (losses)
from continuing
operations $
582 $
437 $
419 $
214 $
59 $
13 $
(383) 1,341
Earnings from discontinued
operations 267
Earnings attributable to common
shares $
1,608
(1) Management believes Income (Loss)
Before Interest and Tax is a useful
measurement of our segments'
performance because it can be used
to evaluate the effectiveness of
our operations exclusive of
interest and income tax, neither of
which is directly relevant to the
efficiency of those operations.
(2) Includes $1,747 million gain on the
sale of our South American
businesses in the second quarter
of 2020.
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SOURCE Sempra Energy
