Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
|
||||||||||
|
||||||||||
|
Yes
|
X
|
No
|
|
|
Large
accelerated filer
|
Accelerated filer
|
Non-accelerated filer
|
Smaller reporting company
|
Emerging growth company
|
|||||||
Sempra Energy
|
[ X ]
|
[ ]
|
[ ]
|
[ ]
|
[ ]
|
|||||||
San Diego Gas & Electric Company
|
[ ]
|
[ ]
|
[ X ]
|
[ ]
|
[ ]
|
|||||||
Southern California Gas Company
|
[ ]
|
[ ]
|
[ X ]
|
[ ]
|
[ ]
|
SEMPRA ENERGY FORM 10-Q
SAN DIEGO GAS & ELECTRIC COMPANY FORM 10-Q
SOUTHERN CALIFORNIA GAS COMPANY FORM 10-Q
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page
|
|
6
|
||
|
|
|
PART I – FINANCIAL INFORMATION
|
|
|
Item 1.
|
8
|
|
Item 2.
|
80
|
|
Item 3.
|
121
|
|
Item 4.
|
122
|
|
|
|
|
PART II – OTHER INFORMATION
|
|
|
Item 1.
|
123
|
|
Item 1A.
|
123
|
|
Item 6.
|
123
|
|
|
|
|
125
|
GLOSSARY
|
|
|
|
|
|
2016 GRC FD
|
final decision in the California Utilities’ 2016 General Rate Case
|
AFUDC
|
allowance for funds used during construction
|
Annual Report
|
Annual Report on Form 10-K for the year ended December 31, 2016
|
AOCI
|
Accumulated Other Comprehensive Income (Loss)
|
ASU
|
Accounting Standards Update
|
Bay Gas
|
Bay Gas Storage Company, Ltd.
|
Bcf
|
billion cubic feet
|
Blade
|
Blade Energy Partners
|
CAISO
|
California Independent System Operator
|
California Utilities
|
San Diego Gas & Electric Company and Southern California Gas Company, collectively
|
Cameron LNG JV
|
Cameron LNG Holdings, LLC
|
CARB
|
California Air Resources Board
|
CCA
|
Community Choice Aggregation
|
CCM
|
cost of capital adjustment mechanism
|
CEC
|
California Energy Commission
|
CEQA
|
California Environmental Quality Act
|
CFCA
|
Core Fixed Cost Account
|
CFE
|
Comisión Federal de Electricidad (Federal Electricity Commission in Mexico)
|
Chilquinta Energía
|
Chilquinta Energía S.A. and its subsidiaries
|
COFECE
|
Comisión Federal de Competencia Económica (Mexican Competition Commission)
|
CPED
|
Consumer Protection and Enforcement Division
|
CPI
|
Consumer Price Index
|
CPUC
|
California Public Utilities Commission
|
CRE
|
Comisión Reguladora de Energía (Energy Regulatory Commission in Mexico)
|
CRR
|
congestion revenue right
|
DA
|
Direct Access
|
DEN
|
Ductos y Energéticos del Norte, S. de R.L. de C.V.
|
DOE
|
U.S. Department of Energy
|
DOGGR
|
California Department of Conservation’s Division of Oil, Gas, and Geothermal Resources
|
DPH
|
Los Angeles County Department of Public Health
|
Ecogas
|
Ecogas México, S. de R.L. de C.V.
|
Edison
|
Southern California Edison Company
|
Eletrans
|
Eletrans S.A., Eletrans II S.A. and Eletrans III S.A., collectively
|
EnergySouth
|
EnergySouth Inc.
|
EPA
|
U.S. Environmental Protection Agency
|
EPC
|
engineering, procurement and construction
|
EPS
|
earnings per common share
|
ERRA
|
Energy Resource Recovery Account
|
FERC
|
Federal Energy Regulatory Commission
|
FTA
|
Free Trade Agreement
|
GCIM
|
Gas Cost Incentive Mechanism
|
GdC
|
Gasoductos de Chihuahua, S. de R.L. de C.V.
|
GHG
|
greenhouse gas
|
GRC
|
General Rate Case
|
HLBV
|
hypothetical liquidation at book value
|
HMRC
|
United Kingdom’s Revenue and Customs Department
|
IEnova
|
Infraestructura Energética Nova, S.A.B. de C.V.
|
IEnova Pipelines
|
IEnova Pipelines, S. de R.L. de C.V.
|
IMG
|
Infraestructura Marina del Golfo
|
IRS
|
Internal Revenue Service
|
ISFSI
|
independent spent fuel storage installation
|
JP Morgan
|
J.P. Morgan Chase & Co.
|
kV
|
kilovolt
|
LA Storage
|
LA Storage, LLC
|
GLOSSARY (CONTINUED)
|
|
|
|
|
|
LNG
|
liquefied natural gas
|
LPG
|
liquid petroleum gas
|
Luz del Sur
|
Luz del Sur S.A.A. and its subsidiaries
|
MHI
|
Mitsubishi Heavy Industries, Ltd., Mitsubishi Nuclear Energy Systems, Inc., and Mitsubishi Heavy Industries America, Inc., collectively
|
Mississippi Hub
|
Mississippi Hub, LLC
|
MMBtu
|
million British thermal units (of natural gas)
|
Mobile Gas
|
Mobile Gas Service Corporation
|
Mtpa
|
million tonnes per annum
|
MW
|
megawatt
|
MWh
|
megawatt hour
|
NDT
|
Nuclear Decommissioning Trusts
|
NEIL
|
Nuclear Electric Insurance Limited
|
NEPA
|
National Environmental Policy Act
|
NRC
|
Nuclear Regulatory Commission
|
OCI
|
Other Comprehensive Income (Loss)
|
OII
|
Order Instituting Investigation
|
O&M
|
operation and maintenance expense
|
OMEC
|
Otay Mesa Energy Center
|
OMEC LLC
|
Otay Mesa Energy Center LLC
|
ORA
|
CPUC Office of Ratepayer Advocates
|
Otay Mesa VIE
|
OMEC LLC VIE
|
PEMEX
|
Petróleos Mexicanos (Mexican state-owned oil company)
|
PG&E
|
Pacific Gas and Electric Company
|
PHMSA
|
Pipeline and Hazardous Materials Safety Administration
|
PP&E
|
property, plant and equipment
|
PPA
|
power purchase agreement
|
PSEP
|
Pipeline Safety Enhancement Plan
|
RAMP
|
Risk Assessment Mitigation Phase
|
RBS
|
The Royal Bank of Scotland plc
|
RBS SEE
|
RBS Sempra Energy Europe
|
RBS Sempra Commodities
|
RBS Sempra Commodities LLP
|
Rockies Express
|
Rockies Express Pipeline LLC
|
ROE
|
return on equity
|
RSA
|
restricted stock award
|
RSU
|
restricted stock unit
|
SB
|
Senate Bill
|
SCAQMD
|
South Coast Air Quality Management District
|
SDCA
|
United States District Court for the Southern District of California
|
SDG&E
|
San Diego Gas & Electric Company
|
SEC
|
United States Securities and Exchange Commission
|
SEDATU
|
Secretaría de Desarrollo Agrario, Territorial y Urbano (Mexican agency in charge of agriculture, land and urban development)
|
SFP
|
secondary financial protection
|
SoCalGas
|
Southern California Gas Company
|
SONGS
|
San Onofre Nuclear Generating Station
|
SONGS OII
|
CPUC’s Order Instituting Investigation into the SONGS Outage
|
TdM
|
Termoeléctrica de Mexicali
|
TransCanada
|
TransCanada Corporation
|
Tribunal
|
International Chamber of Commerce International Court of Arbitration Tribunal
|
TURN
|
The Utility Reform Network
|
U.S. GAAP
|
accounting principles generally accepted in the United States of America
|
Valero Energy
|
Valero Energy Corporation
|
VAT
|
value-added tax
|
Ventika
|
Ventika, S.A.P.I. de C.V. and Ventika II, S.A.P.I. de C.V., collectively
|
VIE
|
variable interest entity
|
Willmut Gas
|
Willmut Gas Company
|
|
|
|
|
|
▪
|
actions and the timing of actions, including decisions, new regulations, and issuances of permits and other authorizations by the CPUC, DOE, DOGGR, FERC, EPA, PHMSA, DPH, states, cities and counties, and other regulatory and governmental bodies in the United States and other countries in which we operate
;
|
▪
|
the timing and success of business development efforts and construction projects, including risks in obtaining or maintaining permits and other authorizations on a timely basis, risks in completing construction projects on schedule and on budget, and risks in obtaining the consent and participation of partners
;
|
▪
|
the resolution of civil and criminal litigation and regulatory investigation
s;
|
▪
|
deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and ratepayers; modifications of settlements; and delays in, or disallowance or denial of, regulatory agency authorizations to recover costs in rates from customers (including with respect to regulatory assets associated with the SONGS facility and 2007 wildfires) or regulatory agency approval for projects required to enhance safety and reliability
;
|
▪
|
the availability of electric power, natural gas and liquefied natural gas, and natural gas pipeline and storage capacity, including disruptions caused by failures in the transmission grid, moratoriums or limitations on the withdrawal or injection of natural gas from or into storage facilities, and equipment failures
;
|
▪
|
changes in energy markets; volatility in commodity prices; moves to reduce or eliminate reliance on natural gas; and the impact on the value of our investment in natural gas storage and related assets from low natural gas prices, low volatility of natural gas prices and the inability to procure favorable long-term contracts for storage services
;
|
▪
|
risks posed by actions of third parties who control the operations of our investments, and risks that our partners or counterparties will be unable or unwilling to fulfill their contractual commitments
;
|
▪
|
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 greenhouse gases, radioactive materials and harmful emissions, cause wildfires and subject us to third-party liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits) or may be disputed by insurers
;
|
▪
|
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
;
|
▪
|
capital markets and economic conditions, including the availability of credit and the liquidity of our investments; and fluctuations in inflation, interest and currency exchange rate
s and our ability to effectively hedge the risk of such fluctuations;
|
▪
|
changes in the tax code as a result of potential federal tax reform, such as the elimination of the deduction for interest and non-deductibility of all, or a portion of, the cost of imported materials, equipment and commodities;
|
▪
|
changes in foreign and domestic trade policies and laws, including border tariffs, revisions to favorable international trade agreements, and changes that make our exports less competitive or otherwise restrict our ability to export;
|
▪
|
the ability to win competitively bid infrastructure projects against a number of strong and aggressive competitors
;
|
▪
|
expropriation of assets by foreign governments and title and other property disputes
;
|
▪
|
the impact on reliability of SDG&E’s electric transmission and distribution system due to increased amount and variability of power supply from renewable energy sources
;
|
▪
|
the impact on competitive customer rates due to the growth in distributed and local power generation and the corresponding decrease in demand for power delivered through SDG&E’s electric transmission and distribution system and from possible
|
▪
|
other uncertainties, some of which may be difficult to predict and are beyond our control.
|
SEMPRA ENERGY
|
|
|
|
|
|
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||||
(Dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016(1)
|
|
2017
|
|
2016(1)
|
||||||||
|
(unaudited)
|
||||||||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Utilities
|
$
|
2,197
|
|
|
$
|
1,994
|
|
|
$
|
4,895
|
|
|
$
|
4,436
|
|
Energy-related businesses
|
336
|
|
|
162
|
|
|
669
|
|
|
342
|
|
||||
Total revenues
|
2,533
|
|
|
2,156
|
|
|
5,564
|
|
|
4,778
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EXPENSES AND OTHER INCOME
|
|
|
|
|
|
|
|
||||||||
Utilities:
|
|
|
|
|
|
|
|
||||||||
Cost of electric fuel and purchased power
|
(553
|
)
|
|
(561
|
)
|
|
(1,080
|
)
|
|
(1,076
|
)
|
||||
Cost of natural gas
|
(228
|
)
|
|
(183
|
)
|
|
(713
|
)
|
|
(494
|
)
|
||||
Energy-related businesses:
|
|
|
|
|
|
|
|
||||||||
Cost of natural gas, electric fuel and purchased power
|
(62
|
)
|
|
(62
|
)
|
|
(129
|
)
|
|
(118
|
)
|
||||
Other cost of sales
|
38
|
|
|
(226
|
)
|
|
16
|
|
|
(261
|
)
|
||||
Operation and maintenance
|
(731
|
)
|
|
(706
|
)
|
|
(1,445
|
)
|
|
(1,406
|
)
|
||||
Depreciation and amortization
|
(368
|
)
|
|
(314
|
)
|
|
(728
|
)
|
|
(642
|
)
|
||||
Franchise fees and other taxes
|
(101
|
)
|
|
(96
|
)
|
|
(211
|
)
|
|
(207
|
)
|
||||
Impairment losses
|
(71
|
)
|
|
(21
|
)
|
|
(71
|
)
|
|
(22
|
)
|
||||
Equity earnings (losses), before income tax
|
18
|
|
|
14
|
|
|
21
|
|
|
(8
|
)
|
||||
Other income, net
|
91
|
|
|
23
|
|
|
260
|
|
|
72
|
|
||||
Interest income
|
8
|
|
|
6
|
|
|
14
|
|
|
12
|
|
||||
Interest expense
|
(159
|
)
|
|
(142
|
)
|
|
(328
|
)
|
|
(285
|
)
|
||||
Income (loss) before income taxes and equity earnings (losses)
of certain unconsolidated subsidiaries
|
415
|
|
|
(112
|
)
|
|
1,170
|
|
|
343
|
|
||||
Income tax (expense) benefit
|
(167
|
)
|
|
106
|
|
|
(462
|
)
|
|
(2
|
)
|
||||
Equity earnings (losses), net of income tax
|
—
|
|
|
33
|
|
|
(8
|
)
|
|
50
|
|
||||
Net income
|
248
|
|
|
27
|
|
|
700
|
|
|
391
|
|
||||
Losses (earnings) attributable to noncontrolling interests
|
12
|
|
|
(10
|
)
|
|
1
|
|
|
(21
|
)
|
||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Earnings
|
$
|
259
|
|
|
$
|
16
|
|
|
$
|
700
|
|
|
$
|
369
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
1.03
|
|
|
$
|
0.06
|
|
|
$
|
2.79
|
|
|
$
|
1.48
|
|
Weighted-average number of shares outstanding, basic (thousands)
|
251,447
|
|
|
250,096
|
|
|
251,290
|
|
|
249,915
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share
|
$
|
1.03
|
|
|
$
|
0.06
|
|
|
$
|
2.77
|
|
|
$
|
1.47
|
|
Weighted-average number of shares outstanding, diluted (thousands)
|
252,822
|
|
|
252,036
|
|
|
252,609
|
|
|
251,775
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share of common stock
|
$
|
0.83
|
|
|
$
|
0.75
|
|
|
$
|
1.65
|
|
|
$
|
1.51
|
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
SEMPRA ENERGY
|
|||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
Sempra Energy shareholders’ equity
|
|
|
|
|
||||||||||||||
|
Pretax
amount |
|
Income tax
(expense) benefit |
|
Net-of-tax
amount |
|
Noncontrolling
interests
(after-tax)
|
|
Total
|
||||||||||
|
Three months ended June 30, 2017 and 2016
|
||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
427
|
|
|
$
|
(167
|
)
|
|
$
|
260
|
|
|
$
|
(12
|
)
|
|
$
|
248
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
3
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
5
|
|
|||||
Financial instruments
|
(43
|
)
|
|
17
|
|
|
(26
|
)
|
|
(4
|
)
|
|
(30
|
)
|
|||||
Pension and other postretirement benefits
|
2
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Total other comprehensive loss
|
(38
|
)
|
|
16
|
|
|
(22
|
)
|
|
(2
|
)
|
|
(24
|
)
|
|||||
Comprehensive income (loss)
|
389
|
|
|
(151
|
)
|
|
238
|
|
|
(14
|
)
|
|
224
|
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive income (loss), after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
388
|
|
|
$
|
(151
|
)
|
|
$
|
237
|
|
|
$
|
(14
|
)
|
|
$
|
223
|
|
2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
$
|
(89
|
)
|
|
$
|
106
|
|
|
$
|
17
|
|
|
$
|
10
|
|
|
$
|
27
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||
Financial instruments
|
(78
|
)
|
|
35
|
|
|
(43
|
)
|
|
1
|
|
|
(42
|
)
|
|||||
Pension and other postretirement benefits
|
2
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Total other comprehensive (loss) income
|
(65
|
)
|
|
34
|
|
|
(31
|
)
|
|
1
|
|
|
(30
|
)
|
|||||
Comprehensive (loss) income
|
(154
|
)
|
|
140
|
|
|
(14
|
)
|
|
11
|
|
|
(3
|
)
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive (loss) income, after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
(155
|
)
|
|
$
|
140
|
|
|
$
|
(15
|
)
|
|
$
|
11
|
|
|
$
|
(4
|
)
|
|
Six months ended June 30, 2017 and 2016
|
||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
1,163
|
|
|
$
|
(462
|
)
|
|
$
|
701
|
|
|
$
|
(1
|
)
|
|
$
|
700
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
49
|
|
|
—
|
|
|
49
|
|
|
11
|
|
|
60
|
|
|||||
Financial instruments
|
(36
|
)
|
|
14
|
|
|
(22
|
)
|
|
(2
|
)
|
|
(24
|
)
|
|||||
Pension and other postretirement benefits
|
5
|
|
|
(2
|
)
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Total other comprehensive income
|
18
|
|
|
12
|
|
|
30
|
|
|
9
|
|
|
39
|
|
|||||
Comprehensive income
|
1,181
|
|
|
(450
|
)
|
|
731
|
|
|
8
|
|
|
739
|
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive income, after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
1,180
|
|
|
$
|
(450
|
)
|
|
$
|
730
|
|
|
$
|
8
|
|
|
$
|
738
|
|
2016(1):
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
372
|
|
|
$
|
(2
|
)
|
|
$
|
370
|
|
|
$
|
21
|
|
|
$
|
391
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
79
|
|
|
—
|
|
|
79
|
|
|
5
|
|
|
84
|
|
|||||
Financial instruments
|
(237
|
)
|
|
110
|
|
|
(127
|
)
|
|
(4
|
)
|
|
(131
|
)
|
|||||
Pension and other postretirement benefits
|
4
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Total other comprehensive (loss) income
|
(154
|
)
|
|
108
|
|
|
(46
|
)
|
|
1
|
|
|
(45
|
)
|
|||||
Comprehensive income
|
218
|
|
|
106
|
|
|
324
|
|
|
22
|
|
|
346
|
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive income, after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
217
|
|
|
$
|
106
|
|
|
$
|
323
|
|
|
$
|
22
|
|
|
$
|
345
|
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
SEMPRA ENERGY
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||
(Dollars in millions)
|
|||||||
|
June 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
223
|
|
|
$
|
349
|
|
Restricted cash
|
70
|
|
|
66
|
|
||
Accounts receivable – trade, net
|
1,139
|
|
|
1,390
|
|
||
Accounts receivable – other, net
|
165
|
|
|
164
|
|
||
Due from unconsolidated affiliates
|
26
|
|
|
26
|
|
||
Income taxes receivable
|
110
|
|
|
43
|
|
||
Inventories
|
239
|
|
|
258
|
|
||
Regulatory balancing accounts – undercollected
|
261
|
|
|
259
|
|
||
Fixed-price contracts and other derivatives
|
186
|
|
|
83
|
|
||
Assets held for sale
|
109
|
|
|
201
|
|
||
Other
|
239
|
|
|
271
|
|
||
Total current assets
|
2,767
|
|
|
3,110
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Restricted cash
|
17
|
|
|
10
|
|
||
Due from unconsolidated affiliates
|
373
|
|
|
201
|
|
||
Regulatory assets
|
3,569
|
|
|
3,414
|
|
||
Nuclear decommissioning trusts
|
1,029
|
|
|
1,026
|
|
||
Investments
|
2,134
|
|
|
2,097
|
|
||
Goodwill
|
2,379
|
|
|
2,364
|
|
||
Other intangible assets
|
541
|
|
|
548
|
|
||
Dedicated assets in support of certain benefit plans
|
427
|
|
|
430
|
|
||
Insurance receivable for Aliso Canyon costs
|
554
|
|
|
606
|
|
||
Deferred income taxes
|
166
|
|
|
234
|
|
||
Sundry
|
859
|
|
|
815
|
|
||
Total other assets
|
12,048
|
|
|
11,745
|
|
||
|
|
|
|
||||
Property, plant and equipment:
|
|
|
|
||||
Property, plant and equipment
|
45,704
|
|
|
43,624
|
|
||
Less accumulated depreciation and amortization
|
(11,143
|
)
|
|
(10,693
|
)
|
||
Property, plant and equipment, net ($335 and $354 at June 30, 2017 and
December 31, 2016, respectively, related to VIE)
|
34,561
|
|
|
32,931
|
|
||
Total assets
|
$
|
49,376
|
|
|
$
|
47,786
|
|
(1)
|
Derived from audited financial statements.
|
SEMPRA ENERGY
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|||||||
(Dollars in millions)
|
|
|
|
||||
|
June 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
1,826
|
|
|
$
|
1,779
|
|
Accounts payable – trade
|
1,054
|
|
|
1,346
|
|
||
Accounts payable – other
|
113
|
|
|
130
|
|
||
Due to unconsolidated affiliates
|
11
|
|
|
11
|
|
||
Dividends and interest payable
|
339
|
|
|
319
|
|
||
Accrued compensation and benefits
|
314
|
|
|
409
|
|
||
Regulatory balancing accounts – overcollected
|
204
|
|
|
122
|
|
||
Current portion of long-term debt
|
1,287
|
|
|
913
|
|
||
Fixed-price contracts and other derivatives
|
109
|
|
|
83
|
|
||
Customer deposits
|
158
|
|
|
158
|
|
||
Reserve for Aliso Canyon costs
|
63
|
|
|
53
|
|
||
Liabilities held for sale
|
47
|
|
|
47
|
|
||
Other
|
538
|
|
|
557
|
|
||
Total current liabilities
|
6,063
|
|
|
5,927
|
|
||
|
|
|
|
||||
Long-term debt ($289 and $293 at June 30, 2017 and December 31, 2016, respectively,
related to VIE)
|
15,000
|
|
|
14,429
|
|
||
|
|
|
|
||||
Deferred credits and other liabilities:
|
|
|
|
||||
Customer advances for construction
|
146
|
|
|
152
|
|
||
Pension and other postretirement benefit plan obligations, net of plan assets
|
1,240
|
|
|
1,208
|
|
||
Deferred income taxes
|
4,191
|
|
|
3,745
|
|
||
Deferred investment tax credits
|
27
|
|
|
28
|
|
||
Regulatory liabilities arising from removal obligations
|
2,746
|
|
|
2,697
|
|
||
Asset retirement obligations
|
2,469
|
|
|
2,431
|
|
||
Fixed-price contracts and other derivatives
|
330
|
|
|
405
|
|
||
Deferred credits and other
|
1,559
|
|
|
1,523
|
|
||
Total deferred credits and other liabilities
|
12,708
|
|
|
12,189
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
||||
Preferred stock (50 million shares authorized; none issued)
|
—
|
|
|
—
|
|
||
Common stock (750 million shares authorized; 251 million and 250 million shares
outstanding at June 30, 2017 and December 31, 2016, respectively; no par value)
|
3,046
|
|
|
2,982
|
|
||
Retained earnings
|
11,004
|
|
|
10,717
|
|
||
Accumulated other comprehensive income (loss)
|
(718
|
)
|
|
(748
|
)
|
||
Total Sempra Energy shareholders
’
equity
|
13,332
|
|
|
12,951
|
|
||
Preferred stock of subsidiary
|
20
|
|
|
20
|
|
||
Other noncontrolling interests
|
2,253
|
|
|
2,270
|
|
||
Total equity
|
15,605
|
|
|
15,241
|
|
||
Total liabilities and equity
|
$
|
49,376
|
|
|
$
|
47,786
|
|
(1)
|
Derived from audited financial statements.
|
SEMPRA ENERGY
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(Dollars in millions)
|
|||||||
|
Six months ended June 30,
|
||||||
|
2017
|
|
2016(1)
|
||||
|
(unaudited)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
700
|
|
|
$
|
391
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
728
|
|
|
642
|
|
||
Deferred income taxes and investment tax credits
|
411
|
|
|
(76
|
)
|
||
Impairment losses
|
71
|
|
|
22
|
|
||
Equity earnings, net
|
(13
|
)
|
|
(42
|
)
|
||
Fixed-price contracts and other derivatives
|
(142
|
)
|
|
41
|
|
||
Other
|
(19
|
)
|
|
45
|
|
||
Net change in other working capital components
|
138
|
|
|
167
|
|
||
Insurance receivable for Aliso Canyon costs
|
52
|
|
|
(354
|
)
|
||
Changes in other assets
|
(88
|
)
|
|
(67
|
)
|
||
Changes in other liabilities
|
51
|
|
|
147
|
|
||
Net cash provided by operating activities
|
1,889
|
|
|
916
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(1,802
|
)
|
|
(2,006
|
)
|
||
Expenditures for investments
|
(97
|
)
|
|
(46
|
)
|
||
Proceeds from sale of assets
|
4
|
|
|
443
|
|
||
Distributions from investments
|
18
|
|
|
12
|
|
||
Purchases of nuclear decommissioning and other trust assets
|
(823
|
)
|
|
(206
|
)
|
||
Proceeds from sales by nuclear decommissioning and other trusts
|
823
|
|
|
204
|
|
||
Increases in restricted cash
|
(194
|
)
|
|
(32
|
)
|
||
Decreases in restricted cash
|
185
|
|
|
44
|
|
||
Advances to unconsolidated affiliates
|
(183
|
)
|
|
(9
|
)
|
||
Repayments of advances to unconsolidated affiliates
|
2
|
|
|
9
|
|
||
Other
|
—
|
|
|
(6
|
)
|
||
Net cash used in investing activities
|
(2,067
|
)
|
|
(1,593
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Common dividends paid
|
(368
|
)
|
|
(335
|
)
|
||
Preferred dividends paid by subsidiary
|
(1
|
)
|
|
(1
|
)
|
||
Issuances of common stock
|
28
|
|
|
29
|
|
||
Repurchases of common stock
|
(14
|
)
|
|
(54
|
)
|
||
Issuances of debt (maturities greater than 90 days)
|
1,932
|
|
|
1,384
|
|
||
Payments on debt (maturities greater than 90 days)
|
(1,006
|
)
|
|
(986
|
)
|
||
(Decrease) increase in short-term debt, net
|
(493
|
)
|
|
865
|
|
||
Net distributions to noncontrolling interests
|
(25
|
)
|
|
(10
|
)
|
||
Other
|
(9
|
)
|
|
(10
|
)
|
||
Net cash provided by financing activities
|
44
|
|
|
882
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
8
|
|
|
8
|
|
||
|
|
|
|
||||
(Decrease) increase in cash and cash equivalents
|
(126
|
)
|
|
213
|
|
||
Cash and cash equivalents, January 1
|
349
|
|
|
403
|
|
||
Cash and cash equivalents, June 30
|
$
|
223
|
|
|
$
|
616
|
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|
|
|
|
|||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|||||||||||||
(Dollars in millions)
|
|
|
|||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016(1)
|
||||||||
|
(unaudited)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Electric
|
$
|
946
|
|
|
$
|
897
|
|
|
$
|
1,821
|
|
|
$
|
1,740
|
|
Natural gas
|
112
|
|
|
95
|
|
|
294
|
|
|
243
|
|
||||
Total operating revenues
|
1,058
|
|
|
992
|
|
|
2,115
|
|
|
1,983
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of electric fuel and purchased power
|
316
|
|
|
314
|
|
|
577
|
|
|
562
|
|
||||
Cost of natural gas
|
38
|
|
|
25
|
|
|
103
|
|
|
64
|
|
||||
Operation and maintenance
|
237
|
|
|
266
|
|
|
464
|
|
|
512
|
|
||||
Depreciation and amortization
|
166
|
|
|
158
|
|
|
329
|
|
|
317
|
|
||||
Franchise fees and other taxes
|
60
|
|
|
59
|
|
|
123
|
|
|
122
|
|
||||
Total operating expenses
|
817
|
|
|
822
|
|
|
1,596
|
|
|
1,577
|
|
||||
Operating income
|
241
|
|
|
170
|
|
|
519
|
|
|
406
|
|
||||
Other income, net
|
15
|
|
|
13
|
|
|
33
|
|
|
27
|
|
||||
Interest expense
|
(49
|
)
|
|
(48
|
)
|
|
(98
|
)
|
|
(96
|
)
|
||||
Income before income taxes
|
207
|
|
|
135
|
|
|
454
|
|
|
337
|
|
||||
Income tax expense
|
(54
|
)
|
|
(48
|
)
|
|
(144
|
)
|
|
(113
|
)
|
||||
Net income
|
153
|
|
|
87
|
|
|
310
|
|
|
224
|
|
||||
(Earnings) losses attributable to noncontrolling interest
|
(4
|
)
|
|
13
|
|
|
(6
|
)
|
|
12
|
|
||||
Earnings attributable to common shares
|
$
|
149
|
|
|
$
|
100
|
|
|
$
|
304
|
|
|
$
|
236
|
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
SDG&E shareholder’s equity
|
|
|
|
|
||||||||||||||
|
Pretax
amount
|
|
Income tax
expense
|
|
Net-of-tax
amount
|
|
Noncontrolling
interest
(after-tax)
|
|
Total
|
||||||||||
|
Three months ended June 30, 2017 and 2016
|
||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
203
|
|
|
$
|
(54
|
)
|
|
$
|
149
|
|
|
$
|
4
|
|
|
$
|
153
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Comprehensive income
|
$
|
203
|
|
|
$
|
(54
|
)
|
|
$
|
149
|
|
|
$
|
5
|
|
|
$
|
154
|
|
2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
148
|
|
|
$
|
(48
|
)
|
|
$
|
100
|
|
|
$
|
(13
|
)
|
|
$
|
87
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Comprehensive income (loss)
|
$
|
148
|
|
|
$
|
(48
|
)
|
|
$
|
100
|
|
|
$
|
(12
|
)
|
|
$
|
88
|
|
|
Six months ended June 30, 2017 and 2016
|
||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
448
|
|
|
$
|
(144
|
)
|
|
$
|
304
|
|
|
$
|
6
|
|
|
$
|
310
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||
Comprehensive income
|
$
|
448
|
|
|
$
|
(144
|
)
|
|
$
|
304
|
|
|
$
|
10
|
|
|
$
|
314
|
|
2016(1):
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
349
|
|
|
$
|
(113
|
)
|
|
$
|
236
|
|
|
$
|
(12
|
)
|
|
$
|
224
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Comprehensive income (loss)
|
$
|
349
|
|
|
$
|
(113
|
)
|
|
$
|
236
|
|
|
$
|
(13
|
)
|
|
$
|
223
|
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|
|
|
||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
||||
(Dollars in millions)
|
|
|
|
||||
|
June 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
12
|
|
|
$
|
8
|
|
Restricted cash
|
1
|
|
|
11
|
|
||
Accounts receivable – trade, net
|
368
|
|
|
354
|
|
||
Accounts receivable – other, net
|
20
|
|
|
17
|
|
||
Due from unconsolidated affiliates
|
2
|
|
|
4
|
|
||
Income taxes receivable
|
98
|
|
|
122
|
|
||
Inventories
|
89
|
|
|
80
|
|
||
Prepaid expenses
|
23
|
|
|
59
|
|
||
Regulatory balancing accounts – net undercollected
|
261
|
|
|
259
|
|
||
Regulatory assets
|
104
|
|
|
81
|
|
||
Fixed-price contracts and other derivatives
|
29
|
|
|
58
|
|
||
Other
|
19
|
|
|
19
|
|
||
Total current assets
|
1,026
|
|
|
1,072
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Restricted cash
|
13
|
|
|
1
|
|
||
Deferred income taxes recoverable in rates
|
1,059
|
|
|
1,014
|
|
||
Other regulatory assets
|
1,004
|
|
|
998
|
|
||
Nuclear decommissioning trusts
|
1,029
|
|
|
1,026
|
|
||
Sundry
|
362
|
|
|
358
|
|
||
Total other assets
|
3,467
|
|
|
3,397
|
|
||
|
|
|
|
||||
Property, plant and equipment:
|
|
|
|
||||
Property, plant and equipment
|
18,996
|
|
|
17,844
|
|
||
Less accumulated depreciation and amortization
|
(4,781
|
)
|
|
(4,594
|
)
|
||
Property, plant and equipment, net ($335 and $354 at June 30, 2017 and
December 31, 2016, respectively, related to VIE) |
14,215
|
|
|
13,250
|
|
||
Total assets
|
$
|
18,708
|
|
|
$
|
17,719
|
|
(1)
|
Derived from audited financial statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|
|
|
||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|
|
|
||||
(Dollars in millions)
|
|
|
|
||||
|
June 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
5
|
|
|
$
|
—
|
|
Accounts payable
|
433
|
|
|
460
|
|
||
Due to unconsolidated affiliates
|
26
|
|
|
15
|
|
||
Interest payable
|
41
|
|
|
40
|
|
||
Accrued compensation and benefits
|
77
|
|
|
121
|
|
||
Accrued franchise fees
|
37
|
|
|
43
|
|
||
Current portion of long-term debt
|
57
|
|
|
191
|
|
||
Asset retirement obligations
|
83
|
|
|
79
|
|
||
Fixed-price contracts and other derivatives
|
61
|
|
|
61
|
|
||
Customer deposits
|
77
|
|
|
76
|
|
||
Other
|
54
|
|
|
82
|
|
||
Total current liabilities
|
951
|
|
|
1,168
|
|
||
|
|
|
|
||||
Long-term debt ($289 and $293 at June 30, 2017 and December 31, 2016,
respectively, related to VIE) |
5,523
|
|
|
4,658
|
|
||
|
|
|
|
||||
Deferred credits and other liabilities:
|
|
|
|
||||
Customer advances for construction
|
52
|
|
|
52
|
|
||
Pension and other postretirement benefit plan obligations, net of plan assets
|
244
|
|
|
232
|
|
||
Deferred income taxes
|
2,980
|
|
|
2,829
|
|
||
Deferred investment tax credits
|
17
|
|
|
16
|
|
||
Regulatory liabilities arising from removal obligations
|
1,782
|
|
|
1,725
|
|
||
Asset retirement obligations
|
758
|
|
|
751
|
|
||
Fixed-price contracts and other derivatives
|
182
|
|
|
189
|
|
||
Deferred credits and other
|
415
|
|
|
421
|
|
||
Total deferred credits and other liabilities
|
6,430
|
|
|
6,215
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 11)
|
|
|
|
||||
|
|
|
|
||||
Equity:
|
|
|
|
||||
Preferred stock (45 million shares authorized; none issued)
|
—
|
|
|
—
|
|
||
Common stock (255 million shares authorized; 117 million shares outstanding;
no par value) |
1,338
|
|
|
1,338
|
|
||
Retained earnings
|
4,440
|
|
|
4,311
|
|
||
Accumulated other comprehensive income (loss)
|
(8
|
)
|
|
(8
|
)
|
||
Total SDG&E shareholder
’
s equity
|
5,770
|
|
|
5,641
|
|
||
Noncontrolling interest
|
34
|
|
|
37
|
|
||
Total equity
|
5,804
|
|
|
5,678
|
|
||
Total liabilities and equity
|
$
|
18,708
|
|
|
$
|
17,719
|
|
(1)
|
Derived from audited financial statements.
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|
|
|
|
|||||||||||
CONDENSED STATEMENTS OF OPERATIONS
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016(1)
|
||||||||
|
(unaudited)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
770
|
|
|
$
|
617
|
|
|
$
|
2,011
|
|
|
$
|
1,650
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of natural gas
|
179
|
|
|
147
|
|
|
587
|
|
|
400
|
|
||||
Operation and maintenance
|
336
|
|
|
318
|
|
|
689
|
|
|
644
|
|
||||
Depreciation and amortization
|
126
|
|
|
112
|
|
|
252
|
|
|
234
|
|
||||
Franchise fees and other taxes
|
34
|
|
|
30
|
|
|
73
|
|
|
67
|
|
||||
Impairment losses
|
—
|
|
|
21
|
|
|
—
|
|
|
22
|
|
||||
Total operating expenses
|
675
|
|
|
628
|
|
|
1,601
|
|
|
1,367
|
|
||||
Operating income (loss)
|
95
|
|
|
(11
|
)
|
|
410
|
|
|
283
|
|
||||
Other income, net
|
9
|
|
|
6
|
|
|
20
|
|
|
16
|
|
||||
Interest expense
|
(26
|
)
|
|
(24
|
)
|
|
(51
|
)
|
|
(46
|
)
|
||||
Income (loss) before income taxes
|
78
|
|
|
(29
|
)
|
|
379
|
|
|
253
|
|
||||
Income tax (expense) benefit
|
(19
|
)
|
|
29
|
|
|
(117
|
)
|
|
(54
|
)
|
||||
Net income
|
59
|
|
|
—
|
|
|
262
|
|
|
199
|
|
||||
Preferred dividend requirements
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Earnings (losses) attributable to common shares
|
$
|
58
|
|
|
$
|
(1
|
)
|
|
$
|
261
|
|
|
$
|
198
|
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||||||
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Pretax
amount |
|
Income tax
(expense) benefit
|
|
Net-of-tax
amount |
||||||
|
Three months ended June 30, 2017 and 2016
|
||||||||||
|
(unaudited)
|
||||||||||
2017:
|
|
|
|
|
|
||||||
Net income
|
$
|
78
|
|
|
$
|
(19
|
)
|
|
$
|
59
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pension and other postretirement benefits
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|||
Comprehensive income
|
$
|
79
|
|
|
$
|
(19
|
)
|
|
$
|
60
|
|
2016:
|
|
|
|
|
|
||||||
Net loss/Comprehensive loss
|
$
|
(29
|
)
|
|
$
|
29
|
|
|
$
|
—
|
|
|
Six months ended June 30, 2017 and 2016
|
||||||||||
|
(unaudited)
|
||||||||||
2017:
|
|
|
|
|
|
||||||
Net income
|
$
|
379
|
|
|
$
|
(117
|
)
|
|
$
|
262
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pension and other postretirement benefits
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|||
Comprehensive income
|
$
|
380
|
|
|
$
|
(117
|
)
|
|
$
|
263
|
|
2016(1):
|
|
|
|
|
|
||||||
Net income/Comprehensive income
|
$
|
253
|
|
|
$
|
(54
|
)
|
|
$
|
199
|
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||
CONDENSED BALANCE SHEETS
|
|||||||
(Dollars in millions)
|
|||||||
|
June 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
38
|
|
|
$
|
12
|
|
Accounts receivable – trade, net
|
377
|
|
|
608
|
|
||
Accounts receivable – other, net
|
67
|
|
|
77
|
|
||
Due from unconsolidated affiliates
|
56
|
|
|
8
|
|
||
Income taxes receivable
|
6
|
|
|
2
|
|
||
Inventories
|
45
|
|
|
58
|
|
||
Regulatory assets
|
8
|
|
|
8
|
|
||
Other
|
48
|
|
|
63
|
|
||
Total current assets
|
645
|
|
|
836
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Regulatory assets arising from pension obligations
|
757
|
|
|
742
|
|
||
Other regulatory assets
|
679
|
|
|
589
|
|
||
Insurance receivable for Aliso Canyon costs
|
554
|
|
|
606
|
|
||
Sundry
|
439
|
|
|
399
|
|
||
Total other assets
|
2,429
|
|
|
2,336
|
|
||
|
|
|
|
||||
Property, plant and equipment:
|
|
|
|
||||
Property, plant and equipment
|
15,889
|
|
|
15,344
|
|
||
Less accumulated depreciation and amortization
|
(5,220
|
)
|
|
(5,092
|
)
|
||
Property, plant and equipment, net
|
10,669
|
|
|
10,252
|
|
||
Total assets
|
$
|
13,743
|
|
|
$
|
13,424
|
|
(1)
|
Derived from audited financial statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||
CONDENSED BALANCE SHEETS (CONTINUED)
|
|||||||
(Dollars in millions)
|
|||||||
|
June 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
—
|
|
|
$
|
62
|
|
Accounts payable – trade
|
330
|
|
|
481
|
|
||
Accounts payable – other
|
69
|
|
|
74
|
|
||
Due to unconsolidated affiliates
|
1
|
|
|
28
|
|
||
Accrued compensation and benefits
|
124
|
|
|
150
|
|
||
Regulatory balancing accounts – net overcollected
|
204
|
|
|
122
|
|
||
Current portion of long-term debt
|
501
|
|
|
—
|
|
||
Customer deposits
|
74
|
|
|
76
|
|
||
Reserve for Aliso Canyon costs
|
63
|
|
|
53
|
|
||
Other
|
205
|
|
|
195
|
|
||
Total current liabilities
|
1,571
|
|
|
1,241
|
|
||
|
|
|
|
||||
Long-term debt
|
2,484
|
|
|
2,982
|
|
||
|
|
|
|
||||
Deferred credits and other liabilities:
|
|
|
|
||||
Customer advances for construction
|
94
|
|
|
99
|
|
||
Pension obligation, net of plan assets
|
777
|
|
|
762
|
|
||
Deferred income taxes
|
1,875
|
|
|
1,709
|
|
||
Deferred investment tax credits
|
11
|
|
|
12
|
|
||
Regulatory liabilities arising from removal obligations
|
964
|
|
|
972
|
|
||
Asset retirement obligations
|
1,643
|
|
|
1,616
|
|
||
Deferred credits and other
|
552
|
|
|
521
|
|
||
Total deferred credits and other liabilities
|
5,916
|
|
|
5,691
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 11)
|
|
|
|
||||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock (11 million shares authorized; 1 million shares outstanding)
|
22
|
|
|
22
|
|
||
Common stock (100 million shares authorized; 91 million shares outstanding;
|
|
|
|
||||
no par value)
|
866
|
|
|
866
|
|
||
Retained earnings
|
2,905
|
|
|
2,644
|
|
||
Accumulated other comprehensive income (loss)
|
(21
|
)
|
|
(22
|
)
|
||
Total shareholders’ equity
|
3,772
|
|
|
3,510
|
|
||
Total liabilities and shareholders’ equity
|
$
|
13,743
|
|
|
$
|
13,424
|
|
(1)
|
Derived from audited financial statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||
CONDENSED STATEMENTS OF CASH FLOWS
|
|||||||
(Dollars in millions)
|
|||||||
|
Six months ended June 30,
|
||||||
|
2017
|
|
2016(1)
|
||||
|
(unaudited)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
262
|
|
|
$
|
199
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
252
|
|
|
234
|
|
||
Deferred income taxes and investment tax credits
|
96
|
|
|
28
|
|
||
Impairment losses
|
—
|
|
|
22
|
|
||
Other
|
(13
|
)
|
|
(15
|
)
|
||
Net change in other working capital components
|
253
|
|
|
190
|
|
||
Insurance receivable for Aliso Canyon costs
|
52
|
|
|
(354
|
)
|
||
Changes in other assets
|
(40
|
)
|
|
(54
|
)
|
||
Changes in other liabilities
|
(7
|
)
|
|
12
|
|
||
Net cash provided by operating activities
|
855
|
|
|
262
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(682
|
)
|
|
(650
|
)
|
||
(Increase) decrease in loans to affiliate, net
|
(84
|
)
|
|
50
|
|
||
Net cash used in investing activities
|
(766
|
)
|
|
(600
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Preferred dividends paid
|
(1
|
)
|
|
(1
|
)
|
||
Issuances of long-term debt
|
—
|
|
|
499
|
|
||
Payments on long-term debt
|
—
|
|
|
(3
|
)
|
||
Decrease in short-term debt, net
|
(62
|
)
|
|
—
|
|
||
Debt issuance costs
|
—
|
|
|
(4
|
)
|
||
Net cash (used in) provided by financing activities
|
(63
|
)
|
|
491
|
|
||
|
|
|
|
||||
Increase in cash and cash equivalents
|
26
|
|
|
153
|
|
||
Cash and cash equivalents, January 1
|
12
|
|
|
58
|
|
||
Cash and cash equivalents, June 30
|
$
|
38
|
|
|
$
|
211
|
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
||||
Interest payments, net of amounts capitalized
|
$
|
49
|
|
|
$
|
43
|
|
Income tax payments, net
|
22
|
|
|
35
|
|
||
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITY
|
|
|
|
||||
Accrued capital expenditures
|
$
|
155
|
|
|
$
|
140
|
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016.
|
|
|
|
|
|
▪
|
Sempra Utilities, which includes our SDG&E, SoCalGas and Sempra South American Utilities reportable segments; and
|
▪
|
Sempra Infrastructure, which includes our Sempra Mexico, Sempra Renewables and Sempra LNG & Midstream reportable segments.
|
▪
|
the Condensed Consolidated Financial Statements and related Notes of Sempra Energy and its subsidiaries and VIEs;
|
▪
|
the Condensed Consolidated Financial Statements and related Notes of SDG&E and its VIE; and
|
▪
|
the Condensed Financial Statements and related Notes of SoCalGas.
|
|
|
|
|
|
IMPACT FROM ADOPTION OF ASU 2016-09
|
|||||||||||
(Dollars in millions, except per share amounts)
|
|||||||||||
|
Six months ended June 30, 2016
|
||||||||||
|
As previously reported
|
|
Effect of adoption
|
|
As adjusted
|
||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
||||||
Condensed Consolidated Statement of Operations:
|
|
|
|
|
|
||||||
Income tax expense
|
$
|
(36
|
)
|
|
$
|
34
|
|
|
$
|
(2
|
)
|
Net income
|
357
|
|
|
34
|
|
|
391
|
|
|||
Earnings
|
335
|
|
|
34
|
|
|
369
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per common share
|
$
|
1.34
|
|
|
$
|
0.14
|
|
|
$
|
1.48
|
|
Diluted earnings per common share
|
$
|
1.33
|
|
|
$
|
0.14
|
|
|
$
|
1.47
|
|
Weighted-average number of shares outstanding, diluted (thousands)(1)
|
251,686
|
|
|
89
|
|
|
251,775
|
|
|||
|
|
|
|
|
|
||||||
Condensed Consolidated Statement of Comprehensive Income (Loss):
|
|
|
|
|
|
||||||
Net income
|
$
|
357
|
|
|
$
|
34
|
|
|
$
|
391
|
|
Comprehensive income
|
312
|
|
|
34
|
|
|
346
|
|
|||
Comprehensive income, after preferred dividends of subsidiary
|
311
|
|
|
34
|
|
|
345
|
|
(1)
|
For the three months ended June 30, 2016, we previously reported
251,938
shares; the effect of adoption of the ASU resulted in an “as adjusted”
252,036
shares.
|
(2)
|
For the six months ended June 30, 2016, we previously reported
$33 million
in Other, which was reduced to
$11 million
, as
$22 million
was reclassified to Impairment Losses to conform to current year presentation.
|
|
|
|
|
|
ASSETS HELD FOR SALE AT JUNE 30, 2017
|
|
||||
(Dollars in millions)
|
|
||||
|
|
Termoeléctrica de Mexicali
|
|
||
Inventories
|
|
$
|
10
|
|
|
Other current assets
|
|
19
|
|
|
|
Property, plant and equipment, net
|
|
55
|
|
|
|
Other noncurrent assets
|
|
25
|
|
|
|
Total assets held for sale
|
|
$
|
109
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
11
|
|
|
Other current liabilities
|
|
4
|
|
|
|
Asset retirement obligations
|
|
5
|
|
|
|
Other noncurrent liabilities
|
|
27
|
|
|
|
Total liabilities held for sale
|
|
$
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
INVENTORY BALANCES
|
||||||||||||||||||||||||||||||||||
(Dollars in millions)
|
||||||||||||||||||||||||||||||||||
|
Natural gas
|
|
|
Liquefied natural gas
|
|
|
Materials and supplies
|
|
|
Total
|
||||||||||||||||||||||||
|
June 30, 2017
|
|
December 31, 2016
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
|
June 30,
2017 |
|
December 31, 2016
|
|
|
June 30,
2017 |
|
December 31, 2016
|
||||||||||||||||
SDG&E
|
$
|
1
|
|
|
$
|
2
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
88
|
|
|
$
|
78
|
|
|
|
$
|
89
|
|
|
$
|
80
|
|
SoCalGas(1)
|
—
|
|
|
11
|
|
|
|
—
|
|
|
—
|
|
|
|
45
|
|
|
47
|
|
|
|
45
|
|
|
58
|
|
||||||||
Sempra South American Utilities
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
33
|
|
|
27
|
|
|
|
33
|
|
|
27
|
|
||||||||
Sempra Mexico
|
—
|
|
|
—
|
|
|
|
12
|
|
|
6
|
|
|
|
2
|
|
|
1
|
|
|
|
14
|
|
|
7
|
|
||||||||
Sempra Renewables
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
4
|
|
|
4
|
|
|
|
4
|
|
|
4
|
|
||||||||
Sempra LNG & Midstream
|
51
|
|
|
79
|
|
|
|
3
|
|
|
3
|
|
|
|
—
|
|
|
—
|
|
|
|
54
|
|
|
82
|
|
||||||||
Sempra Energy Consolidated
|
$
|
52
|
|
|
$
|
92
|
|
|
|
$
|
15
|
|
|
$
|
9
|
|
|
|
$
|
172
|
|
|
$
|
157
|
|
|
|
$
|
239
|
|
|
$
|
258
|
|
(1)
|
At
June 30, 2017
and
December 31, 2016
, SoCalGas’ natural gas inventory for core customers is net of an inventory loss related to the Aliso Canyon natural gas leak, which we discuss in Note 11.
|
GHG ALLOWANCES AND OBLIGATIONS
|
|||||||||||||||||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Sempra Energy
Consolidated |
|
SDG&E
|
|
SoCalGas
|
||||||||||||||||||
|
June 30,
2017
|
|
December 31,
2016
|
|
June 30,
2017
|
|
December 31,
2016 |
|
June 30,
2017
|
|
December 31,
2016 |
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other current assets
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
24
|
|
|
$
|
24
|
|
Sundry
|
334
|
|
|
295
|
|
|
190
|
|
|
182
|
|
|
140
|
|
|
109
|
|
||||||
Total assets
|
$
|
374
|
|
|
$
|
335
|
|
|
$
|
206
|
|
|
$
|
198
|
|
|
$
|
164
|
|
|
$
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other current liabilities
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
24
|
|
|
$
|
24
|
|
Deferred credits and other
|
202
|
|
|
171
|
|
|
88
|
|
|
72
|
|
|
111
|
|
|
96
|
|
||||||
Total liabilities
|
$
|
242
|
|
|
$
|
211
|
|
|
$
|
104
|
|
|
$
|
88
|
|
|
$
|
135
|
|
|
$
|
120
|
|
▪
|
the purpose and design of the VIE;
|
▪
|
the nature of the VIE’s risks and the risks we absorb;
|
▪
|
the power to direct activities that most significantly impact the economic performance of the VIE; and
|
▪
|
the obligation to absorb losses or right to receive benefits that could be significant to the VIE.
|
AMOUNTS ASSOCIATED WITH OTAY MESA VIE
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of electric fuel and purchased power
|
$
|
(21
|
)
|
|
$
|
(17
|
)
|
|
$
|
(39
|
)
|
|
$
|
(34
|
)
|
Operation and maintenance
|
5
|
|
|
15
|
|
|
9
|
|
|
19
|
|
||||
Depreciation and amortization
|
7
|
|
|
10
|
|
|
14
|
|
|
17
|
|
||||
Total operating expenses
|
(9
|
)
|
|
8
|
|
|
(16
|
)
|
|
2
|
|
||||
Operating income (loss)
|
9
|
|
|
(8
|
)
|
|
16
|
|
|
(2
|
)
|
||||
Interest expense
|
(5
|
)
|
|
(5
|
)
|
|
(10
|
)
|
|
(10
|
)
|
||||
Income (loss) before income taxes/Net income (loss)
|
4
|
|
|
(13
|
)
|
|
6
|
|
|
(12
|
)
|
||||
(Earnings) losses attributable to noncontrolling interest
|
(4
|
)
|
|
13
|
|
|
(6
|
)
|
|
12
|
|
||||
Earnings attributable to common shares
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NET PERIODIC BENEFIT COST – SEMPRA ENERGY CONSOLIDATED
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||
|
Three months ended June 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
29
|
|
|
$
|
27
|
|
|
$
|
5
|
|
|
$
|
6
|
|
Interest cost
|
37
|
|
|
40
|
|
|
11
|
|
|
11
|
|
||||
Expected return on assets
|
(40
|
)
|
|
(41
|
)
|
|
(17
|
)
|
|
(18
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss
|
8
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Regulatory adjustment
|
(29
|
)
|
|
(28
|
)
|
|
2
|
|
|
2
|
|
||||
Total net periodic benefit cost
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six months ended June 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
57
|
|
|
$
|
55
|
|
|
$
|
11
|
|
|
$
|
11
|
|
Interest cost
|
74
|
|
|
80
|
|
|
20
|
|
|
22
|
|
||||
Expected return on assets
|
(80
|
)
|
|
(83
|
)
|
|
(33
|
)
|
|
(35
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
5
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
16
|
|
|
13
|
|
|
(1
|
)
|
|
—
|
|
||||
Regulatory adjustment
|
(41
|
)
|
|
(56
|
)
|
|
4
|
|
|
4
|
|
||||
Total net periodic benefit cost
|
$
|
31
|
|
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
2
|
|
NET PERIODIC BENEFIT COST – SDG&E
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||
|
Three months ended June 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
1
|
|
Interest cost
|
10
|
|
|
11
|
|
|
2
|
|
|
2
|
|
||||
Expected return on assets
|
(13
|
)
|
|
(13
|
)
|
|
(4
|
)
|
|
(2
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Actuarial loss (gain)
|
2
|
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
||||
Regulatory adjustment
|
(7
|
)
|
|
(8
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Total net periodic benefit cost
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six months ended June 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
15
|
|
|
$
|
15
|
|
|
$
|
3
|
|
|
$
|
2
|
|
Interest cost
|
19
|
|
|
21
|
|
|
4
|
|
|
4
|
|
||||
Expected return on assets
|
(24
|
)
|
|
(25
|
)
|
|
(7
|
)
|
|
(5
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Actuarial loss (gain)
|
4
|
|
|
5
|
|
|
—
|
|
|
(1
|
)
|
||||
Regulatory adjustment
|
(14
|
)
|
|
(15
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||
Total net periodic benefit cost
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NET PERIODIC BENEFIT COST – SOCALGAS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||
|
Three months ended June 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
24
|
|
|
25
|
|
|
8
|
|
|
9
|
|
||||
Expected return on assets
|
(25
|
)
|
|
(27
|
)
|
|
(13
|
)
|
|
(14
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost (credit)
|
2
|
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
||||
Actuarial loss (gain)
|
4
|
|
|
2
|
|
|
(1
|
)
|
|
—
|
|
||||
Regulatory adjustment
|
(22
|
)
|
|
(20
|
)
|
|
3
|
|
|
3
|
|
||||
Total net periodic benefit cost
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six months ended June 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
36
|
|
|
$
|
35
|
|
|
$
|
7
|
|
|
$
|
7
|
|
Interest cost
|
48
|
|
|
50
|
|
|
15
|
|
|
17
|
|
||||
Expected return on assets
|
(51
|
)
|
|
(52
|
)
|
|
(26
|
)
|
|
(28
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost (credit)
|
4
|
|
|
4
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Actuarial loss (gain)
|
8
|
|
|
5
|
|
|
(1
|
)
|
|
—
|
|
||||
Regulatory adjustment
|
(27
|
)
|
|
(41
|
)
|
|
6
|
|
|
6
|
|
||||
Total net periodic benefit cost
|
$
|
18
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
BENEFIT PLAN CONTRIBUTIONS
|
||||||||||||
(Dollars in millions)
|
||||||||||||
|
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||
Contributions through June 30, 2017:
|
|
|
|
|
|
|
||||||
Pension plans
|
|
$
|
28
|
|
|
$
|
2
|
|
|
$
|
17
|
|
Other postretirement benefit plans
|
|
1
|
|
|
—
|
|
|
—
|
|
|||
Total expected contributions in 2017:
|
|
|
|
|
|
|
||||||
Pension plans
|
|
$
|
174
|
|
|
$
|
32
|
|
|
$
|
90
|
|
Other postretirement benefit plans
|
|
8
|
|
|
4
|
|
|
1
|
|
EARNINGS PER SHARE COMPUTATIONS
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions, except per share amounts; shares in thousands)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016(1)
|
|
2017
|
|
2016(1)
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Earnings/Income attributable to common shares
|
$
|
259
|
|
|
$
|
16
|
|
|
$
|
700
|
|
|
$
|
369
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding for basic EPS(2)
|
251,447
|
|
|
250,096
|
|
|
251,290
|
|
|
249,915
|
|
||||
Dilutive effect of stock options, RSAs and RSUs(3)
|
1,375
|
|
|
1,940
|
|
|
1,319
|
|
|
1,860
|
|
||||
Weighted-average common shares outstanding for diluted EPS
|
252,822
|
|
|
252,036
|
|
|
252,609
|
|
|
251,775
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EPS:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.03
|
|
|
$
|
0.06
|
|
|
$
|
2.79
|
|
|
$
|
1.48
|
|
Diluted
|
1.03
|
|
|
0.06
|
|
|
2.77
|
|
|
1.47
|
|
(1)
|
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
|
(2)
|
Includes
608
and
568
average fully vested RSUs held in our Deferred Compensation Plan for the three months ended
June 30, 2017
and
2016
, respectively, and
604
and
562
for the six months ended June 30, 2017 and 2016, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.
|
(3)
|
Due to market fluctuations of both Sempra Energy stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 8 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.
|
CAPITALIZED FINANCING COSTS
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated
|
$
|
62
|
|
|
$
|
58
|
|
|
$
|
144
|
|
|
$
|
110
|
|
SDG&E
|
21
|
|
|
17
|
|
|
41
|
|
|
32
|
|
||||
SoCalGas
|
15
|
|
|
14
|
|
|
30
|
|
|
27
|
|
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Foreign
currency
translation
adjustments
|
|
Financial
instruments
|
|
Pension and other
postretirement
benefits
|
|
Total
accumulated other
comprehensive
income (loss)
|
||||||||
|
Three months ended June 30, 2017 and 2016
|
||||||||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2017
|
$
|
(481
|
)
|
|
$
|
(121
|
)
|
|
$
|
(94
|
)
|
|
$
|
(696
|
)
|
OCI before reclassifications
|
3
|
|
|
(26
|
)
|
|
—
|
|
|
(23
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Net OCI
|
3
|
|
|
(26
|
)
|
|
1
|
|
|
(22
|
)
|
||||
Balance as of June 30, 2017
|
$
|
(478
|
)
|
|
$
|
(147
|
)
|
|
$
|
(93
|
)
|
|
$
|
(718
|
)
|
|
|
|
|
|
.
|
|
|
||||||||
Balance as of March 31, 2016
|
$
|
(514
|
)
|
|
$
|
(221
|
)
|
|
$
|
(86
|
)
|
|
$
|
(821
|
)
|
OCI before reclassifications
|
11
|
|
|
(48
|
)
|
|
—
|
|
|
(37
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
5
|
|
|
1
|
|
|
6
|
|
||||
Net OCI
|
11
|
|
|
(43
|
)
|
|
1
|
|
|
(31
|
)
|
||||
Balance as of June 30, 2016
|
$
|
(503
|
)
|
|
$
|
(264
|
)
|
|
$
|
(85
|
)
|
|
$
|
(852
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2017 and June 30, 2017
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2016 and June 30, 2016
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
||||
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2017
|
|
|
$
|
(13
|
)
|
|
$
|
(9
|
)
|
|
$
|
(22
|
)
|
||
Amounts reclassified from AOCI
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Net OCI
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Balance as of June 30, 2017
|
|
|
$
|
(13
|
)
|
|
$
|
(8
|
)
|
|
$
|
(21
|
)
|
||
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2016 and June 30, 2016
|
|
|
$
|
(14
|
)
|
|
$
|
(5
|
)
|
|
$
|
(19
|
)
|
(1)
|
All amounts are net of income tax, if subject to tax, and exclude noncontrolling interests.
|
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Foreign
currency
translation
adjustments
|
|
Financial
instruments
|
|
Pension and other
postretirement
benefits
|
|
Total
accumulated other
comprehensive
income (loss)
|
||||||||
|
Six months ended June 30, 2017 and 2016
|
||||||||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016
|
$
|
(527
|
)
|
|
$
|
(125
|
)
|
|
$
|
(96
|
)
|
|
$
|
(748
|
)
|
OCI before reclassifications
|
49
|
|
|
(28
|
)
|
|
—
|
|
|
21
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
6
|
|
|
3
|
|
|
9
|
|
||||
Net OCI
|
49
|
|
|
(22
|
)
|
|
3
|
|
|
30
|
|
||||
Balance as of June 30, 2017
|
$
|
(478
|
)
|
|
$
|
(147
|
)
|
|
$
|
(93
|
)
|
|
$
|
(718
|
)
|
|
|
|
|
|
.
|
|
|
||||||||
Balance as of December 31, 2015
|
$
|
(582
|
)
|
|
$
|
(137
|
)
|
|
$
|
(87
|
)
|
|
$
|
(806
|
)
|
OCI before reclassifications
|
79
|
|
|
(130
|
)
|
|
—
|
|
|
(51
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
3
|
|
|
2
|
|
|
5
|
|
||||
Net OCI
|
79
|
|
|
(127
|
)
|
|
2
|
|
|
(46
|
)
|
||||
Balance as of June 30, 2016
|
$
|
(503
|
)
|
|
$
|
(264
|
)
|
|
$
|
(85
|
)
|
|
$
|
(852
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016 and June 30, 2017
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2015 and June 30, 2016
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
||||
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016
|
|
|
$
|
(13
|
)
|
|
$
|
(9
|
)
|
|
$
|
(22
|
)
|
||
Amounts reclassified from AOCI
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Net OCI
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Balance as of June 30, 2017
|
|
|
$
|
(13
|
)
|
|
$
|
(8
|
)
|
|
$
|
(21
|
)
|
||
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2015 and June 30, 2016
|
|
|
$
|
(14
|
)
|
|
$
|
(5
|
)
|
|
$
|
(19
|
)
|
(1)
|
All amounts are net of income tax, if subject to tax, and exclude noncontrolling interests.
|
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|||||||||
(Dollars in millions)
|
|||||||||
Details about accumulated other
comprehensive income (loss) components |
Amounts reclassified
from accumulated other comprehensive income (loss) |
|
Affected line item on Condensed
Consolidated Statements of Operations |
||||||
|
Three months ended June 30,
|
|
|
||||||
|
2017
|
|
2016
|
|
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate and foreign exchange instruments
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
Interest Expense
|
Interest rate instruments
|
2
|
|
|
2
|
|
|
Equity Earnings (Losses), Before Income Tax
|
||
Interest rate and foreign exchange instruments
|
3
|
|
|
5
|
|
|
Equity Earnings (Losses), Net of Income Tax
|
||
Foreign exchange instruments
|
(1
|
)
|
|
—
|
|
|
Revenues: Energy-Related Businesses
|
||
Total before income tax
|
3
|
|
|
10
|
|
|
|
||
|
(1
|
)
|
|
(1
|
)
|
|
Income Tax (Expense) Benefit
|
||
Net of income tax
|
2
|
|
|
9
|
|
|
|
||
|
(2
|
)
|
|
(4
|
)
|
|
Losses (Earnings) Attributable to Noncontrolling Interests
|
||
|
$
|
—
|
|
|
$
|
5
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of actuarial loss
|
$
|
2
|
|
|
$
|
2
|
|
|
See note (1) below
|
|
(1
|
)
|
|
(1
|
)
|
|
Income Tax (Expense) Benefit
|
||
Net of income tax
|
$
|
1
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
$
|
1
|
|
|
$
|
6
|
|
|
|
SDG&E:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate instruments
|
$
|
3
|
|
|
$
|
3
|
|
|
Interest Expense
|
|
(3
|
)
|
|
(3
|
)
|
|
(Earnings) Losses Attributable to Noncontrolling Interest
|
||
Total reclassifications for the period
|
$
|
—
|
|
|
$
|
—
|
|
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
||
Amortization of actuarial loss
|
$
|
1
|
|
|
$
|
—
|
|
|
See note (1) below
|
Total reclassifications for the period, net of tax
|
$
|
1
|
|
|
$
|
—
|
|
|
|
(1)
|
Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).
|
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|||||||||
(Dollars in millions)
|
|||||||||
Details about accumulated other
comprehensive income (loss) components |
Amounts reclassified
from accumulated other comprehensive income (loss) |
|
Affected line item on Condensed
Consolidated Statements of Operations |
||||||
|
Six months ended June 30,
|
|
|
||||||
|
2017
|
|
2016
|
|
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate and foreign exchange instruments
|
$
|
(4
|
)
|
|
$
|
7
|
|
|
Interest Expense
|
Interest rate instruments
|
4
|
|
|
5
|
|
|
Equity Earnings (Losses), Before Income Tax
|
||
Interest rate and foreign exchange instruments
|
5
|
|
|
6
|
|
|
Equity Earnings (Losses), Net of Income Tax
|
||
Foreign exchange instruments
|
1
|
|
|
—
|
|
|
Revenues: Energy-Related Businesses
|
||
Commodity contracts not subject to rate recovery
|
9
|
|
|
(7
|
)
|
|
Revenues: Energy-Related Businesses
|
||
Total before income tax
|
15
|
|
|
11
|
|
|
|
||
|
(5
|
)
|
|
(1
|
)
|
|
Income Tax (Expense) Benefit
|
||
Net of income tax
|
10
|
|
|
10
|
|
|
|
||
|
(4
|
)
|
|
(7
|
)
|
|
Losses (Earnings) Attributable to Noncontrolling Interests
|
||
|
$
|
6
|
|
|
$
|
3
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of actuarial loss
|
$
|
5
|
|
|
$
|
4
|
|
|
See note (1) below
|
|
(2
|
)
|
|
(2
|
)
|
|
Income Tax (Expense) Benefit
|
||
Net of income tax
|
$
|
3
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
$
|
9
|
|
|
$
|
5
|
|
|
|
SDG&E:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate instruments
|
$
|
6
|
|
|
$
|
6
|
|
|
Interest Expense
|
|
(6
|
)
|
|
(6
|
)
|
|
(Earnings) Losses Attributable to Noncontrolling Interest
|
||
Total reclassifications for the period
|
$
|
—
|
|
|
$
|
—
|
|
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
||
Amortization of actuarial loss
|
$
|
1
|
|
|
$
|
—
|
|
|
See note (1) below
|
Total reclassifications for the period, net of tax
|
$
|
1
|
|
|
$
|
—
|
|
|
|
(1)
|
Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).
|
SHAREHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS – SEMPRA ENERGY CONSOLIDATED
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Sempra Energy
shareholders ’ equity(1) |
|
Non-
controlling interests(2) |
|
Total
equity(1) |
||||||
Balance at December 31, 2016
|
$
|
12,951
|
|
|
$
|
2,290
|
|
|
$
|
15,241
|
|
Comprehensive income
|
731
|
|
|
8
|
|
|
739
|
|
|||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Share-based compensation expense
|
23
|
|
|
—
|
|
|
23
|
|
|||
Common stock dividends declared
|
(413
|
)
|
|
—
|
|
|
(413
|
)
|
|||
Issuances of common stock
|
55
|
|
|
—
|
|
|
55
|
|
|||
Repurchases of common stock
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||
Equity contributed by noncontrolling interest
|
—
|
|
|
1
|
|
|
1
|
|
|||
Distributions to noncontrolling interests
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
|||
Balance at June 30, 2017
|
$
|
13,332
|
|
|
$
|
2,273
|
|
|
$
|
15,605
|
|
Balance at December 31, 2015
|
$
|
11,809
|
|
|
$
|
770
|
|
|
$
|
12,579
|
|
Cumulative-effect adjustment from change in accounting principle
|
107
|
|
|
—
|
|
|
107
|
|
|||
Comprehensive income
|
324
|
|
|
22
|
|
|
346
|
|
|||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Share-based compensation expense
|
24
|
|
|
—
|
|
|
24
|
|
|||
Common stock dividends declared
|
(377
|
)
|
|
—
|
|
|
(377
|
)
|
|||
Issuances of common stock
|
56
|
|
|
—
|
|
|
56
|
|
|||
Repurchases of common stock
|
(54
|
)
|
|
—
|
|
|
(54
|
)
|
|||
Equity contributed by noncontrolling interest
|
—
|
|
|
1
|
|
|
1
|
|
|||
Distributions to noncontrolling interests
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||
Balance at June 30, 2016
|
$
|
11,888
|
|
|
$
|
782
|
|
|
$
|
12,670
|
|
(1)
|
Amounts for the six months ended June 30, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
|
(2)
|
Noncontrolling interests include the preferred stock of SoCalGas and other noncontrolling interests as listed in the table below under “Other Noncontrolling Interests.”
|
SHAREHOLDER’S EQUITY AND NONCONTROLLING INTEREST – SDG&E
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
SDG&E
shareholder ’ s equity(1) |
|
Non-
controlling interest |
|
Total
equity(1) |
||||||
Balance at December 31, 2016
|
$
|
5,641
|
|
|
$
|
37
|
|
|
$
|
5,678
|
|
Comprehensive income
|
304
|
|
|
10
|
|
|
314
|
|
|||
Common stock dividends declared
|
(175
|
)
|
|
—
|
|
|
(175
|
)
|
|||
Equity contributed by noncontrolling interest
|
—
|
|
|
1
|
|
|
1
|
|
|||
Distributions to noncontrolling interest
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
|||
Balance at June 30, 2017
|
$
|
5,770
|
|
|
$
|
34
|
|
|
$
|
5,804
|
|
Balance at December 31, 2015
|
$
|
5,223
|
|
|
$
|
53
|
|
|
$
|
5,276
|
|
Cumulative-effect adjustment from change in accounting principle
|
23
|
|
|
—
|
|
|
23
|
|
|||
Comprehensive income (loss)
|
236
|
|
|
(13
|
)
|
|
223
|
|
|||
Common stock dividends declared
|
(175
|
)
|
|
—
|
|
|
(175
|
)
|
|||
Distributions to noncontrolling interest
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||
Balance at June 30, 2016
|
$
|
5,307
|
|
|
$
|
37
|
|
|
$
|
5,344
|
|
(1)
|
Amounts for the six months ended June 30, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
|
SHAREHOLDERS’ EQUITY – SOCALGAS
|
|||
(Dollars in millions)
|
|||
|
Total
equity(1) |
||
Balance at December 31, 2016
|
$
|
3,510
|
|
Comprehensive income
|
263
|
|
|
Preferred stock dividends declared
|
(1
|
)
|
|
Balance at June 30, 2017
|
$
|
3,772
|
|
Balance at December 31, 2015
|
$
|
3,149
|
|
Cumulative-effect adjustment from change in accounting principle
|
15
|
|
|
Comprehensive income
|
199
|
|
|
Preferred stock dividends declared
|
(1
|
)
|
|
Balance at June 30, 2016
|
$
|
3,362
|
|
(1)
|
Amounts for the six months ended June 30, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
|
OTHER NONCONTROLLING INTERESTS
|
|||||||||||
(Dollars in millions)
|
|
|
|||||||||
|
Percent ownership held by noncontrolling interests
|
|
Equity held by
noncontrolling interests
|
||||||||
|
June 30,
2017 |
|
December 31,
2016 |
|
June 30,
2017 |
|
December 31,
2016 |
||||
SDG&E:
|
|
|
|
|
|
|
|
||||
Otay Mesa VIE
|
100
|
%
|
100
|
%
|
$
|
34
|
|
|
$
|
37
|
|
Sempra South American Utilities:
|
|
|
|
|
|
|
|
||||
Chilquinta Energía subsidiaries(1)
|
22.9 – 43.4
|
|
23.1 – 43.4
|
|
22
|
|
|
22
|
|
||
Luz del Sur
|
16.4
|
|
16.4
|
|
184
|
|
|
173
|
|
||
Tecsur S.A.
|
9.8
|
|
9.8
|
|
3
|
|
|
4
|
|
||
Sempra Mexico:
|
|
|
|
|
|
|
|
||||
IEnova
|
33.6
|
|
33.6
|
|
1,514
|
|
|
1,524
|
|
||
Sempra Renewables:
|
|
|
|
|
|
|
|
||||
Tax equity arrangement – wind(2)
|
NA
|
|
NA
|
|
91
|
|
|
92
|
|
||
Tax equity arrangement – solar(2)
|
NA
|
|
NA
|
|
363
|
|
|
376
|
|
||
Sempra LNG & Midstream:
|
|
|
|
|
|
|
|
||||
Bay Gas
|
9.1
|
|
9.1
|
|
28
|
|
|
27
|
|
||
Liberty Gas Storage, LLC
|
23.3
|
|
23.3
|
|
13
|
|
|
14
|
|
||
Southern Gas Transmission Company
|
49.0
|
|
49.0
|
|
1
|
|
|
1
|
|
||
Total Sempra Energy
|
|
|
|
|
$
|
2,253
|
|
|
$
|
2,270
|
|
(1)
|
Chilquinta Energía has four subsidiaries with noncontrolling interests held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.
|
(2)
|
Net income or loss attributable to the noncontrolling interests is computed using the HLBV method and is not based on ownership percentages, as we discuss in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
|
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
|
|||||||
(Dollars in millions)
|
|||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||
Sempra Energy Consolidated:
|
|
|
|
||||
Total due from various unconsolidated affiliates – current
|
$
|
26
|
|
|
$
|
26
|
|
|
|
|
|
||||
Sempra South American Utilities(1):
|
|
|
|
||||
Eletrans – 4% Note(2)
|
$
|
90
|
|
|
$
|
96
|
|
Other related party receivables
|
1
|
|
|
1
|
|
||
Sempra Mexico(1):
|
|
|
|
||||
IMG – Note due March 15, 2022(3)
|
177
|
|
|
—
|
|
||
Affiliate of joint venture with Ductos y Energéticos del Norte – Notes due
November 14, 2018(4) |
92
|
|
|
90
|
|
||
Energía Sierra Juárez – Note(5)
|
13
|
|
|
14
|
|
||
Total due from unconsolidated affiliates – noncurrent
|
$
|
373
|
|
|
$
|
201
|
|
|
|
|
|
||||
Total due to various unconsolidated affiliates – current
|
$
|
(11
|
)
|
|
$
|
(11
|
)
|
SDG&E:
|
|
|
|
||||
Sempra Energy(6)
|
$
|
—
|
|
|
$
|
3
|
|
SoCalGas
|
1
|
|
|
—
|
|
||
Various affiliates
|
1
|
|
|
1
|
|
||
Total due from various unconsolidated affiliates – current
|
$
|
2
|
|
|
$
|
4
|
|
|
|
|
|
||||
Sempra Energy
|
$
|
(18
|
)
|
|
$
|
—
|
|
SoCalGas
|
—
|
|
|
(8
|
)
|
||
Various affiliates
|
(8
|
)
|
|
(7
|
)
|
||
Total due to various unconsolidated affiliates – current
|
$
|
(26
|
)
|
|
$
|
(15
|
)
|
|
|
|
|
||||
Income taxes due from Sempra Energy(7)
|
$
|
132
|
|
|
$
|
159
|
|
SoCalGas:
|
|
|
|
||||
Sempra Energy(8)
|
$
|
55
|
|
|
$
|
—
|
|
SDG&E
|
—
|
|
|
8
|
|
||
Various affiliates
|
1
|
|
|
—
|
|
||
Total due from unconsolidated affiliates – current
|
$
|
56
|
|
|
$
|
8
|
|
|
|
|
|
||||
Sempra Energy
|
$
|
—
|
|
|
$
|
(28
|
)
|
SDG&E
|
(1
|
)
|
|
—
|
|
||
Total due to unconsolidated affiliates – current
|
$
|
(1
|
)
|
|
$
|
(28
|
)
|
|
|
|
|
||||
Income taxes due from Sempra Energy(7)
|
$
|
6
|
|
|
$
|
5
|
|
(1)
|
Amounts include principal balances plus accumulated interest outstanding.
|
(2)
|
U.S. dollar-denominated loan, at a fixed interest rate with no stated maturity date, to provide project financing for the construction of transmission lines at Eletrans, which includes, collectively, joint ventures of Chilquinta Energía.
|
(3)
|
Mexican peso-denominated revolving line of credit for up to
$9.0 billion
Mexican pesos or approximately
$500 million
U.S. dollar-equivalent, at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus
220
basis points (
9.60
percent at June 30, 2017), to finance construction of the natural gas marine pipeline.
|
(4)
|
Four U.S. dollar-denominated loans, at variable interest rates based on the 30-day LIBOR plus
450
basis points (
5.72
percent at
June 30, 2017
), to finance the Los Ramones Norte pipeline.
|
(5)
|
U.S. dollar-denominated loan, at a variable interest rate based on the 30-day LIBOR plus
637.5
basis points (
7.60
percent at
June 30, 2017
) with no stated maturity date, to finance the first phase of the Energía Sierra Juárez wind project, which is a joint venture of IEnova.
|
(6)
|
At
December 31, 2016
, net receivable included outstanding advances to Sempra Energy of
$31 million
at an interest rate of
0.68
percent.
|
(7)
|
SDG&E and SoCalGas are included in the consolidated income tax return of Sempra Energy and are allocated income tax expense from Sempra Energy in an amount equal to that which would result from each company having always filed a separate return.
|
(8)
|
At
June 30, 2017
, net receivable included outstanding advances to Sempra Energy of
$84 million
at an interest rate of
1.23
percent.
|
REVENUES AND COST OF SALES FROM UNCONSOLIDATED AFFILIATES
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sempra Energy Consolidated
|
$
|
8
|
|
|
$
|
5
|
|
|
$
|
15
|
|
|
$
|
10
|
|
SDG&E
|
2
|
|
|
—
|
|
|
4
|
|
|
3
|
|
||||
SoCalGas
|
17
|
|
|
18
|
|
|
35
|
|
|
35
|
|
||||
Cost of Sales:
|
|
|
|
|
|
|
|
||||||||
Sempra Energy Consolidated
|
$
|
14
|
|
|
$
|
20
|
|
|
$
|
28
|
|
|
$
|
50
|
|
SDG&E
|
19
|
|
|
16
|
|
|
39
|
|
|
30
|
|
OTHER INCOME, NET
|
|
|
|
|
|
|
|||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Allowance for equity funds used during construction
|
$
|
40
|
|
|
$
|
30
|
|
|
$
|
112
|
|
|
$
|
57
|
|
Investment gains(1)
|
14
|
|
|
10
|
|
|
30
|
|
|
20
|
|
||||
Gains (losses) on interest rate and foreign exchange instruments, net
|
31
|
|
|
(15
|
)
|
|
94
|
|
|
(12
|
)
|
||||
Foreign currency transaction gains (losses)
|
7
|
|
|
(5
|
)
|
|
17
|
|
|
(7
|
)
|
||||
Electrical infrastructure relocation income(2)
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
||||
Regulatory interest, net(3)
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Sundry, net
|
(1
|
)
|
|
—
|
|
|
5
|
|
|
8
|
|
||||
Total
|
$
|
91
|
|
|
$
|
23
|
|
|
$
|
260
|
|
|
$
|
72
|
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Allowance for equity funds used during construction
|
$
|
16
|
|
|
$
|
13
|
|
|
$
|
31
|
|
|
$
|
24
|
|
Regulatory interest, net(3)
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Sundry, net
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
15
|
|
|
$
|
13
|
|
|
$
|
33
|
|
|
$
|
27
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Allowance for equity funds used during construction
|
$
|
11
|
|
|
$
|
10
|
|
|
$
|
22
|
|
|
$
|
20
|
|
Sundry, net
|
(2
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||
Total
|
$
|
9
|
|
|
$
|
6
|
|
|
$
|
20
|
|
|
$
|
16
|
|
(1)
|
Represents investment gains on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are partially offset by corresponding changes in compensation expense related to the plans, recorded in Operation and Maintenance on the Condensed Consolidated Statements of Operations.
|
(2)
|
Income at Luz del Sur associated with the relocation of electrical infrastructure.
|
(3)
|
Interest on regulatory balancing accounts.
|
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
|
|||||||||||||
(Dollars in millions)
|
|||||||||||||
|
Income tax
expense
|
|
Effective
income tax rate
|
|
Income tax
(benefit) expense
|
|
Effective
income tax rate
|
||||||
|
Three months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Sempra Energy Consolidated
|
$
|
167
|
|
|
40
|
%
|
|
$
|
(106
|
)
|
|
95
|
%
|
SDG&E
|
54
|
|
|
26
|
|
|
48
|
|
|
36
|
|
||
SoCalGas
|
19
|
|
|
24
|
|
|
(29
|
)
|
|
100
|
|
||
|
|
|
|
|
|
|
|
||||||
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016(1)
|
||||||||||
Sempra Energy Consolidated
|
$
|
462
|
|
|
39
|
%
|
|
$
|
2
|
|
|
1
|
%
|
SDG&E
|
144
|
|
|
32
|
|
|
113
|
|
|
34
|
|
||
SoCalGas
|
117
|
|
|
31
|
|
|
54
|
|
|
21
|
|
(1)
|
Reflects the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
|
▪
|
repairs expenditures related to a certain portion of utility plant assets
|
▪
|
the equity portion of AFUDC
|
▪
|
a portion of the cost of removal of utility plant assets
|
▪
|
utility self-developed software expenditures
|
▪
|
depreciation on a certain portion of utility plant assets
|
▪
|
state income taxes
|
|
|
|
|
|
PRIMARY U.S. COMMITTED LINES OF CREDIT
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|||||||||||
|
|
|
At June 30, 2017
|
||||||||||
|
|
|
Total facility
|
|
Commercial paper outstanding(4)
|
|
Available unused credit
|
||||||
Sempra Energy(1)
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
Sempra Global(2)
|
|
2,335
|
|
|
(1,236
|
)
|
|
1,099
|
|
||||
California Utilities(3):
|
|
|
|
|
|
|
|||||||
|
SDG&E
|
|
750
|
|
|
(5
|
)
|
|
745
|
|
|||
|
SoCalGas
|
|
750
|
|
|
—
|
|
|
750
|
|
|||
|
Less: combined limit of $1 billion for both utilities
|
|
(500
|
)
|
|
—
|
|
|
(500
|
)
|
|||
|
|
|
1,000
|
|
|
(5
|
)
|
|
995
|
|
|||
Total
|
|
$
|
4,335
|
|
|
$
|
(1,241
|
)
|
|
$
|
3,094
|
|
CREDIT FACILITIES IN SOUTH AMERICA AND MEXICO
|
|||||||||||||||
(U.S. dollar-equivalent in millions)
|
|
|
|
|
|
||||||||||
|
|
|
|
At June 30, 2017
|
|||||||||||
|
|
Denominated in
|
|
Total facility
|
|
Amount outstanding
|
|
|
Available unused credit
|
||||||
Sempra South American Utilities(1):
|
|
|
|
|
|
|
|
|
|||||||
|
Peru(2)
|
Peruvian sol
|
|
$
|
379
|
|
|
$
|
(147
|
)
|
(3)
|
|
$
|
232
|
|
|
Chile
|
Chilean peso
|
|
115
|
|
|
—
|
|
|
|
115
|
|
|||
Sempra Mexico:
|
|
|
|
|
|
|
|
|
|||||||
|
IEnova(4)
|
U.S. dollar
|
|
1,170
|
|
|
(516
|
)
|
|
|
654
|
|
|||
Total
|
|
|
$
|
1,664
|
|
|
$
|
(663
|
)
|
|
|
$
|
1,001
|
|
|
|
|
|
|
▪
|
The California Utilities use natural gas and electricity derivatives, for the benefit of customers, with the objective of managing price risk and basis risks, and stabilizing and lowering natural gas and electricity costs. These derivatives include fixed price natural gas and electricity positions, options, and basis risk instruments, which are either exchange-traded or over-the-counter financial instruments, or bilateral physical transactions. This activity is governed by risk management and transacting activity plans that have been filed with and approved by the CPUC. Natural gas and electricity derivative activities are recorded as commodity costs that are offset by regulatory account balances and are recovered in rates. Net commodity cost impacts on the Condensed Consolidated Statements of Operations are reflected in Cost of Electric Fuel and Purchased Power or in Cost of Natural Gas.
|
▪
|
SDG&E is allocated and may purchase CRRs, which serve to reduce the regional electricity price volatility risk that may result from local transmission capacity constraints. Unrealized gains and losses do not impact earnings, as they are offset by regulatory account balances. Realized gains and losses associated with CRRs, which are recoverable in rates, are recorded in Cost of Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations.
|
▪
|
Sempra Mexico, Sempra LNG & Midstream, and Sempra Renewables may use natural gas and electricity derivatives, as appropriate, to optimize the earnings of their assets which support the following businesses: LNG, natural gas transportation and storage, and power generation. Gains and losses associated with undesignated derivatives are recognized in Energy-Related Businesses Revenues or in Cost of Natural Gas, Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. Certain of these derivatives may also be designated as cash flow hedges. Sempra Mexico may also use natural gas energy derivatives with the objective of managing price risk and lowering natural gas prices at its Mexican distribution
|
▪
|
From time to time, our various businesses, including the California Utilities, may use other energy derivatives to hedge exposures such as the price of vehicle fuel.
|
NET ENERGY DERIVATIVE VOLUMES
|
|||||||
(Quantities in millions)
|
|||||||
Commodity
|
Unit of measure
|
|
June 30,
2017 |
|
December 31,
2016 |
||
California Utilities:
|
|
|
|
|
|
||
SDG&E:
|
|
|
|
|
|
||
Natural gas
|
MMBtu
|
|
44
|
|
|
48
|
|
Electricity
|
MWh
|
|
4
|
|
|
4
|
|
Congestion revenue rights
|
MWh
|
|
42
|
|
|
48
|
|
SoCalGas – natural gas
|
MMBtu
|
|
—
|
|
|
1
|
|
|
|
|
|
|
|
||
Energy-Related Businesses:
|
|
|
|
|
|
||
Sempra LNG & Midstream – natural gas
|
MMBtu
|
|
14
|
|
|
31
|
|
Sempra Mexico – natural gas
|
MMBtu
|
|
3
|
|
|
—
|
|
INTEREST RATE DERIVATIVES
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||||||
|
Notional debt
|
|
Maturities
|
|
Notional debt
|
|
Maturities
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||
Cash flow hedges(1)
|
$
|
897
|
|
|
2017-2032
|
|
$
|
924
|
|
|
2017-2032
|
SDG&E:
|
|
|
|
|
|
|
|
||||
Cash flow hedges(1)
|
300
|
|
|
2017-2019
|
|
305
|
|
|
2017-2019
|
(1)
|
Includes Otay Mesa VIE. All of SDG&E’s interest rate derivatives relate to Otay Mesa VIE.
|
FOREIGN CURRENCY DERIVATIVES
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||||||
|
Notional amount
|
|
Maturities
|
|
Notional amount
|
|
Maturities
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||
Cross-currency swaps
|
$
|
408
|
|
|
2017-2023
|
|
$
|
408
|
|
|
2017-2023
|
Other foreign currency derivatives(1)
|
903
|
|
|
2017-2018
|
|
86
|
|
|
2017-2018
|
(1)
|
In the first quarter of 2017, we entered into foreign currency derivatives with notional amounts totaling
$850 million
that expire in December 2017.
|
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
June 30, 2017
|
||||||||||||||
|
Current
assets: Fixed-price contracts and other derivatives(1) |
|
Other
assets: Sundry |
|
Current liabilities:
Fixed-price contracts and other derivatives(2) |
|
Deferred
credits and other liabilities: Fixed-price contracts and other derivatives |
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign exchange instruments(3)
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(56
|
)
|
|
$
|
(153
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange instruments
|
130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodity contracts not subject to rate recovery
|
43
|
|
|
8
|
|
|
(33
|
)
|
|
(5
|
)
|
||||
Associated offsetting commodity contracts
|
(29
|
)
|
|
(3
|
)
|
|
29
|
|
|
3
|
|
||||
Commodity contracts subject to rate recovery
|
15
|
|
|
71
|
|
|
(59
|
)
|
|
(147
|
)
|
||||
Associated offsetting commodity contracts
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
15
|
|
|
10
|
|
||||
Net amounts presented on the balance sheet
|
159
|
|
|
76
|
|
|
(103
|
)
|
|
(292
|
)
|
||||
Additional cash collateral for commodity contracts
not subject to rate recovery
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(4)
|
$
|
186
|
|
|
$
|
76
|
|
|
$
|
(103
|
)
|
|
$
|
(292
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments(3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
(7
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
14
|
|
|
71
|
|
|
(58
|
)
|
|
(147
|
)
|
||||
Associated offsetting commodity contracts
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
15
|
|
|
10
|
|
||||
Net amounts presented on the balance sheet
|
13
|
|
|
71
|
|
|
(55
|
)
|
|
(144
|
)
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(4)
|
$
|
29
|
|
|
$
|
71
|
|
|
$
|
(55
|
)
|
|
$
|
(144
|
)
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Net amounts presented on the balance sheet
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
not subject to rate recovery
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
(1)
|
Included in Current Assets: Other for SoCalGas.
|
(2)
|
Included in Current Liabilities: Other for SoCalGas.
|
(3)
|
Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE.
|
(4)
|
Normal purchase contracts previously measured at fair value are excluded.
|
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
December 31, 2016
|
||||||||||||||
|
Current
assets: Fixed-price contracts and other derivatives(1) |
|
Other
assets: Sundry |
|
Current liabilities:
Fixed-price contracts and other derivatives(2) |
|
Deferred
credits and other liabilities: Fixed-price contracts and other derivatives |
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign exchange instruments(3)
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
(24
|
)
|
|
$
|
(228
|
)
|
Commodity contracts not subject to rate recovery
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts not subject to rate recovery
|
248
|
|
|
36
|
|
|
(254
|
)
|
|
(28
|
)
|
||||
Associated offsetting commodity contracts
|
(242
|
)
|
|
(27
|
)
|
|
242
|
|
|
27
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
(1
|
)
|
|
16
|
|
|
1
|
|
||||
Commodity contracts subject to rate recovery
|
37
|
|
|
73
|
|
|
(57
|
)
|
|
(150
|
)
|
||||
Associated offsetting commodity contracts
|
(9
|
)
|
|
(1
|
)
|
|
9
|
|
|
1
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
5
|
|
|
13
|
|
||||
Net amounts presented on the balance sheet
|
41
|
|
|
82
|
|
|
(77
|
)
|
|
(364
|
)
|
||||
Additional cash collateral for commodity contracts
not subject to rate recovery
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(4)
|
$
|
83
|
|
|
$
|
82
|
|
|
$
|
(77
|
)
|
|
$
|
(364
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments(3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
(12
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
33
|
|
|
73
|
|
|
(51
|
)
|
|
(150
|
)
|
||||
Associated offsetting commodity contracts
|
(6
|
)
|
|
(1
|
)
|
|
6
|
|
|
1
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
3
|
|
|
13
|
|
||||
Net amounts presented on the balance sheet
|
27
|
|
|
72
|
|
|
(55
|
)
|
|
(148
|
)
|
||||
Additional cash collateral for commodity contracts
not subject to rate recovery
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(4)
|
$
|
58
|
|
|
$
|
72
|
|
|
$
|
(55
|
)
|
|
$
|
(148
|
)
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
Associated offsetting commodity contracts
|
(3
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Net amounts presented on the balance sheet
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
not subject to rate recovery
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
CASH FLOW HEDGE IMPACTS
|
|||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||
|
Pretax (loss) gain
recognized in OCI
|
|
|
|
Pretax gain (loss) reclassified
from AOCI into earnings
|
||||||||||||
|
Three months ended June 30,
|
|
|
|
Three months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
Location
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign
exchange instruments(1)
|
$
|
(8
|
)
|
|
$
|
1
|
|
|
Interest Expense
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
Interest rate instruments
|
(32
|
)
|
|
(70
|
)
|
|
Equity Earnings (Losses),
Before Income Tax
|
|
(2
|
)
|
|
(2
|
)
|
||||
Interest rate and foreign
exchange instruments
|
(9
|
)
|
|
(15
|
)
|
|
Equity Earnings (Losses),
Net of Income Tax
|
|
(3
|
)
|
|
(5
|
)
|
||||
Foreign exchange instruments
|
(1
|
)
|
|
—
|
|
|
Revenues: Energy-
Related Businesses
|
|
1
|
|
|
—
|
|
||||
Commodity contracts not subject
to rate recovery
|
—
|
|
|
(5
|
)
|
|
Revenues: Energy-
Related Businesses
|
|
—
|
|
|
—
|
|
||||
Total(2)
|
$
|
(50
|
)
|
|
$
|
(89
|
)
|
|
|
|
$
|
(3
|
)
|
|
$
|
(10
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments(1)(3)
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
Interest Expense
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six months ended June 30,
|
|
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
Location
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign
exchange instruments(1) |
$
|
8
|
|
|
$
|
(10
|
)
|
|
Interest Expense
|
|
$
|
4
|
|
|
$
|
(7
|
)
|
Interest rate instruments
|
(37
|
)
|
|
(207
|
)
|
|
Equity Earnings (Losses),
Before Income Tax |
|
(4
|
)
|
|
(5
|
)
|
||||
Interest rate and foreign
exchange instruments |
(18
|
)
|
|
(33
|
)
|
|
Equity Earnings (Losses),
Net of Income Tax
|
|
(5
|
)
|
|
(6
|
)
|
||||
Foreign exchange instruments
|
(10
|
)
|
|
—
|
|
|
Revenues: Energy-
Related Businesses |
|
(1
|
)
|
|
—
|
|
||||
Commodity contracts not subject
to rate recovery |
3
|
|
|
(4
|
)
|
|
Revenues: Energy-
Related Businesses |
|
(9
|
)
|
|
7
|
|
||||
Total(2)
|
$
|
(54
|
)
|
|
$
|
(254
|
)
|
|
|
|
$
|
(15
|
)
|
|
$
|
(11
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments(1)(3)
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
|
Interest Expense
|
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
(1)
|
Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
|
(2)
|
There was
$2 million
of losses from hedge ineffectiveness related to these cash flow hedges in each of the
three months and six months
ended
June 30, 2017
and negligible amounts for the same periods in
2016
.
|
(3)
|
There was negligible hedge ineffectiveness related to these cash flow hedges in the
three months and six months
ended June 30, 2017 and 2016.
|
UNDESIGNATED DERIVATIVE IMPACTS
|
||||||||||||||||
(Dollars in millions)
|
||||||||||||||||
|
|
Pretax gain (loss) on derivatives recognized in earnings
|
||||||||||||||
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
Location
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange instruments
|
Other Income, Net
|
$
|
32
|
|
|
$
|
(15
|
)
|
|
$
|
97
|
|
|
$
|
(12
|
)
|
Foreign exchange instruments
|
Equity Earnings (Losses),
Net of Income Tax
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Commodity contracts not subject
to rate recovery
|
Revenues: Energy-Related
Businesses
|
16
|
|
|
(24
|
)
|
|
30
|
|
|
(29
|
)
|
||||
Commodity contracts not subject
to rate recovery
|
Operation and Maintenance
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
||||
Commodity contracts subject
to rate recovery
|
Cost of Electric Fuel
and Purchased Power
|
6
|
|
|
40
|
|
|
(23
|
)
|
|
28
|
|
||||
Commodity contracts subject
to rate recovery
|
Cost of Natural Gas
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Total
|
|
$
|
54
|
|
|
$
|
1
|
|
|
$
|
103
|
|
|
$
|
(12
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject
to rate recovery
|
Cost of Electric Fuel
and Purchased Power
|
$
|
6
|
|
|
$
|
40
|
|
|
$
|
(23
|
)
|
|
$
|
28
|
|
SoCalGas:
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts not subject
to rate recovery
|
Operation and Maintenance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Commodity contracts subject
to rate recovery
|
Cost of Natural Gas
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Total
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
|
|
|
|
▪
|
Nuclear decommissioning trusts reflect the assets of SDG&E’s NDT, excluding cash balances. A third party trustee values the trust assets using prices from a pricing service based on a market approach. We validate these prices by comparison to prices from other independent data sources. Securities are valued using quoted prices listed on nationally recognized securities exchanges or based on closing prices reported in the active market in which the identical security is traded (Level 1). Other securities are valued based on yields that are currently available for comparable securities of issuers with similar credit ratings (Level 2).
|
▪
|
For commodity contracts, interest rate derivatives and foreign exchange instruments, we primarily use a market approach with market participant assumptions to value these derivatives. Market participant assumptions include those about risk, and the risk inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable. We have exchange-traded derivatives that are valued based on quoted prices in active markets for the identical instruments (Level 1). We also may have other commodity derivatives that are valued using industry standard models that consider quoted forward prices for commodities, time value, current market and contractual prices for the underlying instruments, volatility factors, and other relevant economic measures (Level 2). Level 3 recurring items relate to CRRs and long-term, fixed-price electricity positions at SDG&E, as we discuss below in “Level 3 Information.”
|
▪
|
Rabbi Trust investments include marketable securities that we value using a market approach based on closing prices reported in the active market in which the identical security is traded (Level 1). These investments in marketable securities were negligible at both
June 30, 2017
and
December 31, 2016
.
|
RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
Fair value at June 30, 2017
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
494
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
499
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government corporations and agencies
|
49
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|||||
Municipal bonds
|
—
|
|
|
263
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|||||
Other securities
|
—
|
|
|
199
|
|
|
—
|
|
|
—
|
|
|
199
|
|
|||||
Total debt securities
|
49
|
|
|
470
|
|
|
—
|
|
|
—
|
|
|
519
|
|
|||||
Total nuclear decommissioning trusts(2)
|
543
|
|
|
475
|
|
|
—
|
|
|
—
|
|
|
1,018
|
|
|||||
Interest rate and foreign exchange instruments
|
—
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|
131
|
|
|||||
Commodity contracts not subject to rate recovery
|
7
|
|
|
12
|
|
|
—
|
|
|
10
|
|
|
29
|
|
|||||
Commodity contracts subject to rate recovery
|
—
|
|
|
1
|
|
|
84
|
|
|
17
|
|
|
102
|
|
|||||
Total
|
$
|
550
|
|
|
$
|
619
|
|
|
$
|
84
|
|
|
$
|
27
|
|
|
$
|
1,280
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate and foreign exchange instruments
|
$
|
—
|
|
|
$
|
209
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
209
|
|
Commodity contracts not subject to rate recovery
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Commodity contracts subject to rate recovery
|
25
|
|
|
6
|
|
|
174
|
|
|
(25
|
)
|
|
180
|
|
|||||
Total
|
$
|
28
|
|
|
$
|
218
|
|
|
$
|
174
|
|
|
$
|
(25
|
)
|
|
$
|
395
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fair value at December 31, 2016
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
508
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
508
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government corporations and agencies
|
36
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|||||
Municipal bonds
|
—
|
|
|
206
|
|
|
—
|
|
|
—
|
|
|
206
|
|
|||||
Other securities
|
—
|
|
|
141
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|||||
Total debt securities
|
36
|
|
|
363
|
|
|
—
|
|
|
—
|
|
|
399
|
|
|||||
Total nuclear decommissioning trusts(2)
|
544
|
|
|
363
|
|
|
—
|
|
|
—
|
|
|
907
|
|
|||||
Interest rate and foreign exchange instruments
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||
Commodity contracts not subject to rate recovery
|
—
|
|
|
15
|
|
|
—
|
|
|
9
|
|
|
24
|
|
|||||
Commodity contracts subject to rate recovery
|
1
|
|
|
3
|
|
|
96
|
|
|
32
|
|
|
132
|
|
|||||
Total
|
$
|
545
|
|
|
$
|
390
|
|
|
$
|
96
|
|
|
$
|
41
|
|
|
$
|
1,072
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate and foreign exchange instruments
|
$
|
—
|
|
|
$
|
252
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
252
|
|
Commodity contracts not subject to rate recovery
|
16
|
|
|
11
|
|
|
—
|
|
|
(17
|
)
|
|
10
|
|
|||||
Commodity contracts subject to rate recovery
|
19
|
|
|
8
|
|
|
170
|
|
|
(18
|
)
|
|
179
|
|
|||||
Total
|
$
|
35
|
|
|
$
|
271
|
|
|
$
|
170
|
|
|
$
|
(35
|
)
|
|
$
|
441
|
|
(1)
|
Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
|
(2)
|
Excludes cash balances and cash equivalents.
|
RECURRING FAIR VALUE MEASURES – SDG&E
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
Fair value at June 30, 2017
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
494
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
499
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government corporations and agencies
|
49
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|||||
Municipal bonds
|
—
|
|
|
263
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|||||
Other securities
|
—
|
|
|
199
|
|
|
—
|
|
|
—
|
|
|
199
|
|
|||||
Total debt securities
|
49
|
|
|
470
|
|
|
—
|
|
|
—
|
|
|
519
|
|
|||||
Total nuclear decommissioning trusts(2)
|
543
|
|
|
475
|
|
|
—
|
|
|
—
|
|
|
1,018
|
|
|||||
Commodity contracts subject to rate recovery
|
—
|
|
|
—
|
|
|
84
|
|
|
16
|
|
|
100
|
|
|||||
Total
|
$
|
543
|
|
|
$
|
475
|
|
|
$
|
84
|
|
|
$
|
16
|
|
|
$
|
1,118
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate instruments
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Commodity contracts subject to rate recovery
|
25
|
|
|
5
|
|
|
174
|
|
|
(25
|
)
|
|
179
|
|
|||||
Total
|
$
|
25
|
|
|
$
|
25
|
|
|
$
|
174
|
|
|
$
|
(25
|
)
|
|
$
|
199
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fair value at December 31, 2016
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
508
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
508
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government corporations and agencies
|
36
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|||||
Municipal bonds
|
—
|
|
|
206
|
|
|
—
|
|
|
—
|
|
|
206
|
|
|||||
Other securities
|
—
|
|
|
141
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|||||
Total debt securities
|
36
|
|
|
363
|
|
|
—
|
|
|
—
|
|
|
399
|
|
|||||
Total nuclear decommissioning trusts(2)
|
544
|
|
|
363
|
|
|
—
|
|
|
—
|
|
|
907
|
|
|||||
Commodity contracts not subject to rate recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Commodity contracts subject to rate recovery
|
1
|
|
|
2
|
|
|
96
|
|
|
30
|
|
|
129
|
|
|||||
Total
|
$
|
545
|
|
|
$
|
365
|
|
|
$
|
96
|
|
|
$
|
31
|
|
|
$
|
1,037
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate instruments
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25
|
|
Commodity contracts subject to rate recovery
|
17
|
|
|
7
|
|
|
170
|
|
|
(16
|
)
|
|
178
|
|
|||||
Total
|
$
|
17
|
|
|
$
|
32
|
|
|
$
|
170
|
|
|
$
|
(16
|
)
|
|
$
|
203
|
|
(1)
|
Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
|
(2)
|
Excludes cash balances and cash equivalents.
|
RECURRING FAIR VALUE MEASURES – SOCALGAS
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
Fair value at June 30, 2017
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts not subject to rate recovery
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Commodity contracts subject to rate recovery
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts subject to rate recovery
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Total
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fair value at December 31, 2016
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts not subject to rate recovery
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Commodity contracts subject to rate recovery
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
3
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts subject to rate recovery
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
Total
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
(1)
|
Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
|
LEVEL 3 RECONCILIATIONS
|
|||||||
(Dollars in millions)
|
|||||||
|
Three months ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Balance at April 1
|
$
|
(96
|
)
|
|
$
|
11
|
|
Realized and unrealized (losses) gains
|
(3
|
)
|
|
8
|
|
||
Settlements
|
9
|
|
|
5
|
|
||
Balance at June 30
|
$
|
(90
|
)
|
|
$
|
24
|
|
Change in unrealized gains relating to
|
|
|
|
||||
instruments still held at June 30
|
$
|
2
|
|
|
$
|
9
|
|
|
Six months ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Balance at January 1
|
$
|
(74
|
)
|
|
$
|
19
|
|
Realized and unrealized (losses) gains
|
(16
|
)
|
|
7
|
|
||
Settlements
|
—
|
|
|
(2
|
)
|
||
Balance at June 30
|
$
|
(90
|
)
|
|
$
|
24
|
|
Change in unrealized (losses) gains relating to
|
|
|
|
||||
instruments still held at June 30
|
$
|
(14
|
)
|
|
$
|
9
|
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
June 30, 2017
|
||||||||||||||||||
|
Carrying
amount |
|
Fair value
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term amounts due from unconsolidated affiliates(1)
|
$
|
345
|
|
|
$
|
—
|
|
|
$
|
228
|
|
|
$
|
92
|
|
|
$
|
320
|
|
Total long-term debt(2)(3)
|
15,519
|
|
|
—
|
|
|
15,900
|
|
|
494
|
|
|
16,394
|
|
|||||
SDG&E:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total long-term debt(3)(4)
|
$
|
4,891
|
|
|
$
|
—
|
|
|
$
|
5,032
|
|
|
$
|
300
|
|
|
$
|
5,332
|
|
SoCalGas:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total long-term debt(5)
|
$
|
3,009
|
|
|
$
|
—
|
|
|
$
|
3,169
|
|
|
$
|
—
|
|
|
$
|
3,169
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31, 2016
|
||||||||||||||||||
|
Carrying
amount |
|
Fair value
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term amounts due from unconsolidated affiliates(1)
|
$
|
184
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
84
|
|
|
$
|
175
|
|
Total long-term debt(2)(3)
|
15,068
|
|
|
—
|
|
|
15,455
|
|
|
492
|
|
|
15,947
|
|
|||||
SDG&E:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total long-term debt(3)(4)
|
$
|
4,654
|
|
|
$
|
—
|
|
|
$
|
4,727
|
|
|
$
|
305
|
|
|
$
|
5,032
|
|
SoCalGas:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total long-term debt(5)
|
$
|
3,009
|
|
|
$
|
—
|
|
|
$
|
3,131
|
|
|
$
|
—
|
|
|
$
|
3,131
|
|
(1)
|
Excluding accumulated interest outstanding of
$22 million
and
$17 million
at
June 30, 2017
and
December 31, 2016
, respectively, and excluding foreign currency translation of
$6 million
on a Mexican peso-denominated loan at June 30, 2017.
|
(2)
|
Before reductions for unamortized discount (net of premium) and debt issuance costs of
$114 million
and
$109 million
at
June 30, 2017
and
December 31, 2016
, respectively, and excluding build-to-suit and capital lease obligations of
$882 million
and
$383 million
at
June 30, 2017
and
December 31, 2016
, respectively. We discuss our long-term debt in Note 6 above and in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report.
|
(3)
|
Level 3 instruments include
$300 million
and
$305 million
at
June 30, 2017
and
December 31, 2016
, respectively, related to Otay Mesa VIE.
|
(4)
|
Before reductions for unamortized discount and debt issuance costs of
$48 million
and
$45 million
at
June 30, 2017
and
December 31, 2016
, respectively, and excluding capital lease obligations of
$737 million
and
$240 million
at
June 30, 2017
and
December 31, 2016
, respectively.
|
(5)
|
Before reductions for unamortized discount and debt issuance costs of
$25 million
and
$27 million
at
June 30, 2017
and
December 31, 2016
, respectively, and excluding capital lease obligations of
$1 million
at June 30, 2017.
|
(1)
|
At measurement date of June 30, 2017.
|
|
|
|
|
|
NUCLEAR DECOMMISSIONING TRUSTS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Estimated
fair
value
|
||||||||
At June 30, 2017:
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies(1)
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57
|
|
Municipal bonds(2)
|
256
|
|
|
8
|
|
|
(1
|
)
|
|
263
|
|
||||
Other securities(3)
|
197
|
|
|
3
|
|
|
(1
|
)
|
|
199
|
|
||||
Total debt securities
|
510
|
|
|
11
|
|
|
(2
|
)
|
|
519
|
|
||||
Equity securities
|
196
|
|
|
305
|
|
|
(2
|
)
|
|
499
|
|
||||
Cash and cash equivalents
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Total
|
$
|
717
|
|
|
$
|
316
|
|
|
$
|
(4
|
)
|
|
$
|
1,029
|
|
At December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52
|
|
Municipal bonds
|
203
|
|
|
4
|
|
|
(1
|
)
|
|
206
|
|
||||
Other securities
|
141
|
|
|
2
|
|
|
(2
|
)
|
|
141
|
|
||||
Total debt securities
|
396
|
|
|
6
|
|
|
(3
|
)
|
|
399
|
|
||||
Equity securities
|
143
|
|
|
366
|
|
|
(1
|
)
|
|
508
|
|
||||
Cash and cash equivalents
|
119
|
|
|
—
|
|
|
—
|
|
|
119
|
|
||||
Total
|
$
|
658
|
|
|
$
|
372
|
|
|
$
|
(4
|
)
|
|
$
|
1,026
|
|
(1)
|
Maturity dates are 2018-2047.
|
(2)
|
Maturity dates are 2017-2047.
|
(3)
|
Maturity dates are 2017-2066.
|
SALES OF SECURITIES
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Proceeds from sales(1)
|
$
|
466
|
|
|
$
|
111
|
|
|
$
|
823
|
|
|
$
|
204
|
|
Gross realized gains
|
79
|
|
|
5
|
|
|
124
|
|
|
8
|
|
||||
Gross realized losses
|
(3
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
(11
|
)
|
(1)
|
Excludes securities that are held to maturity.
|
|
|
|
|
|
▪
|
net revenue changes;
|
▪
|
mandatory tax law, tax accounting, tax procedural, or tax policy changes; and
|
▪
|
elective tax law, tax accounting, tax procedural, or tax policy changes.
|
|
|
|
|
|
(1)
|
This amount will be recorded over the life of the lease as Cost of Electric Fuel and Purchased Power on Sempra Energy’s and SDG&E’s Condensed Consolidated Statements of Operations. This expense will receive ratemaking treatment consistent with purchased-power costs, which are recovered in rates.
|
(2)
|
Amount necessary to reduce net minimum lease payments to estimated present value at the inception of the lease.
|
|
|
|
|
|
▪
|
SDG&E
provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County.
|
▪
|
SoCalGas
is a natural gas distribution utility, serving customers throughout most of Southern California and part of central California.
|
▪
|
Sempra South American Utilities
develops, owns and operates, or holds interests in, electric transmission, distribution and generation infrastructure in Chile and Peru.
|
▪
|
Sempra Mexico
develops, owns and operates, or holds interests in, natural gas, electric, LNG, LPG, ethane and liquid fuels infrastructure, and has marketing operations for the purchase of LNG and the purchase and sale of natural gas in Mexico. In February 2016, management approved a plan to market and sell the TdM natural gas-fired power plant located in Mexicali, Baja California, as we discuss in Note 3.
|
▪
|
Sempra Renewables
develops, owns and operates, or holds interests in, wind and solar energy generation facilities serving wholesale electricity markets in the United States.
|
▪
|
Sempra LNG & Midstream
develops, owns and operates, or holds interests in, a terminal for the import and export of LNG and sale of natural gas, and natural gas pipelines and storage facilities, all within the United States. In September 2016, Sempra LNG & Midstream sold EnergySouth, the parent company of Mobile Gas and Willmut Gas, and in May 2016, sold its 25-percent interest in Rockies Express. We discuss these divestitures in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.
|
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
1,058
|
|
|
$
|
992
|
|
|
$
|
2,115
|
|
|
$
|
1,983
|
|
SoCalGas
|
770
|
|
|
617
|
|
|
2,011
|
|
|
1,650
|
|
||||
Sempra South American Utilities
|
381
|
|
|
385
|
|
|
793
|
|
|
785
|
|
||||
Sempra Mexico
|
273
|
|
|
147
|
|
|
537
|
|
|
285
|
|
||||
Sempra Renewables
|
26
|
|
|
6
|
|
|
48
|
|
|
13
|
|
||||
Sempra LNG & Midstream
|
122
|
|
|
90
|
|
|
254
|
|
|
220
|
|
||||
Intersegment revenues(1)
|
(97
|
)
|
|
(81
|
)
|
|
(194
|
)
|
|
(158
|
)
|
||||
Total
|
$
|
2,533
|
|
|
$
|
2,156
|
|
|
$
|
5,564
|
|
|
$
|
4,778
|
|
INTEREST EXPENSE
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
49
|
|
|
$
|
48
|
|
|
$
|
98
|
|
|
$
|
96
|
|
SoCalGas
|
26
|
|
|
24
|
|
|
51
|
|
|
46
|
|
||||
Sempra South American Utilities
|
11
|
|
|
11
|
|
|
20
|
|
|
20
|
|
||||
Sempra Mexico
|
20
|
|
|
4
|
|
|
52
|
|
|
8
|
|
||||
Sempra Renewables
|
4
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Sempra LNG & Midstream
|
9
|
|
|
10
|
|
|
20
|
|
|
22
|
|
||||
All other
|
67
|
|
|
74
|
|
|
135
|
|
|
146
|
|
||||
Intercompany eliminations
|
(27
|
)
|
|
(29
|
)
|
|
(56
|
)
|
|
(53
|
)
|
||||
Total
|
$
|
159
|
|
|
$
|
142
|
|
|
$
|
328
|
|
|
$
|
285
|
|
INTEREST INCOME
|
|
|
|
|
|
|
|
||||||||
Sempra South American Utilities
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
11
|
|
|
$
|
10
|
|
Sempra Mexico
|
3
|
|
|
1
|
|
|
5
|
|
|
3
|
|
||||
Sempra Renewables
|
2
|
|
|
—
|
|
|
3
|
|
|
1
|
|
||||
Sempra LNG & Midstream
|
12
|
|
|
17
|
|
|
29
|
|
|
33
|
|
||||
Intercompany eliminations
|
(15
|
)
|
|
(17
|
)
|
|
(34
|
)
|
|
(35
|
)
|
||||
Total
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
14
|
|
|
$
|
12
|
|
DEPRECIATION AND AMORTIZATION
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
166
|
|
|
$
|
158
|
|
|
$
|
329
|
|
|
$
|
317
|
|
SoCalGas
|
126
|
|
|
112
|
|
|
252
|
|
|
234
|
|
||||
Sempra South American Utilities
|
13
|
|
|
14
|
|
|
26
|
|
|
27
|
|
||||
Sempra Mexico
|
37
|
|
|
15
|
|
|
73
|
|
|
32
|
|
||||
Sempra Renewables
|
10
|
|
|
2
|
|
|
19
|
|
|
3
|
|
||||
Sempra LNG & Midstream
|
11
|
|
|
12
|
|
|
21
|
|
|
25
|
|
||||
All other
|
5
|
|
|
1
|
|
|
8
|
|
|
4
|
|
||||
Total
|
$
|
368
|
|
|
$
|
314
|
|
|
$
|
728
|
|
|
$
|
642
|
|
INCOME TAX EXPENSE (BENEFIT)(2)
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
54
|
|
|
$
|
48
|
|
|
$
|
144
|
|
|
$
|
113
|
|
SoCalGas
|
19
|
|
|
(29
|
)
|
|
117
|
|
|
54
|
|
||||
Sempra South American Utilities
|
20
|
|
|
15
|
|
|
39
|
|
|
29
|
|
||||
Sempra Mexico
|
102
|
|
|
(12
|
)
|
|
244
|
|
|
28
|
|
||||
Sempra Renewables
|
(5
|
)
|
|
(9
|
)
|
|
(16
|
)
|
|
(22
|
)
|
||||
Sempra LNG & Midstream
|
18
|
|
|
(99
|
)
|
|
19
|
|
|
(128
|
)
|
||||
All other
|
(41
|
)
|
|
(20
|
)
|
|
(85
|
)
|
|
(72
|
)
|
||||
Total
|
$
|
167
|
|
|
$
|
(106
|
)
|
|
$
|
462
|
|
|
$
|
2
|
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
EQUITY EARNINGS (LOSSES)
|
|
|
|
|
|
|
|
||||||||
Earnings (losses) recorded before tax:
|
|
|
|
|
|
|
|
||||||||
Sempra Renewables
|
$
|
16
|
|
|
$
|
11
|
|
|
$
|
18
|
|
|
$
|
18
|
|
Sempra LNG & Midstream
|
2
|
|
|
3
|
|
|
3
|
|
|
(26
|
)
|
||||
Total
|
$
|
18
|
|
|
$
|
14
|
|
|
$
|
21
|
|
|
$
|
(8
|
)
|
Earnings (losses) recorded net of tax:
|
|
|
|
|
|
|
|
||||||||
Sempra South American Utilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Sempra Mexico
|
—
|
|
|
33
|
|
|
(9
|
)
|
|
48
|
|
||||
Total
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
(8
|
)
|
|
$
|
50
|
|
EARNINGS (LOSSES)(2)
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
149
|
|
|
$
|
100
|
|
|
$
|
304
|
|
|
$
|
236
|
|
SoCalGas(3)
|
58
|
|
|
(1
|
)
|
|
261
|
|
|
198
|
|
||||
Sempra South American Utilities
|
45
|
|
|
43
|
|
|
92
|
|
|
81
|
|
||||
Sempra Mexico
|
(9
|
)
|
|
57
|
|
|
39
|
|
|
75
|
|
||||
Sempra Renewables
|
23
|
|
|
12
|
|
|
34
|
|
|
26
|
|
||||
Sempra LNG & Midstream
|
27
|
|
|
(149
|
)
|
|
28
|
|
|
(181
|
)
|
||||
All other
|
(34
|
)
|
|
(46
|
)
|
|
(58
|
)
|
|
(66
|
)
|
||||
Total
|
$
|
259
|
|
|
$
|
16
|
|
|
$
|
700
|
|
|
$
|
369
|
|
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
|
|
|
|
$
|
763
|
|
|
$
|
602
|
|
||||
SoCalGas
|
|
|
|
|
682
|
|
|
650
|
|
||||||
Sempra South American Utilities
|
|
|
|
|
77
|
|
|
82
|
|
||||||
Sempra Mexico
|
|
|
|
|
155
|
|
|
140
|
|
||||||
Sempra Renewables
|
|
|
|
|
100
|
|
|
457
|
|
||||||
Sempra LNG & Midstream
|
|
|
|
|
12
|
|
|
68
|
|
||||||
All other
|
|
|
|
|
13
|
|
|
7
|
|
||||||
Total
|
|
|
|
|
$
|
1,802
|
|
|
$
|
2,006
|
|
||||
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||
ASSETS
|
|
|
|
|
|||||||||||
SDG&E
|
|
|
|
|
$
|
18,708
|
|
|
$
|
17,719
|
|
||||
SoCalGas
|
|
|
|
|
13,743
|
|
|
13,424
|
|
||||||
Sempra South American Utilities
|
|
|
|
|
3,750
|
|
|
3,591
|
|
||||||
Sempra Mexico
|
|
|
|
|
7,835
|
|
|
7,542
|
|
||||||
Sempra Renewables
|
|
|
|
|
2,349
|
|
|
3,644
|
|
||||||
Sempra LNG & Midstream
|
|
|
|
|
4,861
|
|
|
5,564
|
|
||||||
All other
|
|
|
|
|
660
|
|
|
475
|
|
||||||
Intersegment receivables
|
|
|
|
|
(2,530
|
)
|
|
(4,173
|
)
|
||||||
Total
|
|
|
|
|
$
|
49,376
|
|
|
$
|
47,786
|
|
||||
EQUITY METHOD AND OTHER INVESTMENTS
|
|
|
|
|
|||||||||||
Sempra South American Utilities
|
|
|
|
|
$
|
20
|
|
|
$
|
—
|
|
||||
Sempra Mexico
|
|
|
|
|
234
|
|
|
180
|
|
||||||
Sempra Renewables
|
|
|
|
|
825
|
|
|
844
|
|
||||||
Sempra LNG & Midstream
|
|
|
|
|
977
|
|
|
997
|
|
||||||
All other
|
|
|
|
|
78
|
|
|
76
|
|
||||||
Total
|
|
|
|
|
$
|
2,134
|
|
|
$
|
2,097
|
|
(1)
|
Revenues for reportable segments include intersegment revenues of
$3 million
,
$17 million
,
$26 million
and
$51 million
for the three months ended
June 30, 2017
;
$4 million
,
$35 million
,
$51 million
and
$104 million
for the six months ended
June 30, 2017
; a negligible amount,
$18 million
,
$27 million
and
$36 million
for the three months ended
June 30, 2016
; and
$3 million
,
$35 million
,
$54 million
and
$66 million
for the six months ended
June 30, 2016
for SDG&E, SoCalGas, Sempra Mexico and Sempra LNG & Midstream, respectively.
|
(2)
|
Amounts for the
six
months ended
June 30, 2016
reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
|
(3)
|
After preferred dividends.
|
|
|
|
|
|
▪
|
Sempra Energy and its consolidated entities
|
▪
|
SDG&E and its consolidated VIE
|
▪
|
SoCalGas
|
▪
|
the Condensed Consolidated Financial Statements and related Notes of Sempra Energy and its subsidiaries and VIEs;
|
▪
|
the Condensed Consolidated Financial Statements and related Notes of SDG&E and its VIE; and
|
▪
|
the Condensed Financial Statements and related Notes of SoCalGas.
|
SEMPRA UTILITIES
|
|
|
|
|
|
Business summary
|
Market
|
Service territory
|
SDG&E
A regulated public utility; infrastructure supports electric generation, transmission and distribution, and natural gas distribution
|
▪
Provides electricity to a population of 3.6 million (1.4 million meters)
▪
Provides natural gas to a population of 3.3 million (0.9 million meters)
|
Serves the county of San Diego, California (electric and natural gas) and an adjacent portion of southern Orange County (electric only) covering 4,100 square miles
|
SOCALGAS
A regulated public utility; infrastructure supports natural gas distribution, transmission and storage
|
▪
Provides natural gas to a population of 21.7 million (5.9 million meters)
|
Southern California and portions of central California (excluding San Diego County, the city of Long Beach and the desert area of San Bernardino County) covering 20,000 square miles
|
SEMPRA SOUTH AMERICAN UTILITIES
Develops, owns and operates, or holds interests in electric transmission, distribution and generation infrastructure
|
▪
Provides electricity to a population of approximately 2 million (approximately 0.7 million meters) in Chile and approximately 4.9 million (approximately 1.1 million meters) in Peru
|
▪
Region of Valparaiso in central Chile
▪
Southern zone of metropolitan Lima, Peru
|
SEMPRA INFRASTRUCTURE
|
|
|
|
|
|
|
|
Business summary
|
Market
|
Geographic area
|
|
SEMPRA MEXICO
Develops, owns and operates, or holds interests in:
▪
natural gas transmission pipelines
▪
LPG and ethane systems
▪
a natural gas distribution utility
▪
electric generation facilities, including wind, solar and a natural gas-fired power plant (presently held for sale)
▪
a terminal for the import of LNG
▪
a terminal for the storage of LPG
▪
a marine terminal for the receipt, storage and delivery of liquid fuels
▪
marketing operations for the purchase of LNG and the purchase and sale of natural gas
|
▪
Natural gas
▪
Wholesale electricity
▪
LNG
▪
LPG
▪
Liquid fuels
|
▪
Mexico
|
|
SEMPRA RENEWABLES
Develops, owns and operates, or holds interests in renewable energy generation projects
|
▪
Wholesale electricity
|
▪
Arizona
▪
California
▪
Colorado
▪
Hawaii
▪
Indiana
▪
Kansas
|
▪
Michigan
▪
Minnesota
▪
Nebraska
▪
Nevada
▪
Pennsylvania
|
SEMPRA LNG & MIDSTREAM
Develops, owns and operates, or holds interests in LNG and natural gas midstream assets:
▪
a terminal in the U.S. for the import and export of LNG and sale of natural gas
▪
natural gas pipelines and storage facilities
▪
marketing operations
|
▪
LNG
▪
Natural gas
|
▪
Alabama
▪
Louisiana
▪
Mississippi
▪
Texas
|
|
|
|
|
|
|
▪
|
Overall results of our operations
|
▪
|
Segment results
|
▪
|
Adjusted earnings and adjusted earnings per share
|
▪
|
Significant changes in revenues, costs and earnings between periods
|
▪
|
Impact of foreign currency and inflation rates on our results of operations
|
SEMPRA ENERGY EARNINGS (LOSSES) BY SEGMENT
|
|
|
|||||||||||||
(Dollars in millions)
|
|
|
|||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016(1)
|
||||||||
Sempra Utilities:
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
149
|
|
|
$
|
100
|
|
|
$
|
304
|
|
|
$
|
236
|
|
SoCalGas(2)
|
58
|
|
|
(1
|
)
|
|
261
|
|
|
198
|
|
||||
Sempra South American Utilities
|
45
|
|
|
43
|
|
|
92
|
|
|
81
|
|
||||
Sempra Infrastructure:
|
|
|
|
|
|
|
|
||||||||
Sempra Mexico
|
(9
|
)
|
|
57
|
|
|
39
|
|
|
75
|
|
||||
Sempra Renewables
|
23
|
|
|
12
|
|
|
34
|
|
|
26
|
|
||||
Sempra LNG & Midstream
|
27
|
|
|
(149
|
)
|
|
28
|
|
|
(181
|
)
|
||||
Parent and other(3)
|
(34
|
)
|
|
(46
|
)
|
|
(58
|
)
|
|
(66
|
)
|
||||
Earnings
|
$
|
259
|
|
|
$
|
16
|
|
|
$
|
700
|
|
|
$
|
369
|
|
(1)
|
Reflects the adoption of ASU 2016-09, as we discuss in Note 2 of the Notes to Condensed Consolidated Financial Statements herein.
|
(2)
|
After preferred dividends.
|
(3)
|
Includes after-tax interest expense ($40 million and $44 million for the
three months ended June 30, 2017
and
2016
, respectively, and $81 million and $87 million for the
six months ended June 30, 2017
and 2016, respectively), intercompany eliminations recorded in consolidation and certain corporate costs.
|
▪
|
$31 million charge in 2016 associated with prior years’ income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the 2016 GRC FD;
|
▪
|
$16 million higher CPUC base operating margin authorized for 2017 and lower non-refundable operating costs;
|
▪
|
$8 million favorable impact in 2017 from the resolution of prior years’ income tax items;
|
▪
|
$5 million higher earnings from electric transmission operations primarily due to higher rate base; and
|
▪
|
$3 million increase in AFUDC related to equity;
offset by
|
▪
|
$9 million favorable impact in 2016 from the retroactive application of the 2016 GRC FD for the first quarter of 2016.
|
▪
|
$31 million charge in 2016 associated with prior years’ income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the 2016 GRC FD;
|
▪
|
$22 million higher CPUC base operating margin authorized for 2017 and lower non-refundable operating costs;
|
▪
|
$8 million favorable impact in 2017 from the resolution of prior years’ income tax items;
|
▪
|
$7 million higher earnings from electric transmission operations primarily due to higher rate base;
|
▪
|
$7 million increase in AFUDC related to equity; and
|
▪
|
$6 million reimbursement of litigation costs associated with the arbitration ruling over the SONGS replacement steam generators, as we discuss in Note 9 of the Notes to Condensed Consolidated Financial Statements herein;
offset by
|
▪
|
$7 million income tax benefit in 2016 associated with excess tax benefits related to share-based compensation.
|
▪
|
$49 million of charges in 2016 associated with prior years’ income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the 2016 GRC FD;
|
▪
|
$13 million impairment of assets in 2016 related to the Southern Gas System Reliability Project (also referred to as the North-South Pipeline); and
|
▪
|
$5 million higher earnings associated with the PSEP and advanced metering assets;
offset by
|
▪
|
$12 million favorable impact in 2016 from the retroactive application of the 2016 GRC FD for the first quarter of 2016.
|
▪
|
$49 million of charges in 2016 associated with prior years’ income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the 2016 GRC FD;
|
▪
|
$13 million impairment of assets in 2016 related to the Southern Gas System Reliability Project; and
|
•
|
$10 million higher earnings associated with the PSEP and advanced metering assets;
offset by
|
•
|
$4 million income tax benefit in 2016 associated with excess tax benefits related to share-based compensation.
|
▪
|
$71 million impairment in 2017, net of a $12 million income tax benefit that has been fully reserved, of the TdM natural gas-fired power plant assets held for sale, as we discuss in Note 3 of the Notes to Condensed Consolidated Financial Statements herein;
|
▪
|
$29 million unfavorable impact in 2017 from foreign currency and inflation effects, net of related hedging activities, as follows:
|
◦
|
$52 million from income tax expense ($34 million after noncontrolling interests), and
|
◦
|
$9 million in equity losses from our joint ventures,
offset by
|
◦
|
$8 million favorable transactional effects.
|
▪
|
$22 million favorable impact in 2016 from foreign currency and inflation effects, net of related hedging activities, as follows:
|
◦
|
$22 million from income tax benefit ($18 million after noncontrolling interests), and
|
◦
|
$15 million in equity earnings from our joint ventures,
offset by
|
◦
|
$6 million unfavorable transactional effects.
|
▪
|
$13 million valuation allowance against TdM’s deferred tax assets;
|
▪
|
$7 million higher interest expense, including $4 million at Ventika and $2 million at IEnova Pipelines (formerly known as GdC) related to debt assumed in their acquisitions; and
|
▪
|
$7 million lower operating results at TdM, mainly due to higher operating expenses related to major maintenance;
offset by
|
▪
|
$35 million higher pipeline operational earnings, primarily attributable to the increase in our ownership interest in IEnova Pipelines from 50 percent to 100 percent in September 2016 and from other pipeline assets placed in service;
|
▪
|
$15 million losses attributable to noncontrolling interests in 2017 compared to $16 million earnings attributable to noncontrolling interests in 2016 at IEnova, as we discuss below in “Changes in Revenues, Costs and Earnings – Losses (Earnings) Attributable to Noncontrolling Interests;”
|
▪
|
$8 million operational earnings in 2017 from the Ventika wind power generation facilities, which we acquired in December 2016;
|
▪
|
$3 million tax benefit in 2017 from a reduction to the outside basis deferred tax liability compared to $3 million tax expense in 2016 on our investment in TdM that is held for sale; and
|
▪
|
$4 million higher earnings from the recognition of AFUDC related to equity primarily associated with the Ojinaga pipeline project.
|
▪
|
$86 million unfavorable impact in 2017 from foreign currency and inflation effects, net of related hedging activities, as follows:
|
◦
|
$149 million from income tax expense ($99 million after noncontrolling interests), and
|
◦
|
$22 million in equity losses from our joint ventures,
offset by
|
◦
|
$17 million favorable transactional effects.
|
▪
|
$25 million favorable impact in 2016 from foreign currency and inflation effects, net of related hedging activities, as follows:
|
◦
|
$22 million from income tax benefit ($18 million after noncontrolling interests), and
|
◦
|
$15 million in equity earnings from our joint ventures,
offset by
|
◦
|
$5 million net unfavorable transactional and translation effects.
|
▪
|
$71 million impairment in 2017, net of a $12 million income tax benefit that has been fully reserved, of the TdM assets held for sale;
|
▪
|
$15 million higher interest expense, including $8 million at Ventika and $4 million at IEnova Pipelines; and
|
▪
|
$13 million valuation allowance against TdM’s deferred tax assets;
offset by
|
▪
|
$57 million higher pipeline operational earnings, primarily attributable to the increase in ownership in IEnova Pipelines and from other pipeline assets placed in service;
|
▪
|
$8 million tax benefit in 2017 from a reduction to the outside basis deferred tax liability compared to $32 million tax expense in 2016 on our investment in TdM that is held for sale;
|
▪
|
$32 million higher earnings from the recognition of AFUDC related to equity primarily associated with the Ojinaga and San Isidro pipeline projects;
|
▪
|
$10 million losses attributable to noncontrolling interests in 2017 compared to $21 million earnings attributable to noncontrolling interests in 2016 at IEnova; and
|
▪
|
$18 million operational earnings in 2017 from Ventika.
|
▪
|
$123 million loss in 2016 on permanent release of certain pipeline capacity, as we discuss in Note 15 of the Notes to Consolidated Financial Statements in the Annual Report;
|
▪
|
$34 million settlement proceeds from a breach of contract claim against a counterparty in bankruptcy court, of which $28 million is related to the charge in 2016 from the permanent release of certain pipeline capacity, as we discuss in Note 11 of the Notes to Condensed Consolidated Financial Statements herein;
|
▪
|
$18 million primarily due to mark-to-market losses in 2016 from natural gas marketing activities; and
|
▪
|
$5 million higher results from LNG marketing activities primarily driven by changes in natural gas prices.
|
▪
|
$123 million loss in 2016 on permanent release of certain pipeline capacity;
|
▪
|
$39 million improved results primarily due to mark-to-market losses in 2016 from natural gas marketing activities;
|
▪
|
$34 million settlement proceeds from a breach of contract claim against a counterparty in bankruptcy court, of which $28 million is related to the charge in 2016 from the permanent release of certain pipeline capacity;
|
▪
|
$27 million impairment charge in the first quarter of 2016 related to our investment in Rockies Express, which we discuss further in Note 3 of the Notes to Condensed Consolidated Financial Statements herein; and
|
▪
|
$9 million higher results from LNG marketing activities primarily driven by changes in natural gas prices;
offset by
|
▪
|
$11 million lower equity earnings resulting from the sale of our investment in Rockies Express in May 2016; and
|
▪
|
$7 million lower earnings due to the sale of EnergySouth in September 2016, as we discuss in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.
|
▪
|
$14 million higher income tax benefits in 2017, including:
|
◦
|
$2 million income tax benefit in 2017 compared to $8 million income tax expense in 2016 due to the interim period application of an annual forecasted consolidated effective tax rate, and
|
◦
|
$4 million U.S. income tax expense in 2016 on planned repatriation of earnings from certain non-U.S. subsidiaries;
|
▪
|
$5 million higher investment gains on dedicated assets in support of our executive retirement and deferred compensation plans, and a decrease in deferred compensation expense associated with the investments; and
|
▪
|
$5 million lower net interest expense in 2017;
offset by
|
▪
|
$6 million higher proportion of operating costs retained at Parent; and
|
▪
|
$5 million ($8 million pretax) of costs in 2017 associated with foreign currency derivatives.
|
▪
|
$10 million higher investment gains on dedicated assets in support of our executive retirement and deferred compensation plans;
|
▪
|
$9 million lower net interest expense in 2017; and
|
▪
|
$6 million higher income tax benefits in 2017, including:
|
◦
|
$3 million income tax benefit in 2017 compared to $6 million income tax expense in 2016 due to the interim period application of an annual forecasted consolidated effective tax rate,
|
◦
|
$9 million U.S. income tax expense in 2016 on planned repatriation of earnings from certain non-U.S. subsidiaries, and
|
◦
|
$7 million income tax benefit in 2017 related to a deferred income tax liability on an outside basis difference in a subsidiary investment,
offset by
|
◦
|
$1
million income tax expense in 2017 compared to $17 million income tax benefit in 2016 associated with excess tax deficiencies/benefits related to share-based compensation;
offset by
|
▪
|
$10 million ($16 million pretax) of costs in 2017 associated with foreign currency derivatives; and
|
▪
|
$4 million higher proportion of operating costs retained at Parent.
|
SEMPRA ENERGY ADJUSTED EARNINGS AND ADJUSTED EPS
|
|||||||||||||||||||
(Dollars in millions, except per share amounts)
|
|||||||||||||||||||
|
Pretax amount
|
|
Income tax (benefit) expense(1)
|
|
Non-controlling interests
|
|
Earnings
|
|
Diluted
EPS
|
||||||||||
|
Three months ended June 30, 2017
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
259
|
|
|
$
|
1.03
|
|
||||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of TdM assets held for sale
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
47
|
|
|
0.19
|
|
||
Deferred income tax benefit associated with TdM
|
—
|
|
|
(3
|
)
|
|
1
|
|
|
(2
|
)
|
|
(0.01
|
)
|
|||||
Recoveries related to 2016 permanent release of pipeline capacity
|
(47
|
)
|
|
19
|
|
|
—
|
|
|
(28
|
)
|
|
(0.11
|
)
|
|||||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
276
|
|
|
$
|
1.10
|
|
||||||
Weighted-average number of shares outstanding, diluted (thousands)
|
|
|
|
|
|
|
|
|
|
|
252,822
|
|
|||||||
|
Three months ended June 30, 2016(2)
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
16
|
|
|
$
|
0.06
|
|
||||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Permanent release of pipeline capacity
|
$
|
206
|
|
|
$
|
(83
|
)
|
|
$
|
—
|
|
|
123
|
|
|
0.49
|
|
||
SDG&E tax repairs adjustments related to 2016 GRC FD
|
52
|
|
|
(21
|
)
|
|
—
|
|
|
31
|
|
|
0.12
|
|
|||||
SoCalGas tax repairs adjustments related to 2016 GRC FD
|
83
|
|
|
(34
|
)
|
|
—
|
|
|
49
|
|
|
0.19
|
|
|||||
SDG&E retroactive impact of 2016 GRC FD for first-quarter 2016
|
(15
|
)
|
|
6
|
|
|
—
|
|
|
(9
|
)
|
|
(0.03
|
)
|
|||||
SoCalGas retroactive impact of 2016 GRC FD for first-quarter 2016
|
(20
|
)
|
|
8
|
|
|
—
|
|
|
(12
|
)
|
|
(0.05
|
)
|
|||||
Deferred income tax expense associated with TdM
|
—
|
|
|
3
|
|
|
(1
|
)
|
|
2
|
|
|
0.01
|
|
|||||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
200
|
|
|
$
|
0.79
|
|
||||||
Weighted-average number of shares outstanding, diluted (thousands)
|
|
|
|
|
|
|
|
|
252,036
|
|
|||||||||
|
Six months ended June 30, 2017
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
700
|
|
|
$
|
2.77
|
|
||||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of TdM assets held for sale
|
$
|
71
|
|
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
47
|
|
|
0.19
|
|
||
Deferred income tax benefit associated with TdM
|
—
|
|
|
(8
|
)
|
|
3
|
|
|
(5
|
)
|
|
(0.02
|
)
|
|||||
Recoveries related to 2016 permanent release of pipeline capacity
|
(47
|
)
|
|
19
|
|
|
—
|
|
|
(28
|
)
|
|
(0.11
|
)
|
|||||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
714
|
|
|
$
|
2.83
|
|
||||||
Weighted-average number of shares outstanding, diluted (thousands)
|
|
|
|
|
|
|
|
|
252,609
|
|
|||||||||
|
Six months ended June 30, 2016(2)
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
369
|
|
|
$
|
1.47
|
|
||||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Permanent release of pipeline capacity
|
$
|
206
|
|
|
$
|
(83
|
)
|
|
$
|
—
|
|
|
123
|
|
|
0.49
|
|
||
SDG&E tax repairs adjustments related to 2016 GRC FD
|
52
|
|
|
(21
|
)
|
|
—
|
|
|
31
|
|
|
0.12
|
|
|||||
SoCalGas tax repairs adjustments related to 2016 GRC FD
|
83
|
|
|
(34
|
)
|
|
—
|
|
|
49
|
|
|
0.19
|
|
|||||
Impairment of investment in Rockies Express
|
44
|
|
|
(17
|
)
|
|
—
|
|
|
27
|
|
|
0.11
|
|
|||||
Deferred income tax expense associated with TdM
|
—
|
|
|
32
|
|
|
(6
|
)
|
|
26
|
|
|
0.10
|
|
|||||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
625
|
|
|
$
|
2.48
|
|
||||||
Weighted-average number of shares outstanding, diluted (thousands)
|
|
|
|
|
|
|
|
|
251,775
|
|
(1)
|
Income taxes were calculated based on applicable statutory tax rates, except for adjustments that are solely income tax. 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)
|
Reflects the adoption of ASU 2016-09, as we discuss in Note 2 of the Notes to Condensed Consolidated Financial Statements herein.
|
SDG&E ADJUSTED EARNINGS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Pretax amount
|
|
Income tax (benefit) expense(1)
|
|
Earnings
|
||||||
|
Three months ended June 30, 2016
|
||||||||||
SDG&E GAAP Earnings
|
|
|
|
|
$
|
100
|
|
||||
Excluded items:
|
|
|
|
|
|
||||||
Tax repairs adjustments related to 2016 GRC FD
|
$
|
52
|
|
|
$
|
(21
|
)
|
|
31
|
|
|
Retroactive impact of 2016 GRC FD for first-quarter 2016
|
(15
|
)
|
|
6
|
|
|
(9
|
)
|
|||
SDG&E Adjusted Earnings
|
|
|
|
|
$
|
122
|
|
||||
|
Six months ended June 30, 2016(2)
|
||||||||||
SDG&E GAAP Earnings
|
|
|
|
|
$
|
236
|
|
||||
Excluded item:
|
|
|
|
|
|
||||||
Tax repairs adjustments related to 2016 GRC FD
|
$
|
52
|
|
|
$
|
(21
|
)
|
|
31
|
|
|
SDG&E Adjusted Earnings
|
|
|
|
|
$
|
267
|
|
(1)
|
Income taxes were calculated based on applicable statutory tax rates.
|
(2)
|
Reflects the adoption of ASU 2016-09, as we discuss in Note 2 of the Notes to Condensed Consolidated Financial Statements herein.
|
SOCALGAS ADJUSTED EARNINGS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Pretax amount
|
|
Income tax (benefit) expense(1)
|
|
Earnings
|
||||||
|
Three months ended June 30, 2016
|
||||||||||
SoCalGas GAAP Losses
|
|
|
|
|
$
|
(1
|
)
|
||||
Excluded items:
|
|
|
|
|
|
||||||
Tax repairs adjustments related to 2016 GRC FD
|
$
|
83
|
|
|
$
|
(34
|
)
|
|
49
|
|
|
Retroactive impact of 2016 GRC FD for first-quarter 2016
|
(20
|
)
|
|
8
|
|
|
(12
|
)
|
|||
SoCalGas Adjusted Earnings
|
|
|
|
|
$
|
36
|
|
||||
|
Six months ended June 30, 2016(2)
|
||||||||||
SoCalGas GAAP Earnings
|
|
|
|
|
$
|
198
|
|
||||
Excluded item:
|
|
|
|
|
|
||||||
Tax repairs adjustments related to 2016 GRC FD
|
$
|
83
|
|
|
$
|
(34
|
)
|
|
49
|
|
|
SoCalGas Adjusted Earnings
|
|
|
|
|
$
|
247
|
|
(1)
|
Income taxes were calculated based on applicable statutory tax rates.
|
(2)
|
Reflects the adoption of ASU 2016-09, as we discuss in Note 2 of the Notes to Condensed Consolidated Financial Statements herein.
|
▪
|
SDG&E
|
▪
|
Sempra South American Utilities’ Chilquinta Energía and Luz del Sur
|
▪
|
SDG&E
|
▪
|
SoCalGas
|
▪
|
Sempra Mexico’s Ecogas
|
▪
|
Sempra LNG & Midstream’s Mobile Gas and Willmut Gas (prior to the sale of EnergySouth on September 12, 2016)
|
▪
|
permits SDG&E to recover the actual cost incurred to generate or procure electricity based on annual estimates of the cost of electricity supplied to customers. The differences in cost between estimates and actual are recovered in subsequent periods through rates.
|
▪
|
permits the cost of natural gas purchased for core customers (primarily residential and small commercial and industrial customers) to be passed through to customers in rates substantially as incurred. However, SoCalGas’ GCIM provides SoCalGas the opportunity to share in the savings and/or costs from buying natural gas for its core customers at prices below or above monthly market-based benchmarks. This mechanism permits full recovery of costs incurred when average purchase costs are within a price range around the benchmark price. Any higher costs incurred or savings realized outside this range are shared between the core customers and SoCalGas. We provide further discussion in Note 1 of the Notes to Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business” in the Annual Report.
|
▪
|
also permits the California Utilities to recover certain expenses for programs authorized by the CPUC, or “refundable programs.”
|
UTILITIES REVENUES AND COST OF SALES
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Electric revenues:
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
946
|
|
|
$
|
897
|
|
|
$
|
1,821
|
|
|
$
|
1,740
|
|
Sempra South American Utilities
|
362
|
|
|
365
|
|
|
752
|
|
|
743
|
|
||||
Eliminations and adjustments
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Total
|
1,307
|
|
|
1,261
|
|
|
2,570
|
|
|
2,480
|
|
||||
Natural gas revenues:
|
|
|
|
|
|
|
|
||||||||
SoCalGas
|
770
|
|
|
617
|
|
|
2,011
|
|
|
1,650
|
|
||||
SDG&E
|
112
|
|
|
95
|
|
|
294
|
|
|
243
|
|
||||
Sempra Mexico
|
25
|
|
|
20
|
|
|
55
|
|
|
42
|
|
||||
Sempra LNG & Midstream
|
—
|
|
|
18
|
|
|
—
|
|
|
56
|
|
||||
Eliminations and adjustments
|
(17
|
)
|
|
(17
|
)
|
|
(35
|
)
|
|
(35
|
)
|
||||
Total
|
890
|
|
|
733
|
|
|
2,325
|
|
|
1,956
|
|
||||
Total utilities revenues
|
$
|
2,197
|
|
|
$
|
1,994
|
|
|
$
|
4,895
|
|
|
$
|
4,436
|
|
Cost of electric fuel and purchased power:
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
316
|
|
|
$
|
314
|
|
|
$
|
577
|
|
|
$
|
562
|
|
Sempra South American Utilities
|
237
|
|
|
247
|
|
|
503
|
|
|
514
|
|
||||
Total
|
$
|
553
|
|
|
$
|
561
|
|
|
$
|
1,080
|
|
|
$
|
1,076
|
|
Cost of natural gas:
|
|
|
|
|
|
|
|
||||||||
SoCalGas
|
$
|
179
|
|
|
$
|
147
|
|
|
$
|
587
|
|
|
$
|
400
|
|
SDG&E
|
38
|
|
|
25
|
|
|
103
|
|
|
64
|
|
||||
Sempra Mexico
|
15
|
|
|
11
|
|
|
34
|
|
|
23
|
|
||||
Sempra LNG & Midstream
|
—
|
|
|
4
|
|
|
—
|
|
|
15
|
|
||||
Eliminations and adjustments
|
(4
|
)
|
|
(4
|
)
|
|
(11
|
)
|
|
(8
|
)
|
||||
Total
|
$
|
228
|
|
|
$
|
183
|
|
|
$
|
713
|
|
|
$
|
494
|
|
UTILITIES VOLUMES
|
|||||||||||
(Electric volumes in millions of kilowatt-hours, natural gas volumes in billion cubic feet)
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Electric volumes:
|
|
|
|
|
|
|
|
||||
SDG&E:
|
|
|
|
|
|
|
|
||||
Residential
|
1,388
|
|
|
1,422
|
|
|
3,059
|
|
|
3,111
|
|
Commercial
|
1,632
|
|
|
1,551
|
|
|
3,201
|
|
|
3,130
|
|
Industrial
|
526
|
|
|
519
|
|
|
1,026
|
|
|
1,007
|
|
Direct access
|
786
|
|
|
772
|
|
|
1,573
|
|
|
1,606
|
|
Street and highway lighting
|
19
|
|
|
20
|
|
|
43
|
|
|
37
|
|
Total(1)
|
4,351
|
|
|
4,284
|
|
|
8,902
|
|
|
8,891
|
|
Sempra South American Utilities:
|
|
|
|
|
|
|
|
||||
Luz del Sur
|
1,780
|
|
|
1,887
|
|
|
3,674
|
|
|
3,836
|
|
Chilquinta Energía
|
691
|
|
|
682
|
|
|
1,502
|
|
|
1,481
|
|
Total
|
2,471
|
|
|
2,569
|
|
|
5,176
|
|
|
5,317
|
|
Natural gas volumes(2):
|
|
|
|
|
|
|
|
|
|
||
SoCalGas:
|
|
|
|
|
|
|
|
||||
Natural gas sales
|
61
|
|
|
63
|
|
|
172
|
|
|
162
|
|
Transportation
|
141
|
|
|
138
|
|
|
289
|
|
|
278
|
|
Total(1)
|
202
|
|
|
201
|
|
|
461
|
|
|
440
|
|
SDG&E:
|
|
|
|
|
|
|
|
||||
Natural gas sales
|
10
|
|
|
10
|
|
|
25
|
|
|
24
|
|
Transportation
|
7
|
|
|
6
|
|
|
15
|
|
|
14
|
|
Total(1)
|
17
|
|
|
16
|
|
|
40
|
|
|
38
|
|
Sempra Mexico – Ecogas
|
7
|
|
|
7
|
|
|
15
|
|
|
15
|
|
(1)
|
Includes intercompany sales.
|
(2)
|
In September 2016, Sempra LNG & Midstream completed the sale of EnergySouth, the parent company of Mobile Gas and Willmut Gas. Volume information for Mobile Gas and Willmut Gas has been excluded from 2016 due to immateriality.
|
▪
|
$49 million
increase at SDG&E, which included
|
◦
|
$52 million of charges in 2016 associated with prior years’ income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the 2016 GRC FD,
|
◦
|
$15 million increase in 2017 due to an increase in rates permitted under the attrition mechanism in the 2016 GRC FD, and
|
◦
|
$10 million higher authorized revenues from electric transmission,
offset by
|
◦
|
$14 million favorable impact in 2016 from the retroactive application of the 2016 GRC FD for the first quarter of 2016,
|
◦
|
$14 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in O&M, and
|
◦
|
$12 million charge in 2017 associated with tracking the income tax benefit from certain flow-through items in relation to the forecasted amounts in the 2016 GRC FD;
offset by
|
▪
|
$3 million
decrease at Sempra South American Utilities, which included
|
◦
|
$20 million lower volumes at Luz del Sur primarily due to the migration of regulated and non-regulated customers to tolling customers, who pay only a tolling fee and do not contribute to customer load,
offset by
|
◦
|
$10 million due to higher rates at Luz del Sur, and
|
◦
|
$7
million due to foreign currency exchange rate effects
.
|
▪
|
$9 million lower costs at Chilquinta Energía; and
|
▪
|
$5 million from lower volumes at Luz del Sur, net of higher volume at Chilquinta Energía;
offset by
|
▪
|
$5 million due to foreign currency exchange rate effects.
|
▪
|
$81 million
increase at SDG&E, which included
|
◦
|
$52 million of charges in 2016 associated with prior years’ income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the 2016 GRC FD,
|
◦
|
$26 million increase in 2017 due to an increase in rates permitted under the attrition mechanism in the 2016 GRC FD,
|
◦
|
$16 million higher authorized revenues from electric transmission, and
|
◦
|
$15 million
higher cost of electric fuel and purchased power, which we discuss below,
offset by
|
◦
|
$24 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in O&M, and
|
◦
|
$10 million charge in 2017 associated with tracking the income tax benefit from certain flow-through items in relation to forecasted amounts in the 2016 GRC FD; and
|
▪
|
$9 million
increase at Sempra South American Utilities, which included
|
◦
|
$29 million due to foreign currency exchange rate effects, and
|
◦
|
$20 million due to higher rates at Luz del Sur,
offset by
|
◦
|
$37 million lower volumes at Luz del Sur primarily due to the migration of regulated and non-regulated customers to tolling customers, who pay only a tolling fee and do not contribute to customer load.
|
▪
|
$15 million
increase at SDG&E mainly due to an increase in the cost of purchased power primarily as a result of higher natural gas prices;
offset by
|
▪
|
$11 million
decrease at Sempra South American Utilities, which included
|
◦
|
$24 million lower volumes at Luz del Sur, and
|
◦
|
$9 million lower costs at Chilquinta Energía,
offset by
|
◦
|
$20 million due to foreign currency exchange rate effects.
|
CALIFORNIA UTILITIES AVERAGE COST OF NATURAL GAS
|
|
|
|
|
|||||||||||
(Dollars per thousand cubic feet)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
SoCalGas
|
$
|
2.96
|
|
|
$
|
2.37
|
|
|
$
|
3.44
|
|
|
$
|
2.49
|
|
SDG&E
|
4.07
|
|
|
2.75
|
|
|
4.17
|
|
|
2.70
|
|
▪
|
$153 million
increase at SoCalGas, which included
|
◦
|
$83 million of charges in 2016 associated with prior years’ income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the 2016 GRC FD,
|
◦
|
$32 million
increase in cost of natural gas sold, including $36 million from higher average gas prices offset by $4 million from lower volumes driven by slightly warmer weather in the second quarter of 2017 compared to the same period in 2016,
|
◦
|
$17 million increase due to 2017 attrition,
|
◦
|
$13 million decrease in charges in 2017 associated with tracking the income tax benefit from certain flow-through items in relation to forecasted amounts in the 2016 GRC FD, and
|
◦
|
$13 million higher revenues primarily associated with the PSEP,
offset by
|
◦
|
$14 million favorable impact in 2016 from the retroactive application of the 2016 GRC FD for the first quarter of 2016; and
|
▪
|
$17 million
increase at SDG&E, which included
|
◦
|
$13 million
increase in cost of natural gas sold primarily from higher average gas prices, and
|
◦
|
$6 million higher revenues primarily associated with the PSEP.
|
▪
|
$361 million
increase at SoCalGas, which included
|
◦
|
$187 million
increase in cost of natural gas sold, including $161 million from higher average gas prices and $26 million from higher volumes driven mainly by cooler weather in 2017,
|
◦
|
$83 million of charges in 2016 associated with prior years’ income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the 2016 GRC FD,
|
◦
|
$33 million increase due to 2017 attrition,
|
◦
|
$27 million higher revenues primarily associated with the PSEP,
|
◦
|
$18 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in O&M, and
|
◦
|
$5 million GCIM award approved by the CPUC in January 2017; and
|
▪
|
$51 million
increase at SDG&E, which included
|
◦
|
$39 million
increase in the cost of natural gas sold primarily from higher average gas prices, and
|
◦
|
$10 million higher revenues primarily associated with the PSEP.
|
ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Sempra South American Utilities
|
$
|
19
|
|
|
$
|
20
|
|
|
$
|
41
|
|
|
$
|
42
|
|
Sempra Mexico
|
248
|
|
|
127
|
|
|
482
|
|
|
243
|
|
||||
Sempra Renewables
|
26
|
|
|
6
|
|
|
48
|
|
|
13
|
|
||||
Sempra LNG & Midstream
|
122
|
|
|
72
|
|
|
254
|
|
|
164
|
|
||||
Eliminations and adjustments(1)
|
(79
|
)
|
|
(63
|
)
|
|
(156
|
)
|
|
(120
|
)
|
||||
Total revenues
|
$
|
336
|
|
|
$
|
162
|
|
|
$
|
669
|
|
|
$
|
342
|
|
COST OF SALES(2)
|
|
|
|
|
|
|
|
||||||||
Cost of natural gas, electric fuel and purchased power:
|
|
|
|
|
|
|
|
||||||||
Sempra South American Utilities
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
8
|
|
Sempra Mexico
|
49
|
|
|
40
|
|
|
100
|
|
|
75
|
|
||||
Sempra LNG & Midstream
|
85
|
|
|
77
|
|
|
173
|
|
|
151
|
|
||||
Eliminations and adjustments(1)
|
(76
|
)
|
|
(59
|
)
|
|
(152
|
)
|
|
(116
|
)
|
||||
Total
|
$
|
62
|
|
|
$
|
62
|
|
|
$
|
129
|
|
|
$
|
118
|
|
Other cost of sales:
|
|
|
|
|
|
|
|
||||||||
Sempra South American Utilities
|
$
|
12
|
|
|
$
|
14
|
|
|
$
|
27
|
|
|
$
|
29
|
|
Sempra Mexico
|
—
|
|
|
3
|
|
|
3
|
|
|
5
|
|
||||
Sempra LNG & Midstream
|
(50
|
)
|
|
211
|
|
|
(43
|
)
|
|
231
|
|
||||
Eliminations and adjustments(1)
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||
Total
|
$
|
(38
|
)
|
|
$
|
226
|
|
|
$
|
(16
|
)
|
|
$
|
261
|
|
(1)
|
Includes eliminations of intercompany activity.
|
(2)
|
Excludes depreciation and amortization, which are shown separately on Sempra Energy’s Condensed Consolidated Statements of Operations.
|
▪
|
$121 million
increase at Sempra Mexico primarily due to:
|
◦
|
$88 million due to the acquisition of the remaining 50-percent interest in IEnova Pipelines (formerly known as GdC) in September 2016 and from other pipeline assets placed in service, and
|
◦
|
$27 million due to the acquisition of Ventika in December 2016;
|
▪
|
$50 million
increase at Sempra LNG & Midstream primarily due to mark-to-market losses in 2016 from natural gas marketing activities and from changes in natural gas prices; and
|
▪
|
$20 million higher revenues at Sempra Renewables primarily due to solar and wind assets placed in service during 2016;
offset by
|
▪
|
$16 million
primarily from higher intercompany eliminations associated with sales between Sempra LNG & Midstream and Sempra Mexico.
|
▪
|
$9 million
increase at Sempra Mexico primarily due to higher natural gas costs; and
|
▪
|
$8 million
increase at Sempra LNG & Midstream primarily due to higher natural gas costs;
offset by
|
▪
|
$17 million
primarily from higher intercompany eliminations of costs associated with sales between Sempra LNG & Midstream and Sempra Mexico.
|
▪
|
$239 million
increase at Sempra Mexico primarily due to:
|
◦
|
$164 million due to the acquisition of the remaining 50-percent interest in IEnova Pipelines in September 2016 and from other pipeline assets placed in service, and
|
◦
|
$53 million due to the acquisition of Ventika in December 2016;
|
▪
|
$90 million
increase at Sempra LNG & Midstream, which included
|
◦
|
$75 million primarily due to mark-to-market losses in 2016 from natural gas marketing activities and from changes in natural gas prices, and
|
◦
|
$16 million from higher natural gas sales to Sempra Mexico; and
|
▪
|
$35 million
increase at Sempra Renewables primarily due to solar and wind assets placed in service during 2016;
offset by
|
▪
|
$36 million
from higher intercompany eliminations associated with sales between Sempra LNG & Midstream and Sempra Mexico.
|
▪
|
$25 million
increase at Sempra Mexico primarily due to higher natural gas costs; and
|
▪
|
$22 million
increase at Sempra LNG & Midstream primarily due to higher natural gas costs;
offset by
|
▪
|
$36 million
from higher intercompany eliminations of costs associated with sales between Sempra LNG & Midstream and Sempra Mexico.
|
▪
|
$30 million increase at Sempra Mexico, primarily at IEnova Pipelines and Ventika, and from scheduled major maintenance at TdM in the second quarter of 2017; and
|
▪
|
$18 million
increase at SoCalGas, which included
|
◦
|
$15 million higher non-refundable operating costs, including labor, contract services and administrative and support costs, and
|
◦
|
$4 million higher expenses associated with CPUC-authorized refundable programs for which all costs incurred are fully recovered in revenue (refundable program expenses);
offset by
|
▪
|
$29 million
decrease at SDG&E, which included
|
◦
|
$13 million lower expenses associated with CPUC-authorized refundable programs, for which all costs incurred are fully recovered in revenue (refundable program expenses),
|
◦
|
$10 million decrease at Otay Mesa VIE primarily due to scheduled major maintenance in 2016 at the OMEC plant, and
|
◦
|
$10 million lower non-refundable operating costs, including labor, contract services and administrative and support costs.
|
▪
|
$46 million increase at Sempra Mexico primarily at IEnova Pipelines and Ventika, and from scheduled major maintenance at TdM in the second quarter of 2017; and
|
▪
|
$45 million
increase at SoCalGas, which included
|
◦
|
$30 million higher non-refundable operating costs, including labor, contract services and administrative and support costs, and
|
◦
|
$18 million higher expenses associated with CPUC-authorized refundable programs for which all costs incurred are fully recovered in revenue (refundable program expenses);
offset by
|
▪
|
$48 million
decrease at SDG&E, which included
|
◦
|
$23 million lower expenses associated with CPUC-authorized refundable programs, for which all costs incurred are fully recovered in revenue (refundable program expenses),
|
◦
|
$11 million reimbursement of litigation costs associated with the arbitration ruling over the SONGS replacement steam generators, as we discuss in Note 9 of the Notes to the Condensed Consolidated Financial Statements herein,
|
◦
|
$10 million decrease at Otay Mesa VIE primarily due to scheduled major maintenance in 2016 at the OMEC plant, and
|
◦
|
$5 million lower non-refundable operating costs, including labor, contract services and administrative and support costs; and
|
▪
|
$22 million decrease at Sempra LNG & Midstream, primarily from lower costs due to the sale of EnergySouth.
|
•
|
$31 million from net gains in 2017 on foreign currency derivatives compared to $15 million losses in 2016 primarily as a result of significant appreciation of the Mexican peso;
|
▪
|
$10 million
increase in equity-related AFUDC primarily at Sempra Mexico mainly from the Ojinaga and San Isidro pipeline projects; and
|
▪
|
$7 million foreign currency transactional gains in 2017 compared to $5 million losses in 2016.
|
•
|
$94 million from net gains
in 2017
on foreign currency derivatives compared to $12 million losses in 2016 primarily as a result of significant appreciation of the Mexican peso;
|
▪
|
$55 million
increase in equity-related AFUDC primarily at Sempra Mexico mainly from the Ojinaga and San Isidro pipeline projects; and
|
▪
|
$17 million foreign currency transactional gains in 2017 compared to $7 million losses in 2016.
|
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
|
|||||||||||||
(Dollars in millions)
|
|||||||||||||
|
Income tax
expense
|
|
Effective
income tax rate
|
|
Income tax
(benefit) expense |
|
Effective
income tax rate
|
||||||
|
Three months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Sempra Energy Consolidated
|
$
|
167
|
|
|
40
|
%
|
|
$
|
(106
|
)
|
|
95
|
%
|
SDG&E
|
54
|
|
|
26
|
|
|
48
|
|
|
36
|
|
||
SoCalGas
|
19
|
|
|
24
|
|
|
(29
|
)
|
|
100
|
|
||
|
|
|
|
|
|
|
|
||||||
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016(1)
|
||||||||||
Sempra Energy Consolidated
|
$
|
462
|
|
|
39
|
%
|
|
$
|
2
|
|
|
1
|
%
|
SDG&E
|
144
|
|
|
32
|
|
|
113
|
|
|
34
|
|
||
SoCalGas
|
117
|
|
|
31
|
|
|
54
|
|
|
21
|
|
(1)
|
Reflects the adoption of ASU 2016-09, as we discuss in Note 2 of the Notes to Condensed Consolidated Financial Statements herein.
|
▪
|
$52 million income tax expense in 2017 compared to $22 million income tax benefit in 2016 from foreign currency and inflation effects as a result of significant appreciation of the Mexican peso in 2017; and
|
▪
|
$25 million valuation allowance in 2017 against deferred tax assets at TdM that is held for sale, including $12 million associated with the 2017 impairment. We discuss the planned sale and the impairment further in Notes 3 and 8 of the Notes to Condensed Consolidated Financial Statements herein
;
offset by
|
▪
|
higher forecasted flow-through items as a percentage of pretax income in 2017;
|
▪
|
$3 million tax benefit in 2017 from a reduction to the outside basis deferred tax liability, net of valuation allowance, compared to $3 million tax expense in 2016 on our outside basis difference in TdM that is held for sale; and
|
▪
|
$9 million favorable resolution of prior years’ income tax items in 2017.
|
▪
|
$149 million income tax expense in 2017 compared to $22 million income tax benefit in 2016 from foreign currency and inflation effects as a result of significant appreciation of the Mexican peso in 2017;
|
▪
|
$25 million valuation allowance in 2017 against deferred tax assets at TdM that is held for sale, including $12 million associated with the 2017 impairment; and
|
▪
|
$2 million income tax expense in 2017 compared to $34 million income tax benefit in 2016 associated with excess tax deficiencies/benefits related to share-based compensation;
offset by
|
▪
|
$9 million U.S. income tax expense in 2016 on planned repatriation of earnings from certain non-U.S. subsidiaries. We discuss repatriation in “Results of Operations - Changes in Revenues, Costs and Earnings - Income Taxes” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report;
|
▪
|
$8 million tax benefit in 2017 from a reduction to the outside basis deferred tax liability, net of valuation allowance, compared to $32 million tax expense in 2016 on our outside basis difference in TdM that is held for sale; and
|
▪
|
$9 million favorable resolution of prior years’ income tax items in 2017.
|
▪
|
higher forecasted flow-through items as a percentage of pretax income in 2017; and
|
▪
|
$8 million favorable resolution of prior years’ income tax items in 2017.
|
▪
|
higher forecasted flow-through items as a percentage of pretax income in 2017; and
|
▪
|
$8 million favorable resolution of prior years’ income tax items in 2017;
offset by
|
▪
|
$7 million income tax benefit in 2016 associated with excess tax benefits related to share-based compensation.
|
▪
|
$44 million of equity earnings in 2016 from IEnova Pipelines, including $12 million from DEN, prior to IEnova’s acquisition of the remaining 50-percent interest in IEnova Pipelines in September 2016; and
|
▪
|
$11 million of equity losses in 2017 at DEN primarily from foreign currency and inflation effects.
|
▪
|
$15 million losses attributable to noncontrolling interests in 2017 compared to $16 million earnings attributable to noncontrolling interest in 2016 at IEnova, including:
|
◦
|
$25 million higher losses attributable to noncontrolling interests from foreign currency and inflation effects without the corresponding benefit from foreign currency derivatives that are not subject to noncontrolling interests, as we discuss above in “Other Income, Net,”
|
◦
|
$8 million lower earnings attributable to noncontrolling interests as a result of the decrease in earnings, excluding the effects of foreign currency and inflation, as we discuss above in “Segment Results – Sempra Mexico;”
offset by
|
◦
|
$2 million higher earnings attributable to noncontrolling interests, excluding the effects of foreign currency and inflation, from the decrease in our controlling interest from 81.1 percent to 66.4 percent following IEnova’s equity offerings in October 2016, which we discuss in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report; and
|
▪
|
$7 million attribution of losses to tax equity investors at Sempra Renewables;
offset by
|
▪
|
$17 million increase in earnings at Otay Mesa VIE primarily as a result of scheduled major maintenance at the OMEC plant in 2016.
|
▪
|
$10 million losses attributable to noncontrolling interests in 2017 compared to $21 million earnings attributable to noncontrolling interest in 2016 at IEnova, including:
|
◦
|
$57 million higher losses attributable to noncontrolling interests from foreign currency and inflation effects without the corresponding benefit from foreign currency derivatives that are not subject to noncontrolling interests,
offset by
|
◦
|
$18 million higher earnings attributable to noncontrolling interests, excluding the effects of foreign currency and inflation, from the decrease in our controlling interest from 81.1 percent to 66.4 percent following IEnova’s equity offerings in October 2016, and
|
◦
|
$8 million higher earnings attributable to noncontrolling interests as a result of the increase in earnings, excluding the effects of foreign currency and inflation, as we discuss above in “Segment Results – Sempra Mexico;” and
|
▪
|
$10 million attribution of losses to tax equity investors at Sempra Renewables;
offset by
|
▪
|
$18 million increase in earnings at Otay Mesa VIE primarily as a result of scheduled major maintenance at the OMEC plant in 2016.
|
TRANSACTIONAL GAINS (LOSSES) FROM FOREIGN CURRENCY AND INFLATION
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Total reported amounts
|
|
Transactional
gains (losses) included
in reported amounts
|
||||||||||||
|
Three months ended June 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Other income, net
|
$
|
91
|
|
|
$
|
23
|
|
|
$
|
39
|
|
|
$
|
(20
|
)
|
Income tax (expense) benefit
|
(167
|
)
|
|
106
|
|
|
(52
|
)
|
|
23
|
|
||||
Equity earnings, net of income tax
|
—
|
|
|
33
|
|
|
(9
|
)
|
|
17
|
|
||||
Net income
|
248
|
|
|
27
|
|
|
(35
|
)
|
|
23
|
|
||||
Earnings
|
259
|
|
|
16
|
|
|
(18
|
)
|
|
17
|
|
||||
|
Six months ended June 30,
|
||||||||||||||
|
2017
|
|
2016(1)
|
|
2017
|
|
2016
|
||||||||
Other income, net
|
$
|
260
|
|
|
$
|
72
|
|
|
$
|
114
|
|
|
$
|
(19
|
)
|
Income tax expense
|
(462
|
)
|
|
(2
|
)
|
|
(149
|
)
|
|
24
|
|
||||
Equity (losses) earnings, net of income tax
|
(8
|
)
|
|
50
|
|
|
(22
|
)
|
|
18
|
|
||||
Net income
|
700
|
|
|
391
|
|
|
(96
|
)
|
|
26
|
|
||||
Earnings
|
700
|
|
|
369
|
|
|
(45
|
)
|
|
20
|
|
(1)
|
Reflects the adoption of ASU 2016-09, as we discuss in Note 2 of the Notes to Condensed Consolidated Financial Statements herein.
|
|
|
|
|
|
AVAILABLE FUNDS AT JUNE 30, 2017
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||
Unrestricted cash and cash equivalents(1)
|
$
|
223
|
|
|
$
|
12
|
|
|
$
|
38
|
|
Available unused credit(2)(3)
|
3,094
|
|
|
745
|
|
|
750
|
|
(1)
|
Amounts at Sempra Energy Consolidated include $150 million held in non-U.S. jurisdictions that are unavailable to fund U.S. operations unless repatriated. We discuss repatriation in “Results of Operations – Changes in Revenues, Costs and Earnings – Income Taxes” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report.
|
(2)
|
Available unused credit is the total available on Sempra Energy’s, Sempra Global’s and the California Utilities’ credit facilities that we discuss in Note 6 of the Notes to Condensed Consolidated Financial Statements herein. Borrowings on the shared line of credit at SDG&E and SoCalGas are limited to $750 million for each utility and a combined total of $1 billion.
|
▪
|
finance capital expenditures
|
▪
|
meet liquidity requirements
|
▪
|
fund shareholder dividends
|
▪
|
fund new business acquisitions or start-ups
|
▪
|
repay maturing long-term debt
|
▪
|
fund expenditures related to the natural gas leak at SoCalGas’ Aliso Canyon natural gas storage facility
|
CASH PROVIDED BY OPERATING ACTIVITIES
|
||||||||||||||||
(Dollars in millions)
|
||||||||||||||||
|
Six months ended
June 30, 2017 |
|
|
2017 change
|
|
|
Six months ended
June 30, 2016(1) |
|||||||||
Sempra Energy Consolidated
|
$
|
1,889
|
|
|
|
$
|
973
|
|
|
106
|
%
|
|
|
$
|
916
|
|
SDG&E
|
690
|
|
|
|
182
|
|
|
36
|
|
|
|
508
|
|
|||
SoCalGas
|
855
|
|
|
|
593
|
|
|
226
|
|
|
|
262
|
|
▪
|
$713 million
higher net income, adjusted for noncash items included in earnings, in 2017 compared to 2016, primarily due to improved results at our operating segments; and
|
▪
|
$573 million net increase related to the natural gas leak at the Aliso Canyon natural gas storage facility, comprised of:
|
◦
|
$52 million
net decrease in insurance receivable in 2017 compared to a
$354 million
net increase in 2016. The
$52 million
net decrease includes $104 million in insurance proceeds, offset primarily by $53 million of additional accruals, and
|
◦
|
$10 million
net increase in reserve for accrued expenditures in 2017 compared to a $157 million net decrease in 2016. The
$10 million
net increase includes $53 million of additional accruals, offset primarily by $49 million of cash expenditures;
offset by
|
▪
|
$110 million decrease in accounts payable in 2017 compared to a $25 million decrease in 2016;
|
▪
|
$63 million increase in income taxes receivable in 2017 compared to a $7 million decrease in 2016;
|
▪
|
$261 million decrease in accounts receivable in 2017 compared to a $328 million decrease in 2016; and
|
▪
|
$79 million increase in net overcollected regulatory balancing accounts at SoCalGas (including long-term amounts included in regulatory assets) in 2017 compared to a $140 million increase in 2016.
|
▪
|
$178 million
higher net income, adjusted for noncash items included in earnings, in 2017 compared to 2016; and
|
▪
|
$35 million decrease in income taxes receivable in 2017 compared to a $31 million increase in 2016;
offset by
|
▪
|
$21 million increase in accounts receivable in 2017 compared to a $19 million decrease in 2016; and
|
▪
|
$41 million increase in accounts payable in 2017 compared to a $63 million increase in 2016.
|
▪
|
$573 million net increase related to the natural gas leak at the Aliso Canyon natural gas storage facility, comprised of:
|
◦
|
$52 million
net decrease in insurance receivable in 2017 compared to a
$354 million
net increase in 2016. The
$52 million
net decrease includes $104 million in insurance proceeds, offset primarily by $53 million of additional accruals, and
|
◦
|
$10 million
net increase in reserve for accrued expenditures in 2017 compared to a $157 million net decrease in 2016. The
$10 million
net increase includes $53 million of additional accruals, offset primarily by $49 million of cash expenditures; and
|
▪
|
$129 million
higher net income, adjusted for noncash items included in earnings, in 2017 compared to 2016;
offset by
|
▪
|
$234 million decrease in accounts receivable in 2017 compared to a $308 million decrease in 2016; and
|
▪
|
$79 million increase in net overcollected regulatory balancing accounts (including long-term amounts included in regulatory assets) in 2017 compared to a $140 million increase in 2016.
|
CASH USED IN INVESTING ACTIVITIES
|
||||||||||||||||
(Dollars in millions)
|
||||||||||||||||
|
Six months ended
June 30, 2017 |
|
|
2017 change
|
|
|
Six months ended
June 30, 2016 |
|||||||||
Sempra Energy Consolidated
|
$
|
(2,067
|
)
|
|
|
$
|
474
|
|
|
30
|
%
|
|
|
$
|
(1,593
|
)
|
SDG&E
|
(734
|
)
|
|
|
(36
|
)
|
|
(5
|
)
|
|
|
(770
|
)
|
|||
SoCalGas
|
(766
|
)
|
|
|
166
|
|
|
28
|
|
|
|
(600
|
)
|
▪
|
$443 million of net proceeds received from Sempra LNG & Midstream’s sale of its investment in Rockies Express in 2016;
|
▪
|
$174 million higher advances to unconsolidated affiliates; and
|
▪
|
$51 million
increase in expenditures for investments;
offset by
|
▪
|
$204 million
decrease in capital expenditures.
|
▪
|
$31 million
decrease in advances to Sempra Energy in 2017 compared to a
$172 million
net increase in 2016;
offset by
|
▪
|
$161 million
increase in capital expenditures.
|
▪
|
$84 million
increase in net advances to Sempra Energy in 2017 compared to a
$50 million
decrease in 2016; and
|
▪
|
$32 million
increase in capital expenditures.
|
EXPENDITURES FOR PP&E
|
|||||||
(Dollars in millions)
|
|||||||
|
Six months ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
SDG&E:
|
|
|
|
||||
Improvements to natural gas, including certain pipeline safety, and electric and generation
|
|
|
|
|
|
||
distribution systems
|
$
|
503
|
|
|
$
|
360
|
|
PSEP
|
21
|
|
|
65
|
|
||
Improvements to electric transmission systems
|
229
|
|
|
168
|
|
||
Electric generation plants and equipment
|
10
|
|
|
9
|
|
||
SoCalGas:
|
|
|
|
|
|
||
Improvements to natural gas distribution, transmission and storage systems, and for certain pipeline safety
|
572
|
|
|
444
|
|
||
PSEP
|
86
|
|
|
150
|
|
||
Advanced metering infrastructure
|
24
|
|
|
56
|
|
||
Sempra South American Utilities:
|
|
|
|
|
|
||
Improvements to electric transmission and distribution systems and generation projects in Peru
|
49
|
|
|
57
|
|
||
Improvements to electric transmission and distribution infrastructure in Chile
|
28
|
|
|
25
|
|
||
Sempra Mexico:
|
|
|
|
|
|
||
Construction of the Sonora, Ojinaga and San Isidro pipeline projects
|
124
|
|
|
128
|
|
||
Construction of other natural gas pipeline and wind projects, and capital expenditures at Ecogas
|
31
|
|
|
12
|
|
||
Sempra Renewables:
|
|
|
|
||||
Construction costs for wind projects
|
58
|
|
|
27
|
|
||
Construction costs for solar projects/facilities
|
42
|
|
|
430
|
|
||
Sempra LNG & Midstream:
|
|
|
|
|
|
||
Cameron Interstate Pipeline expansion and other LNG liquefaction development costs
|
10
|
|
|
55
|
|
||
Other
|
2
|
|
|
13
|
|
||
Parent and other
|
13
|
|
|
7
|
|
||
Total
|
$
|
1,802
|
|
|
$
|
2,006
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|||||||||||||
(Dollars in millions)
|
|||||||||||||
|
Six months ended
June 30, 2017 |
|
|
2017 change
|
|
|
Six months ended
June 30, 2016(1) |
||||||
Sempra Energy Consolidated
|
$
|
44
|
|
|
|
$
|
(838
|
)
|
|
|
$
|
882
|
|
SDG&E
|
48
|
|
|
|
(202
|
)
|
|
|
250
|
|
|||
SoCalGas
|
(63
|
)
|
|
|
(554
|
)
|
|
|
491
|
|
▪
|
$493 million
decrease in short-term debt in 2017 compared to an
$865 million
increase in 2016;
offset by
|
▪
|
$548 million
higher issuances of debt with maturities greater than 90 days, including:
|
◦
|
$350 million for commercial paper and other short-term debt ($736 million in 2017 compared to $386 million in 2016), and
|
◦
|
$198 million for long-term debt ($1.2 billion in 2017 compared to $1 billion in 2016).
|
▪
|
$175 million
common dividends paid in 2017;
|
▪
|
$100 million
lower issuances of long-term debt; and
|
▪
|
$35 million
higher payments of long-term debt;
offset by
|
▪
|
$5 million
increase in short-term debt in 2017 compared to a
$114 million
decrease in 2016.
|
▪
|
$499 million
issuances of long-term debt in 2016; and
|
▪
|
$62 million
decrease in short-term debt in 2017.
|
|
|
|
|
|
CAPITAL PROJECTS – SDG&E
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
Project description
|
Estimated capital cost
(in millions) |
|
Status
|
||||||
South Orange County Reliability Enhancement
|
|
|
|
|
|
|
|||
§
|
December 2016 CPUC final decision granted a Certificate of Public Convenience and Necessity to replace/upgrade existing electric transmission lines and substation infrastructure to enhance the capacity and reliability of electric service to the south Orange County area.
|
|
$
|
381
|
|
|
§
|
Construction expected to start in the second half of 2017.
|
|
|
|
|
|
§
|
Rehearing requests filed by the City of San Juan Capistrano and local opposition group pending with CPUC.
|
||||
Electric Vehicle Charging
|
|
|
|
|
|
|
|||
§
|
January 2017 application, pursuant to SB 350, to perform various activities and make investments in support of electric vehicle charging.
|
|
$
|
298
|
|
|
§
|
Application pending
|
|
§
|
Estimated implementation cost of $51 million of O&M.
|
|
|
|
|
|
|
||
Energy Storage
|
|
|
|
|
|
|
|||
§
|
August 2016 CPUC approval to own and operate two energy storage projects totaling 37.5 MW to enhance electric reliability in the San Diego service territory.
|
Not
disclosed |
§
|
Completed in first quarter of 2017.
|
|||||
§
|
April 2017 application to procure up to 70 MW of utility-owned energy storage to provide local capacity.
|
Not
disclosed |
§
|
Application pending
|
|||||
Utility Billing and Customer Information Systems Software
|
|
|
|
|
|
|
|||
§
|
April 2017 application to replace the software.
|
|
$
|
220
|
|
|
§
|
Application pending
|
|
§
|
Estimated implementation cost of $67 million of O&M.
|
|
|
|
§
|
May 2017 ruling authorizes SDG&E to establish a memorandum account to record related costs prior to receiving a final decision on the application.
|
▪
|
a reopened CPUC proceeding that is considering whether a SONGS-related amended settlement agreement approved in 2014 is reasonable and in the public interest;
|
▪
|
matters concerning the ability to timely withdraw funds from trust accounts for the payment of decommissioning costs; and
|
▪
|
the arbitration decision finding MHI liable for breach of contract in connection with the replacement steam generators at the SONGS nuclear power plant, subject to a contractual limitation of liability, and
awarding MHI 95 percent of its arbitration costs as MHI was found to be the prevailing party.
|
▪
|
Electric Rate Reform – California Assembly Bill 327
|
▪
|
Distributed Energy Storage – California Assembly Bill 2868
|
▪
|
Renewable Energy Procurement
|
▪
|
Clean Energy and Pollution Reduction Act – California SB 350
|
▪
|
In January 2016, the Governor of the State of California issued an Order (the Governor’s Order) proclaiming a state of emergency to exist in Los Angeles County due to the natural gas leak at the Aliso Canyon natural gas storage facility. The Governor’s Order imposes various orders with respect to: stopping the leak; protecting public health and safety; ensuring accountability; and strengthening oversight. We provide further detail regarding the Governor’s Order and the CARB’s
Aliso Canyon Methane Leak Climate Impacts Mitigation Program
, issued pursuant to the Governor’s Order, in Note 11 of the Notes to Condensed Consolidated Financial Statements herein.
|
▪
|
In January 2016, SoCalGas entered into a Stipulated Order for Abatement with the SCAQMD and agreed to take various actions in connection with injecting and withdrawing natural gas at the Aliso Canyon natural gas storage facility, sealing the well, monitoring, reporting, safety and funding a health impact study, among other things. In February 2017, SoCalGas entered into a settlement agreement with the SCAQMD, and in March 2017, the Hearing Board terminated the Abatement Order. We provide further detail regarding the SCAQMD stipulated Abatement Order in Note 11 of the Notes to Condensed Consolidated Financial Statements herein.
|
▪
|
In January 2016, DOGGR and the CPUC selected Blade to conduct an independent analysis under the direction and supervision of DOGGR and the CPUC to be funded by SoCalGas to investigate the technical root cause of the Aliso Canyon natural gas storage facility gas leak. The timing of the root cause analysis is under the control of Blade, DOGGR and the CPUC.
|
▪
|
In February 2017, the CPUC opened a proceeding to determine the feasibility of minimizing or eliminating use of the Aliso Canyon natural gas storage facility, while still maintaining energy and electric reliability for the region, as we discuss below in “Regulatory Proceedings” and “SB 380.”
|
▪
|
requires PHMSA to issue, within two years of passage, “minimum safety standards for underground natural gas storage facilities;”
|
▪
|
imposes a “user fee” on underground storage facilities as needed to implement the safety standards;
|
▪
|
grants PHMSA authority to issue emergency orders and impose emergency restrictions, prohibitions and safety measures on owners and operators of gas or hazardous liquid pipeline facilities without prior notice or an opportunity for hearing, if the Secretary of Energy determines that an unsafe condition or practice, or a combination of unsafe conditions and practices, constitutes or is causing an imminent hazard; and
|
▪
|
directs the Secretary of Energy to establish an Interagency Task Force comprised of representatives from various federal agencies and representatives of state and local governments.
|
▪
|
that natural gas injections into the Aliso Canyon natural gas storage facility be prohibited until a comprehensive review of the safety of the gas storage wells at the facility was completed, as we discuss below;
|
▪
|
that all gas storage wells returning to service at the Aliso Canyon natural gas storage facility inject or produce gas only through the interior metal tubing and not through the annulus between the tubing and the well casing, which allows SoCalGas wells to operate with two complete barriers to mitigate the potential for an uncontrolled release of natural gas; and
|
▪
|
a CPUC proceeding (which was opened in February 2017) to determine the feasibility of minimizing or eliminating the use of the Aliso Canyon natural gas storage facility, while still maintaining energy and electric reliability for the region, and to consult with various governmental agencies and other entities in making its determination. The order establishing the scope of the proceeding expressly excludes issues with respect to air quality, public health, causation, culpability or cost responsibility regarding the Aliso Canyon natural gas storage facility gas leak.
|
CAPITAL PROJECTS – CALIFORNIA UTILITIES
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
Project description
|
Estimated capital cost
(in millions)
|
|
Status
|
||||||
Mobile Home Park Utility Upgrade Program
|
|
|
|
|
|
|
|||
§
|
May 2017 application filed with the CPUC to convert an additional 20 percent of eligible units to direct utility service, for a total of 30 percent of mobile homes.
|
|
$
|
471
|
|
|
§
|
Application pending
|
|
|
to
|
|
|
|
|||||
|
$
|
508
|
|
|
|
||||
§
|
Estimated implementation cost of $2 million of O&M at SDG&E and $3 million to $4 million of O&M at SoCalGas.
|
|
|
|
|
||||
Pipeline Safety Enhancement Plan
|
|
|
|
||||||
§
|
March 2017 application filed with the CPUC to recover forecasted costs associated with twelve Phase 1B and Phase 2A pipeline safety projects.
|
|
$
|
198
|
|
|
§
|
Application pending
|
|
§
|
Estimated implementation cost of $57 million of O&M at SoCalGas.
|
|
|
|
|
|
|
PIPELINE SAFETY ENHANCEMENT PLAN
–
REASONABLENESS REVIEW SUMMARY
|
|
|
|||||||||||||
(Dollars in millions)
|
|
|
|||||||||||||
|
2011 through June 30, 2017
|
||||||||||||||
|
Total
invested(1)
|
|
CPUC review
completed(2)
|
|
CPUC review
pending(3)
|
|
2018 recovery filing(4)(5)
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Capital
|
$
|
1,351
|
|
|
$
|
8
|
|
|
$
|
143
|
|
|
$
|
1,200
|
|
Operation and maintenance
|
173
|
|
|
25
|
|
|
63
|
|
|
85
|
|
||||
Total
|
$
|
1,524
|
|
|
$
|
33
|
|
|
$
|
206
|
|
|
$
|
1,285
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Capital
|
$
|
1,031
|
|
|
$
|
8
|
|
|
$
|
129
|
|
|
$
|
894
|
|
Operation and maintenance
|
164
|
|
|
25
|
|
|
62
|
|
|
77
|
|
||||
Total
|
$
|
1,195
|
|
|
$
|
33
|
|
|
$
|
191
|
|
|
$
|
971
|
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Capital
|
$
|
320
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
306
|
|
Operation and maintenance
|
9
|
|
|
—
|
|
|
1
|
|
|
8
|
|
||||
Total
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
314
|
|
CAPITAL PROJECTS – SEMPRA SOUTH AMERICAN UTILITIES
|
|||||||||
|
|
|
|
|
|
|
|||
Project description
|
Our share of
estimated capital cost
(in millions)
|
|
Status
|
||||||
Chilquinta Energía - Eletrans
|
|
|
|
|
|
|
|||
§
|
220-kV electric transmission line awarded in June 2017.
|
|
$
|
50
|
|
|
§
|
Estimated completion: 2021
|
|
§
|
Transmission line in the northern region of Chile to extend approximately 133 miles.
|
|
|
|
|
|
|||
§
|
Once in operation, will earn a return in U.S. dollars, indexed to the CPI, for 20 years and a regulated return thereafter.
|
|
|
|
|
|
|
||
§
|
50-percent equity interest in joint venture.
|
|
|
|
|
|
CAPITAL PROJECTS COMPLETED IN 2017
–
SEMPRA MEXICO
|
|||||||
|
|
|
|
|
|
|
|
Project description
|
|
|
|
||||
Sonora Pipeline
|
|
|
|
|
|
||
§
|
Awarded two contracts in October 2012 by the CFE to build and operate a 500-mile pipeline network.
|
|
|
|
§
|
First segment completed in stages from fourth quarter of 2014 through August 2015.
|
|
§
|
Comprised of two segments that interconnect to the U.S. interstate pipeline system.
|
|
|
|
§
|
Second segment completed in May 2017.
|
|
§
|
Pipeline to transport natural gas from the U.S.-Mexico border south of Tucson, Arizona through the Mexican state of Sonora to the northern part of the Mexican state of Sinaloa along the Gulf of California.
|
|
|
|
|
|
|
§
|
Capacity is fully contracted by the CFE under two 25-year contracts denominated in U.S. dollars.
|
|
|
|
|
|
|
Ojinaga Pipeline
|
|
|
|
|
|
||
§
|
December 2014 agreement with CFE for development, construction and operation of the approximately 137-mile pipeline.
|
|
|
|
§
|
Pipeline completed in June 2017.
|
|
§
|
Natural gas transportation services agreement for a 25-year term, denominated in U.S. dollars, for 100 percent of the transport capacity, equal to 1.4 Bcf per day.
|
|
|
|
|
|
|
San Isidro Pipeline
|
|
|
|
|
|
||
§
|
July 2015 agreement with CFE for development, construction and operation of the approximately 14-mile pipeline.
|
|
|
|
§
|
Pipeline completed in March 2017.
|
|
§
|
Natural gas transportation services agreement for a 25-year term, denominated in U.S. dollars, for 100 percent of the transport capacity, equal to 1.1 Bcf per day.
|
|
|
|
§
|
Compressor station completed in June 2017.
|
CAPITAL PROJECTS
–
SEMPRA MEXICO
|
|||||||||
|
|
|
|
|
|
|
|||
Project description
|
Estimated capital cost
(in millions)
|
|
Status
|
||||||
Pima Solar
|
|
|
|
|
|
||||
§
|
Awarded 110-MW photovoltaic project located in Sonora, Mexico in March 2017.
|
|
$
|
115
|
|
|
§
|
Construction expected to commence in the fourth quarter of 2017.
|
|
§
|
Entered into a 20-year, U.S. dollar-denominated PPA in March 2017 to provide renewable energy, clean energy certificates and capacity.
|
|
|
|
§
|
Estimated completion: fourth quarter of 2018.
|
|||
Liquid Fuels Terminals at Port of Veracruz, Puebla and Mexico City
|
|
|
|
|
|
||||
§
|
Awarded a 20-year concession in July 2017 to build and operate a marine terminal in the Port of Veracruz in Mexico for the receipt, storage and delivery of liquid fuels.
|
|
$
|
155
|
|
|
§
|
Includes marine concession fees totaling $55 million for concession rights: half to be paid in August 2017 and half to be paid in January 2018.
|
|
§
|
Capacity of 1.4 million barrels of gasoline, diesel and jet fuel to supply the central region of Mexico.
|
|
|
|
§
|
Expected completion of marine terminal: end of 2018.
|
|||
§
|
IEnova will also build and operate two storage terminals located near Puebla and Mexico City with storage capacities of 500,000 and 800,000 barrels, respectively.
|
|
$
|
120
|
|
|
§
|
Expected completion of two inland storage terminals: first half of 2019.
|
|
§
|
Entered into three, long-term, U.S. dollar-denominated terminal services agreements in July 2017 with Valero Energy for the full capacity of the marine terminal and the two inland storage terminals.
|
|
|
|
|
|
|||
§
|
Pursuant to these agreements, Valero Energy has the option to purchase a 50-percent interest in each of the three terminals after commencement of commercial operations, subject to approval by the Port of Veracruz, COFECE and the CRE.
|
|
|
|
|
|
CAPITAL PROJECT
–
SEMPRA RENEWABLES
|
|||||||
|
|
|
|
|
|
|
|
Project description
|
|
|
Status
|
||||
Solar Project
|
|
|
|
|
|
||
§
|
Capable of producing up to 200 MW of solar power once fully constructed, located in Fresno County, California, acquired in July 2017.
|
|
§
|
Expect commercial operation dates and corresponding contracted energy sales to commence in phases beginning in the fourth quarter of 2017 and the first half of 2018.
|
|||
§
|
Fully contracted under four PPAs with an average contract term of 18 years.
|
|
|
|
|
CAPITAL PROJECT COMPLETED IN 2017
–
SEMPRA LNG & MIDSTREAM
|
|||||||
|
|
|
|
|
|
|
|
Project description
|
|
|
|
||||
Cameron Interstate Pipeline Expansion
|
|
|
|
|
|
||
§
|
3.5-mile, 36-inch pipeline addition to existing Cameron Interstate Pipeline, adding bi-directional flow of up to 1.5 Bcf of natural gas per day.
|
|
|
|
§
|
Expansion project completed in the second quarter of 2017.
|
|
§
|
Includes construction of a compressor station and construction of and modifications to meter stations.
|
|
|
|
|
|
|
§
|
Authorized by FERC in June 2014 and approved to commence service in April 2017.
|
|
|
|
|
|
CAPITAL PROJECT
–
SEMPRA LNG & MIDSTREAM
|
|||||||
|
|
|
|
|
|
|
|
Project description
|
|
|
Status
|
||||
Cameron LNG JV Three-Train Liquefaction Project
|
|
|
|
|
|
||
§
|
Sempra Energy contributed Cameron LNG, LLC’s existing facilities to Cameron LNG JV, of which Sempra Energy indirectly owns 50.2 percent, and construction began in the second half of 2014.
|
|
|
|
§
|
Recently, the EPC contractor notified the Cameron LNG JV that its project schedule had again changed. Based on several factors, we think it is reasonable to expect that the first LNG train could be delayed into 2019, with the second and third LNG trains following throughout 2019.
|
|
§
|
Anticipated incremental investment of approximately $7 billion by Cameron LNG JV.
|
|
|
|
|
||
§
|
Capacity of 13.9 Mtpa of LNG with an expected export capacity of 12 Mtpa of LNG, or approximately 1.7 Bcf per day.
|
|
|
|
|
|
|
§
|
Authorized to export up to 14.95 Mtpa of LNG to both FTA and Non-FTA countries.
|
|
|
|
|
|
|
§
|
20-year liquefaction and regasification tolling capacity agreements for full nameplate capacity.
|
|
|
|
|
|
▪
|
DOE FTA approval received in July 2015
|
▪
|
Non-FTA approval received in July 2016
|
▪
|
FERC permit received in May 2016
|
▪
|
The proposed project is designed to include
|
◦
|
two natural gas liquefaction trains with production capability of approximately 13.5 Mtpa, or 698 Bcf per year;
|
◦
|
three LNG storage tanks;
|
◦
|
natural gas liquids and refrigerant storage;
|
◦
|
feed gas pre-treatment facilities; and
|
◦
|
two berths and associated marine and loading facilities.
|
▪
|
In June 2015, Sempra LNG & Midstream filed permit applications with the DOE for authorization to export the LNG produced from the proposed project to all current and future non-FTA countries.
|
▪
|
In August 2015, Sempra LNG & Midstream received authorization from the DOE to export the LNG produced from the proposed project to all current and future FTA countries.
|
▪
|
In February 2016, Sempra LNG & Midstream and Woodside Petroleum Ltd. entered into a project development agreement for the joint development of the proposed Port Arthur LNG liquefaction project. The agreement specifies how the parties will share costs, and establishes a framework for the parties to work jointly on permitting, design, engineering, commercial and marketing activities associated with developing the Port Arthur LNG liquefaction project.
|
▪
|
In June 2017, Sempra LNG & Midstream, Woodside Petroleum Ltd. and Korea Gas Corporation signed a memorandum of understanding that provides a framework for cooperation and joint discussion by the parties regarding key aspects of the potential development of the Port Arthur LNG project, including engineering and construction work, O&M activities, feed gas sourcing, offtake of LNG and the potential for Korea Gas Corporation to purchase LNG from, and become an equity participant in, the Port
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINAL AMOUNT OF LONG-TERM DEBT(1)
|
||||||||||||||||||||||||
(Dollars in millions)
|
||||||||||||||||||||||||
|
June 30, 2017
|
|
|
December 31, 2016
|
||||||||||||||||||||
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
|
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||||||||
Utility fixed-rate
|
$
|
7,600
|
|
|
$
|
4,591
|
|
|
$
|
3,009
|
|
|
|
$
|
7,218
|
|
|
$
|
4,209
|
|
|
$
|
3,009
|
|
Utility variable-rate
|
300
|
|
|
300
|
|
|
—
|
|
|
|
445
|
|
|
445
|
|
|
—
|
|
||||||
Non-utility fixed-rate
|
6,906
|
|
|
—
|
|
|
—
|
|
|
|
6,703
|
|
|
—
|
|
|
—
|
|
||||||
Non-utility variable-rate
|
728
|
|
|
—
|
|
|
—
|
|
|
|
719
|
|
|
—
|
|
|
—
|
|
(1)
|
Before the effects of acquisition-related fair value adjustments, interest rate swaps, reductions/increases for unamortized discount/premium and reduction for debt issuance costs, and excluding capital lease obligations and build-to-suit lease.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
|
Sempra Energy:
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
SEMPRA ENERGY,
(Registrant)
|
|
|
Date: August 4, 2017
|
By: /s/ Trevor I. Mihalik
|
|
Trevor I. Mihalik
Senior Vice President, Controller and
Chief Accounting Officer
|
San Diego Gas & Electric Company:
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
SAN DIEGO GAS & ELECTRIC COMPANY,
(Registrant)
|
|
|
Date: August 4, 2017
|
By: /s/ Bruce A. Folkmann
|
|
Bruce A. Folkmann
Vice President, Controller, Chief Financial Officer and Chief Accounting Officer
|
Southern California Gas Company:
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
SOUTHERN CALIFORNIA GAS COMPANY,
(Registrant)
|
|
|
Date: August 4, 2017
|
By: /s/ Bruce A. Folkmann
|
|
Bruce A. Folkmann
Vice President, Controller, Chief Financial Officer and Chief Accounting Officer
|