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.
|
85
|
|
Item 3.
|
126
|
|
Item 4.
|
127
|
|
|
|
|
PART II – OTHER INFORMATION
|
|
|
Item 1.
|
129
|
|
Item 1A.
|
129
|
|
Item 6.
|
135
|
|
|
|
|
138
|
GLOSSARY
|
|
|
|
|
|
2016 GRC FD
|
final decision in the California Utilities’ 2016 General Rate Case
|
AFUDC
|
allowance for funds used during construction
|
ALJ
|
administrative law judge
|
Annual Report
|
Annual Report on Form 10-K for the year ended December 31, 2016
|
AOCI
|
Accumulated Other Comprehensive Income (Loss)
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
Bay Gas
|
Bay Gas Storage Company, Ltd.
|
Bcf
|
billion cubic feet
|
Blade
|
Blade Energy Partners
|
bps
|
basis points
|
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
|
EFH
|
Energy Future Holdings Corp.
|
EFIH
|
Energy Future Intermediate Holding Company LLC
|
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. (now known as IEnova Pipelines)
|
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. (formerly known as GdC)
|
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
|
LA Superior Court
|
Los Angeles County Superior Court
|
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 Trust
|
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
|
OMI
|
Oncor Management Investment LLC
|
Oncor
|
Oncor Electric Delivery Company LLC
|
Oncor Holdings
|
Oncor Electric Delivery Holdings Company 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
|
PUCT
|
Public Utility Commission of Texas
|
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
|
TTI
|
Texas Transmission Investment LLC
|
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
|
Vistra
|
Vistra Energy Corp.
|
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 investigations;
|
▪
|
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 rates and our ability to effectively hedge the risk of such fluctuations;
|
▪
|
changes in the tax code as a result of potential federal tax reform, uncertainty as to what proposals will be enacted, if any, and if enacted, how they would be applied;
|
▪
|
changes in foreign and domestic trade policies and laws, including border tariffs, revisions to international trade agreements, such as the North American Free Trade Agreement, and changes that make our exports less competitive or otherwise restrict our ability to export or resolve trade disputes;
|
▪
|
the ability to win competitively bid infrastructure projects against a number of strong and aggressive competitors;
|
▪
|
expropriation of assets by foreign governments and title and other property disputes;
|
▪
|
the impact on reliability of 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 departing retail load resulting from customers transferring to Direct Access and Community Choice Aggregation or other forms of distributed and local power generation and the potential risk of nonrecovery for stranded assets and contractual obligations; and
|
▪
|
other uncertainties, some of which may be difficult to predict and are beyond our control.
|
▪
|
the risk that Sempra Energy, EFH or Oncor may be unable to obtain bankruptcy court and governmental and regulatory approvals required for the merger, or that required bankruptcy court and governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the transaction or be onerous to Sempra Energy;
|
▪
|
the risk that a condition to closing of the merger may not be satisfied, including receipt of a satisfactory supplemental private letter ruling from the IRS;
|
▪
|
the risk that the transaction may not be completed for other reasons, or may not be completed on the terms or timing currently contemplated;
|
▪
|
the risk that the anticipated benefits from the transaction may not be fully realized or may take longer to realize than expected;
|
▪
|
the risk that Sempra Energy may be unable to obtain the external financing necessary to pay the consideration and expenses related to the merger on terms favorable to Sempra Energy, if at all;
|
▪
|
disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; and
|
▪
|
the diversion of management time and attention to merger-related issues and related legal, accounting and other costs, whether or not the merger is completed.
|
SEMPRA ENERGY
|
|
|
|
|
|
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||||
(Dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended September 30,
|
|
Nine months ended
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(unaudited)
|
||||||||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Utilities
|
$
|
2,277
|
|
|
$
|
2,264
|
|
|
$
|
7,172
|
|
|
$
|
6,700
|
|
Energy-related businesses
|
402
|
|
|
271
|
|
|
1,071
|
|
|
613
|
|
||||
Total revenues
|
2,679
|
|
|
2,535
|
|
|
8,243
|
|
|
7,313
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EXPENSES AND OTHER INCOME
|
|
|
|
|
|
|
|
||||||||
Utilities:
|
|
|
|
|
|
|
|
||||||||
Cost of electric fuel and purchased power
|
(650
|
)
|
|
(604
|
)
|
|
(1,730
|
)
|
|
(1,680
|
)
|
||||
Cost of natural gas
|
(190
|
)
|
|
(208
|
)
|
|
(903
|
)
|
|
(702
|
)
|
||||
Energy-related businesses:
|
|
|
|
|
|
|
|
|
|
||||||
Cost of natural gas, electric fuel and purchased power
|
(97
|
)
|
|
(95
|
)
|
|
(226
|
)
|
|
(213
|
)
|
||||
Other cost of sales
|
(21
|
)
|
|
(32
|
)
|
|
(5
|
)
|
|
(293
|
)
|
||||
Operation and maintenance
|
(762
|
)
|
|
(703
|
)
|
|
(2,207
|
)
|
|
(2,109
|
)
|
||||
Depreciation and amortization
|
(378
|
)
|
|
(328
|
)
|
|
(1,106
|
)
|
|
(970
|
)
|
||||
Franchise fees and other taxes
|
(114
|
)
|
|
(108
|
)
|
|
(325
|
)
|
|
(315
|
)
|
||||
Impairment of wildfire regulatory asset
|
(351
|
)
|
|
—
|
|
|
(351
|
)
|
|
—
|
|
||||
Other impairment losses
|
(1
|
)
|
|
(132
|
)
|
|
(72
|
)
|
|
(154
|
)
|
||||
Gain on sale of assets
|
2
|
|
|
131
|
|
|
2
|
|
|
131
|
|
||||
Equity earnings, before income tax
|
10
|
|
|
12
|
|
|
31
|
|
|
4
|
|
||||
Remeasurement of equity method investment
|
—
|
|
|
617
|
|
|
—
|
|
|
617
|
|
||||
Other income, net
|
41
|
|
|
26
|
|
|
301
|
|
|
98
|
|
||||
Interest income
|
12
|
|
|
7
|
|
|
26
|
|
|
19
|
|
||||
Interest expense
|
(165
|
)
|
|
(136
|
)
|
|
(493
|
)
|
|
(421
|
)
|
||||
Income before income taxes and equity earnings (losses)
of certain unconsolidated subsidiaries
|
15
|
|
|
982
|
|
|
1,185
|
|
|
1,325
|
|
||||
Income tax benefit (expense)
|
84
|
|
|
(282
|
)
|
|
(378
|
)
|
|
(284
|
)
|
||||
Equity earnings (losses), net of income tax
|
3
|
|
|
19
|
|
|
(5
|
)
|
|
69
|
|
||||
Net income
|
102
|
|
|
719
|
|
|
802
|
|
|
1,110
|
|
||||
Earnings attributable to noncontrolling interests
|
(45
|
)
|
|
(97
|
)
|
|
(44
|
)
|
|
(118
|
)
|
||||
Preferred dividends of subsidiary
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Earnings
|
$
|
57
|
|
|
$
|
622
|
|
|
$
|
757
|
|
|
$
|
991
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
0.23
|
|
|
$
|
2.48
|
|
|
$
|
3.01
|
|
|
$
|
3.96
|
|
Weighted-average number of shares outstanding, basic (thousands)
|
251,692
|
|
|
250,386
|
|
|
251,425
|
|
|
250,073
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share
|
$
|
0.22
|
|
|
$
|
2.46
|
|
|
$
|
2.99
|
|
|
$
|
3.93
|
|
Weighted-average number of shares outstanding, diluted (thousands)
|
253,364
|
|
|
252,405
|
|
|
252,987
|
|
|
251,976
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share of common stock
|
$
|
0.82
|
|
|
$
|
0.76
|
|
|
$
|
2.47
|
|
|
$
|
2.27
|
|
SEMPRA ENERGY
|
|||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
Sempra Energy shareholders’ equity
|
|
|
|
|
||||||||||||||
|
Pretax
amount |
|
Income tax
benefit (expense) |
|
Net-of-tax
amount |
|
Noncontrolling
interests
(after-tax)
|
|
Total
|
||||||||||
|
Three months ended September 30, 2017 and 2016
|
||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
$
|
(27
|
)
|
|
$
|
84
|
|
|
$
|
57
|
|
|
$
|
45
|
|
|
$
|
102
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
27
|
|
|
—
|
|
|
27
|
|
|
(1
|
)
|
|
26
|
|
|||||
Financial instruments
|
7
|
|
|
(1
|
)
|
|
6
|
|
|
8
|
|
|
14
|
|
|||||
Pension and other postretirement benefits
|
11
|
|
|
(4
|
)
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Total other comprehensive income
|
45
|
|
|
(5
|
)
|
|
40
|
|
|
7
|
|
|
47
|
|
|||||
Comprehensive income
|
$
|
18
|
|
|
$
|
79
|
|
|
$
|
97
|
|
|
$
|
52
|
|
|
$
|
149
|
|
2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
904
|
|
|
$
|
(282
|
)
|
|
$
|
622
|
|
|
$
|
97
|
|
|
$
|
719
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
|
(7
|
)
|
|
(35
|
)
|
|||||
Financial instruments
|
23
|
|
|
(10
|
)
|
|
13
|
|
|
5
|
|
|
18
|
|
|||||
Pension and other postretirement benefits
|
4
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Total other comprehensive loss
|
(1
|
)
|
|
(12
|
)
|
|
(13
|
)
|
|
(2
|
)
|
|
(15
|
)
|
|||||
Comprehensive income
|
$
|
903
|
|
|
$
|
(294
|
)
|
|
$
|
609
|
|
|
$
|
95
|
|
|
$
|
704
|
|
|
Nine months ended September 30, 2017 and 2016
|
||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1,136
|
|
|
$
|
(378
|
)
|
|
$
|
758
|
|
|
$
|
44
|
|
|
$
|
802
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
76
|
|
|
—
|
|
|
76
|
|
|
10
|
|
|
86
|
|
|||||
Financial instruments
|
(29
|
)
|
|
13
|
|
|
(16
|
)
|
|
6
|
|
|
(10
|
)
|
|||||
Pension and other postretirement benefits
|
16
|
|
|
(6
|
)
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Total other comprehensive income
|
63
|
|
|
7
|
|
|
70
|
|
|
16
|
|
|
86
|
|
|||||
Comprehensive income
|
1,199
|
|
|
(371
|
)
|
|
828
|
|
|
60
|
|
|
888
|
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive income, after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
1,198
|
|
|
$
|
(371
|
)
|
|
$
|
827
|
|
|
$
|
60
|
|
|
$
|
887
|
|
2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1,276
|
|
|
$
|
(284
|
)
|
|
$
|
992
|
|
|
$
|
118
|
|
|
$
|
1,110
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
51
|
|
|
—
|
|
|
51
|
|
|
(2
|
)
|
|
49
|
|
|||||
Financial instruments
|
(214
|
)
|
|
100
|
|
|
(114
|
)
|
|
1
|
|
|
(113
|
)
|
|||||
Pension and other postretirement benefits
|
8
|
|
|
(4
|
)
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Total other comprehensive loss
|
(155
|
)
|
|
96
|
|
|
(59
|
)
|
|
(1
|
)
|
|
(60
|
)
|
|||||
Comprehensive income
|
1,121
|
|
|
(188
|
)
|
|
933
|
|
|
117
|
|
|
1,050
|
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive income, after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
1,120
|
|
|
$
|
(188
|
)
|
|
$
|
932
|
|
|
$
|
117
|
|
|
$
|
1,049
|
|
SEMPRA ENERGY
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||
(Dollars in millions)
|
|||||||
|
September 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
189
|
|
|
$
|
349
|
|
Restricted cash
|
59
|
|
|
66
|
|
||
Accounts receivable – trade, net
|
1,212
|
|
|
1,390
|
|
||
Accounts receivable – other, net
|
175
|
|
|
164
|
|
||
Due from unconsolidated affiliates
|
31
|
|
|
26
|
|
||
Income taxes receivable
|
118
|
|
|
43
|
|
||
Inventories
|
296
|
|
|
258
|
|
||
Regulatory balancing accounts – undercollected
|
170
|
|
|
259
|
|
||
Fixed-price contracts and other derivatives
|
174
|
|
|
83
|
|
||
Assets held for sale
|
117
|
|
|
201
|
|
||
Other
|
337
|
|
|
271
|
|
||
Total current assets
|
2,878
|
|
|
3,110
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Restricted cash
|
13
|
|
|
10
|
|
||
Due from unconsolidated affiliates
|
506
|
|
|
201
|
|
||
Regulatory assets
|
3,186
|
|
|
3,414
|
|
||
Nuclear decommissioning trusts
|
1,041
|
|
|
1,026
|
|
||
Investments
|
2,128
|
|
|
2,097
|
|
||
Goodwill
|
2,393
|
|
|
2,364
|
|
||
Other intangible assets
|
537
|
|
|
548
|
|
||
Dedicated assets in support of certain benefit plans
|
435
|
|
|
430
|
|
||
Insurance receivable for Aliso Canyon costs
|
542
|
|
|
606
|
|
||
Deferred income taxes
|
132
|
|
|
234
|
|
||
Sundry
|
954
|
|
|
815
|
|
||
Total other assets
|
11,867
|
|
|
11,745
|
|
||
|
|
|
|
||||
Property, plant and equipment:
|
|
|
|
||||
Property, plant and equipment
|
46,725
|
|
|
43,624
|
|
||
Less accumulated depreciation and amortization
|
(11,341
|
)
|
|
(10,693
|
)
|
||
Property, plant and equipment, net ($328 and $354 at September 30, 2017 and
December 31, 2016, respectively, related to VIE)
|
35,384
|
|
|
32,931
|
|
||
Total assets
|
$
|
50,129
|
|
|
$
|
47,786
|
|
(1)
|
Derived from audited financial statements.
|
SEMPRA ENERGY
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|||||||
(Dollars in millions)
|
|
|
|
||||
|
September 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
2,498
|
|
|
$
|
1,779
|
|
Accounts payable – trade
|
1,190
|
|
|
1,346
|
|
||
Accounts payable – other
|
143
|
|
|
130
|
|
||
Due to unconsolidated affiliates
|
10
|
|
|
11
|
|
||
Dividends and interest payable
|
386
|
|
|
319
|
|
||
Accrued compensation and benefits
|
334
|
|
|
409
|
|
||
Regulatory balancing accounts – overcollected
|
278
|
|
|
122
|
|
||
Current portion of long-term debt
|
1,423
|
|
|
913
|
|
||
Fixed-price contracts and other derivatives
|
105
|
|
|
83
|
|
||
Customer deposits
|
149
|
|
|
158
|
|
||
Reserve for Aliso Canyon costs
|
42
|
|
|
53
|
|
||
Liabilities held for sale
|
47
|
|
|
47
|
|
||
Other
|
589
|
|
|
557
|
|
||
Total current liabilities
|
7,194
|
|
|
5,927
|
|
||
|
|
|
|
||||
Long-term debt ($286 and $293 at September 30, 2017 and December 31, 2016, respectively,
related to VIE)
|
14,803
|
|
|
14,429
|
|
||
|
|
|
|
||||
Deferred credits and other liabilities:
|
|
|
|
||||
Customer advances for construction
|
148
|
|
|
152
|
|
||
Pension and other postretirement benefit plan obligations, net of plan assets
|
1,238
|
|
|
1,208
|
|
||
Deferred income taxes
|
4,090
|
|
|
3,745
|
|
||
Deferred investment tax credits
|
28
|
|
|
28
|
|
||
Regulatory liabilities arising from removal obligations
|
2,774
|
|
|
2,697
|
|
||
Asset retirement obligations
|
2,482
|
|
|
2,431
|
|
||
Fixed-price contracts and other derivatives
|
301
|
|
|
405
|
|
||
Deferred credits and other
|
1,569
|
|
|
1,523
|
|
||
Total deferred credits and other liabilities
|
12,630
|
|
|
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 September 30, 2017 and December 31, 2016, respectively; no par value)
|
3,088
|
|
|
2,982
|
|
||
Retained earnings
|
10,855
|
|
|
10,717
|
|
||
Accumulated other comprehensive income (loss)
|
(678
|
)
|
|
(748
|
)
|
||
Total Sempra Energy shareholders’ equity
|
13,265
|
|
|
12,951
|
|
||
Preferred stock of subsidiary
|
20
|
|
|
20
|
|
||
Other noncontrolling interests
|
2,217
|
|
|
2,270
|
|
||
Total equity
|
15,502
|
|
|
15,241
|
|
||
Total liabilities and equity
|
$
|
50,129
|
|
|
$
|
47,786
|
|
(1)
|
Derived from audited financial statements.
|
SEMPRA ENERGY
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(Dollars in millions)
|
|||||||
|
Nine months ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(unaudited)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
802
|
|
|
$
|
1,110
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,106
|
|
|
970
|
|
||
Deferred income taxes and investment tax credits
|
302
|
|
|
170
|
|
||
Impairment of wildfire regulatory asset
|
351
|
|
|
—
|
|
||
Other impairment losses
|
72
|
|
|
154
|
|
||
Gain on sale of assets
|
(2
|
)
|
|
(131
|
)
|
||
Equity earnings, net
|
(26
|
)
|
|
(73
|
)
|
||
Remeasurement of equity method investment
|
—
|
|
|
(617
|
)
|
||
Fixed-price contracts and other derivatives
|
(142
|
)
|
|
39
|
|
||
Other
|
20
|
|
|
50
|
|
||
Net change in other working capital components
|
229
|
|
|
224
|
|
||
Insurance receivable for Aliso Canyon costs
|
64
|
|
|
(339
|
)
|
||
Changes in other assets
|
(137
|
)
|
|
(4
|
)
|
||
Changes in other liabilities
|
71
|
|
|
138
|
|
||
Net cash provided by operating activities
|
2,710
|
|
|
1,691
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(2,880
|
)
|
|
(3,087
|
)
|
||
Expenditures for investments and acquisition of businesses,
net of cash and cash equivalents acquired
|
(110
|
)
|
|
(1,212
|
)
|
||
Proceeds from sale of assets, net of cash sold
|
12
|
|
|
761
|
|
||
Distributions from investments
|
25
|
|
|
23
|
|
||
Purchases of nuclear decommissioning and other trust assets
|
(1,082
|
)
|
|
(418
|
)
|
||
Proceeds from sales by nuclear decommissioning and other trusts
|
1,082
|
|
|
486
|
|
||
Increases in restricted cash
|
(293
|
)
|
|
(53
|
)
|
||
Decreases in restricted cash
|
298
|
|
|
71
|
|
||
Advances to unconsolidated affiliates
|
(321
|
)
|
|
(12
|
)
|
||
Repayments of advances to unconsolidated affiliates
|
8
|
|
|
11
|
|
||
Other
|
1
|
|
|
(2
|
)
|
||
Net cash used in investing activities
|
(3,260
|
)
|
|
(3,432
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Common dividends paid
|
(561
|
)
|
|
(510
|
)
|
||
Preferred dividends paid by subsidiary
|
(1
|
)
|
|
(1
|
)
|
||
Issuances of common stock
|
37
|
|
|
40
|
|
||
Repurchases of common stock
|
(15
|
)
|
|
(55
|
)
|
||
Issuances of debt (maturities greater than 90 days)
|
2,395
|
|
|
2,013
|
|
||
Payments on debt (maturities greater than 90 days)
|
(1,829
|
)
|
|
(1,298
|
)
|
||
Increase in short-term debt, net
|
475
|
|
|
1,636
|
|
||
Deposit for sale of noncontrolling interest
|
—
|
|
|
78
|
|
||
Net distributions to noncontrolling interests
|
(109
|
)
|
|
(43
|
)
|
||
Other
|
(11
|
)
|
|
(12
|
)
|
||
Net cash provided by financing activities
|
381
|
|
|
1,848
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
9
|
|
|
8
|
|
||
|
|
|
|
||||
(Decrease) increase in cash and cash equivalents
|
(160
|
)
|
|
115
|
|
||
Cash and cash equivalents, January 1
|
349
|
|
|
403
|
|
||
Cash and cash equivalents, September 30
|
$
|
189
|
|
|
$
|
518
|
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|
|
|
|
|||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|||||||||||||
(Dollars in millions)
|
|
|
|||||||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(unaudited)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Electric
|
$
|
1,131
|
|
|
$
|
1,111
|
|
|
$
|
2,952
|
|
|
$
|
2,851
|
|
Natural gas
|
105
|
|
|
98
|
|
|
399
|
|
|
341
|
|
||||
Total operating revenues
|
1,236
|
|
|
1,209
|
|
|
3,351
|
|
|
3,192
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of electric fuel and purchased power
|
417
|
|
|
364
|
|
|
994
|
|
|
926
|
|
||||
Cost of natural gas
|
29
|
|
|
25
|
|
|
132
|
|
|
89
|
|
||||
Operation and maintenance
|
249
|
|
|
268
|
|
|
713
|
|
|
780
|
|
||||
Depreciation and amortization
|
170
|
|
|
161
|
|
|
499
|
|
|
478
|
|
||||
Franchise fees and other taxes
|
74
|
|
|
68
|
|
|
197
|
|
|
190
|
|
||||
Impairment of wildfire regulatory asset
|
351
|
|
|
—
|
|
|
351
|
|
|
—
|
|
||||
Total operating expenses
|
1,290
|
|
|
886
|
|
|
2,886
|
|
|
2,463
|
|
||||
Operating (loss) income
|
(54
|
)
|
|
323
|
|
|
465
|
|
|
729
|
|
||||
Other income, net
|
16
|
|
|
11
|
|
|
49
|
|
|
38
|
|
||||
Interest expense
|
(53
|
)
|
|
(49
|
)
|
|
(151
|
)
|
|
(145
|
)
|
||||
(Loss) income before income taxes
|
(91
|
)
|
|
285
|
|
|
363
|
|
|
622
|
|
||||
Income tax benefit (expense)
|
72
|
|
|
(91
|
)
|
|
(72
|
)
|
|
(204
|
)
|
||||
Net (loss) income
|
(19
|
)
|
|
194
|
|
|
291
|
|
|
418
|
|
||||
(Earnings) losses attributable to noncontrolling interest
|
(9
|
)
|
|
(11
|
)
|
|
(15
|
)
|
|
1
|
|
||||
(Losses) earnings attributable to common shares
|
$
|
(28
|
)
|
|
$
|
183
|
|
|
$
|
276
|
|
|
$
|
419
|
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
SDG&E shareholder’s equity
|
|
|
|
|
||||||||||||||
|
Pretax
amount
|
|
Income tax
benefit (expense)
|
|
Net-of-tax
amount
|
|
Noncontrolling
interest
(after-tax)
|
|
Total
|
||||||||||
|
Three months ended September 30, 2017 and 2016
|
||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
$
|
(100
|
)
|
|
$
|
72
|
|
|
$
|
(28
|
)
|
|
$
|
9
|
|
|
$
|
(19
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||
Pension and other postretirement benefits
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|
3
|
|
|
4
|
|
|||||
Comprehensive (loss) income
|
$
|
(99
|
)
|
|
$
|
72
|
|
|
$
|
(27
|
)
|
|
$
|
12
|
|
|
$
|
(15
|
)
|
2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
274
|
|
|
$
|
(91
|
)
|
|
$
|
183
|
|
|
$
|
11
|
|
|
$
|
194
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|||||
Comprehensive income
|
$
|
274
|
|
|
$
|
(91
|
)
|
|
$
|
183
|
|
|
$
|
16
|
|
|
$
|
199
|
|
|
Nine months ended September 30, 2017 and 2016
|
||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
348
|
|
|
$
|
(72
|
)
|
|
$
|
276
|
|
|
$
|
15
|
|
|
$
|
291
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|||||
Pension and other postretirement benefits
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|
7
|
|
|
8
|
|
|||||
Comprehensive income
|
$
|
349
|
|
|
$
|
(72
|
)
|
|
$
|
277
|
|
|
$
|
22
|
|
|
$
|
299
|
|
2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
623
|
|
|
$
|
(204
|
)
|
|
$
|
419
|
|
|
$
|
(1
|
)
|
|
$
|
418
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||
Comprehensive income
|
$
|
623
|
|
|
$
|
(204
|
)
|
|
$
|
419
|
|
|
$
|
3
|
|
|
$
|
422
|
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|
|
|
||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
||||
(Dollars in millions)
|
|
|
|
||||
|
September 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
18
|
|
|
$
|
8
|
|
Restricted cash
|
6
|
|
|
11
|
|
||
Accounts receivable – trade, net
|
448
|
|
|
354
|
|
||
Accounts receivable – other, net
|
37
|
|
|
17
|
|
||
Due from unconsolidated affiliates
|
1
|
|
|
4
|
|
||
Income taxes receivable
|
67
|
|
|
122
|
|
||
Inventories
|
97
|
|
|
80
|
|
||
Prepaid expenses
|
80
|
|
|
59
|
|
||
Regulatory balancing accounts – net undercollected
|
170
|
|
|
259
|
|
||
Regulatory assets
|
112
|
|
|
81
|
|
||
Fixed-price contracts and other derivatives
|
20
|
|
|
58
|
|
||
Other
|
19
|
|
|
19
|
|
||
Total current assets
|
1,075
|
|
|
1,072
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Restricted cash
|
9
|
|
|
1
|
|
||
Deferred income taxes recoverable in rates
|
1,090
|
|
|
1,014
|
|
||
Other regulatory assets
|
572
|
|
|
998
|
|
||
Nuclear decommissioning trusts
|
1,041
|
|
|
1,026
|
|
||
Sundry
|
408
|
|
|
358
|
|
||
Total other assets
|
3,120
|
|
|
3,397
|
|
||
|
|
|
|
||||
Property, plant and equipment:
|
|
|
|
||||
Property, plant and equipment
|
19,273
|
|
|
17,844
|
|
||
Less accumulated depreciation and amortization
|
(4,839
|
)
|
|
(4,594
|
)
|
||
Property, plant and equipment, net ($328 and $354 at September 30, 2017 and
December 31, 2016, respectively, related to VIE) |
14,434
|
|
|
13,250
|
|
||
Total assets
|
$
|
18,629
|
|
|
$
|
17,719
|
|
(1)
|
Derived from audited financial statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|
|
|
||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|
|
|
||||
(Dollars in millions)
|
|
|
|
||||
|
September 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
185
|
|
|
$
|
—
|
|
Accounts payable
|
434
|
|
|
460
|
|
||
Due to unconsolidated affiliates
|
42
|
|
|
15
|
|
||
Interest payable
|
52
|
|
|
40
|
|
||
Accrued compensation and benefits
|
89
|
|
|
121
|
|
||
Accrued franchise fees
|
52
|
|
|
43
|
|
||
Current portion of long-term debt
|
219
|
|
|
191
|
|
||
Asset retirement obligations
|
81
|
|
|
79
|
|
||
Fixed-price contracts and other derivatives
|
61
|
|
|
61
|
|
||
Customer deposits
|
70
|
|
|
76
|
|
||
Other
|
94
|
|
|
82
|
|
||
Total current liabilities
|
1,379
|
|
|
1,168
|
|
||
|
|
|
|
||||
Long-term debt ($286 and $293 at September 30, 2017 and December 31, 2016,
respectively, related to VIE) |
5,339
|
|
|
4,658
|
|
||
|
|
|
|
||||
Deferred credits and other liabilities:
|
|
|
|
||||
Customer advances for construction
|
55
|
|
|
52
|
|
||
Pension and other postretirement benefit plan obligations, net of plan assets
|
250
|
|
|
232
|
|
||
Deferred income taxes
|
2,910
|
|
|
2,829
|
|
||
Deferred investment tax credits
|
17
|
|
|
16
|
|
||
Regulatory liabilities arising from removal obligations
|
1,824
|
|
|
1,725
|
|
||
Asset retirement obligations
|
753
|
|
|
751
|
|
||
Fixed-price contracts and other derivatives
|
162
|
|
|
189
|
|
||
Deferred credits and other
|
437
|
|
|
421
|
|
||
Total deferred credits and other liabilities
|
6,408
|
|
|
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
|
4,137
|
|
|
4,311
|
|
||
Accumulated other comprehensive income (loss)
|
(7
|
)
|
|
(8
|
)
|
||
Total SDG&E shareholder’s equity
|
5,468
|
|
|
5,641
|
|
||
Noncontrolling interest
|
35
|
|
|
37
|
|
||
Total equity
|
5,503
|
|
|
5,678
|
|
||
Total liabilities and equity
|
$
|
18,629
|
|
|
$
|
17,719
|
|
(1)
|
Derived from audited financial statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|
|
|
|
|||||||||||
CONDENSED STATEMENTS OF OPERATIONS
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(unaudited)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
684
|
|
|
$
|
686
|
|
|
$
|
2,695
|
|
|
$
|
2,336
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of natural gas
|
153
|
|
|
171
|
|
|
740
|
|
|
571
|
|
||||
Operation and maintenance
|
355
|
|
|
322
|
|
|
1,044
|
|
|
966
|
|
||||
Depreciation and amortization
|
132
|
|
|
121
|
|
|
384
|
|
|
355
|
|
||||
Franchise fees and other taxes
|
34
|
|
|
33
|
|
|
107
|
|
|
100
|
|
||||
Impairment losses
|
—
|
|
|
1
|
|
|
—
|
|
|
23
|
|
||||
Total operating expenses
|
674
|
|
|
648
|
|
|
2,275
|
|
|
2,015
|
|
||||
Operating income
|
10
|
|
|
38
|
|
|
420
|
|
|
321
|
|
||||
Other income, net
|
8
|
|
|
8
|
|
|
28
|
|
|
24
|
|
||||
Interest income
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Interest expense
|
(26
|
)
|
|
(25
|
)
|
|
(77
|
)
|
|
(71
|
)
|
||||
(Loss) income before income taxes
|
(7
|
)
|
|
21
|
|
|
372
|
|
|
274
|
|
||||
Income tax benefit (expense)
|
14
|
|
|
(21
|
)
|
|
(103
|
)
|
|
(75
|
)
|
||||
Net income
|
7
|
|
|
—
|
|
|
269
|
|
|
199
|
|
||||
Preferred dividend requirements
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Earnings attributable to common shares
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
268
|
|
|
$
|
198
|
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||||||
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Pretax
amount |
|
Income tax
benefit (expense)
|
|
Net-of-tax
amount |
||||||
|
Three months ended September 30, 2017 and 2016
|
||||||||||
|
(unaudited)
|
||||||||||
2017:
|
|
|
|
|
|
||||||
Net (loss) income/Comprehensive (loss) income
|
$
|
(7
|
)
|
|
$
|
14
|
|
|
$
|
7
|
|
2016:
|
|
|
|
|
|
||||||
Net income
|
$
|
21
|
|
|
$
|
(21
|
)
|
|
$
|
—
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Financial instruments
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|||
Comprehensive income
|
$
|
22
|
|
|
$
|
(21
|
)
|
|
$
|
1
|
|
|
Nine months ended September 30, 2017 and 2016
|
||||||||||
|
(unaudited)
|
||||||||||
2017:
|
|
|
|
|
|
||||||
Net income
|
$
|
372
|
|
|
$
|
(103
|
)
|
|
$
|
269
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pension and other postretirement benefits
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|||
Comprehensive income
|
$
|
373
|
|
|
$
|
(103
|
)
|
|
$
|
270
|
|
2016:
|
|
|
|
|
|
||||||
Net Income
|
$
|
274
|
|
|
$
|
(75
|
)
|
|
$
|
199
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Financial instruments
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|||
Comprehensive income
|
$
|
275
|
|
|
$
|
(75
|
)
|
|
$
|
200
|
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||
CONDENSED BALANCE SHEETS
|
|||||||
(Dollars in millions)
|
|||||||
|
September 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
8
|
|
|
$
|
12
|
|
Accounts receivable – trade, net
|
334
|
|
|
608
|
|
||
Accounts receivable – other, net
|
60
|
|
|
77
|
|
||
Due from unconsolidated affiliates
|
6
|
|
|
8
|
|
||
Income taxes receivable
|
10
|
|
|
2
|
|
||
Inventories
|
97
|
|
|
58
|
|
||
Regulatory assets
|
8
|
|
|
8
|
|
||
Other
|
66
|
|
|
63
|
|
||
Total current assets
|
589
|
|
|
836
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Regulatory assets arising from pension obligations
|
762
|
|
|
742
|
|
||
Other regulatory assets
|
692
|
|
|
589
|
|
||
Insurance receivable for Aliso Canyon costs
|
542
|
|
|
606
|
|
||
Sundry
|
439
|
|
|
399
|
|
||
Total other assets
|
2,435
|
|
|
2,336
|
|
||
|
|
|
|
||||
Property, plant and equipment:
|
|
|
|
||||
Property, plant and equipment
|
16,182
|
|
|
15,344
|
|
||
Less accumulated depreciation and amortization
|
(5,289
|
)
|
|
(5,092
|
)
|
||
Property, plant and equipment, net
|
10,893
|
|
|
10,252
|
|
||
Total assets
|
$
|
13,917
|
|
|
$
|
13,424
|
|
(1)
|
Derived from audited financial statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||
CONDENSED BALANCE SHEETS (CONTINUED)
|
|||||||
(Dollars in millions)
|
|||||||
|
September 30,
2017 |
|
December 31,
2016(1) |
||||
|
(unaudited)
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
26
|
|
|
$
|
62
|
|
Accounts payable – trade
|
373
|
|
|
481
|
|
||
Accounts payable – other
|
85
|
|
|
74
|
|
||
Due to unconsolidated affiliates
|
35
|
|
|
28
|
|
||
Accrued compensation and benefits
|
121
|
|
|
150
|
|
||
Regulatory balancing accounts – net overcollected
|
278
|
|
|
122
|
|
||
Current portion of long-term debt
|
501
|
|
|
—
|
|
||
Customer deposits
|
74
|
|
|
76
|
|
||
Reserve for Aliso Canyon costs
|
42
|
|
|
53
|
|
||
Other
|
202
|
|
|
195
|
|
||
Total current liabilities
|
1,737
|
|
|
1,241
|
|
||
|
|
|
|
||||
Long-term debt
|
2,484
|
|
|
2,982
|
|
||
|
|
|
|
||||
Deferred credits and other liabilities:
|
|
|
|
||||
Customer advances for construction
|
93
|
|
|
99
|
|
||
Pension obligation, net of plan assets
|
780
|
|
|
762
|
|
||
Deferred income taxes
|
1,867
|
|
|
1,709
|
|
||
Deferred investment tax credits
|
11
|
|
|
12
|
|
||
Regulatory liabilities arising from removal obligations
|
949
|
|
|
972
|
|
||
Asset retirement obligations
|
1,657
|
|
|
1,616
|
|
||
Deferred credits and other
|
560
|
|
|
521
|
|
||
Total deferred credits and other liabilities
|
5,917
|
|
|
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
|
2,912
|
|
|
2,644
|
|
||
Accumulated other comprehensive income (loss)
|
(21
|
)
|
|
(22
|
)
|
||
Total shareholders’ equity
|
3,779
|
|
|
3,510
|
|
||
Total liabilities and shareholders’ equity
|
$
|
13,917
|
|
|
$
|
13,424
|
|
(1)
|
Derived from audited financial statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||
CONDENSED STATEMENTS OF CASH FLOWS
|
|||||||
(Dollars in millions)
|
|||||||
|
Nine months ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(unaudited)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
269
|
|
|
$
|
199
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
384
|
|
|
355
|
|
||
Deferred income taxes and investment tax credits
|
86
|
|
|
52
|
|
||
Impairment losses
|
—
|
|
|
23
|
|
||
Other
|
(22
|
)
|
|
(22
|
)
|
||
Net change in other working capital components
|
359
|
|
|
135
|
|
||
Insurance receivable for Aliso Canyon costs
|
64
|
|
|
(339
|
)
|
||
Changes in other assets
|
(65
|
)
|
|
2
|
|
||
Changes in other liabilities
|
(9
|
)
|
|
4
|
|
||
Net cash provided by operating activities
|
1,066
|
|
|
409
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(1,033
|
)
|
|
(949
|
)
|
||
Increase in loans to affiliate, net
|
—
|
|
|
(1
|
)
|
||
Net cash used in investing activities
|
(1,033
|
)
|
|
(950
|
)
|
||
|
|
|
|
||||
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
|
(36
|
)
|
|
—
|
|
||
Debt issuance costs
|
—
|
|
|
(4
|
)
|
||
Net cash (used in) provided by financing activities
|
(37
|
)
|
|
491
|
|
||
|
|
|
|
||||
Decrease in cash and cash equivalents
|
(4
|
)
|
|
(50
|
)
|
||
Cash and cash equivalents, January 1
|
12
|
|
|
58
|
|
||
Cash and cash equivalents, September 30
|
$
|
8
|
|
|
$
|
8
|
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
||||
Interest payments, net of amounts capitalized
|
$
|
65
|
|
|
$
|
60
|
|
Income tax payments, net
|
22
|
|
|
35
|
|
||
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITY
|
|
|
|
||||
Accrued capital expenditures
|
$
|
148
|
|
|
$
|
150
|
|
|
|
|
|
|
▪
|
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.
|
|
|
|
|
|
EXPECTED IMPACT FROM ADOPTION OF ASU 2016-15 AND ASU 2016-18
|
||||
(Dollars in millions)
|
||||
|
Nine months ended September 30, 2017
|
|||
Sempra Energy Condensed Consolidated Statement of Cash Flows:
|
|
|||
Increase (decrease), compared to amounts reported:
|
|
|
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
$
|
76
|
|
|
Net cash provided by operating activities
|
|
(6
|
)
|
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
2
|
|
|
Cash, cash equivalents and restricted cash, end of period
|
|
72
|
|
|
SDG&E Condensed Consolidated Statement of Cash Flows:
|
|
|
|
|
Increase (decrease), compared to amounts reported:
|
|
|
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
$
|
12
|
|
|
Net cash provided by operating activities
|
|
(6
|
)
|
|
Net cash used in investing activities
|
|
9
|
|
|
Cash, cash equivalents and restricted cash, end of period
|
|
15
|
|
|
|
|
|
|
|
▪
|
seven of which will be independent directors under the rules of the New York Stock Exchange (and at least two of which shall have no current or prior material relationship with Sempra Energy),
|
▪
|
two of which will be designated by EFIH (which, after the Merger, will be a subsidiary of Sempra Energy that Sempra Energy is expected to control),
|
▪
|
two of which will be appointed by TTI, and
|
▪
|
two of which will be members of Oncor management.
|
ASSETS HELD FOR SALE AT SEPTEMBER 30, 2017
|
|
||||
(Dollars in millions)
|
|
||||
|
|
Termoeléctrica de Mexicali
|
|
||
Inventories
|
|
$
|
10
|
|
|
Other current assets
|
|
25
|
|
|
|
Property, plant and equipment, net
|
|
55
|
|
|
|
Other noncurrent assets
|
|
27
|
|
|
|
Total assets held for sale
|
|
$
|
117
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
5
|
|
|
Other current liabilities
|
|
5
|
|
|
|
Asset retirement obligations
|
|
5
|
|
|
|
Other noncurrent liabilities
|
|
32
|
|
|
|
Total liabilities held for sale
|
|
$
|
47
|
|
|
DECONSOLIDATION OF SUBSIDIARY
|
||||
(Dollars in millions)
|
||||
|
EnergySouth Inc.
|
|||
Proceeds from sale, net of transaction costs
|
$
|
304
|
|
|
Cash
|
(2
|
)
|
||
Other current assets
|
(17
|
)
|
||
Property, plant and equipment, net
|
(199
|
)
|
||
Other noncurrent assets
|
(137
|
)
|
||
Current liabilities
|
25
|
|
||
Long-term debt
|
67
|
|
||
Other noncurrent liabilities
|
89
|
|
||
Gain on sale
|
$
|
130
|
|
|
|
|
|
|
|
|
|
|
|
INVENTORY BALANCES
|
||||||||||||||||||||||||||||||||||
(Dollars in millions)
|
||||||||||||||||||||||||||||||||||
|
Natural gas
|
|
|
Liquefied natural gas
|
|
|
Materials and supplies
|
|
|
Total
|
||||||||||||||||||||||||
|
September 30, 2017
|
|
December 31, 2016
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||
SDG&E
|
$
|
2
|
|
|
$
|
2
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
95
|
|
|
$
|
78
|
|
|
|
$
|
97
|
|
|
$
|
80
|
|
SoCalGas(1)
|
50
|
|
|
11
|
|
|
|
—
|
|
|
—
|
|
|
|
47
|
|
|
47
|
|
|
|
97
|
|
|
58
|
|
||||||||
Sempra South American Utilities
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
43
|
|
|
27
|
|
|
|
43
|
|
|
27
|
|
||||||||
Sempra Mexico
|
—
|
|
|
—
|
|
|
|
7
|
|
|
6
|
|
|
|
2
|
|
|
1
|
|
|
|
9
|
|
|
7
|
|
||||||||
Sempra Renewables
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
4
|
|
|
4
|
|
|
|
4
|
|
|
4
|
|
||||||||
Sempra LNG & Midstream
|
43
|
|
|
79
|
|
|
|
3
|
|
|
3
|
|
|
|
—
|
|
|
—
|
|
|
|
46
|
|
|
82
|
|
||||||||
Sempra Energy Consolidated
|
$
|
95
|
|
|
$
|
92
|
|
|
|
$
|
10
|
|
|
$
|
9
|
|
|
|
$
|
191
|
|
|
$
|
157
|
|
|
|
$
|
296
|
|
|
$
|
258
|
|
(1)
|
At September 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
|
||||||||||||||||||
|
September 30,
2017 |
|
December 31,
2016 |
|
September 30,
2017 |
|
December 31,
2016 |
|
September 30,
2017 |
|
December 31,
2016 |
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other current assets
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
24
|
|
|
$
|
24
|
|
Sundry
|
352
|
|
|
295
|
|
|
190
|
|
|
182
|
|
|
159
|
|
|
109
|
|
||||||
Total assets
|
$
|
392
|
|
|
$
|
335
|
|
|
$
|
206
|
|
|
$
|
198
|
|
|
$
|
183
|
|
|
$
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other current liabilities
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
24
|
|
|
$
|
24
|
|
Deferred credits and other
|
240
|
|
|
171
|
|
|
105
|
|
|
72
|
|
|
131
|
|
|
96
|
|
||||||
Total liabilities
|
$
|
280
|
|
|
$
|
211
|
|
|
$
|
121
|
|
|
$
|
88
|
|
|
$
|
155
|
|
|
$
|
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 September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of electric fuel and purchased power
|
$
|
(26
|
)
|
|
$
|
(28
|
)
|
|
$
|
(65
|
)
|
|
$
|
(62
|
)
|
Operation and maintenance
|
4
|
|
|
4
|
|
|
13
|
|
|
23
|
|
||||
Depreciation and amortization
|
7
|
|
|
8
|
|
|
21
|
|
|
25
|
|
||||
Total operating expenses
|
(15
|
)
|
|
(16
|
)
|
|
(31
|
)
|
|
(14
|
)
|
||||
Operating income
|
15
|
|
|
16
|
|
|
31
|
|
|
14
|
|
||||
Interest expense
|
(6
|
)
|
|
(5
|
)
|
|
(16
|
)
|
|
(15
|
)
|
||||
Income (loss) before income taxes/Net income (loss)
|
9
|
|
|
11
|
|
|
15
|
|
|
(1
|
)
|
||||
(Earnings) losses attributable to noncontrolling interest
|
(9
|
)
|
|
(11
|
)
|
|
(15
|
)
|
|
1
|
|
||||
Earnings attributable to common shares
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
AMOUNTS ASSOCIATED WITH TAX EQUITY ARRANGEMENTS
|
|
|
||||||
(Dollars in millions)
|
|
|
||||||
|
|
Three months ended September 30, 2017
|
|
Nine months ended September 30, 2017
|
||||
REVENUES
|
|
|
|
|||||
Energy-related businesses
|
$
|
17
|
|
|
$
|
48
|
|
|
EXPENSES
|
|
|
|
|||||
Operation and maintenance
|
(5
|
)
|
|
(14
|
)
|
|||
Depreciation and amortization
|
(8
|
)
|
|
(24
|
)
|
|||
Income before income taxes
|
4
|
|
|
10
|
|
|||
Income tax expense
|
(3
|
)
|
|
(9
|
)
|
|||
Net income
|
1
|
|
|
1
|
|
|||
Losses attributable to noncontrolling interests(1)
|
6
|
|
|
16
|
|
|||
Earnings
|
$
|
7
|
|
|
$
|
17
|
|
|
|
|
|
|
|
||||
(1)
|
Net income or loss attributable to the noncontrolling interests is computed using the HLBV method and is not based on ownership percentages.
|
NET PERIODIC BENEFIT COST – SEMPRA ENERGY CONSOLIDATED
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||
|
Three months ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
31
|
|
|
$
|
26
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest cost
|
39
|
|
|
40
|
|
|
9
|
|
|
9
|
|
||||
Expected return on assets
|
(41
|
)
|
|
(41
|
)
|
|
(16
|
)
|
|
(17
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
11
|
|
|
10
|
|
|
(2
|
)
|
|
(1
|
)
|
||||
Settlements
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Special termination benefits
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Regulatory adjustment
|
(18
|
)
|
|
(28
|
)
|
|
(11
|
)
|
|
5
|
|
||||
Total net periodic benefit cost
|
$
|
33
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine months ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
88
|
|
|
$
|
81
|
|
|
$
|
15
|
|
|
$
|
15
|
|
Interest cost
|
113
|
|
|
120
|
|
|
29
|
|
|
31
|
|
||||
Expected return on assets
|
(121
|
)
|
|
(124
|
)
|
|
(49
|
)
|
|
(52
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
27
|
|
|
23
|
|
|
(3
|
)
|
|
(1
|
)
|
||||
Settlements
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Special termination benefits
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Regulatory adjustment
|
(59
|
)
|
|
(84
|
)
|
|
(7
|
)
|
|
9
|
|
||||
Total net periodic benefit cost
|
$
|
64
|
|
|
$
|
24
|
|
|
$
|
1
|
|
|
$
|
2
|
|
NET PERIODIC BENEFIT COST – SDG&E
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||
|
Three months ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
9
|
|
|
10
|
|
|
2
|
|
|
2
|
|
||||
Expected return on assets
|
(11
|
)
|
|
(12
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Actuarial loss
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Regulatory adjustment
|
(7
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Total net periodic benefit cost
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine months ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
22
|
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
3
|
|
Interest cost
|
28
|
|
|
31
|
|
|
6
|
|
|
6
|
|
||||
Expected return on assets
|
(35
|
)
|
|
(37
|
)
|
|
(9
|
)
|
|
(8
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Actuarial loss (gain)
|
7
|
|
|
7
|
|
|
—
|
|
|
(1
|
)
|
||||
Regulatory adjustment
|
(21
|
)
|
|
(22
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||
Total net periodic benefit cost
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NET PERIODIC BENEFIT COST – SOCALGAS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||
|
Three months ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
21
|
|
|
$
|
16
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest cost
|
25
|
|
|
26
|
|
|
6
|
|
|
7
|
|
||||
Expected return on assets
|
(26
|
)
|
|
(26
|
)
|
|
(14
|
)
|
|
(15
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost (credit)
|
3
|
|
|
3
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Actuarial loss (gain)
|
6
|
|
|
3
|
|
|
(1
|
)
|
|
—
|
|
||||
Special termination benefits
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Regulatory adjustment
|
(11
|
)
|
|
(21
|
)
|
|
(10
|
)
|
|
5
|
|
||||
Total net periodic benefit cost
|
$
|
18
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine months ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
57
|
|
|
$
|
51
|
|
|
$
|
11
|
|
|
$
|
11
|
|
Interest cost
|
73
|
|
|
76
|
|
|
21
|
|
|
24
|
|
||||
Expected return on assets
|
(77
|
)
|
|
(78
|
)
|
|
(40
|
)
|
|
(43
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost (credit)
|
7
|
|
|
7
|
|
|
(2
|
)
|
|
(3
|
)
|
||||
Actuarial loss (gain)
|
14
|
|
|
8
|
|
|
(2
|
)
|
|
—
|
|
||||
Special termination benefits
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Regulatory adjustment
|
(38
|
)
|
|
(62
|
)
|
|
(4
|
)
|
|
11
|
|
||||
Total net periodic benefit cost
|
$
|
36
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
BENEFIT PLAN CONTRIBUTIONS
|
||||||||||||
(Dollars in millions)
|
||||||||||||
|
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||
Contributions through September 30, 2017:
|
|
|
|
|
|
|
||||||
Pension plans
|
|
$
|
64
|
|
|
$
|
3
|
|
|
$
|
35
|
|
Other postretirement benefit plans
|
|
5
|
|
|
1
|
|
|
2
|
|
|||
Total expected contributions in 2017:
|
|
|
|
|
|
|
||||||
Pension plans
|
|
$
|
174
|
|
|
$
|
25
|
|
|
$
|
94
|
|
Other postretirement benefit plans
|
|
10
|
|
|
5
|
|
|
3
|
|
EARNINGS PER SHARE COMPUTATIONS
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions, except per share amounts; shares in thousands)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Earnings/Income attributable to common shares
|
$
|
57
|
|
|
$
|
622
|
|
|
$
|
757
|
|
|
$
|
991
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding for basic EPS(1)
|
251,692
|
|
|
250,386
|
|
|
251,425
|
|
|
250,073
|
|
||||
Dilutive effect of stock options, RSAs and RSUs(2)
|
1,672
|
|
|
2,019
|
|
|
1,562
|
|
|
1,903
|
|
||||
Weighted-average common shares outstanding for diluted EPS
|
253,364
|
|
|
252,405
|
|
|
252,987
|
|
|
251,976
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EPS:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.23
|
|
|
$
|
2.48
|
|
|
$
|
3.01
|
|
|
$
|
3.96
|
|
Diluted
|
0.22
|
|
|
2.46
|
|
|
2.99
|
|
|
3.93
|
|
(1)
|
Includes 612 and 572 average fully vested RSUs held in our Deferred Compensation Plan for the three months ended September 30, 2017 and 2016, respectively, and 607 and 565 of such RSUs for the nine months ended September 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.
|
(2)
|
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 September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated
|
$
|
54
|
|
|
$
|
62
|
|
|
$
|
198
|
|
|
$
|
172
|
|
SDG&E
|
21
|
|
|
15
|
|
|
62
|
|
|
47
|
|
||||
SoCalGas
|
15
|
|
|
14
|
|
|
45
|
|
|
41
|
|
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 September 30, 2017 and 2016
|
|
||||||||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of June 30, 2017
|
$
|
(478
|
)
|
|
$
|
(147
|
)
|
|
$
|
(93
|
)
|
|
$
|
(718
|
)
|
|
OCI before reclassifications
|
27
|
|
|
8
|
|
|
—
|
|
|
35
|
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
(2
|
)
|
|
7
|
|
|
5
|
|
|
||||
Net OCI
|
27
|
|
|
6
|
|
|
7
|
|
|
40
|
|
|
||||
Balance as of September 30, 2017
|
$
|
(451
|
)
|
|
$
|
(141
|
)
|
|
$
|
(86
|
)
|
|
$
|
(678
|
)
|
|
|
|
|
|
|
.
|
|
|
|
||||||||
Balance as of June 30, 2016
|
$
|
(503
|
)
|
|
$
|
(264
|
)
|
|
$
|
(85
|
)
|
|
$
|
(852
|
)
|
|
OCI before reclassifications
|
(28
|
)
|
|
8
|
|
|
—
|
|
|
(20
|
)
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
5
|
|
|
2
|
|
|
7
|
|
|
||||
Net OCI
|
(28
|
)
|
|
13
|
|
|
2
|
|
|
(13
|
)
|
|
||||
Balance as of September 30, 2016
|
$
|
(531
|
)
|
|
$
|
(251
|
)
|
|
$
|
(83
|
)
|
|
$
|
(865
|
)
|
|
SDG&E:
|
|
|
|
|
|
|
|
|
||||||||
Balance as of June 30, 2017
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
|
||||
Amounts reclassified from AOCI
|
|
|
|
|
1
|
|
|
1
|
|
|
||||||
Net OCI
|
|
|
|
|
1
|
|
|
1
|
|
|
||||||
Balance as of September 30, 2017
|
|
|
|
|
$
|
(7
|
)
|
|
$
|
(7
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of June 30, 2016 and September 30, 2016
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
|
||||
SoCalGas:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of June 30, 2017 and September 30, 2017
|
|
|
$
|
(13
|
)
|
|
$
|
(8
|
)
|
|
$
|
(21
|
)
|
|
||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of June 30, 2016
|
|
|
$
|
(14
|
)
|
|
$
|
(5
|
)
|
|
$
|
(19
|
)
|
|
||
Amounts reclassified from AOCI
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|||||
Net OCI
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|||||
Balance as of September 30, 2016
|
|
|
$
|
(13
|
)
|
|
$
|
(5
|
)
|
|
$
|
(18
|
)
|
|
(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)
|
|
||||||||
|
Nine months ended September 30, 2017 and 2016
|
|
||||||||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016
|
$
|
(527
|
)
|
|
$
|
(125
|
)
|
|
$
|
(96
|
)
|
|
$
|
(748
|
)
|
|
OCI before reclassifications
|
76
|
|
|
(20
|
)
|
|
—
|
|
|
56
|
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
4
|
|
|
10
|
|
|
14
|
|
|
||||
Net OCI
|
76
|
|
|
(16
|
)
|
|
10
|
|
|
70
|
|
|
||||
Balance as of September 30, 2017
|
$
|
(451
|
)
|
|
$
|
(141
|
)
|
|
$
|
(86
|
)
|
|
$
|
(678
|
)
|
|
|
|
|
|
|
.
|
|
|
|
||||||||
Balance as of December 31, 2015
|
$
|
(582
|
)
|
|
$
|
(137
|
)
|
|
$
|
(87
|
)
|
|
$
|
(806
|
)
|
|
OCI before reclassifications
|
51
|
|
|
(122
|
)
|
|
—
|
|
|
(71
|
)
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
8
|
|
|
4
|
|
|
12
|
|
|
||||
Net OCI
|
51
|
|
|
(114
|
)
|
|
4
|
|
|
(59
|
)
|
|
||||
Balance as of September 30, 2016
|
$
|
(531
|
)
|
|
$
|
(251
|
)
|
|
$
|
(83
|
)
|
|
$
|
(865
|
)
|
|
SDG&E:
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
|
||||
Amounts reclassified from AOCI
|
|
|
|
|
1
|
|
|
1
|
|
|
||||||
Net OCI
|
|
|
|
|
1
|
|
|
1
|
|
|
||||||
Balance as of September 30, 2017
|
|
|
|
|
$
|
(7
|
)
|
|
$
|
(7
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2015 and September 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 September 30, 2017
|
|
|
$
|
(13
|
)
|
|
$
|
(8
|
)
|
|
$
|
(21
|
)
|
|
||
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2015
|
|
|
$
|
(14
|
)
|
|
$
|
(5
|
)
|
|
$
|
(19
|
)
|
|
||
Amounts reclassified from AOCI
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|||||
Net OCI
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|||||
Balance as of September 30, 2016
|
|
|
$
|
(13
|
)
|
|
$
|
(5
|
)
|
|
$
|
(18
|
)
|
|
(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 September 30,
|
|
|
||||||
|
2017
|
|
2016
|
|
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate and foreign exchange instruments(1)
|
$
|
—
|
|
|
$
|
4
|
|
|
Interest Expense
|
Interest rate instruments
|
2
|
|
|
3
|
|
|
Equity Earnings, Before Income Tax
|
||
Interest rate and foreign exchange instruments
|
—
|
|
|
7
|
|
|
Remeasurement of Equity Method Investment
|
||
Interest rate and foreign exchange instruments
|
(2
|
)
|
|
(2
|
)
|
|
Equity Earnings (Losses), Net of Income Tax
|
||
Foreign exchange instruments
|
(2
|
)
|
|
—
|
|
|
Revenues: Energy-Related Businesses
|
||
Total before income tax
|
(2
|
)
|
|
12
|
|
|
|
||
|
1
|
|
|
(3
|
)
|
|
Income Tax Benefit (Expense)
|
||
Net of income tax
|
(1
|
)
|
|
9
|
|
|
|
||
|
(1
|
)
|
|
(4
|
)
|
|
Earnings Attributable to Noncontrolling Interests
|
||
|
$
|
(2
|
)
|
|
$
|
5
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of actuarial loss
|
$
|
11
|
|
|
$
|
4
|
|
|
See note (2) below
|
|
(4
|
)
|
|
(2
|
)
|
|
Income Tax Benefit (Expense)
|
||
Net of income tax
|
$
|
7
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
$
|
5
|
|
|
$
|
7
|
|
|
|
SDG&E:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate instruments(1)
|
$
|
3
|
|
|
$
|
3
|
|
|
Interest Expense
|
|
(3
|
)
|
|
(3
|
)
|
|
(Earnings) Losses Attributable to Noncontrolling Interest
|
||
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of actuarial loss
|
$
|
1
|
|
|
$
|
—
|
|
|
See note (2) below
|
Total reclassifications for the period, net of tax
|
$
|
1
|
|
|
$
|
—
|
|
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate instruments
|
$
|
—
|
|
|
$
|
1
|
|
|
Interest Expense
|
Total reclassifications for the period, net of tax
|
$
|
—
|
|
|
$
|
1
|
|
|
|
(1)
|
Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
|
(2)
|
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 |
||||||
|
Nine months ended September 30,
|
|
|
||||||
|
2017
|
|
2016
|
|
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate and foreign exchange instruments(1)
|
$
|
(4
|
)
|
|
$
|
11
|
|
|
Interest Expense
|
Interest rate instruments
|
6
|
|
|
8
|
|
|
Equity Earnings, Before Income Tax
|
||
Interest rate and foreign exchange instruments
|
—
|
|
|
7
|
|
|
Remeasurement of Equity Method Investment
|
||
Interest rate and foreign exchange instruments
|
3
|
|
|
4
|
|
|
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
|
13
|
|
|
23
|
|
|
|
||
|
(4
|
)
|
|
(4
|
)
|
|
Income Tax Benefit (Expense)
|
||
Net of income tax
|
9
|
|
|
19
|
|
|
|
||
|
(5
|
)
|
|
(11
|
)
|
|
Earnings Attributable to Noncontrolling Interests
|
||
|
$
|
4
|
|
|
$
|
8
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of actuarial loss
|
$
|
16
|
|
|
$
|
8
|
|
|
See note (2) below
|
|
(6
|
)
|
|
(4
|
)
|
|
Income Tax Benefit (Expense)
|
||
Net of income tax
|
$
|
10
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
$
|
14
|
|
|
$
|
12
|
|
|
|
SDG&E:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate instruments(1)
|
$
|
9
|
|
|
$
|
9
|
|
|
Interest Expense
|
|
(9
|
)
|
|
(9
|
)
|
|
(Earnings) Losses Attributable to Noncontrolling Interest
|
||
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of actuarial loss
|
$
|
1
|
|
|
$
|
—
|
|
|
See note (2) below
|
Total reclassifications for the period, net of tax
|
$
|
1
|
|
|
$
|
—
|
|
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate instruments
|
$
|
—
|
|
|
$
|
1
|
|
|
Interest Expense
|
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
||
Amortization of actuarial loss
|
1
|
|
|
—
|
|
|
See note (2) below
|
||
Total reclassifications for the period, net of tax
|
$
|
1
|
|
|
$
|
1
|
|
|
|
(1)
|
Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
|
(2)
|
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 |
|
Non-
controlling interests(1) |
|
Total
equity |
||||||
Balance at December 31, 2016
|
$
|
12,951
|
|
|
$
|
2,290
|
|
|
$
|
15,241
|
|
Comprehensive income
|
828
|
|
|
60
|
|
|
888
|
|
|||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Share-based compensation expense
|
44
|
|
|
—
|
|
|
44
|
|
|||
Common stock dividends declared
|
(619
|
)
|
|
—
|
|
|
(619
|
)
|
|||
Issuances of common stock
|
77
|
|
|
—
|
|
|
77
|
|
|||
Repurchases of common stock
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||
Equity contributed by noncontrolling interests
|
—
|
|
|
2
|
|
|
2
|
|
|||
Distributions to noncontrolling interests
|
—
|
|
|
(115
|
)
|
|
(115
|
)
|
|||
Balance at September 30, 2017
|
$
|
13,265
|
|
|
$
|
2,237
|
|
|
$
|
15,502
|
|
Balance at December 31, 2015
|
$
|
11,809
|
|
|
$
|
770
|
|
|
$
|
12,579
|
|
Cumulative-effect adjustment from change in accounting principle
|
107
|
|
|
—
|
|
|
107
|
|
|||
Comprehensive income
|
933
|
|
|
117
|
|
|
1,050
|
|
|||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Share-based compensation expense
|
38
|
|
|
—
|
|
|
38
|
|
|||
Common stock dividends declared
|
(565
|
)
|
|
—
|
|
|
(565
|
)
|
|||
Issuances of common stock
|
80
|
|
|
—
|
|
|
80
|
|
|||
Repurchases of common stock
|
(55
|
)
|
|
—
|
|
|
(55
|
)
|
|||
Equity contributed by noncontrolling interests
|
—
|
|
|
2
|
|
|
2
|
|
|||
Distributions to noncontrolling interests
|
—
|
|
|
(44
|
)
|
|
(44
|
)
|
|||
Balance at September 30, 2016
|
$
|
12,346
|
|
|
$
|
845
|
|
|
$
|
13,191
|
|
(1)
|
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 |
|
Non-
controlling interest |
|
Total
equity |
||||||
Balance at December 31, 2016
|
$
|
5,641
|
|
|
$
|
37
|
|
|
$
|
5,678
|
|
Comprehensive income
|
277
|
|
|
22
|
|
|
299
|
|
|||
Common stock dividends declared
|
(450
|
)
|
|
—
|
|
|
(450
|
)
|
|||
Equity contributed by noncontrolling interest
|
—
|
|
|
1
|
|
|
1
|
|
|||
Distributions to noncontrolling interest
|
—
|
|
|
(25
|
)
|
|
(25
|
)
|
|||
Balance at September 30, 2017
|
$
|
5,468
|
|
|
$
|
35
|
|
|
$
|
5,503
|
|
Balance at December 31, 2015
|
$
|
5,223
|
|
|
$
|
53
|
|
|
$
|
5,276
|
|
Cumulative-effect adjustment from change in accounting principle
|
23
|
|
|
—
|
|
|
23
|
|
|||
Comprehensive income
|
419
|
|
|
3
|
|
|
422
|
|
|||
Common stock dividends declared
|
(175
|
)
|
|
—
|
|
|
(175
|
)
|
|||
Equity contributed by noncontrolling interest
|
—
|
|
|
1
|
|
|
1
|
|
|||
Distributions to noncontrolling interest
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||
Balance at September 30, 2016
|
$
|
5,490
|
|
|
$
|
50
|
|
|
$
|
5,540
|
|
SHAREHOLDERS’ EQUITY – SOCALGAS
|
|||
(Dollars in millions)
|
|||
|
Total
equity |
||
Balance at December 31, 2016
|
$
|
3,510
|
|
Comprehensive income
|
270
|
|
|
Preferred stock dividends declared
|
(1
|
)
|
|
Balance at September 30, 2017
|
$
|
3,779
|
|
Balance at December 31, 2015
|
$
|
3,149
|
|
Cumulative-effect adjustment from change in accounting principle
|
15
|
|
|
Comprehensive income
|
200
|
|
|
Preferred stock dividends declared
|
(1
|
)
|
|
Balance at September 30, 2016
|
$
|
3,363
|
|
OTHER NONCONTROLLING INTERESTS
|
|||||||||||
(Dollars in millions)
|
|
|
|||||||||
|
Percent ownership held by noncontrolling interests
|
|
Equity held by
noncontrolling interests
|
||||||||
|
September 30,
2017 |
|
December 31,
2016 |
|
September 30,
2017 |
|
December 31,
2016 |
||||
SDG&E:
|
|
|
|
|
|
|
|
||||
Otay Mesa VIE
|
100
|
%
|
100
|
%
|
$
|
35
|
|
|
$
|
37
|
|
Sempra South American Utilities:
|
|
|
|
|
|
|
|
||||
Chilquinta Energía subsidiaries(1)
|
22.9 – 43.4
|
|
23.1 – 43.4
|
|
23
|
|
|
22
|
|
||
Luz del Sur
|
16.4
|
|
16.4
|
|
185
|
|
|
173
|
|
||
Tecsur S.A.
|
9.8
|
|
9.8
|
|
4
|
|
|
4
|
|
||
Sempra Mexico:
|
|
|
|
|
|
|
|
||||
IEnova
|
33.6
|
|
33.6
|
|
1,483
|
|
|
1,524
|
|
||
Sempra Renewables:
|
|
|
|
|
|
|
|
||||
Tax equity arrangement – wind(2)
|
NA
|
|
NA
|
|
91
|
|
|
92
|
|
||
Tax equity arrangement – solar(2)
|
NA
|
|
NA
|
|
354
|
|
|
376
|
|
||
Sempra LNG & Midstream:
|
|
|
|
|
|
|
|
||||
Bay Gas
|
9.1
|
|
9.1
|
|
28
|
|
|
27
|
|
||
Liberty Gas Storage, LLC
|
23.3
|
|
23.3
|
|
14
|
|
|
14
|
|
||
Southern Gas Transmission Company(3)
|
—
|
|
49.0
|
|
—
|
|
|
1
|
|
||
Total Sempra Energy
|
|
|
|
|
$
|
2,217
|
|
|
$
|
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.
|
(3)
|
We sold our assets in Southern Gas Transmission Company in August 2017.
|
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
|
|||||||
(Dollars in millions)
|
|||||||
|
September 30, 2017
|
|
December 31, 2016
|
||||
Sempra Energy Consolidated:
|
|
|
|
||||
Total due from various unconsolidated affiliates – current
|
$
|
31
|
|
|
$
|
26
|
|
|
|
|
|
||||
Sempra South American Utilities(1):
|
|
|
|
||||
Eletrans – 4% Note(2)
|
$
|
98
|
|
|
$
|
96
|
|
Other related party receivables
|
1
|
|
|
1
|
|
||
Sempra Mexico(1):
|
|
|
|
||||
IMG – Note due March 15, 2022(3)
|
307
|
|
|
—
|
|
||
Affiliate of joint venture with DEN – Notes due November 14, 2018(4)
|
93
|
|
|
90
|
|
||
Energía Sierra Juárez – Note(5)
|
7
|
|
|
14
|
|
||
Total due from unconsolidated affiliates – noncurrent
|
$
|
506
|
|
|
$
|
201
|
|
|
|
|
|
||||
Total due to various unconsolidated affiliates – current
|
$
|
(10
|
)
|
|
$
|
(11
|
)
|
SDG&E:
|
|
|
|
||||
Sempra Energy(6)
|
$
|
—
|
|
|
$
|
3
|
|
Various affiliates
|
1
|
|
|
1
|
|
||
Total due from unconsolidated affiliates – current
|
$
|
1
|
|
|
$
|
4
|
|
|
|
|
|
||||
Sempra Energy
|
$
|
(29
|
)
|
|
$
|
—
|
|
SoCalGas
|
(6
|
)
|
|
(8
|
)
|
||
Various affiliates
|
(7
|
)
|
|
(7
|
)
|
||
Total due to unconsolidated affiliates – current
|
$
|
(42
|
)
|
|
$
|
(15
|
)
|
|
|
|
|
||||
Income taxes due from Sempra Energy(7)
|
$
|
101
|
|
|
$
|
159
|
|
SoCalGas:
|
|
|
|
||||
Due from SDG&E – current
|
$
|
6
|
|
|
$
|
8
|
|
|
|
|
|
||||
Due to Sempra Energy – current
|
$
|
(35
|
)
|
|
$
|
(28
|
)
|
|
|
|
|
||||
Income taxes due from Sempra Energy(7)
|
$
|
10
|
|
|
$
|
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 $495 million U.S. dollar-equivalent, at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 basis points (9.58 percent at September 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 (5.73 percent at September 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 (7.61 percent at September 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.
|
REVENUES AND COST OF SALES FROM UNCONSOLIDATED AFFILIATES
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sempra Energy Consolidated
|
$
|
13
|
|
|
$
|
5
|
|
|
$
|
28
|
|
|
$
|
15
|
|
SDG&E
|
2
|
|
|
2
|
|
|
6
|
|
|
5
|
|
||||
SoCalGas
|
21
|
|
|
21
|
|
|
56
|
|
|
56
|
|
||||
Cost of Sales:
|
|
|
|
|
|
|
|
||||||||
Sempra Energy Consolidated
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
36
|
|
|
$
|
60
|
|
SDG&E
|
16
|
|
|
16
|
|
|
55
|
|
|
46
|
|
OTHER INCOME, NET
|
|
|
|
|
|
|
|||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Allowance for equity funds used during construction
|
$
|
27
|
|
|
$
|
29
|
|
|
$
|
139
|
|
|
$
|
86
|
|
Investment gains(1)
|
13
|
|
|
9
|
|
|
43
|
|
|
29
|
|
||||
Gains (losses) on interest rate and foreign exchange instruments, net
|
5
|
|
|
(11
|
)
|
|
99
|
|
|
(23
|
)
|
||||
Foreign currency transaction (losses) gains
|
(10
|
)
|
|
(2
|
)
|
|
7
|
|
|
(9
|
)
|
||||
Electrical infrastructure relocation income(2)
|
2
|
|
|
1
|
|
|
2
|
|
|
4
|
|
||||
Regulatory interest, net(3)
|
1
|
|
|
1
|
|
|
3
|
|
|
4
|
|
||||
Sundry, net
|
3
|
|
|
(1
|
)
|
|
8
|
|
|
7
|
|
||||
Total
|
$
|
41
|
|
|
$
|
26
|
|
|
$
|
301
|
|
|
$
|
98
|
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Allowance for equity funds used during construction
|
$
|
15
|
|
|
$
|
11
|
|
|
$
|
46
|
|
|
$
|
35
|
|
Regulatory interest, net(3)
|
1
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||
Total
|
$
|
16
|
|
|
$
|
11
|
|
|
$
|
49
|
|
|
$
|
38
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Allowance for equity funds used during construction
|
$
|
11
|
|
|
$
|
10
|
|
|
$
|
33
|
|
|
$
|
30
|
|
Regulatory interest, net(3)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Sundry, net
|
(3
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(7
|
)
|
||||
Total
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
28
|
|
|
$
|
24
|
|
(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 (BENEFIT) EXPENSE AND EFFECTIVE INCOME TAX RATES
|
|||||||||||||
(Dollars in millions)
|
|||||||||||||
|
Income tax
(benefit) expense
|
|
Effective
income tax rate
|
|
Income tax
expense
|
|
Effective
income tax rate
|
||||||
|
Three months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Sempra Energy Consolidated
|
$
|
(84
|
)
|
|
(560
|
)%
|
|
$
|
282
|
|
|
29
|
%
|
SDG&E
|
(72
|
)
|
|
79
|
|
|
91
|
|
|
32
|
|
||
SoCalGas
|
(14
|
)
|
|
200
|
|
|
21
|
|
|
100
|
|
||
|
|
|
|
|
|
|
|
||||||
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Sempra Energy Consolidated
|
$
|
378
|
|
|
32
|
%
|
|
$
|
284
|
|
|
21
|
%
|
SDG&E
|
72
|
|
|
20
|
|
|
204
|
|
|
33
|
|
||
SoCalGas
|
103
|
|
|
28
|
|
|
75
|
|
|
27
|
|
▪
|
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 September 30, 2017
|
||||||||||
|
|
|
Total facility
|
|
Commercial paper outstanding(1)
|
|
Available unused credit
|
||||||
Sempra Energy(2)
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
Sempra Global(3)
|
|
2,335
|
|
|
(1,512
|
)
|
|
823
|
|
||||
California Utilities(4):
|
|
|
|
|
|
|
|||||||
|
SDG&E
|
|
750
|
|
|
(185
|
)
|
|
565
|
|
|||
|
SoCalGas
|
|
750
|
|
|
(26
|
)
|
|
724
|
|
|||
|
Less: combined limit of $1 billion for both utilities
|
|
(500
|
)
|
|
—
|
|
|
(500
|
)
|
|||
|
|
|
1,000
|
|
|
(211
|
)
|
|
789
|
|
|||
Total
|
|
$
|
4,335
|
|
|
$
|
(1,723
|
)
|
|
$
|
2,612
|
|
CREDIT FACILITIES IN SOUTH AMERICA AND MEXICO
|
|||||||||||||||
(U.S. dollar-equivalent in millions)
|
|
|
|
|
|
||||||||||
|
|
|
|
At September 30, 2017
|
|||||||||||
|
|
Denominated in
|
|
Total facility
|
|
Amount outstanding
|
|
|
Available unused credit
|
||||||
Sempra South American Utilities(1):
|
|
|
|
|
|
|
|
|
|||||||
|
Peru(2)
|
Peruvian sol
|
|
$
|
399
|
|
|
$
|
(159
|
)
|
(3)
|
|
$
|
240
|
|
|
Chile
|
Chilean peso
|
|
115
|
|
|
—
|
|
|
|
115
|
|
|||
Sempra Mexico:
|
|
|
|
|
|
|
|
|
|||||||
|
IEnova(4)
|
U.S. dollar
|
|
1,170
|
|
|
(681
|
)
|
|
|
489
|
|
|||
Total
|
|
|
$
|
1,684
|
|
|
$
|
(840
|
)
|
|
|
$
|
844
|
|
|
|
|
|
|
▪
|
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
|
|
September 30,
2017 |
|
December 31,
2016 |
||
California Utilities:
|
|
|
|
|
|
||
SDG&E:
|
|
|
|
|
|
||
Natural gas
|
MMBtu
|
|
43
|
|
|
48
|
|
Electricity
|
MWh
|
|
3
|
|
|
4
|
|
Congestion revenue rights
|
MWh
|
|
60
|
|
|
48
|
|
SoCalGas – natural gas
|
MMBtu
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
||
Energy-Related Businesses:
|
|
|
|
|
|
||
Sempra LNG & Midstream – natural gas
|
MMBtu
|
|
4
|
|
|
31
|
|
Sempra Mexico – natural gas
|
MMBtu
|
|
4
|
|
|
—
|
|
INTEREST RATE DERIVATIVES
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
|
Notional debt
|
|
Maturities
|
|
Notional debt
|
|
Maturities
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||
Cash flow hedges(1)
|
$
|
880
|
|
|
2017-2032
|
|
$
|
924
|
|
|
2017-2032
|
SDG&E:
|
|
|
|
|
|
|
|
||||
Cash flow hedges(1)
|
297
|
|
|
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)
|
|||||||||||
|
September 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)
|
965
|
|
|
2017-2019
|
|
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)
|
|||||||||||||||
|
September 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
|
|
|
$
|
(51
|
)
|
|
$
|
(143
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange instruments
|
134
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodity contracts not subject to rate recovery
|
41
|
|
|
6
|
|
|
(29
|
)
|
|
(4
|
)
|
||||
Associated offsetting commodity contracts
|
(26
|
)
|
|
(3
|
)
|
|
26
|
|
|
3
|
|
||||
Commodity contracts subject to rate recovery
|
8
|
|
|
118
|
|
|
(63
|
)
|
|
(128
|
)
|
||||
Associated offsetting commodity contracts
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
17
|
|
|
6
|
|
||||
Net amounts presented on the balance sheet
|
156
|
|
|
121
|
|
|
(99
|
)
|
|
(265
|
)
|
||||
Additional cash collateral for commodity contracts
not subject to rate recovery
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(4)
|
$
|
174
|
|
|
$
|
121
|
|
|
$
|
(99
|
)
|
|
$
|
(265
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments(3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
$
|
(5
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
6
|
|
|
118
|
|
|
(61
|
)
|
|
(128
|
)
|
||||
Associated offsetting commodity contracts
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
17
|
|
|
6
|
|
||||
Net amounts presented on the balance sheet
|
5
|
|
|
117
|
|
|
(55
|
)
|
|
(126
|
)
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(4)
|
$
|
20
|
|
|
$
|
117
|
|
|
$
|
(55
|
)
|
|
$
|
(126
|
)
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
Net amounts presented on the balance sheet
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
(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 gain (loss)
recognized in OCI
|
|
|
|
Pretax (loss) gain reclassified
from AOCI into earnings
|
||||||||||||
|
Three months ended September 30,
|
|
|
|
Three months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
Location
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign
exchange instruments(1)
|
$
|
14
|
|
|
$
|
(16
|
)
|
|
Interest Expense
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
Interest rate instruments
|
(9
|
)
|
|
17
|
|
|
Equity Earnings,
Before Income Tax
|
|
(2
|
)
|
|
(3
|
)
|
||||
Interest rate and foreign
exchange instruments
|
—
|
|
|
—
|
|
|
Remeasurement of Equity
Method Investment
|
|
—
|
|
|
(7
|
)
|
||||
Interest rate and foreign
exchange instruments
|
7
|
|
|
13
|
|
|
Equity Earnings (Losses),
Net of Income Tax
|
|
2
|
|
|
2
|
|
||||
Foreign exchange instruments
|
5
|
|
|
—
|
|
|
Revenues: Energy-
Related Businesses
|
|
2
|
|
|
—
|
|
||||
Commodity contracts not subject
to rate recovery
|
—
|
|
|
2
|
|
|
Revenues: Energy-
Related Businesses
|
|
—
|
|
|
—
|
|
||||
Total(2)
|
$
|
17
|
|
|
$
|
16
|
|
|
|
|
$
|
2
|
|
|
$
|
(12
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments(1)(3)
|
$
|
—
|
|
|
$
|
2
|
|
|
Interest Expense
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
SoCalGas:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest Expense
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine months ended September 30,
|
|
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
Location
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign
exchange instruments(1) |
$
|
22
|
|
|
$
|
(26
|
)
|
|
Interest Expense
|
|
$
|
4
|
|
|
$
|
(11
|
)
|
Interest rate instruments
|
(46
|
)
|
|
(190
|
)
|
|
Equity Earnings,
Before Income Tax |
|
(6
|
)
|
|
(8
|
)
|
||||
Interest rate and foreign
exchange instruments
|
—
|
|
|
—
|
|
|
Remeasurement of Equity
Method Investment
|
|
—
|
|
|
(7
|
)
|
||||
Interest rate and foreign
exchange instruments |
(11
|
)
|
|
(20
|
)
|
|
Equity Earnings (Losses),
Net of Income Tax
|
|
(3
|
)
|
|
(4
|
)
|
||||
Foreign exchange instruments
|
(5
|
)
|
|
—
|
|
|
Revenues: Energy-
Related Businesses |
|
1
|
|
|
—
|
|
||||
Commodity contracts not subject
to rate recovery |
3
|
|
|
(2
|
)
|
|
Revenues: Energy-
Related Businesses |
|
(9
|
)
|
|
7
|
|
||||
Total(2)
|
$
|
(37
|
)
|
|
$
|
(238
|
)
|
|
|
|
$
|
(13
|
)
|
|
$
|
(23
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments(1)(3)
|
$
|
(2
|
)
|
|
$
|
(5
|
)
|
|
Interest Expense
|
|
$
|
(9
|
)
|
|
$
|
(9
|
)
|
SoCalGas:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest Expense
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
(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 and $4 million of losses from hedge ineffectiveness related to these cash flow hedges in the three months and nine months ended September 30, 2017, respectively, 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 nine months ended September 30, 2017 and 2016.
|
UNDESIGNATED DERIVATIVE IMPACTS
|
||||||||||||||||
(Dollars in millions)
|
||||||||||||||||
|
|
Pretax gain (loss) on derivatives recognized in earnings
|
||||||||||||||
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
Location
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange instruments
|
Other Income, Net
|
$
|
4
|
|
|
$
|
(11
|
)
|
|
$
|
101
|
|
|
$
|
(23
|
)
|
Foreign exchange instruments
|
Equity Earnings (Losses),
Net of Income Tax
|
1
|
|
|
1
|
|
|
1
|
|
|
3
|
|
||||
Commodity contracts not subject
to rate recovery
|
Revenues: Energy-Related
Businesses
|
(3
|
)
|
|
3
|
|
|
27
|
|
|
(26
|
)
|
||||
Commodity contracts not subject
to rate recovery
|
Operation and Maintenance
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
||||
Commodity contracts subject
to rate recovery
|
Cost of Electric Fuel
and Purchased Power
|
59
|
|
|
(118
|
)
|
|
36
|
|
|
(90
|
)
|
||||
Commodity contracts subject
to rate recovery
|
Cost of Natural Gas
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Total
|
|
$
|
60
|
|
|
$
|
(125
|
)
|
|
$
|
163
|
|
|
$
|
(137
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject
to rate recovery
|
Cost of Electric Fuel
and Purchased Power
|
$
|
59
|
|
|
$
|
(118
|
)
|
|
$
|
36
|
|
|
$
|
(90
|
)
|
SoCalGas:
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts not subject
to rate recovery
|
Operation and Maintenance
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity contracts subject
to rate recovery
|
Cost of Natural Gas
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(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 September 30, 2017 and December 31, 2016.
|
RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
Fair value at September 30, 2017
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
503
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
508
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government corporations and agencies
|
44
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|||||
Municipal bonds
|
—
|
|
|
245
|
|
|
—
|
|
|
—
|
|
|
245
|
|
|||||
Other securities
|
—
|
|
|
210
|
|
|
—
|
|
|
—
|
|
|
210
|
|
|||||
Total debt securities
|
44
|
|
|
462
|
|
|
—
|
|
|
—
|
|
|
506
|
|
|||||
Total nuclear decommissioning trusts(2)
|
547
|
|
|
467
|
|
|
—
|
|
|
—
|
|
|
1,014
|
|
|||||
Interest rate and foreign exchange instruments
|
—
|
|
|
135
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|||||
Commodity contracts not subject to rate recovery
|
6
|
|
|
12
|
|
|
—
|
|
|
2
|
|
|
20
|
|
|||||
Commodity contracts subject to rate recovery
|
—
|
|
|
2
|
|
|
122
|
|
|
16
|
|
|
140
|
|
|||||
Total
|
$
|
553
|
|
|
$
|
616
|
|
|
$
|
122
|
|
|
$
|
18
|
|
|
$
|
1,309
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate and foreign exchange instruments
|
$
|
—
|
|
|
$
|
194
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
194
|
|
Commodity contracts not subject to rate recovery
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Commodity contracts subject to rate recovery
|
23
|
|
|
7
|
|
|
159
|
|
|
(23
|
)
|
|
166
|
|
|||||
Total
|
$
|
23
|
|
|
$
|
205
|
|
|
$
|
159
|
|
|
$
|
(23
|
)
|
|
$
|
364
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
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 September 30, 2017
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
503
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
508
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government corporations and agencies
|
44
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|||||
Municipal bonds
|
—
|
|
|
245
|
|
|
—
|
|
|
—
|
|
|
245
|
|
|||||
Other securities
|
—
|
|
|
210
|
|
|
—
|
|
|
—
|
|
|
210
|
|
|||||
Total debt securities
|
44
|
|
|
462
|
|
|
—
|
|
|
—
|
|
|
506
|
|
|||||
Total nuclear decommissioning trusts(2)
|
547
|
|
|
467
|
|
|
—
|
|
|
—
|
|
|
1,014
|
|
|||||
Commodity contracts subject to rate recovery
|
—
|
|
|
—
|
|
|
122
|
|
|
15
|
|
|
137
|
|
|||||
Total
|
$
|
547
|
|
|
$
|
467
|
|
|
$
|
122
|
|
|
$
|
15
|
|
|
$
|
1,151
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate instruments
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Commodity contracts subject to rate recovery
|
23
|
|
|
5
|
|
|
159
|
|
|
(23
|
)
|
|
164
|
|
|||||
Total
|
$
|
23
|
|
|
$
|
22
|
|
|
$
|
159
|
|
|
$
|
(23
|
)
|
|
$
|
181
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
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 September 30, 2017
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts subject to rate recovery
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Total
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts subject to rate recovery
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Total
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
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 September 30,
|
||||||
|
2017
|
|
2016
|
||||
Balance at July 1
|
$
|
(90
|
)
|
|
$
|
24
|
|
Realized and unrealized gains (losses)
|
30
|
|
|
(145
|
)
|
||
Settlements
|
23
|
|
|
34
|
|
||
Balance at September 30
|
$
|
(37
|
)
|
|
$
|
(87
|
)
|
Change in unrealized gains (losses) relating to
|
|
|
|
||||
instruments still held at September 30
|
$
|
38
|
|
|
$
|
(114
|
)
|
|
Nine months ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Balance at January 1
|
$
|
(74
|
)
|
|
$
|
19
|
|
Realized and unrealized gains (losses)
|
14
|
|
|
(138
|
)
|
||
Settlements
|
23
|
|
|
32
|
|
||
Balance at September 30
|
$
|
(37
|
)
|
|
$
|
(87
|
)
|
Change in unrealized gains (losses) relating to
|
|
|
|
||||
instruments still held at September 30
|
$
|
26
|
|
|
$
|
(111
|
)
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
September 30, 2017
|
||||||||||||||||||
|
Carrying
amount |
|
Fair value
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term amounts due from unconsolidated affiliates(1)
|
$
|
476
|
|
|
$
|
—
|
|
|
$
|
346
|
|
|
$
|
92
|
|
|
$
|
438
|
|
Total long-term debt(2)(3)
|
15,459
|
|
|
—
|
|
|
15,930
|
|
|
464
|
|
|
16,394
|
|
|||||
SDG&E:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total long-term debt(3)(4)
|
$
|
4,871
|
|
|
$
|
—
|
|
|
$
|
5,029
|
|
|
$
|
297
|
|
|
$
|
5,326
|
|
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 $31 million and $17 million at September 30, 2017 and December 31, 2016, respectively, and excluding foreign currency translation of $(1) million on a Mexican peso-denominated loan at September 30, 2017.
|
(2)
|
Before reductions for unamortized discount (net of premium) and debt issuance costs of $112 million and $109 million at September 30, 2017 and December 31, 2016, respectively, and excluding build-to-suit and capital lease obligations of $879 million and $383 million at September 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 $297 million and $305 million at September 30, 2017 and December 31, 2016, respectively, related to Otay Mesa VIE.
|
(4)
|
Before reductions for unamortized discount and debt issuance costs of $47 million and $45 million at September 30, 2017 and December 31, 2016, respectively, and excluding capital lease obligations of $734 million and $240 million at September 30, 2017 and December 31, 2016, respectively.
|
(5)
|
Before reductions for unamortized discount and debt issuance costs of $25 million and $27 million at September 30, 2017 and December 31, 2016, respectively, and excluding capital lease obligations of $1 million at September 30, 2017.
|
(1)
|
At measurement date of June 30, 2017. At September 30, 2017, TdM has a carrying value of $70 million, reflecting subsequent business activity, and is classified as held for sale.
|
|
|
|
|
|
NUCLEAR DECOMMISSIONING TRUSTS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Estimated
fair
value
|
||||||||
At September 30, 2017:
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies(1)
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51
|
|
Municipal bonds(1)
|
238
|
|
|
7
|
|
|
—
|
|
|
245
|
|
||||
Other securities(2)
|
207
|
|
|
4
|
|
|
(1
|
)
|
|
210
|
|
||||
Total debt securities
|
496
|
|
|
11
|
|
|
(1
|
)
|
|
506
|
|
||||
Equity securities
|
189
|
|
|
321
|
|
|
(2
|
)
|
|
508
|
|
||||
Cash and cash equivalents
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||
Total
|
$
|
712
|
|
|
$
|
332
|
|
|
$
|
(3
|
)
|
|
$
|
1,041
|
|
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 2017-2047.
|
(2)
|
Maturity dates are 2017-2066.
|
SALES OF SECURITIES IN THE NDT
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Proceeds from sales(1)
|
$
|
259
|
|
|
$
|
282
|
|
|
$
|
1,082
|
|
|
$
|
486
|
|
Gross realized gains
|
8
|
|
|
24
|
|
|
132
|
|
|
32
|
|
||||
Gross realized losses
|
(3
|
)
|
|
(3
|
)
|
|
(11
|
)
|
|
(14
|
)
|
(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.
|
AUTHORIZED COST OF CAPITAL AND RATE STRUCTURE – CPUC
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
SDG&E
|
|
SoCalGas
|
||||||||||
Authorized weighting
|
Return on
rate base
|
Weighted
return on
rate base
|
|
Authorized weighting
|
Return on
rate base |
Weighted
return on rate base |
||||||
45.25
|
%
|
4.59
|
%
|
2.08
|
%
|
Long-Term Debt
|
45.60
|
%
|
4.33
|
%
|
1.97
|
%
|
2.75
|
%
|
6.22
|
%
|
0.17
|
%
|
Preferred Stock
|
2.40
|
%
|
6.00
|
%
|
0.14
|
%
|
52.00
|
%
|
10.20
|
%
|
5.30
|
%
|
Common Equity
|
52.00
|
%
|
10.05
|
%
|
5.23
|
%
|
100.00
|
%
|
|
|
7.55
|
%
|
|
100.00
|
%
|
|
|
7.34
|
%
|
IMPACT OF THE EMBEDDED COST OF DEBT
|
|
||||||||||||
|
|
||||||||||||
|
SDG&E
|
|
SoCalGas
|
||||||||||
|
Cost of
debt
|
Return on
rate base
|
|
Cost of
debt |
Return on
rate base |
||||||||
Current
|
5.00
|
|
%
|
7.79
|
|
%
|
|
5.77
|
|
%
|
8.02
|
|
%
|
Authorized, effective January 1, 2018
|
4.59
|
|
%
|
7.55
|
|
%
|
|
4.33
|
|
%
|
7.34
|
|
%
|
Differences
|
(41
|
)
|
bps
|
(24
|
)
|
bps
|
|
(144
|
)
|
bps
|
(68
|
)
|
bps
|
|
|
|
|
|
(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 herein and Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.
|
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
1,236
|
|
|
$
|
1,209
|
|
|
$
|
3,351
|
|
|
$
|
3,192
|
|
SoCalGas
|
684
|
|
|
686
|
|
|
2,695
|
|
|
2,336
|
|
||||
Sempra South American Utilities
|
376
|
|
|
385
|
|
|
1,169
|
|
|
1,170
|
|
||||
Sempra Mexico
|
336
|
|
|
196
|
|
|
873
|
|
|
481
|
|
||||
Sempra Renewables
|
26
|
|
|
12
|
|
|
74
|
|
|
25
|
|
||||
Sempra LNG & Midstream
|
152
|
|
|
164
|
|
|
406
|
|
|
384
|
|
||||
Adjustments and eliminations
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Intersegment revenues(1)
|
(131
|
)
|
|
(116
|
)
|
|
(325
|
)
|
|
(274
|
)
|
||||
Total
|
$
|
2,679
|
|
|
$
|
2,535
|
|
|
$
|
8,243
|
|
|
$
|
7,313
|
|
INTEREST EXPENSE
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
53
|
|
|
$
|
49
|
|
|
$
|
151
|
|
|
$
|
145
|
|
SoCalGas
|
26
|
|
|
25
|
|
|
77
|
|
|
71
|
|
||||
Sempra South American Utilities
|
10
|
|
|
9
|
|
|
30
|
|
|
29
|
|
||||
Sempra Mexico
|
21
|
|
|
5
|
|
|
73
|
|
|
13
|
|
||||
Sempra Renewables
|
3
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
Sempra LNG & Midstream
|
9
|
|
|
11
|
|
|
29
|
|
|
33
|
|
||||
All other
|
74
|
|
|
68
|
|
|
209
|
|
|
214
|
|
||||
Intercompany eliminations
|
(31
|
)
|
|
(31
|
)
|
|
(87
|
)
|
|
(84
|
)
|
||||
Total
|
$
|
165
|
|
|
$
|
136
|
|
|
$
|
493
|
|
|
$
|
421
|
|
INTEREST INCOME
|
|
|
|
|
|
|
|
||||||||
SoCalGas
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Sempra South American Utilities
|
6
|
|
|
5
|
|
|
17
|
|
|
15
|
|
||||
Sempra Mexico
|
7
|
|
|
2
|
|
|
12
|
|
|
5
|
|
||||
Sempra Renewables
|
1
|
|
|
1
|
|
|
4
|
|
|
2
|
|
||||
Sempra LNG & Midstream
|
14
|
|
|
19
|
|
|
43
|
|
|
52
|
|
||||
All other
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Intercompany eliminations
|
(18
|
)
|
|
(21
|
)
|
|
(52
|
)
|
|
(56
|
)
|
||||
Total
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
26
|
|
|
$
|
19
|
|
DEPRECIATION AND AMORTIZATION
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
170
|
|
|
$
|
161
|
|
|
$
|
499
|
|
|
$
|
478
|
|
SoCalGas
|
132
|
|
|
121
|
|
|
384
|
|
|
355
|
|
||||
Sempra South American Utilities
|
14
|
|
|
14
|
|
|
40
|
|
|
41
|
|
||||
Sempra Mexico
|
41
|
|
|
15
|
|
|
114
|
|
|
47
|
|
||||
Sempra Renewables
|
9
|
|
|
1
|
|
|
28
|
|
|
4
|
|
||||
Sempra LNG & Midstream
|
10
|
|
|
12
|
|
|
31
|
|
|
37
|
|
||||
All other
|
2
|
|
|
4
|
|
|
10
|
|
|
8
|
|
||||
Total
|
$
|
378
|
|
|
$
|
328
|
|
|
$
|
1,106
|
|
|
$
|
970
|
|
INCOME TAX (BENEFIT) EXPENSE
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
(72
|
)
|
|
$
|
91
|
|
|
$
|
72
|
|
|
$
|
204
|
|
SoCalGas
|
(14
|
)
|
|
21
|
|
|
103
|
|
|
75
|
|
||||
Sempra South American Utilities
|
18
|
|
|
17
|
|
|
57
|
|
|
46
|
|
||||
Sempra Mexico
|
34
|
|
|
142
|
|
|
278
|
|
|
170
|
|
||||
Sempra Renewables
|
(9
|
)
|
|
(7
|
)
|
|
(25
|
)
|
|
(29
|
)
|
||||
Sempra LNG & Midstream
|
(2
|
)
|
|
51
|
|
|
17
|
|
|
(77
|
)
|
||||
All other
|
(39
|
)
|
|
(33
|
)
|
|
(124
|
)
|
|
(105
|
)
|
||||
Total
|
$
|
(84
|
)
|
|
$
|
282
|
|
|
$
|
378
|
|
|
$
|
284
|
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
EQUITY EARNINGS (LOSSES)
|
|
|
|
|
|
|
|
||||||||
Earnings (losses) recorded before tax:
|
|
|
|
|
|
|
|
||||||||
Sempra Renewables
|
$
|
7
|
|
|
$
|
12
|
|
|
$
|
25
|
|
|
$
|
30
|
|
Sempra LNG & Midstream
|
3
|
|
|
—
|
|
|
6
|
|
|
(26
|
)
|
||||
Total
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
31
|
|
|
$
|
4
|
|
Earnings (losses) recorded net of tax:
|
|
|
|
|
|
|
|
||||||||
Sempra South American Utilities
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Sempra Mexico
|
2
|
|
|
18
|
|
|
(7
|
)
|
|
66
|
|
||||
Total
|
$
|
3
|
|
|
$
|
19
|
|
|
$
|
(5
|
)
|
|
$
|
69
|
|
(LOSSES) EARNINGS
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
(28
|
)
|
|
$
|
183
|
|
|
$
|
276
|
|
|
$
|
419
|
|
SoCalGas(2)
|
7
|
|
|
—
|
|
|
268
|
|
|
198
|
|
||||
Sempra South American Utilities
|
42
|
|
|
46
|
|
|
134
|
|
|
127
|
|
||||
Sempra Mexico
|
66
|
|
|
332
|
|
|
105
|
|
|
407
|
|
||||
Sempra Renewables
|
15
|
|
|
17
|
|
|
49
|
|
|
43
|
|
||||
Sempra LNG & Midstream
|
(4
|
)
|
|
77
|
|
|
24
|
|
|
(104
|
)
|
||||
All other
|
(41
|
)
|
|
(33
|
)
|
|
(99
|
)
|
|
(99
|
)
|
||||
Total
|
$
|
57
|
|
|
$
|
622
|
|
|
$
|
757
|
|
|
$
|
991
|
|
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
|
|
|
|
$
|
1,122
|
|
|
$
|
959
|
|
||||
SoCalGas
|
|
|
|
|
1,033
|
|
|
949
|
|
||||||
Sempra South American Utilities
|
|
|
|
|
138
|
|
|
133
|
|
||||||
Sempra Mexico
|
|
|
|
|
193
|
|
|
232
|
|
||||||
Sempra Renewables
|
|
|
|
|
361
|
|
|
700
|
|
||||||
Sempra LNG & Midstream
|
|
|
|
|
16
|
|
|
100
|
|
||||||
All other
|
|
|
|
|
17
|
|
|
14
|
|
||||||
Total
|
|
|
|
|
$
|
2,880
|
|
|
$
|
3,087
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
ASSETS
|
|
|
|
|
|||||||||||
SDG&E
|
|
|
|
|
$
|
18,629
|
|
|
$
|
17,719
|
|
||||
SoCalGas
|
|
|
|
|
13,917
|
|
|
13,424
|
|
||||||
Sempra South American Utilities
|
|
|
|
|
3,862
|
|
|
3,591
|
|
||||||
Sempra Mexico
|
|
|
|
|
8,100
|
|
|
7,542
|
|
||||||
Sempra Renewables
|
|
|
|
|
2,650
|
|
|
3,644
|
|
||||||
Sempra LNG & Midstream
|
|
|
|
|
4,849
|
|
|
5,564
|
|
||||||
All other
|
|
|
|
|
691
|
|
|
475
|
|
||||||
Intersegment receivables
|
|
|
|
|
(2,569
|
)
|
|
(4,173
|
)
|
||||||
Total
|
|
|
|
|
$
|
50,129
|
|
|
$
|
47,786
|
|
||||
EQUITY METHOD AND OTHER INVESTMENTS
|
|
|
|
|
|||||||||||
Sempra South American Utilities
|
|
|
|
|
$
|
22
|
|
|
$
|
—
|
|
||||
Sempra Mexico
|
|
|
|
|
243
|
|
|
180
|
|
||||||
Sempra Renewables
|
|
|
|
|
807
|
|
|
844
|
|
||||||
Sempra LNG & Midstream
|
|
|
|
|
980
|
|
|
997
|
|
||||||
All other
|
|
|
|
|
76
|
|
|
76
|
|
||||||
Total
|
|
|
|
|
$
|
2,128
|
|
|
$
|
2,097
|
|
(1)
|
Revenues for reportable segments include intersegment revenues of $1 million, $21 million, $27 million and $82 million for the three months ended September 30, 2017; $5 million, $56 million, $78 million and $186 million for the nine months ended September 30, 2017; $2 million, $21 million, $26 million and $67 million for the three months ended September 30, 2016; and $5 million, $56 million, $80 million and $133 million for the nine months ended September 30, 2016 for SDG&E, SoCalGas, Sempra Mexico and Sempra LNG & Midstream, respectively.
|
(2)
|
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 September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Sempra Utilities:
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
(28
|
)
|
|
$
|
183
|
|
|
$
|
276
|
|
|
$
|
419
|
|
SoCalGas(1)
|
7
|
|
|
—
|
|
|
268
|
|
|
198
|
|
||||
Sempra South American Utilities
|
42
|
|
|
46
|
|
|
134
|
|
|
127
|
|
||||
Sempra Infrastructure:
|
|
|
|
|
|
|
|
||||||||
Sempra Mexico
|
66
|
|
|
332
|
|
|
105
|
|
|
407
|
|
||||
Sempra Renewables
|
15
|
|
|
17
|
|
|
49
|
|
|
43
|
|
||||
Sempra LNG & Midstream
|
(4
|
)
|
|
77
|
|
|
24
|
|
|
(104
|
)
|
||||
Parent and other(2)
|
(41
|
)
|
|
(33
|
)
|
|
(99
|
)
|
|
(99
|
)
|
||||
Earnings
|
$
|
57
|
|
|
$
|
622
|
|
|
$
|
757
|
|
|
$
|
991
|
|
(1)
|
After preferred dividends.
|
(2)
|
Includes after-tax interest expense ($44 million and $41 million for the three months ended September 30, 2017 and 2016, respectively, and $125 million and $128 million for the nine months ended September 30, 2017 and 2016, respectively), intercompany eliminations recorded in consolidation and certain corporate costs.
|
▪
|
$208 million impairment of a regulatory asset associated with wildfire costs; and
|
▪
|
$7 million income tax benefit in 2016 associated with excess tax benefits related to share-based compensation; offset by
|
▪
|
$31 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;
|
▪
|
$25 million higher CPUC base operating margin authorized for 2017, and lower non-refundable operating costs;
|
▪
|
$11 million increase in AFUDC related to equity; and
|
▪
|
$8 million favorable impact in 2017 from the resolution of prior years’ income tax items.
|
▪
|
$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;
|
▪
|
$14 million higher earnings associated with the PSEP and advanced metering assets; and
|
▪
|
$13 million impairment of assets in 2016 related to the Southern Gas System Reliability Project (also referred to as the North-South Pipeline); offset by
|
•
|
$4 million income tax benefit in 2016 associated with excess tax benefits related to share-based compensation.
|
▪
|
$5 million higher earnings from foreign currency translation effects; and
|
▪
|
$3 million higher earnings from operations primarily at Luz del Sur, mainly driven by an increase in rates, and lower operating expenses, offset by lower volumes, and lower results at Chilquinta Energía.
|
▪
|
$432 million noncash gain in 2016 associated with the remeasurement of our equity interest in IEnova Pipelines (formerly known as GdC);
|
▪
|
$31 million tax benefit in 2016 from a reduction to the outside basis deferred tax liability on our investment in TdM that is held for sale;
|
▪
|
$10 million lower earnings from the recognition of AFUDC related to equity associated with pipeline assets placed in service; and
|
▪
|
$6 million higher net interest expense, including $5 million at Ventika and $2 million at IEnova Pipelines related to debt assumed in their respective acquisitions; offset by
|
▪
|
$111 million impairment in 2016 of TdM assets held for sale;
|
▪
|
$35 million higher pipeline operational earnings, primarily attributable to the increase in our ownership in IEnova Pipelines from 50 percent to 100 percent in September 2016 and from other pipeline assets placed in service;
|
▪
|
$33 million earnings attributable to noncontrolling interests at IEnova in 2017 compared to $80 million in 2016;
|
▪
|
$10 million operational earnings in 2017 from the Ventika wind power generation facilities, which we acquired in December 2016;
|
▪
|
$10 million favorable impact in 2017 due to $3 million favorable foreign currency and inflation effects and $7 million gain from foreign currency derivatives, which are hedging Sempra Mexico’s foreign currency exposure from its controlling interest in IEnova. We discuss these effects below in “Impact of Foreign Currency and Inflation Rate on Results of Operations;” and
|
▪
|
$3 million unfavorable impact in 2016 due to a $7 million loss from foreign currency derivatives, offset by $4 million favorable foreign currency and inflation effects.
|
▪
|
$432 million noncash gain in 2016 associated with the remeasurement of our equity interest in IEnova Pipelines;
|
▪
|
$76 million unfavorable impact in 2017 due to $151 million unfavorable foreign currency and inflation effects, offset by a $75 million gain from foreign currency derivatives;
|
▪
|
$22 million favorable impact in 2016 due to $36 million favorable foreign currency and inflation effects, offset by a $14 million loss from foreign currency derivatives; and
|
▪
|
$21 million higher interest expense, including $13 million at Ventika and $6 million at IEnova Pipelines related to debt assumed in their respective acquisitions; offset by
|
▪
|
$92 million higher pipeline operational earnings, primarily attributable to the increase in ownership in IEnova Pipelines from 50 percent to 100 percent in September 2016 and from other pipeline assets placed in service;
|
▪
|
$23 million earnings attributable to noncontrolling interests at IEnova in 2017 compared to $101 million in 2016;
|
▪
|
$71 million impairment in 2017 of TdM assets held for sale, net of a $12 million income tax benefit that has been fully reserved, compared to a $111 million impairment in 2016 of such assets;
|
▪
|
$28 million operational earnings in 2017 from Ventika, which we acquired in December 2016; and
|
▪
|
$22 million higher earnings in 2017 from the recognition of AFUDC related to equity primarily associated with the Ojinaga and San Isidro pipeline projects.
|
▪
|
$16 million losses attributed to tax equity investors reflected in noncontrolling interests; offset by
|
▪
|
$6 million higher general and administrative and development costs; and
|
▪
|
$2 million lower earnings primarily due to decreased tax benefits in 2017 at our solar assets placed into service in 2016.
|
▪
|
$78 million gain on the sale of EnergySouth in September 2016, net of related expenses; and
|
▪
|
$5 million primarily due to higher results from midstream activities in 2016.
|
▪
|
$123 million loss in 2016 on permanent release of certain pipeline capacity;
|
▪
|
$34 million settlement proceeds received 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;
|
▪
|
$34 million improved results due to unfavorable results from midstream activities in 2016;
|
▪
|
$27 million impairment charge in 2016 related to our investment in Rockies Express; and
|
▪
|
$10 million higher results from LNG marketing activities primarily driven by changes in natural gas prices; offset by
|
▪
|
$78 million gain on the sale of EnergySouth in September 2016, net of related expenses;
|
▪
|
$11 million lower equity earnings resulting from the sale of our investment in Rockies Express in May 2016; and
|
▪
|
$6 million lower earnings due to the sale of EnergySouth in September 2016.
|
▪
|
$5 million of costs in 2017 associated with foreign currency derivatives;
|
▪
|
$2 million higher net interest expense in 2017; and
|
▪
|
$2 million lower income tax benefits in 2017, including:
|
◦
|
$2 million income tax expense in 2017 compared to a $5 million income tax benefit in 2016 due to the interim timing of the application of the forecasted consolidated effective tax rate, offset by
|
◦
|
$4 million U.S. income tax expense in 2016 on planned repatriation of earnings from certain non-U.S. subsidiaries, offset by
|
▪
|
$3 million higher investment gains on dedicated assets in support of our executive retirement and deferred compensation plans, offset by an increase in deferred compensation expense associated with those investments.
|
▪
|
$13 million higher investment gains on dedicated assets in support of our executive retirement and deferred compensation plans, offset by an increase in deferred compensation expense associated with those investments;
|
▪
|
$7 million lower net interest expense in 2017; and
|
▪
|
$4 million higher income tax benefits in 2017, including:
|
◦
|
$13 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
|
◦
|
$17 million income tax benefit in 2016 associated with excess tax benefits related to share-based compensation; offset by
|
▪
|
$15 million of costs in 2017 associated with foreign currency derivatives; and
|
▪
|
$5 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 September 30, 2017
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
57
|
|
|
$
|
0.22
|
|
||||||
Excluded item:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of wildfire regulatory asset
|
$
|
351
|
|
|
$
|
(143
|
)
|
|
$
|
—
|
|
|
208
|
|
|
0.82
|
|
||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
265
|
|
|
$
|
1.04
|
|
||||||
Weighted-average number of shares outstanding, diluted (thousands)
|
|
|
|
|
|
|
|
|
|
|
253,364
|
|
|||||||
|
Three months ended September 30, 2016
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
622
|
|
|
$
|
2.46
|
|
||||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Remeasurement gain in connection with GdC acquisition
|
$
|
(617
|
)
|
|
$
|
185
|
|
|
$
|
82
|
|
|
(350
|
)
|
|
(1.39
|
)
|
||
Gain on sale of EnergySouth
|
(130
|
)
|
|
52
|
|
|
—
|
|
|
(78
|
)
|
|
(0.31
|
)
|
|||||
Impairment of TdM assets held for sale
|
131
|
|
|
(20
|
)
|
|
(21
|
)
|
|
90
|
|
|
0.36
|
|
|||||
Reduction of deferred income tax liability associated with TdM
|
—
|
|
|
(31
|
)
|
|
6
|
|
|
(25
|
)
|
|
(0.10
|
)
|
|||||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
259
|
|
|
$
|
1.02
|
|
||||||
Weighted-average number of shares outstanding, diluted (thousands)
|
|
|
|
|
|
|
|
|
252,405
|
|
|||||||||
|
Nine months ended September 30, 2017
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
757
|
|
|
$
|
2.99
|
|
||||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of wildfire regulatory asset
|
$
|
351
|
|
|
$
|
(143
|
)
|
|
$
|
—
|
|
|
208
|
|
|
0.82
|
|
||
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
|
|
|
|
|
|
|
$
|
979
|
|
|
$
|
3.87
|
|
||||||
Weighted-average number of shares outstanding, diluted (thousands)
|
|
|
|
|
|
|
|
|
252,987
|
|
|||||||||
|
Nine months ended September 30, 2016
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
991
|
|
|
$
|
3.93
|
|
||||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Remeasurement gain in connection with GdC acquisition
|
$
|
(617
|
)
|
|
$
|
185
|
|
|
$
|
82
|
|
|
(350
|
)
|
|
(1.39
|
)
|
||
Gain on sale of EnergySouth
|
(130
|
)
|
|
52
|
|
|
—
|
|
|
(78
|
)
|
|
(0.31
|
)
|
|||||
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
|
|
|
0.20
|
|
|||||
Impairment of investment in Rockies Express
|
44
|
|
|
(17
|
)
|
|
—
|
|
|
27
|
|
|
0.11
|
|
|||||
Impairment of TdM assets held for sale
|
131
|
|
|
(20
|
)
|
|
(21
|
)
|
|
90
|
|
|
0.36
|
|
|||||
Deferred income tax expense associated with TdM
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
884
|
|
|
$
|
3.51
|
|
||||||
Weighted-average number of shares outstanding, diluted (thousands)
|
|
|
|
|
|
|
|
|
251,976
|
|
(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.
|
SDG&E ADJUSTED EARNINGS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Pretax amount
|
|
Income tax benefit(1)
|
|
(Losses) earnings
|
||||||
|
Three months ended September 30, 2017
|
||||||||||
SDG&E GAAP Losses
|
|
|
|
|
$
|
(28
|
)
|
||||
Excluded item:
|
|
|
|
|
|
||||||
Impairment of wildfire regulatory asset
|
$
|
351
|
|
|
$
|
(143
|
)
|
|
208
|
|
|
SDG&E Adjusted Earnings
|
|
|
|
|
$
|
180
|
|
||||
|
Nine months ended September 30, 2017
|
||||||||||
SDG&E GAAP Earnings
|
|
|
|
|
$
|
276
|
|
||||
Excluded item:
|
|
|
|
|
|
||||||
Impairment of wildfire regulatory asset
|
$
|
351
|
|
|
$
|
(143
|
)
|
|
208
|
|
|
SDG&E Adjusted Earnings
|
|
|
|
|
$
|
484
|
|
||||
|
Nine months ended September 30, 2016
|
||||||||||
SDG&E GAAP Earnings
|
|
|
|
|
$
|
419
|
|
||||
Excluded item:
|
|
|
|
|
|
||||||
Tax repairs adjustments related to 2016 GRC FD
|
$
|
52
|
|
|
$
|
(21
|
)
|
|
31
|
|
|
SDG&E Adjusted Earnings
|
|
|
|
|
$
|
450
|
|
(1)
|
Income taxes were calculated based on applicable statutory tax rates.
|
SOCALGAS ADJUSTED EARNINGS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Pretax amount
|
|
Income tax benefit(1)
|
|
Earnings
|
||||||
|
Nine months ended September 30, 2016
|
||||||||||
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.
|
▪
|
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 September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Electric revenues:
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
1,131
|
|
|
$
|
1,111
|
|
|
$
|
2,952
|
|
|
$
|
2,851
|
|
Sempra South American Utilities
|
356
|
|
|
359
|
|
|
1,108
|
|
|
1,102
|
|
||||
Eliminations and adjustments
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(4
|
)
|
||||
Total
|
1,485
|
|
|
1,469
|
|
|
4,055
|
|
|
3,949
|
|
||||
Natural gas revenues:
|
|
|
|
|
|
|
|
||||||||
SoCalGas
|
684
|
|
|
686
|
|
|
2,695
|
|
|
2,336
|
|
||||
SDG&E
|
105
|
|
|
98
|
|
|
399
|
|
|
341
|
|
||||
Sempra Mexico
|
25
|
|
|
22
|
|
|
80
|
|
|
64
|
|
||||
Sempra LNG & Midstream
|
—
|
|
|
12
|
|
|
—
|
|
|
68
|
|
||||
Eliminations and adjustments
|
(22
|
)
|
|
(23
|
)
|
|
(57
|
)
|
|
(58
|
)
|
||||
Total
|
792
|
|
|
795
|
|
|
3,117
|
|
|
2,751
|
|
||||
Total utilities revenues
|
$
|
2,277
|
|
|
$
|
2,264
|
|
|
$
|
7,172
|
|
|
$
|
6,700
|
|
Cost of electric fuel and purchased power:
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
417
|
|
|
$
|
364
|
|
|
$
|
994
|
|
|
$
|
926
|
|
Sempra South American Utilities
|
233
|
|
|
240
|
|
|
736
|
|
|
754
|
|
||||
Total
|
$
|
650
|
|
|
$
|
604
|
|
|
$
|
1,730
|
|
|
$
|
1,680
|
|
Cost of natural gas:
|
|
|
|
|
|
|
|
||||||||
SoCalGas
|
$
|
153
|
|
|
$
|
171
|
|
|
$
|
740
|
|
|
$
|
571
|
|
SDG&E
|
29
|
|
|
25
|
|
|
132
|
|
|
89
|
|
||||
Sempra Mexico
|
16
|
|
|
13
|
|
|
50
|
|
|
36
|
|
||||
Sempra LNG & Midstream
|
—
|
|
|
3
|
|
|
—
|
|
|
18
|
|
||||
Eliminations and adjustments
|
(8
|
)
|
|
(4
|
)
|
|
(19
|
)
|
|
(12
|
)
|
||||
Total
|
$
|
190
|
|
|
$
|
208
|
|
|
$
|
903
|
|
|
$
|
702
|
|
UTILITIES VOLUMES
|
|||||||||||
(Electric volumes in millions of kilowatt-hours, natural gas volumes in billion cubic feet)
|
|||||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Electric volumes:
|
|
|
|
|
|
|
|
||||
SDG&E:
|
|
|
|
|
|
|
|
||||
Residential
|
1,938
|
|
|
1,920
|
|
|
4,997
|
|
|
5,031
|
|
Commercial
|
1,881
|
|
|
1,823
|
|
|
5,082
|
|
|
4,953
|
|
Industrial
|
608
|
|
|
616
|
|
|
1,634
|
|
|
1,623
|
|
Direct access
|
957
|
|
|
967
|
|
|
2,530
|
|
|
2,573
|
|
Street and highway lighting
|
16
|
|
|
18
|
|
|
59
|
|
|
55
|
|
Total(1)
|
5,400
|
|
|
5,344
|
|
|
14,302
|
|
|
14,235
|
|
Sempra South American Utilities:
|
|
|
|
|
|
|
|
||||
Luz del Sur
|
1,647
|
|
|
1,771
|
|
|
5,321
|
|
|
5,607
|
|
Chilquinta Energía
|
699
|
|
|
680
|
|
|
2,201
|
|
|
2,161
|
|
Total
|
2,346
|
|
|
2,451
|
|
|
7,522
|
|
|
7,768
|
|
Natural gas volumes(2):
|
|
|
|
|
|
|
|
|
|
||
SoCalGas:
|
|
|
|
|
|
|
|
||||
Natural gas sales
|
49
|
|
|
50
|
|
|
221
|
|
|
212
|
|
Transportation
|
174
|
|
|
176
|
|
|
463
|
|
|
454
|
|
Total(1)
|
223
|
|
|
226
|
|
|
684
|
|
|
666
|
|
SDG&E:
|
|
|
|
|
|
|
|
||||
Natural gas sales
|
7
|
|
|
6
|
|
|
32
|
|
|
30
|
|
Transportation
|
10
|
|
|
9
|
|
|
25
|
|
|
23
|
|
Total(1)
|
17
|
|
|
15
|
|
|
57
|
|
|
53
|
|
Sempra Mexico – Ecogas
|
7
|
|
|
7
|
|
|
22
|
|
|
22
|
|
(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.
|
▪
|
$20 million increase at SDG&E, which included
|
◦
|
$53 million higher cost of electric fuel and purchased power, which we discuss below, and
|
◦
|
$14 million increase in 2017 due to an increase in rates permitted under the attrition mechanism in the 2016 GRC FD, offset by
|
◦
|
$25 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,
|
◦
|
$15 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in O&M, and
|
◦
|
$5 million in 2016 to adjust estimated 2015 income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the CPUC 2016 GRC FD to actual deductions taken on the 2015 tax return; offset by
|
▪
|
$3 million decrease at Sempra South American Utilities, which included
|
◦
|
$21 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 foreign currency exchange rate effects, and
|
◦
|
$8 million higher rates at Luz del Sur, offset by lower rates at Chilquinta Energía.
|
▪
|
$53 million increase at SDG&E primarily due to an increase from the incremental purchase of renewable energy at higher prices and an additional capacity contract; offset by
|
▪
|
$7 million decrease at Sempra South American Utilities, which included
|
◦
|
$11 million lower volumes at Luz del Sur, offset by
|
◦
|
$7 million foreign currency exchange rate effects.
|
▪
|
$101 million increase at SDG&E, which included
|
◦
|
$68 million higher cost of electric fuel and purchased power, which we discuss below,
|
◦
|
$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,
|
◦
|
$40 million increase due to 2017 attrition, and
|
◦
|
$24 million higher authorized revenues from electric transmission, offset by
|
◦
|
$39 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in O&M,
|
◦
|
$35 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
|
◦
|
$5 million in 2016 to adjust estimated 2015 income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the CPUC 2016 GRC FD to actual deductions taken on the 2015 tax return; and
|
▪
|
$6 million increase at Sempra South American Utilities, which included
|
◦
|
$39 million foreign currency exchange rate effects, and
|
◦
|
$33 million higher rates at Luz del Sur, offset by
|
◦
|
$58 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.
|
▪
|
$68 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
|
▪
|
$18 million decrease at Sempra South American Utilities, which included
|
◦
|
$35 million lower volumes at Luz del Sur, and
|
◦
|
$12 million lower costs at Chilquinta Energía, offset by
|
◦
|
$27 million due to foreign currency exchange rate effects.
|
CALIFORNIA UTILITIES AVERAGE COST OF NATURAL GAS
|
|
|
|
|
|||||||||||
(Dollars per thousand cubic feet)
|
|
|
|
|
|||||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
SoCalGas
|
$
|
3.09
|
|
|
$
|
3.48
|
|
|
$
|
3.36
|
|
|
$
|
2.72
|
|
SDG&E
|
4.14
|
|
|
3.73
|
|
|
4.17
|
|
|
2.93
|
|
▪
|
$12 million decrease due to the sale of EnergySouth in September 2016; and
|
▪
|
$2 million decrease at SoCalGas, which included
|
◦
|
$19 million in 2016 to adjust estimated 2015 income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the CPUC 2016 GRC FD to actual deductions taken on the 2015 tax return,
|
◦
|
$18 million decrease in cost of natural gas sold primarily from lower average gas prices, and
|
◦
|
$12 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, offset by
|
◦
|
$16 million increase due to 2017 attrition,
|
◦
|
$13 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in O&M, and
|
◦
|
$12 million higher revenues primarily associated with the PSEP; offset by
|
▪
|
$7 million increase at SDG&E primarily due to higher revenues primarily associated with the PSEP.
|
▪
|
$359 million increase at SoCalGas, which included
|
◦
|
$169 million increase in cost of natural gas sold, including $141 million from higher average gas prices and $28 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,
|
◦
|
$49 million increase due to 2017 attrition,
|
◦
|
$39 million higher revenues primarily associated with the PSEP,
|
◦
|
$31 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, offset by
|
◦
|
$19 million in 2016 to adjust estimated 2015 income tax benefits generated from income tax repairs deductions that were reallocated to ratepayers pursuant to the CPUC 2016 GRC FD to actual deductions taken on the 2015 tax return, and
|
◦
|
$11 million charge in 2017 associated with tracking the income tax benefit from certain flow-through items in relation to forecasted amounts; and
|
▪
|
$58 million increase at SDG&E, which included
|
◦
|
$43 million increase in the cost of natural gas sold mainly from higher average gas prices, and
|
◦
|
$16 million higher revenues primarily associated with the PSEP; offset by
|
▪
|
$68 million decrease due to the sale of EnergySouth in September 2016.
|
ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Sempra South American Utilities
|
$
|
20
|
|
|
$
|
26
|
|
|
$
|
61
|
|
|
$
|
68
|
|
Sempra Mexico
|
311
|
|
|
174
|
|
|
793
|
|
|
417
|
|
||||
Sempra Renewables
|
26
|
|
|
12
|
|
|
74
|
|
|
25
|
|
||||
Sempra LNG & Midstream
|
152
|
|
|
152
|
|
|
406
|
|
|
316
|
|
||||
Eliminations and adjustments(1)
|
(107
|
)
|
|
(93
|
)
|
|
(263
|
)
|
|
(213
|
)
|
||||
Total revenues
|
$
|
402
|
|
|
$
|
271
|
|
|
$
|
1,071
|
|
|
$
|
613
|
|
COST OF SALES(2)
|
|
|
|
|
|
|
|
||||||||
Cost of natural gas, electric fuel and purchased power:
|
|
|
|
|
|
|
|
||||||||
Sempra South American Utilities
|
$
|
7
|
|
|
$
|
4
|
|
|
$
|
15
|
|
|
$
|
12
|
|
Sempra Mexico
|
82
|
|
|
76
|
|
|
182
|
|
|
151
|
|
||||
Sempra LNG & Midstream
|
114
|
|
|
106
|
|
|
287
|
|
|
257
|
|
||||
Eliminations and adjustments(1)
|
(106
|
)
|
|
(91
|
)
|
|
(258
|
)
|
|
(207
|
)
|
||||
Total
|
$
|
97
|
|
|
$
|
95
|
|
|
$
|
226
|
|
|
$
|
213
|
|
Other cost of sales:
|
|
|
|
|
|
|
|
||||||||
Sempra South American Utilities
|
$
|
14
|
|
|
$
|
20
|
|
|
$
|
41
|
|
|
$
|
49
|
|
Sempra Mexico
|
3
|
|
|
2
|
|
|
6
|
|
|
7
|
|
||||
Sempra LNG & Midstream
|
6
|
|
|
12
|
|
|
(37
|
)
|
|
243
|
|
||||
Eliminations and adjustments(1)
|
(2
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(6
|
)
|
||||
Total
|
$
|
21
|
|
|
$
|
32
|
|
|
$
|
5
|
|
|
$
|
293
|
|
(1)
|
Includes eliminations of intercompany activity.
|
(2)
|
Excludes depreciation and amortization, which are shown separately on Sempra Energy’s Condensed Consolidated Statements of Operations.
|
▪
|
$137 million increase at Sempra Mexico primarily due to:
|
◦
|
$104 million from the acquisition of the remaining 50-percent interest in IEnova Pipelines in September 2016 and from other pipeline assets placed in service, and
|
◦
|
$27 million from the acquisition of Ventika in December 2016; and
|
▪
|
$14 million increase at Sempra Renewables primarily due to solar and wind assets placed in service during 2016; offset by
|
▪
|
$14 million higher intercompany eliminations associated with sales between Sempra LNG & Midstream and Sempra Mexico.
|
▪
|
$376 million increase at Sempra Mexico primarily due to:
|
◦
|
$268 million from the acquisition of the remaining 50-percent interest in IEnova Pipelines in September 2016 and from other pipeline assets placed in service,
|
◦
|
$80 million from the acquisition of Ventika in December 2016, and
|
◦
|
$22 million higher revenues due to higher natural gas prices in its gas business;
|
▪
|
$90 million increase at Sempra LNG & Midstream, which included
|
◦
|
$69 million primarily due to mark-to-market losses in 2016 from natural gas marketing activities and from changes in natural gas prices, and
|
◦
|
$18 million from higher natural gas sales to Sempra Mexico; and
|
▪
|
$49 million increase at Sempra Renewables primarily due to solar and wind assets placed in service during 2016; offset by
|
▪
|
$50 million primarily from higher intercompany eliminations associated with sales between Sempra LNG & Midstream and Sempra Mexico.
|
▪
|
$31 million increase at Sempra Mexico primarily due to higher natural gas costs; and
|
▪
|
$30 million increase at Sempra LNG & Midstream primarily due to higher natural gas costs; offset by
|
▪
|
$51 million from higher intercompany eliminations of costs associated with sales between Sempra LNG & Midstream and Sempra Mexico.
|
◦
|
$33 million increase at SoCalGas, which included
|
◦
|
$19 million higher non-refundable operating costs, including labor, contract services and administrative and support costs, and
|
◦
|
$13 million higher expenses associated with CPUC-authorized refundable programs for which all costs incurred are fully recovered in revenue (refundable program expenses); and
|
▪
|
$26 million increase at Sempra Mexico primarily due to consolidation of IEnova Pipelines and Ventika in the second half of 2016, and from growth in the business; offset by
|
▪
|
$19 million decrease at SDG&E primarily due to lower expenses associated with CPUC-authorized refundable programs.
|
▪
|
$78 million increase at SoCalGas, which included
|
◦
|
$49 million higher non-refundable operating costs, including labor, contract services and administrative and support costs, and
|
◦
|
$31 million higher expenses associated with CPUC-authorized refundable programs;
|
▪
|
$72 million increase at Sempra Mexico primarily due to consolidation of IEnova Pipelines and Ventika in 2016, from growth in the business, and from scheduled major maintenance at TdM in the second quarter of 2017;
|
▪
|
$21 million increase at Parent and Other primarily due to higher employee benefits and deferred compensation costs; and
|
▪
|
$16 million increase at Sempra Renewables primarily due to solar and wind assets placed in service during 2016 and higher general and administrative and development costs; offset by
|
▪
|
$67 million decrease at SDG&E, which included
|
◦
|
$46 million lower expenses associated with CPUC-authorized refundable programs,
|
◦
|
$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, and
|
◦
|
$10 million decrease at Otay Mesa VIE primarily due to scheduled major maintenance in 2016 at the OMEC plant; and
|
▪
|
$26 million decrease at Sempra LNG & Midstream primarily due to the sale of EnergySouth.
|
•
|
$99 million from net gains in 2017 on interest rate and foreign currency derivatives compared to $23 million of losses in 2016 primarily as a result of significant fluctuation of the Mexican peso;
|
▪
|
$53 million increase in equity-related AFUDC primarily from the Ojinaga and San Isidro pipeline projects at Sempra Mexico and capital projects at SDG&E; and
|
▪
|
$7 million foreign currency transactional gains in 2017 compared to $9 million losses in 2016.
|
INCOME TAX (BENEFIT) EXPENSE AND EFFECTIVE INCOME TAX RATES
|
|||||||||||||
(Dollars in millions)
|
|||||||||||||
|
Income tax
(benefit) expense
|
|
Effective
income tax rate
|
|
Income tax
expense |
|
Effective
income tax rate
|
||||||
|
Three months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Sempra Energy Consolidated
|
$
|
(84
|
)
|
|
(560
|
)%
|
|
$
|
282
|
|
|
29
|
%
|
SDG&E
|
(72
|
)
|
|
79
|
|
|
91
|
|
|
32
|
|
||
SoCalGas
|
(14
|
)
|
|
200
|
|
|
21
|
|
|
100
|
|
||
|
|
|
|
|
|
|
|
||||||
|
Nine months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Sempra Energy Consolidated
|
$
|
378
|
|
|
32
|
%
|
|
$
|
284
|
|
|
21
|
%
|
SDG&E
|
72
|
|
|
20
|
|
|
204
|
|
|
33
|
|
||
SoCalGas
|
103
|
|
|
28
|
|
|
75
|
|
|
27
|
|
•
|
$18 million income tax benefit in 2017 compared to $5 million income tax expense in 2016 from the resolution of prior years’ income tax items; and
|
•
|
$9 million higher income tax benefit in 2017 from foreign currency and inflation effects primarily as a result of depreciation of the Mexican peso in the third quarter of 2017; offset by
|
•
|
$31 million tax benefit in 2016 from a reduction to the outside basis deferred tax liability on our investment in TdM that is held for sale.
|
•
|
$136 million income tax expense in 2017 compared to $28 million income tax benefit in 2016 from foreign currency and inflation effects primarily as a result of significant appreciation of the Mexican peso in 2017;
|
•
|
$1 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; and
|
•
|
$23 million valuation allowance in 2017 against deferred tax assets at TdM that is held for sale, including $12 million associated with the impairment in the second quarter of 2017. 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
|
•
|
$27 million income tax benefit in 2017 compared to $5 million income tax expense in 2016 related to the resolution of prior years’ income tax items; and
|
•
|
$13 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.
|
•
|
$14 million higher income tax benefit in 2017 from the resolution of prior years’ income tax items; offset by
|
•
|
$7 million income tax benefit in 2016 associated with excess tax benefits related to share-based compensation.
|
•
|
$10 million income tax benefit in 2017 compared to $10 million income tax expense in 2016 related to the resolution of prior years’ income tax items; offset by
|
•
|
$4 million income tax benefit in 2016 associated with excess tax benefits related to share-based compensation.
|
▪
|
$64 million of equity earnings in 2016 from IEnova Pipelines, including $19 million from DEN, prior to IEnova’s acquisition of the remaining 50-percent interest in IEnova Pipelines in September 2016; and
|
▪
|
$16 million of equity losses in 2017 from DEN primarily from foreign currency and inflation effects.
|
▪
|
$47 million decrease at IEnova, which included:
|
◦
|
$61 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
|
◦
|
$14 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
|
▪
|
$6 million losses attributed to tax equity investors at Sempra Renewables.
|
▪
|
$78 million decrease at IEnova, which included:
|
◦
|
$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, and
|
◦
|
$53 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
|
◦
|
$32 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
|
▪
|
$16 million losses attributed to tax equity investors at Sempra Renewables; offset by
|
▪
|
$16 million increase in earnings at Otay Mesa VIE primarily as a result of scheduled major maintenance at the OMEC plant in 2016.
|
TRANSACTIONAL (LOSSES) GAINS FROM FOREIGN CURRENCY AND INFLATION
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Total reported amounts
|
|
Transactional (losses) gains included
in reported amounts
|
||||||||||||
|
Three months ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Other income, net
|
$
|
41
|
|
|
$
|
26
|
|
|
$
|
(6
|
)
|
|
$
|
(13
|
)
|
Income tax benefit (expense)
|
84
|
|
|
(282
|
)
|
|
13
|
|
|
4
|
|
||||
Equity earnings, net of income tax
|
3
|
|
|
19
|
|
|
1
|
|
|
3
|
|
||||
Net income
|
102
|
|
|
719
|
|
|
6
|
|
|
(1
|
)
|
||||
Earnings
|
57
|
|
|
622
|
|
|
6
|
|
|
(2
|
)
|
||||
|
Nine months ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Other income, net
|
$
|
301
|
|
|
$
|
98
|
|
|
$
|
108
|
|
|
$
|
(32
|
)
|
Income tax expense
|
(378
|
)
|
|
(284
|
)
|
|
(136
|
)
|
|
28
|
|
||||
Equity (losses) earnings, net of income tax
|
(5
|
)
|
|
69
|
|
|
(21
|
)
|
|
21
|
|
||||
Net income
|
802
|
|
|
1,110
|
|
|
(90
|
)
|
|
25
|
|
||||
Earnings
|
757
|
|
|
991
|
|
|
(39
|
)
|
|
18
|
|
|
|
|
|
|
AVAILABLE FUNDS AT SEPTEMBER 30, 2017
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||
Unrestricted cash and cash equivalents(1)
|
$
|
189
|
|
|
$
|
18
|
|
|
$
|
8
|
|
Available unused credit(2)(3)
|
2,612
|
|
|
565
|
|
|
724
|
|
(1)
|
Amounts at Sempra Energy Consolidated include $135 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.
|
(3)
|
Because the commercial paper programs are supported by these lines, we reflect the amount of commercial paper outstanding as a reduction to the available unused credit.
|
▪
|
finance capital expenditures
|
▪
|
meet liquidity requirements
|
▪
|
fund shareholder dividends
|
▪
|
fund new business or asset acquisitions or start-ups, including our pending acquisition of EFH
|
▪
|
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)
|
||||||||||||||||
|
Nine months ended
September 30, 2017 |
|
|
2017 change
|
|
|
Nine months ended
September 30, 2016 |
|||||||||
Sempra Energy Consolidated
|
$
|
2,710
|
|
|
|
$
|
1,019
|
|
|
60
|
%
|
|
|
$
|
1,691
|
|
SDG&E
|
1,178
|
|
|
|
245
|
|
|
26
|
|
|
|
933
|
|
|||
SoCalGas
|
1,066
|
|
|
|
657
|
|
|
161
|
|
|
|
409
|
|
▪
|
$811 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;
|
▪
|
$64 million net decrease in Insurance Receivable for Aliso Canyon Costs in 2017 compared to a $339 million net increase in 2016. The $64 million net decrease in 2017 primarily includes $125 million in insurance proceeds received, offset by $63 million of additional accruals;
|
▪
|
$11 million net decrease in Reserve for Aliso Canyon Costs in 2017 compared to a $201 million net decrease in 2016. The $11 million net decrease in 2017 includes $74 million of cash paid, offset by $63 million of additional accruals;
|
▪
|
$55 million decrease in net undercollected regulatory balancing accounts (including long-term amounts included in regulatory assets) at SDG&E in 2017 compared to a $20 million decrease in 2016; and
|
▪
|
$30 million decrease in NDT at SDG&E in 2017 as a result of CPUC authorization to withdraw trust funds for SONGS decommissioning costs incurred in 2017; offset by
|
▪
|
$36 million decrease in accounts payable in 2017 compared to a $92 million increase in 2016;
|
▪
|
$167 million decrease in accounts receivable in 2017 compared to a $269 million decrease in 2016;
|
▪
|
$74 million increase in income taxes receivable in 2017 compared to a $6 million decrease in 2016;
|
▪
|
$168 million increase in net overcollected regulatory balancing accounts (including long-term amounts included in regulatory assets) at SoCalGas in 2017 compared to a $239 million increase in 2016; and
|
▪
|
$23 million reduction to the SONGS regulatory asset in 2016 due to cash received for our portion of a DOE settlement with Edison related to spent nuclear fuel storage.
|
▪
|
$152 million lower income tax payments;
|
▪
|
$141 million higher net income, adjusted for noncash items included in earnings, in 2017 compared to 2016;
|
▪
|
$55 million decrease in net undercollected regulatory balancing accounts (including long-term amounts included in regulatory assets) in 2017 compared to a $20 million decrease in 2016;
|
▪
|
$8 million increase in greenhouse gas allowances in 2017 compared to a $40 million increase in 2016; and
|
▪
|
$30 million decrease in NDT in 2017 as a result of CPUC authorization to withdraw trust funds for SONGS decommissioning costs incurred in 2017; offset by
|
▪
|
$121 million increase in accounts receivable in 2017 compared to a $30 million increase in 2016;
|
▪
|
$55 million increase in accounts payable in 2017 compared to a $95 million increase in 2016; and
|
▪
|
$23 million reduction to the SONGS regulatory asset in 2016 due to cash received for our portion of a DOE settlement with Edison related to spent nuclear fuel storage.
|
▪
|
$64 million net decrease in Insurance Receivable for Aliso Canyon Costs in 2017 compared to a $339 million net increase in 2016. The $64 million net decrease in 2017 primarily includes $125 million in insurance proceeds received, offset by $63 million of additional accruals;
|
▪
|
$11 million net decrease in Reserve for Aliso Canyon Costs in 2017 compared to a $201 million net decrease in 2016. The $11 million net decrease in 2017 includes $74 million of cash paid, offset by $63 million of additional accruals; and
|
▪
|
$110 million higher net income, adjusted for noncash items included in earnings, in 2017 compared to 2016; offset by
|
▪
|
$168 million increase in net overcollected regulatory balancing accounts (including long-term amounts included in regulatory assets) in 2017 compared to a $239 million increase in 2016.
|
CASH USED IN INVESTING ACTIVITIES
|
||||||||||||||||
(Dollars in millions)
|
||||||||||||||||
|
Nine months ended
September 30, 2017 |
|
|
2017 change
|
|
|
Nine months ended
September 30, 2016 |
|||||||||
Sempra Energy Consolidated
|
$
|
(3,260
|
)
|
|
|
$
|
(172
|
)
|
|
(5
|
)%
|
|
|
$
|
(3,432
|
)
|
SDG&E
|
(1,094
|
)
|
|
|
112
|
|
|
11
|
|
|
|
(982
|
)
|
|||
SoCalGas
|
(1,033
|
)
|
|
|
83
|
|
|
9
|
|
|
|
(950
|
)
|
▪
|
$1.078 billion, net of cash acquired, paid for Sempra Mexico’s acquisition of the remaining 50-percent interest in IEnova Pipelines in September 2016; and
|
▪
|
$207 million decrease in capital expenditures; offset by
|
▪
|
$443 million net proceeds received from Sempra LNG & Midstream’s sale of its investment in Rockies Express in 2016;
|
▪
|
$318 million net proceeds received from Sempra LNG & Midstream’s sale of EnergySouth in 2016;
|
▪
|
$309 million higher advances to unconsolidated affiliates; and
|
▪
|
$71 million decrease in NDT at SDG&E in 2016 as a result of CPUC authorization to withdraw trust funds for SONGS decommissioning costs incurred in 2013 and 2014.
|
▪
|
$163 million increase in capital expenditures; and
|
▪
|
$71 million decrease in NDT in 2016 as a result of CPUC authorization to withdraw trust funds for SONGS decommissioning costs incurred in 2013 and 2014; offset by
|
▪
|
$31 million decrease in advances to Sempra Energy in 2017 compared to a $107 million increase in 2016.
|
EXPENDITURES FOR PP&E
|
|||||||
(Dollars in millions)
|
|||||||
|
Nine months ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
SDG&E:
|
|
|
|
||||
Improvements to natural gas, including certain pipeline safety, and electric and generation
|
|
|
|
|
|
||
distribution systems
|
$
|
723
|
|
|
$
|
536
|
|
PSEP
|
39
|
|
|
90
|
|
||
Improvements to electric transmission systems
|
350
|
|
|
302
|
|
||
Electric generation plants and equipment
|
10
|
|
|
31
|
|
||
SoCalGas:
|
|
|
|
|
|
||
Improvements to natural gas distribution, transmission and storage systems, and for certain pipeline safety
|
859
|
|
|
668
|
|
||
PSEP
|
144
|
|
|
206
|
|
||
Advanced metering infrastructure
|
30
|
|
|
75
|
|
||
Sempra South American Utilities:
|
|
|
|
|
|
||
Improvements to electric transmission and distribution systems and generation projects in Peru
|
77
|
|
|
94
|
|
||
Improvements to electric transmission and distribution infrastructure in Chile
|
61
|
|
|
39
|
|
||
Sempra Mexico:
|
|
|
|
|
|
||
Construction of the Sonora, Ojinaga and San Isidro pipeline projects
|
151
|
|
|
214
|
|
||
Construction of other natural gas pipeline and renewables projects, and capital expenditures at Ecogas
|
42
|
|
|
18
|
|
||
Sempra Renewables:
|
|
|
|
||||
Construction costs for wind projects
|
115
|
|
|
101
|
|
||
Construction costs for solar projects/facilities
|
246
|
|
|
599
|
|
||
Sempra LNG & Midstream:
|
|
|
|
|
|
||
Cameron Interstate Pipeline expansion and other LNG liquefaction development costs
|
12
|
|
|
82
|
|
||
Other
|
4
|
|
|
18
|
|
||
Parent and other
|
17
|
|
|
14
|
|
||
Total
|
$
|
2,880
|
|
|
$
|
3,087
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|||||||||||||
(Dollars in millions)
|
|||||||||||||
|
Nine months ended
September 30, 2017 |
|
|
2017 change
|
|
|
Nine months ended
September 30, 2016 |
||||||
Sempra Energy Consolidated
|
$
|
381
|
|
|
|
$
|
(1,467
|
)
|
|
|
$
|
1,848
|
|
SDG&E
|
(74
|
)
|
|
|
(126
|
)
|
|
|
52
|
|
|||
SoCalGas
|
(37
|
)
|
|
|
(528
|
)
|
|
|
491
|
|
▪
|
$475 million net increase in short-term debt in 2017 compared to a $1,636 million net increase in 2016;
|
▪
|
$531 million higher payments of debt with maturities greater than 90 days, including:
|
◦
|
$618 million higher payments of commercial paper and other short-term debt ($973 million in 2017 compared to $355 million in 2016), offset by
|
◦
|
$87 million lower payments of long-term debt ($856 million in 2017 compared to $943 million in 2016);
|
▪
|
$78 million deposit received by Sempra Renewables in 2016 in connection with a tax equity financing arrangement that closed in the fourth quarter of 2016; and
|
▪
|
$66 million higher net distributions to noncontrolling interests, primarily from dividend payments made by IEnova to its minority shareholders; offset by
|
▪
|
$382 million higher issuances of debt with maturities greater than 90 days, including:
|
◦
|
$233 million for commercial paper and other short-term debt ($1.2 billion in 2017 compared to $966 million in 2016), and
|
◦
|
$149 million for long-term debt ($1.2 billion in 2017 compared to $1 billion in 2016).
|
▪
|
$275 million higher common dividends paid in 2017;
|
▪
|
$100 million lower issuances of long-term debt; and
|
▪
|
$35 million higher payments of long-term debt; offset by
|
▪
|
$185 million increase in short-term debt in 2017 compared to a $114 million decrease in 2016.
|
▪
|
$499 million issuance of long-term debt in 2016; and
|
▪
|
$36 million net 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 first quarter of 2018.
|
|
|
|
|
|
§
|
October 2017 CPUC order denied rehearing requests filed by the City of San Juan Capistrano and a local opposition group.
|
||||
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; decision expected in first half of 2018.
|
|
§
|
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; draft decision expected in first half of 2018.
|
|||||
Utility Billing and Customer Information Systems Software
|
|
|
|
|
|
|
|||
§
|
April 2017 application to replace the software.
|
|
$
|
220
|
|
|
§
|
Application pending; draft decision expected in first half of 2018.
|
|
§
|
Estimated implementation cost of $67 million of O&M.
|
|
|
|
|
|
▪
|
a reopened CPUC proceeding that is considering whether a SONGS-related amended settlement agreement approved in 2014 is reasonable and in the public interest, which will result in the reaffirmation of the Amended Settlement Agreement, or a different cost allocation among ratepayers and shareholders associated with the premature shutdown of SONGS Units 2 and 3;
|
▪
|
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 Leak. 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 their direction and supervision to be funded by SoCalGas to investigate the technical root cause of the 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 pursuant to SB 380 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 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
|
|
§
|
September 2017 resolution approved extension of pilot program through the earlier of 2019 or the issuance of a CPUC decision on pending applications, while also allowing an increase from 10 percent to 15 percent of mobile homes to be converted.
|
|||||
|
$
|
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; draft decision expected in second half of 2018.
|
|
§
|
Estimated implementation cost of $57 million of O&M at SoCalGas.
|
|
|
|
|
|
|
PIPELINE SAFETY ENHANCEMENT PLAN – REASONABLENESS REVIEW SUMMARY
|
|
|
|||||||||||||
(Dollars in millions)
|
|
|
|||||||||||||
|
2011 through September 30, 2017
|
||||||||||||||
|
Total
invested(1)
|
|
CPUC review
completed(2)
|
|
CPUC review
pending(3)
|
|
2018 recovery filing(4)(5)
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Capital
|
$
|
1,411
|
|
|
$
|
8
|
|
|
$
|
143
|
|
|
$
|
1,260
|
|
Operation and maintenance
|
173
|
|
|
25
|
|
|
63
|
|
|
85
|
|
||||
Total
|
$
|
1,584
|
|
|
$
|
33
|
|
|
$
|
206
|
|
|
$
|
1,345
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Capital
|
$
|
1,091
|
|
|
$
|
8
|
|
|
$
|
129
|
|
|
$
|
954
|
|
Operation and maintenance
|
164
|
|
|
25
|
|
|
62
|
|
|
77
|
|
||||
Total
|
$
|
1,255
|
|
|
$
|
33
|
|
|
$
|
191
|
|
|
$
|
1,031
|
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Capital
|
$
|
320
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
306
|
|
Operation and maintenance
|
9
|
|
|
—
|
|
|
1
|
|
|
8
|
|
||||
Total
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
314
|
|
CAPITAL PROJECT COMPLETED IN 2017 – SEMPRA SOUTH AMERICAN UTILITIES
|
|||||||
|
|
|
|
|
|
|
|
Project description
|
|
|
|
||||
Chilquinta Energía - Eletrans S.A.
|
|
|
|
|
|
|
|
■
|
Second of two, 220-kV transmission lines awarded in May 2012.
|
|
|
|
■
|
Completed in September 2017.
|
|
■
|
46-mile transmission line extending from Ciruelos to Pichirropulli.
|
|
|
|
|
|
|
■
|
Earns 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.
|
|
|
|
§
|
Operations have been interrupted at the second segment, known as the Guaymas-El Oro segment, of the pipeline since August 23, 2017. IEnova has declared a force majeure event.(1)
|
|
§
|
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 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
|
Estimated capital cost (in millions)
|
|
Status
|
||||||
Great Valley Solar Project
|
|
|
|
|
|
||||
§
|
Capable of producing up to 200 MW of solar power once fully constructed, located in Fresno County, California, acquired in July 2017.
|
|
$
|
375
|
|
|
§
|
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.
|
|
|
|
to
|
|
|
|||||
|
|
$
|
425
|
|
|
|
|||
§
|
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.
|
|
|
|
§
|
Based on a number of factors discussed below, we believe it is reasonable to expect that all three LNG trains will be producing LNG in 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINAL AMOUNT OF LONG-TERM DEBT(1)
|
||||||||||||||||||||||||
(Dollars in millions)
|
||||||||||||||||||||||||
|
September 30, 2017
|
|
|
December 31, 2016
|
||||||||||||||||||||
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
|
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||||||||
California Utilities fixed-rate
|
$
|
7,583
|
|
|
$
|
4,574
|
|
|
$
|
3,009
|
|
|
|
$
|
7,218
|
|
|
$
|
4,209
|
|
|
$
|
3,009
|
|
California Utilities variable-rate
|
297
|
|
|
297
|
|
|
—
|
|
|
|
445
|
|
|
445
|
|
|
—
|
|
||||||
Other fixed-rate
|
6,880
|
|
|
—
|
|
|
—
|
|
|
|
6,703
|
|
|
—
|
|
|
—
|
|
||||||
Other variable-rate
|
712
|
|
|
—
|
|
|
—
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
▪
|
make it more difficult and/or costly for Sempra Energy to pay or refinance its debts as they become due, particularly during adverse economic and industry conditions, because a decrease in revenues or increase in costs could cause cash flow from operations to be insufficient to make scheduled debt service payments;
|
▪
|
limit Sempra Energy’s flexibility to pursue other strategic opportunities or react to changes in its business and the industry sectors in which it operates and, consequently, put Sempra Energy at a competitive disadvantage to its competitors that have less debt;
|
▪
|
require a substantial portion of Sempra Energy’s available cash to be used for debt service payments, thereby reducing the availability of its cash to fund working capital, capital expenditures, development projects, acquisitions, dividend payments and other general corporate purposes, which could harm Sempra Energy’s prospects for growth and the market price of its common stock and debt securities, among other things;
|
▪
|
result in a downgrade in the credit ratings on Sempra Energy’s indebtedness (including as a result of actions by Moody’s Investors Service or Standard & Poor’s as described in the immediately preceding risk factor), which could limit Sempra Energy’s ability to borrow additional funds, increase the interest rates under its credit facilities and under any new indebtedness it may incur, and reduce the trading prices of its outstanding debt securities and common stock;
|
▪
|
make it more difficult for Sempra Energy to raise capital to fund working capital, make capital expenditures, pay dividends, pursue strategic initiatives or for other purposes;
|
▪
|
result in higher interest expense in the event of increases in interest rates on Sempra Energy’s current or future borrowings subject to variable rates of interest; and
|
▪
|
require that additional materially adverse terms, conditions or covenants be placed on Sempra Energy under its debt instruments.
|
▪
|
Following consummation of the Merger, the board of directors of Oncor will consist of thirteen members, seven of which will be independent directors under the rules of the New York Stock Exchange (and at least two of which shall have no current or prior material relationship with Sempra Energy), two of which will be designated by EFIH (which, after the Merger, will be a subsidiary of Sempra Energy that Sempra Energy is expected to control), two of which will be appointed by Oncor’s minority owner, TTI, which is an investment vehicle owned by third parties unaffiliated with EFH and Sempra Energy and that owns approximately 19.75 percent of the outstanding membership interests in Oncor, and two of which will be members of Oncor management. As a result, Sempra Energy will not control the operations, management or policies of Oncor, Oncor Holdings and their respective subsidiaries and will have limited representation on the Oncor Holdings and Oncor boards of directors. Sempra Energy will account for Oncor using the equity method of accounting and not as a consolidated subsidiary;
|
▪
|
If the credit rating on Oncor’s senior secured debt by any rating agency falls below BBB (or the equivalent), Sempra Energy has agreed that Oncor will suspend dividends until otherwise allowed by the PUCT;
|
▪
|
Sempra Energy has agreed to work in good faith so that, within 180 days after the Merger, an equity investment is made in Oncor in an amount sufficient to allow Oncor to achieve a capital structure consisting of 57.5 percent long-term debt and 42.5 percent equity;
|
▪
|
Oncor may not pay dividends to its owners, including Sempra Energy, if and to the extent that payment would cause its debt-to-equity ratio to exceed the debt-to-equity ratio required by the PUCT described below;
|
▪
|
Oncor may not pay any dividends or make any other distributions of cash or property to its owners, including Sempra Energy, if either a majority of its independent directors or one of the directors appointed by Oncor’s minority owner, TTI, determines it is in the best interests of Oncor to retain such amounts to meet expected future requirements;
|
▪
|
Certain transactions, including certain mergers and sales of substantially all assets, changes to the dividend policy and declarations of bankruptcy and liquidation, require the approval of all, or in certain circumstances a majority, of the independent directors of Oncor and at least one, or in certain circumstances both, of the directors appointed by Oncor’s minority owner, TTI; and
|
▪
|
There must be maintained certain “separateness measures” that reinforce the financial separation of Oncor from EFH and EFH’s owners, such as a prohibition on Oncor providing guarantees or security for debt of EFH or Sempra Energy.
|
|
|
|
|
|
EXHIBIT 2 -- PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION
|
|
Sempra Energy
|
|
|
|
EXHIBIT 10 -- MATERIAL CONTRACTS
|
|
Sempra Energy
|
|
|
EXHIBIT 12 -- STATEMENTS RE: COMPUTATION OF RATIOS
|
|
Sempra Energy
|
|
San Diego Gas & Electric Company
|
12.2 San Diego Gas & Electric Company Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
|
Southern California Gas Company
|
12.3 Southern California Gas Company Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
|
EXHIBIT 31 -- SECTION 302 CERTIFICATIONS
|
|
Sempra Energy
|
|
|
San Diego Gas & Electric Company
|
|
|
Southern California Gas Company
|
|
|
EXHIBIT 32 -- SECTION 906 CERTIFICATIONS
|
|
Sempra Energy
|
|
|
San Diego Gas & Electric Company
|
|
|
Southern California Gas Company
|
|
|
EXHIBIT 101 -- INTERACTIVE DATA FILE
|
|
Sempra Energy / San Diego Gas & Electric Company / Southern California Gas Company
|
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
101.SCH XBRL Taxonomy Extension Schema Document
|
|
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB XBRL Taxonomy Extension Label Linkbase Document
|
|
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: October 30, 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: October 30, 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: October 30, 2017
|
By: /s/ Bruce A. Folkmann
|
|
Bruce A. Folkmann
Vice President, Controller, Chief Financial Officer and Chief Accounting Officer
|
1.
|
I have reviewed this report on Form 10-Q of Sempra Energy;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
October 30, 2017
|
/s/ Debra L. Reed
|
|
Debra L. Reed
|
|
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Sempra Energy;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
October 30, 2017
|
/s/ J. Walker Martin
|
|
J. Walker Martin
|
|
Chief Financial Officer
|
1.
|
I have reviewed this report on Form 10-Q of San Diego Gas & Electric Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
October 30, 2017
|
/s/ Scott D. Drury
|
|
Scott D. Drury
|
|
President
|
1.
|
I have reviewed this report on Form 10-Q of San Diego Gas & Electric Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
October 30, 2017
|
/s/ Bruce A. Folkmann
|
|
Bruce A. Folkmann
|
|
Chief Financial Officer
|
1.
|
I have reviewed this report on Form 10-Q of Southern California Gas Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
October 30, 2017
|
/s/ Patricia K. Wagner
|
|
Patricia K. Wagner
|
|
Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Southern California Gas Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
October 30, 2017
|
/s/ Bruce A. Folkmann
|
|
Bruce A. Folkmann
|
|
Chief Financial Officer
|
(i)
|
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended September 30, 2017 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
October 30, 2017
|
/s/ Debra L. Reed
|
|
Debra L. Reed
|
|
Chief Executive Officer
|
(i)
|
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended September 30, 2017 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
October 30, 2017
|
/s/ J. Walker Martin
|
|
J. Walker Martin
|
|
Chief Financial Officer
|
(i)
|
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended September 30, 2017 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
October 30, 2017
|
/s/ Scott D. Drury
|
|
Scott D. Drury
|
|
President
|
(i)
|
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended September 30, 2017 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
October 30, 2017
|
/s/ Bruce A. Folkmann
|
|
Bruce A. Folkmann
|
|
Chief Financial Officer
|
(i)
|
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended September 30, 2017 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
October 30, 2017
|
/s/ Patricia K. Wagner
|
|
Patricia K. Wagner
|
|
Chief Executive Officer
|
(i)
|
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended September 30, 2017 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
October 30, 2017
|
/s/ Bruce A. Folkmann
|
|
Bruce A. Folkmann
|
|
Chief Financial Officer
|