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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Commission File No.
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Exact Name of Registrants as Specified in their Charters, Address and Telephone Number
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State of Incorporation
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I.R.S. Employer Identification Nos.
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Former name, former address and former fiscal year, if changed since last report
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1-14201
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SEMPRA ENERGY
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California
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33-0732627
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No change
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488 8th Avenue
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San Diego,
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California
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92101
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(619)
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696-2000
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1-03779
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SAN DIEGO GAS & ELECTRIC COMPANY
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California
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95-1184800
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No change
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8326 Century Park Court
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San Diego,
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California
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92123
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(619)
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696-2000
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1-01402
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SOUTHERN CALIFORNIA GAS COMPANY
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California
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95-1240705
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No change
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555 West Fifth Street
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Los Angeles,
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California
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90013
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(213)
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244-1200
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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||||||||||||||
Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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SEMPRA ENERGY:
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||||||||||||||
Sempra Energy Common Stock, without par value
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SRE
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NYSE
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|||||||||
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Sempra Energy 6% Mandatory Convertible Preferred Stock, Series A, $100 liquidation preference
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SREPRA
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NYSE
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Sempra Energy 6.75% Mandatory Convertible Preferred Stock, Series B, $100 liquidation preference
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SREPRB
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NYSE
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Sempra Energy 5.75% Junior Subordinated Notes Due 2079, $25 par value
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SREA
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NYSE
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SAN DIEGO GAS & ELECTRIC COMPANY:
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None
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SOUTHERN CALIFORNIA GAS COMPANY:
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None
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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.
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Yes
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☒
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No
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☐
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Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit such files).
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Yes
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☒
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No
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☐
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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SEMPRA ENERGY FORM 10-Q
SAN DIEGO GAS & ELECTRIC COMPANY FORM 10-Q
SOUTHERN CALIFORNIA GAS COMPANY FORM 10-Q
TABLE OF CONTENTS
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Page
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PART I – FINANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II – OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 6.
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GLOSSARY
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2016 GRC FD
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final decision in the California Utilities’ 2016 General Rate Case
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AB
|
Assembly Bill
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AEP
|
American Electric Power Company, Inc.
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AFUDC
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allowance for funds used during construction
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Annual Report
|
Annual Report on Form 10-K for the year ended December 31, 2018
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AOCI
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accumulated other comprehensive income (loss)
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ARO
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asset retirement obligation
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ASC
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Accounting Standards Codification
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Asset Exchange Agreement
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agreement and plan of merger among Oncor, SDTS and SU
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ASU
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Accounting Standards Update
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Bay Gas
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Bay Gas Storage Company, Ltd.
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Bcf
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billion cubic feet
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Blade
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Blade Energy Partners
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bps
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basis points
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Cal PA
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California Public Advocates Office
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California Utilities
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San Diego Gas & Electric Company and Southern California Gas Company, collectively
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Cameron LNG JV
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Cameron LNG Holdings, LLC
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CARB
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California Air Resources Board
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CEC
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California Energy Commission
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CFE
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Comisión Federal de Electricidad (Federal Electricity Commission in Mexico)
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Chilquinta Energía
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Chilquinta Energía S.A. and its subsidiaries
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CPUC
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California Public Utilities Commission
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CRR
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congestion revenue right
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DOE
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U.S. Department of Energy
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DOGGR
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California Department of Conservation’s Division of Oil, Gas, and Geothermal Resources
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DPH
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Los Angeles County Department of Public Health
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DWR
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California Department of Water Resources
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ECA
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Energía Costa Azul
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Ecogas
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Ecogas México, S. de R.L. de C.V.
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Edison
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Southern California Edison Company, a subsidiary of Edison International
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EFH
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Energy Future Holdings Corp. (renamed Sempra Texas Holdings Corp.)
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EFIH
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Energy Future Intermediate Holding Company LLC (renamed Sempra Texas Intermediate Holding Company LLC)
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EPA
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U.S. Environmental Protection Agency
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EPC
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engineering, procurement and construction
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EPS
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earnings per common share
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ETR
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effective income tax rate
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FASB
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Financial Accounting Standards Board
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FERC
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Federal Energy Regulatory Commission
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Fitch
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Fitch Ratings
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FTA
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Free Trade Agreement
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GCIM
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Gas Cost Incentive Mechanism
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GHG
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greenhouse gas
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GRC
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General Rate Case
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HLBV
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hypothetical liquidation at book value
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HMRC
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United Kingdom’s Revenue and Customs Department
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IEnova
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Infraestructura Energética Nova, S.A.B. de C.V.
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IMG
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Infraestructura Marina del Golfo
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InfraREIT
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InfraREIT, Inc. (merged into a wholly owned subsidiary of Oncor)
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InfraREIT Merger Agreement
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agreement and plan of merger among Oncor, 1912 Merger Sub LLC (a wholly owned subsidiary of Oncor), Oncor T&D Partners, LP (a wholly owned indirect subsidiary of Oncor), InfraREIT and InfraREIT Partners
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InfraREIT Partners
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InfraREIT Partners, LP (renamed Oncor NTU Partnership LP)
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IOU
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investor-owned utility
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IRS
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Internal Revenue Service
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ISFSI
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independent spent fuel storage installation
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ISO
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Independent System Operator
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JP Morgan
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J.P. Morgan Chase & Co.
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JV
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joint venture
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LA Superior Court
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Los Angeles County Superior Court
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GLOSSARY (CONTINUED)
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SONGS
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San Onofre Nuclear Generating Station
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S&P
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Standard & Poor’s
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SU
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Sharyland Utilities, L.L.C. (formerly known as Sharyland Utilities, L.P.)
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TAG
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TAG Pipelines Norte, S. de R.L. de C.V.
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TC Energy
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TC Energy Corporation (formerly known as TransCanada Corporation)
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TCJA
|
Tax Cuts and Jobs Act of 2017
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TdM
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Termoeléctrica de Mexicali
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Tecnored
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Tecnored S.A.
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Tecsur
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Tecsur S.A.
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TO5
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Electric Transmission Owner Formula Rate, new application
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TTI
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Texas Transmission Investment LLC
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U.S. GAAP
|
accounting principles generally accepted in the United States of America
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VAT
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value-added tax
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VIE
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variable interest entity
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▪
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the greater degree and prevalence of wildfires in California in recent years and the risk that we may be found liable for damages regardless of fault, such as where inverse condemnation applies, and risk that we may not be able to recover any such costs in rates from customers in California or otherwise, including due to insufficient amounts in the wildfire fund;
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▪
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actions and the timing of actions, including decisions, investigations, new regulations and issuances of permits and other authorizations and renewal of franchises by the CFE, CPUC, DOE, DOGGR, DPH, EPA, FERC, PHMSA, PUCT, states, cities and counties, and other regulatory and governmental bodies in the U.S. and other countries in which we operate;
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▪
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the success of business development efforts, construction projects, and major acquisitions, divestitures and internal structural changes, including risks in (i) obtaining or maintaining authorizations; (ii) completing construction projects on schedule and budget; (iii) obtaining the consent of partners; (iv) counterparties’ ability to fulfill contractual commitments; (v) winning competitively bid infrastructure projects; (vi) the ability to complete contemplated acquisitions and/or divestitures and the disruptions caused by such efforts; and (vii) the ability to realize anticipated benefits from any of these efforts once completed;
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▪
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the resolution of civil and criminal litigation, regulatory investigations and proceedings, and arbitrations;
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▪
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actions by credit rating agencies to downgrade our credit ratings or those of our subsidiaries or to place those ratings on negative outlook and our ability to borrow at favorable interest rates;
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▪
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deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and ratepayers; denial of approvals of proposed settlements; delays in, or denial of, regulatory agency authorizations to recover costs in rates from customers or regulatory agency approval for projects required to enhance safety and reliability; and moves to reduce or eliminate reliance on natural gas;
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▪
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the availability of electric power and natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid, limitations on the withdrawal or injection of natural gas from or into storage facilities, and equipment failures;
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▪
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expropriation of assets, the failure to honor the terms of contracts by foreign governments and state-owned entities such as the CFE, and other property disputes;
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▪
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risks posed by actions of third parties who control the operations of our investments;
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▪
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weather conditions, natural disasters, accidents, equipment failures, computer system outages, explosions, terrorist attacks and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires and subject us to third-party liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits), may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance;
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▪
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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;
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▪
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actions of activist shareholders, which could impact the market price of our securities and disrupt our operations as a result of, among other things, requiring significant time by management and our board of directors;
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▪
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changes in capital markets, energy markets and economic conditions, including the availability of credit; and volatility in currency exchange, interest and inflation rates and commodity prices and our ability to effectively hedge the risk of such volatility;
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▪
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the impact of federal or state tax reform and our ability to mitigate adverse impacts;
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▪
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changes in foreign and domestic trade policies and laws, including border tariffs and revisions to or replacement of international trade agreements, such as the North American Free Trade Agreement, that may increase our costs or impair our ability to resolve trade disputes;
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▪
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the impact at SDG&E on competitive customer rates and reliability of electric transmission and distribution systems due to the growth in distributed and local power generation and from possible departing retail load resulting from customers transferring to Direct Access and Community Choice Aggregation or other forms of distributed and local power generation and the potential risk of nonrecovery for stranded assets and contractual obligations;
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▪
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Oncor’s ability to eliminate or reduce its quarterly dividends due to regulatory capital requirements and other regulatory and governance commitments, including the determination by a majority of Oncor’s independent directors or a minority member director to retain such amounts to meet future requirements; and
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▪
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other uncertainties, some of which may be difficult to predict and are beyond our control.
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SEMPRA ENERGY
|
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||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||||
(Dollars in millions, except per share amounts; shares in thousands)
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|
||||||||
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Three months ended June 30,
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|
Six months ended
June 30,
|
||||||||||||
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2019
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2018
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2019
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2018
|
||||||||
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(unaudited)
|
||||||||||||||
REVENUES
|
|
|
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|
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|
||||||||
Utilities
|
$
|
1,895
|
|
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$
|
1,820
|
|
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$
|
4,410
|
|
|
$
|
4,010
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Energy-related businesses
|
335
|
|
|
355
|
|
|
718
|
|
|
701
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|
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Total revenues
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2,230
|
|
|
2,175
|
|
|
5,128
|
|
|
4,711
|
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||||
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EXPENSES AND OTHER INCOME
|
|
|
|
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|
||||||||
Utilities:
|
|
|
|
|
|
|
|
||||||||
Cost of natural gas
|
(136
|
)
|
|
(179
|
)
|
|
(667
|
)
|
|
(527
|
)
|
||||
Cost of electric fuel and purchased power
|
(263
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)
|
|
(320
|
)
|
|
(519
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)
|
|
(591
|
)
|
||||
Energy-related businesses cost of sales
|
(63
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)
|
|
(70
|
)
|
|
(171
|
)
|
|
(139
|
)
|
||||
Operation and maintenance
|
(838
|
)
|
|
(742
|
)
|
|
(1,670
|
)
|
|
(1,483
|
)
|
||||
Depreciation and amortization
|
(389
|
)
|
|
(377
|
)
|
|
(772
|
)
|
|
(749
|
)
|
||||
Franchise fees and other taxes
|
(112
|
)
|
|
(104
|
)
|
|
(242
|
)
|
|
(221
|
)
|
||||
Impairment losses
|
—
|
|
|
(1,300
|
)
|
|
—
|
|
|
(1,300
|
)
|
||||
Gain on sale of assets
|
66
|
|
|
—
|
|
|
66
|
|
|
—
|
|
||||
Other income (expense), net
|
28
|
|
|
(56
|
)
|
|
110
|
|
|
96
|
|
||||
Interest income
|
21
|
|
|
18
|
|
|
42
|
|
|
47
|
|
||||
Interest expense
|
(258
|
)
|
|
(228
|
)
|
|
(518
|
)
|
|
(434
|
)
|
||||
Income (loss) from continuing operations before income taxes
and equity earnings (losses)
|
286
|
|
|
(1,183
|
)
|
|
787
|
|
|
(590
|
)
|
||||
Income tax (expense) benefit
|
(47
|
)
|
|
602
|
|
|
(89
|
)
|
|
360
|
|
||||
Equity earnings (losses)
|
118
|
|
|
(4
|
)
|
|
219
|
|
|
(25
|
)
|
||||
Income (loss) from continuing operations, net of income tax
|
357
|
|
|
(585
|
)
|
|
917
|
|
|
(255
|
)
|
||||
Income from discontinued operations, net of income tax
|
78
|
|
|
55
|
|
|
36
|
|
|
83
|
|
||||
Net income (loss)
|
435
|
|
|
(530
|
)
|
|
953
|
|
|
(172
|
)
|
||||
(Earnings) losses attributable to noncontrolling interests
|
(45
|
)
|
|
(5
|
)
|
|
(86
|
)
|
|
12
|
|
||||
Mandatory convertible preferred stock dividends
|
(35
|
)
|
|
(25
|
)
|
|
(71
|
)
|
|
(53
|
)
|
||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Earnings (losses) attributable to common shares
|
$
|
354
|
|
|
$
|
(561
|
)
|
|
$
|
795
|
|
|
$
|
(214
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (losses) per common share:
|
|
|
|
|
|
|
|
||||||||
Earnings (losses) from continuing operations attributable to common shares
|
$
|
1.03
|
|
|
$
|
(2.29
|
)
|
|
$
|
2.82
|
|
|
$
|
(1.08
|
)
|
Earnings from discontinued operations attributable to common shares
|
$
|
0.26
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
|
$
|
0.26
|
|
Earnings (losses) attributable to common shares
|
$
|
1.29
|
|
|
$
|
(2.11
|
)
|
|
$
|
2.89
|
|
|
$
|
(0.82
|
)
|
Weighted-average common shares outstanding
|
274,987
|
|
|
265,837
|
|
|
274,831
|
|
|
261,906
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (losses) per common share:
|
|
|
|
|
|
|
|
||||||||
Earnings (losses) from continuing operations attributable to common shares
|
$
|
1.01
|
|
|
$
|
(2.29
|
)
|
|
$
|
2.78
|
|
|
$
|
(1.08
|
)
|
Earnings from discontinued operations attributable to common shares
|
$
|
0.25
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
|
$
|
0.26
|
|
Earnings (losses) attributable to common shares
|
$
|
1.26
|
|
|
$
|
(2.11
|
)
|
|
$
|
2.85
|
|
|
$
|
(0.82
|
)
|
Weighted-average common shares outstanding
|
279,619
|
|
|
265,837
|
|
|
278,424
|
|
|
261,906
|
|
SEMPRA ENERGY
|
|||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
Sempra Energy shareholders’ equity
|
|
|
|
|
||||||||||||||
|
Pretax
amount |
|
Income tax
(expense) benefit |
|
Net-of-tax
amount |
|
Noncontrolling
interests
(after-tax)
|
|
Total
|
||||||||||
|
(unaudited)
|
||||||||||||||||||
|
Three months ended June 30, 2019 and 2018
|
||||||||||||||||||
2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
466
|
|
|
$
|
(76
|
)
|
|
$
|
390
|
|
|
$
|
45
|
|
|
$
|
435
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
14
|
|
|
—
|
|
|
14
|
|
|
2
|
|
|
16
|
|
|||||
Financial instruments
|
(90
|
)
|
|
30
|
|
|
(60
|
)
|
|
(8
|
)
|
|
(68
|
)
|
|||||
Pension and other postretirement benefits
|
21
|
|
|
(6
|
)
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Total other comprehensive loss
|
(55
|
)
|
|
24
|
|
|
(31
|
)
|
|
(6
|
)
|
|
(37
|
)
|
|||||
Comprehensive income
|
411
|
|
|
(52
|
)
|
|
359
|
|
|
39
|
|
|
398
|
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive income, after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
410
|
|
|
$
|
(52
|
)
|
|
$
|
358
|
|
|
$
|
39
|
|
|
$
|
397
|
|
2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
$
|
(1,118
|
)
|
|
$
|
583
|
|
|
$
|
(535
|
)
|
|
$
|
5
|
|
|
$
|
(530
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
(86
|
)
|
|
—
|
|
|
(86
|
)
|
|
(8
|
)
|
|
(94
|
)
|
|||||
Financial instruments
|
35
|
|
|
(8
|
)
|
|
27
|
|
|
6
|
|
|
33
|
|
|||||
Pension and other postretirement benefits
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Total other comprehensive loss
|
(48
|
)
|
|
(8
|
)
|
|
(56
|
)
|
|
(2
|
)
|
|
(58
|
)
|
|||||
Comprehensive (loss) income
|
(1,166
|
)
|
|
575
|
|
|
(591
|
)
|
|
3
|
|
|
(588
|
)
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive (loss) income, after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
(1,167
|
)
|
|
$
|
575
|
|
|
$
|
(592
|
)
|
|
$
|
3
|
|
|
$
|
(589
|
)
|
|
Six months ended June 30, 2019 and 2018
|
||||||||||||||||||
2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
1,136
|
|
|
$
|
(269
|
)
|
|
$
|
867
|
|
|
$
|
86
|
|
|
$
|
953
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
46
|
|
|
—
|
|
|
46
|
|
|
6
|
|
|
52
|
|
|||||
Financial instruments
|
(158
|
)
|
|
52
|
|
|
(106
|
)
|
|
(12
|
)
|
|
(118
|
)
|
|||||
Pension and other postretirement benefits
|
25
|
|
|
(7
|
)
|
|
18
|
|
|
—
|
|
|
18
|
|
|||||
Total other comprehensive loss
|
(87
|
)
|
|
45
|
|
|
(42
|
)
|
|
(6
|
)
|
|
(48
|
)
|
|||||
Comprehensive income
|
1,049
|
|
|
(224
|
)
|
|
825
|
|
|
80
|
|
|
905
|
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive income, after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
1,048
|
|
|
$
|
(224
|
)
|
|
$
|
824
|
|
|
$
|
80
|
|
|
$
|
904
|
|
2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
$
|
(454
|
)
|
|
$
|
294
|
|
|
$
|
(160
|
)
|
|
$
|
(12
|
)
|
|
$
|
(172
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
(62
|
)
|
|
—
|
|
|
(62
|
)
|
|
(3
|
)
|
|
(65
|
)
|
|||||
Financial instruments
|
123
|
|
|
(38
|
)
|
|
85
|
|
|
16
|
|
|
101
|
|
|||||
Pension and other postretirement benefits
|
6
|
|
|
(1
|
)
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Total other comprehensive income
|
67
|
|
|
(39
|
)
|
|
28
|
|
|
13
|
|
|
41
|
|
|||||
Comprehensive (loss) income
|
(387
|
)
|
|
255
|
|
|
(132
|
)
|
|
1
|
|
|
(131
|
)
|
|||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Comprehensive (loss) income, after preferred
|
|
|
|
|
|
|
|
|
|
||||||||||
dividends of subsidiary
|
$
|
(388
|
)
|
|
$
|
255
|
|
|
$
|
(133
|
)
|
|
$
|
1
|
|
|
$
|
(132
|
)
|
SEMPRA ENERGY
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||
(Dollars in millions)
|
|||||||
|
June 30,
2019 |
|
December 31,
2018(1) |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
168
|
|
|
$
|
102
|
|
Restricted cash
|
50
|
|
|
35
|
|
||
Accounts receivable – trade, net
|
901
|
|
|
1,215
|
|
||
Accounts receivable – other, net
|
341
|
|
|
320
|
|
||
Due from unconsolidated affiliates
|
23
|
|
|
37
|
|
||
Income taxes receivable
|
106
|
|
|
60
|
|
||
Inventories
|
214
|
|
|
258
|
|
||
Regulatory assets
|
195
|
|
|
138
|
|
||
Greenhouse gas allowances
|
61
|
|
|
59
|
|
||
Assets held for sale
|
—
|
|
|
713
|
|
||
Assets held for sale in discontinued operations
|
445
|
|
|
459
|
|
||
Other
|
279
|
|
|
249
|
|
||
Total current assets
|
2,783
|
|
|
3,645
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Restricted cash
|
21
|
|
|
21
|
|
||
Due from unconsolidated affiliates
|
710
|
|
|
644
|
|
||
Regulatory assets
|
1,780
|
|
|
1,589
|
|
||
Nuclear decommissioning trusts
|
1,044
|
|
|
974
|
|
||
Investment in Oncor Holdings
|
10,930
|
|
|
9,652
|
|
||
Other investments
|
2,082
|
|
|
2,320
|
|
||
Goodwill
|
1,602
|
|
|
1,602
|
|
||
Other intangible assets
|
219
|
|
|
224
|
|
||
Dedicated assets in support of certain benefit plans
|
409
|
|
|
416
|
|
||
Insurance receivable for Aliso Canyon costs
|
381
|
|
|
461
|
|
||
Deferred income taxes
|
150
|
|
|
141
|
|
||
Greenhouse gas allowances
|
416
|
|
|
289
|
|
||
Right-of-use assets – operating leases
|
600
|
|
|
—
|
|
||
Assets held for sale in discontinued operations
|
3,453
|
|
|
3,259
|
|
||
Sundry
|
865
|
|
|
962
|
|
||
Total other assets
|
24,662
|
|
|
22,554
|
|
||
|
|
|
|
||||
Property, plant and equipment:
|
|
|
|
||||
Property, plant and equipment
|
47,907
|
|
|
46,615
|
|
||
Less accumulated depreciation and amortization
|
(12,625
|
)
|
|
(12,176
|
)
|
||
Property, plant and equipment, net ($280 and $295 at June 30, 2019 and
December 31, 2018, respectively, related to Otay Mesa VIE)
|
35,282
|
|
|
34,439
|
|
||
Total assets
|
$
|
62,727
|
|
|
$
|
60,638
|
|
(1)
|
Derived from audited financial statements.
|
SEMPRA ENERGY
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|||||||
(Dollars in millions)
|
|
|
|
||||
|
June 30,
2019 |
|
December 31,
2018(1) |
||||
|
(unaudited)
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
2,395
|
|
|
$
|
2,024
|
|
Accounts payable – trade
|
1,018
|
|
|
1,160
|
|
||
Accounts payable – other
|
182
|
|
|
138
|
|
||
Due to unconsolidated affiliates
|
9
|
|
|
10
|
|
||
Dividends and interest payable
|
490
|
|
|
480
|
|
||
Accrued compensation and benefits
|
299
|
|
|
440
|
|
||
Regulatory liabilities
|
349
|
|
|
105
|
|
||
Current portion of long-term debt and finance leases ($37 and $28 at June 30, 2019 and
December 31, 2018, respectively, related to Otay Mesa VIE) |
2,156
|
|
|
1,644
|
|
||
Reserve for Aliso Canyon costs
|
46
|
|
|
160
|
|
||
Greenhouse gas obligations
|
61
|
|
|
59
|
|
||
Liabilities held for sale in discontinued operations
|
336
|
|
|
368
|
|
||
Other
|
836
|
|
|
935
|
|
||
Total current liabilities
|
8,177
|
|
|
7,523
|
|
||
|
|
|
|
||||
Long-term debt and finance leases ($172 and $190 at June 30, 2019 and December 31, 2018,
respectively, related to Otay Mesa VIE) |
21,199
|
|
|
20,903
|
|
||
|
|
|
|
||||
Deferred credits and other liabilities:
|
|
|
|
||||
Due to unconsolidated affiliates
|
38
|
|
|
37
|
|
||
Pension and other postretirement benefit plan obligations, net of plan assets
|
1,135
|
|
|
1,143
|
|
||
Deferred income taxes
|
2,626
|
|
|
2,321
|
|
||
Deferred investment tax credits
|
23
|
|
|
24
|
|
||
Regulatory liabilities
|
4,026
|
|
|
4,016
|
|
||
Asset retirement obligations
|
2,815
|
|
|
2,786
|
|
||
Greenhouse gas obligations
|
225
|
|
|
131
|
|
||
Liabilities held for sale in discontinued operations
|
1,090
|
|
|
1,013
|
|
||
Deferred credits and other
|
1,939
|
|
|
1,493
|
|
||
Total deferred credits and other liabilities
|
13,917
|
|
|
12,964
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
||||
Preferred stock (50 million shares authorized):
|
|
|
|
||||
6% mandatory convertible preferred stock, series A
(17.25 million shares issued and outstanding)
|
1,693
|
|
|
1,693
|
|
||
6.75% mandatory convertible preferred stock, series B
(5.75 million shares issued and outstanding)
|
565
|
|
|
565
|
|
||
Common stock (750 million shares authorized; 274 million shares outstanding;
no par value)
|
5,605
|
|
|
5,540
|
|
||
Retained earnings
|
10,425
|
|
|
10,104
|
|
||
Accumulated other comprehensive income (loss)
|
(848
|
)
|
|
(764
|
)
|
||
Total Sempra Energy shareholders’ equity
|
17,440
|
|
|
17,138
|
|
||
Preferred stock of subsidiary
|
20
|
|
|
20
|
|
||
Other noncontrolling interests
|
1,974
|
|
|
2,090
|
|
||
Total equity
|
19,434
|
|
|
19,248
|
|
||
Total liabilities and equity
|
$
|
62,727
|
|
|
$
|
60,638
|
|
(1)
|
Derived from audited financial statements.
|
SEMPRA ENERGY
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(Dollars in millions)
|
|||||||
|
Six months ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(unaudited)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net income (loss)
|
$
|
953
|
|
|
$
|
(172
|
)
|
Less: Income from discontinued operations, net of income tax
|
(36
|
)
|
|
(83
|
)
|
||
Income (loss) from continuing operations, net of income tax
|
917
|
|
|
(255
|
)
|
||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
772
|
|
|
749
|
|
||
Deferred income taxes and investment tax credits
|
(12
|
)
|
|
(432
|
)
|
||
Impairment losses
|
—
|
|
|
1,300
|
|
||
Gain on sale of assets
|
(66
|
)
|
|
—
|
|
||
Equity (earnings) losses
|
(219
|
)
|
|
25
|
|
||
Share-based compensation expense
|
39
|
|
|
33
|
|
||
Fixed-price contracts and other derivatives
|
(28
|
)
|
|
(9
|
)
|
||
Other
|
(4
|
)
|
|
45
|
|
||
Intercompany activities with discontinued operations, net
|
64
|
|
|
42
|
|
||
Net change in other working capital components
|
84
|
|
|
268
|
|
||
Insurance receivable for Aliso Canyon costs
|
80
|
|
|
(84
|
)
|
||
Changes in other noncurrent assets and liabilities, net
|
(104
|
)
|
|
(157
|
)
|
||
Net cash provided by continuing operations
|
1,523
|
|
|
1,525
|
|
||
Net cash provided by discontinued operations
|
181
|
|
|
148
|
|
||
Net cash provided by operating activities
|
1,704
|
|
|
1,673
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(1,651
|
)
|
|
(1,834
|
)
|
||
Expenditures for investments and acquisition
|
(1,391
|
)
|
|
(9,823
|
)
|
||
Proceeds from sale of assets
|
902
|
|
|
1
|
|
||
Purchases of nuclear decommissioning trust assets
|
(497
|
)
|
|
(487
|
)
|
||
Proceeds from sales of nuclear decommissioning trust assets
|
497
|
|
|
487
|
|
||
Advances to unconsolidated affiliates
|
(16
|
)
|
|
(81
|
)
|
||
Repayments of advances to unconsolidated affiliates
|
9
|
|
|
1
|
|
||
Intercompany activities with discontinued operations, net
|
(2
|
)
|
|
(8
|
)
|
||
Other
|
13
|
|
|
39
|
|
||
Net cash used in continuing operations
|
(2,136
|
)
|
|
(11,705
|
)
|
||
Net cash used in discontinued operations
|
(131
|
)
|
|
(112
|
)
|
||
Net cash used in investing activities
|
(2,267
|
)
|
|
(11,817
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Common dividends paid
|
(483
|
)
|
|
(416
|
)
|
||
Preferred dividends paid
|
(71
|
)
|
|
(28
|
)
|
||
Preferred dividends paid by subsidiary
|
(1
|
)
|
|
(1
|
)
|
||
Issuances of mandatory convertible preferred stock, net of $32 in offering costs
|
—
|
|
|
1,693
|
|
||
Issuances of common stock, net of $38 in offering costs in 2018
|
20
|
|
|
2,090
|
|
||
Repurchases of common stock
|
(18
|
)
|
|
(20
|
)
|
||
Issuances of debt (maturities greater than 90 days)
|
2,630
|
|
|
7,328
|
|
||
Payments on debt (maturities greater than 90 days) and finance leases
|
(871
|
)
|
|
(1,799
|
)
|
||
(Decrease) increase in short-term debt, net
|
(444
|
)
|
|
1,265
|
|
||
Proceeds from sale of noncontrolling interest, net of $1 in offering costs
|
—
|
|
|
85
|
|
||
Purchases of and distributions to noncontrolling interests
|
(31
|
)
|
|
(9
|
)
|
||
Intercompany activities with discontinued operations, net
|
—
|
|
|
70
|
|
||
Other
|
(37
|
)
|
|
(104
|
)
|
||
Net cash provided by continuing operations
|
694
|
|
|
10,154
|
|
||
Net cash used in discontinued operations
|
(83
|
)
|
|
(44
|
)
|
||
Net cash provided by financing activities
|
611
|
|
|
10,110
|
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|
|
|
|
|||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|||||||||||||
(Dollars in millions)
|
|
|
|||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(unaudited)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
||||||||
Electric
|
$
|
973
|
|
|
$
|
938
|
|
|
$
|
1,913
|
|
|
$
|
1,822
|
|
Natural gas
|
121
|
|
|
113
|
|
|
326
|
|
|
284
|
|
||||
Total operating revenues
|
1,094
|
|
|
1,051
|
|
|
2,239
|
|
|
2,106
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of electric fuel and purchased power
|
265
|
|
|
323
|
|
|
523
|
|
|
597
|
|
||||
Cost of natural gas
|
34
|
|
|
30
|
|
|
113
|
|
|
80
|
|
||||
Operation and maintenance
|
276
|
|
|
251
|
|
|
562
|
|
|
499
|
|
||||
Depreciation and amortization
|
189
|
|
|
169
|
|
|
375
|
|
|
335
|
|
||||
Franchise fees and other taxes
|
67
|
|
|
63
|
|
|
141
|
|
|
132
|
|
||||
Total operating expenses
|
831
|
|
|
836
|
|
|
1,714
|
|
|
1,643
|
|
||||
Operating income
|
263
|
|
|
215
|
|
|
525
|
|
|
463
|
|
||||
Other income, net
|
19
|
|
|
25
|
|
|
41
|
|
|
53
|
|
||||
Interest income
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Interest expense
|
(102
|
)
|
|
(53
|
)
|
|
(205
|
)
|
|
(105
|
)
|
||||
Income before income taxes
|
181
|
|
|
188
|
|
|
363
|
|
|
413
|
|
||||
Income tax expense
|
(35
|
)
|
|
(42
|
)
|
|
(40
|
)
|
|
(98
|
)
|
||||
Net income
|
146
|
|
|
146
|
|
|
323
|
|
|
315
|
|
||||
(Earnings) losses attributable to noncontrolling interest
|
(3
|
)
|
|
—
|
|
|
(4
|
)
|
|
1
|
|
||||
Earnings attributable to common shares
|
$
|
143
|
|
|
$
|
146
|
|
|
$
|
319
|
|
|
$
|
316
|
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
SDG&E shareholder’s equity
|
|
|
|
|
||||||||||||||
|
Pretax
amount
|
|
Income tax expense
|
|
Net-of-tax
amount
|
|
Noncontrolling
interest
(after-tax)
|
|
Total
|
||||||||||
|
(unaudited)
|
||||||||||||||||||
|
Three months ended June 30, 2019 and 2018
|
||||||||||||||||||
2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
178
|
|
|
$
|
(35
|
)
|
|
$
|
143
|
|
|
$
|
3
|
|
|
$
|
146
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Pension and other postretirement benefits
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Comprehensive income
|
$
|
179
|
|
|
$
|
(35
|
)
|
|
$
|
144
|
|
|
$
|
3
|
|
|
$
|
147
|
|
2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
188
|
|
|
$
|
(42
|
)
|
|
$
|
146
|
|
|
$
|
—
|
|
|
$
|
146
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Comprehensive income
|
$
|
188
|
|
|
$
|
(42
|
)
|
|
$
|
146
|
|
|
$
|
1
|
|
|
$
|
147
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Six months ended June 30, 2019 and 2018
|
||||||||||||||||||
2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
359
|
|
|
$
|
(40
|
)
|
|
$
|
319
|
|
|
$
|
4
|
|
|
$
|
323
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Pension and other postretirement benefits
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|||||
Comprehensive income
|
$
|
360
|
|
|
$
|
(40
|
)
|
|
$
|
320
|
|
|
$
|
5
|
|
|
$
|
325
|
|
2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
414
|
|
|
$
|
(98
|
)
|
|
$
|
316
|
|
|
$
|
(1
|
)
|
|
$
|
315
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|||||
Comprehensive income
|
$
|
414
|
|
|
$
|
(98
|
)
|
|
$
|
316
|
|
|
$
|
4
|
|
|
$
|
320
|
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|
|
|
||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
||||
(Dollars in millions)
|
|
|
|
||||
|
June 30,
2019 |
|
December 31,
2018(1) |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3
|
|
|
$
|
8
|
|
Restricted cash
|
13
|
|
|
11
|
|
||
Accounts receivable – trade, net
|
374
|
|
|
368
|
|
||
Accounts receivable – other, net
|
91
|
|
|
106
|
|
||
Inventories
|
96
|
|
|
102
|
|
||
Prepaid expenses
|
82
|
|
|
74
|
|
||
Regulatory assets
|
182
|
|
|
123
|
|
||
Fixed-price contracts and other derivatives
|
44
|
|
|
82
|
|
||
Greenhouse gas allowances
|
15
|
|
|
15
|
|
||
Other
|
38
|
|
|
5
|
|
||
Total current assets
|
938
|
|
|
894
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Restricted cash
|
18
|
|
|
18
|
|
||
Regulatory assets
|
486
|
|
|
454
|
|
||
Nuclear decommissioning trusts
|
1,044
|
|
|
974
|
|
||
Greenhouse gas allowances
|
179
|
|
|
155
|
|
||
Right-of-use assets – operating leases
|
132
|
|
|
—
|
|
||
Sundry
|
412
|
|
|
420
|
|
||
Total other assets
|
2,271
|
|
|
2,021
|
|
||
|
|
|
|
||||
Property, plant and equipment:
|
|
|
|
||||
Property, plant and equipment
|
22,259
|
|
|
21,662
|
|
||
Less accumulated depreciation and amortization
|
(5,580
|
)
|
|
(5,352
|
)
|
||
Property, plant and equipment, net ($280 and $295 at June 30, 2019 and
December 31, 2018, respectively, related to VIE) |
16,679
|
|
|
16,310
|
|
||
Total assets
|
$
|
19,888
|
|
|
$
|
19,225
|
|
(1)
|
Derived from audited financial statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|
|
|
||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|
|
|
||||
(Dollars in millions)
|
|
|
|
||||
|
June 30,
2019 |
|
December 31,
2018(1) |
||||
|
(unaudited)
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
18
|
|
|
$
|
291
|
|
Accounts payable
|
405
|
|
|
439
|
|
||
Due to unconsolidated affiliates
|
96
|
|
|
61
|
|
||
Accrued compensation and benefits
|
74
|
|
|
117
|
|
||
Accrued franchise fees
|
36
|
|
|
64
|
|
||
Regulatory liabilities
|
39
|
|
|
53
|
|
||
Current portion of long-term debt and finance leases ($37 and $28 at June 30, 2019 and
December 31, 2018, respectively, related to VIE)
|
91
|
|
|
81
|
|
||
Customer deposits
|
71
|
|
|
70
|
|
||
Greenhouse gas obligations
|
15
|
|
|
15
|
|
||
Asset retirement obligations
|
88
|
|
|
96
|
|
||
Other
|
180
|
|
|
141
|
|
||
Total current liabilities
|
1,113
|
|
|
1,428
|
|
||
|
|
|
|
||||
Long-term debt and finance leases ($172 and $190 at June 30, 2019 and December 31, 2018, respectively, related to VIE)
|
6,497
|
|
|
6,138
|
|
||
|
|
|
|
||||
Deferred credits and other liabilities:
|
|
|
|
||||
Pension and other postretirement benefit plan obligations, net of plan assets
|
215
|
|
|
212
|
|
||
Deferred income taxes
|
1,675
|
|
|
1,616
|
|
||
Deferred investment tax credits
|
15
|
|
|
16
|
|
||
Regulatory liabilities
|
2,516
|
|
|
2,404
|
|
||
Asset retirement obligations
|
776
|
|
|
778
|
|
||
Greenhouse gas obligations
|
54
|
|
|
30
|
|
||
Deferred credits and other
|
589
|
|
|
488
|
|
||
Total deferred credits and other liabilities
|
5,840
|
|
|
5,544
|
|
||
|
|
|
|
||||
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
|
5,008
|
|
|
4,687
|
|
||
Accumulated other comprehensive income (loss)
|
(11
|
)
|
|
(10
|
)
|
||
Total SDG&E shareholder’s equity
|
6,335
|
|
|
6,015
|
|
||
Noncontrolling interest
|
103
|
|
|
100
|
|
||
Total equity
|
6,438
|
|
|
6,115
|
|
||
Total liabilities and equity
|
$
|
19,888
|
|
|
$
|
19,225
|
|
(1)
|
Derived from audited financial statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
|||||||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||||||
|
Common
stock |
|
Retained
earnings |
|
Accumulated
other comprehensive income (loss) |
|
SDG&E
shareholder's equity |
|
Noncontrolling
interest |
|
Total
equity |
||||||||||||
|
(unaudited)
|
||||||||||||||||||||||
|
Three months ended June 30, 2019
|
||||||||||||||||||||||
Balance at March 31, 2019
|
$
|
1,338
|
|
|
$
|
4,865
|
|
|
$
|
(12
|
)
|
|
$
|
6,191
|
|
|
$
|
102
|
|
|
$
|
6,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
|
143
|
|
|
|
|
143
|
|
|
3
|
|
|
146
|
|
||||||||
Other comprehensive income
|
|
|
|
|
1
|
|
|
1
|
|
|
|
|
1
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noncontrolling interest activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distributions
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||||||
Balance at June 30, 2019
|
$
|
1,338
|
|
|
$
|
5,008
|
|
|
$
|
(11
|
)
|
|
$
|
6,335
|
|
|
$
|
103
|
|
|
$
|
6,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three months ended June 30, 2018
|
||||||||||||||||||||||
Balance at March 31, 2018
|
$
|
1,338
|
|
|
$
|
4,438
|
|
|
$
|
(8
|
)
|
|
$
|
5,768
|
|
|
$
|
30
|
|
|
$
|
5,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
|
146
|
|
|
|
|
146
|
|
|
|
|
146
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noncontrolling interest activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity contributions
|
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
||||||||||
Distributions
|
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||||
Balance at June 30, 2018
|
$
|
1,338
|
|
|
$
|
4,584
|
|
|
$
|
(8
|
)
|
|
$
|
5,914
|
|
|
$
|
29
|
|
|
$
|
5,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six months ended June 30, 2019
|
||||||||||||||||||||||
Balance at December 31, 2018
|
$
|
1,338
|
|
|
$
|
4,687
|
|
|
$
|
(10
|
)
|
|
$
|
6,015
|
|
|
$
|
100
|
|
|
$
|
6,115
|
|
Cumulative-effect adjustment from
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
change in accounting principle
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
|
319
|
|
|
|
|
319
|
|
|
4
|
|
|
323
|
|
||||||||
Other comprehensive income
|
|
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noncontrolling interest activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distributions
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||||||
Balance at June 30, 2019
|
$
|
1,338
|
|
|
$
|
5,008
|
|
|
$
|
(11
|
)
|
|
$
|
6,335
|
|
|
$
|
103
|
|
|
$
|
6,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six months ended June 30, 2018
|
||||||||||||||||||||||
Balance at December 31, 2017
|
$
|
1,338
|
|
|
$
|
4,268
|
|
|
$
|
(8
|
)
|
|
$
|
5,598
|
|
|
$
|
28
|
|
|
$
|
5,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
|
|
316
|
|
|
|
|
316
|
|
|
(1
|
)
|
|
315
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
5
|
|
|
5
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noncontrolling interest activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity contributions
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|||||||
Distributions
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||||||
Balance at June 30, 2018
|
$
|
1,338
|
|
|
$
|
4,584
|
|
|
$
|
(8
|
)
|
|
$
|
5,914
|
|
|
$
|
29
|
|
|
$
|
5,943
|
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|
|
|
|
|||||||||||
CONDENSED STATEMENTS OF OPERATIONS
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(unaudited)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
806
|
|
|
$
|
772
|
|
|
$
|
2,167
|
|
|
$
|
1,898
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of natural gas
|
104
|
|
|
150
|
|
|
559
|
|
|
439
|
|
||||
Operation and maintenance
|
454
|
|
|
382
|
|
|
864
|
|
|
766
|
|
||||
Depreciation and amortization
|
148
|
|
|
138
|
|
|
295
|
|
|
273
|
|
||||
Franchise fees and other taxes
|
41
|
|
|
33
|
|
|
89
|
|
|
73
|
|
||||
Total operating expenses
|
747
|
|
|
703
|
|
|
1,807
|
|
|
1,551
|
|
||||
Operating income
|
59
|
|
|
69
|
|
|
360
|
|
|
347
|
|
||||
Other income, net
|
1
|
|
|
13
|
|
|
17
|
|
|
46
|
|
||||
Interest income
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Interest expense
|
(34
|
)
|
|
(26
|
)
|
|
(68
|
)
|
|
(53
|
)
|
||||
Income before income taxes
|
27
|
|
|
57
|
|
|
310
|
|
|
341
|
|
||||
Income tax benefit (expense)
|
4
|
|
|
(23
|
)
|
|
(15
|
)
|
|
(82
|
)
|
||||
Net income
|
31
|
|
|
34
|
|
|
295
|
|
|
259
|
|
||||
Preferred dividend requirements
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Earnings attributable to common shares
|
$
|
30
|
|
|
$
|
33
|
|
|
$
|
294
|
|
|
$
|
258
|
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||||||
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Pretax
amount |
|
Income tax benefit (expense)
|
|
Net-of-tax
amount |
||||||
|
(unaudited)
|
||||||||||
|
Three months ended June 30, 2019 and 2018
|
||||||||||
2019:
|
|
|
|
|
|
||||||
Net income
|
$
|
27
|
|
|
$
|
4
|
|
|
$
|
31
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pension and other postretirement benefits
|
6
|
|
|
(2
|
)
|
|
4
|
|
|||
Total other comprehensive income
|
6
|
|
|
(2
|
)
|
|
4
|
|
|||
Comprehensive income
|
$
|
33
|
|
|
$
|
2
|
|
|
$
|
35
|
|
2018:
|
|
|
|
|
|
||||||
Net income
|
$
|
57
|
|
|
$
|
(23
|
)
|
|
$
|
34
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pension and other postretirement benefits
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|||
Comprehensive income
|
$
|
58
|
|
|
$
|
(23
|
)
|
|
$
|
35
|
|
|
|
|
|
|
|
||||||
|
Six months ended June 30, 2019 and 2018
|
||||||||||
2019:
|
|
|
|
|
|
||||||
Net income
|
$
|
310
|
|
|
$
|
(15
|
)
|
|
$
|
295
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pension and other postretirement benefits
|
6
|
|
|
(2
|
)
|
|
4
|
|
|||
Total other comprehensive income
|
6
|
|
|
(2
|
)
|
|
4
|
|
|||
Comprehensive income
|
$
|
316
|
|
|
$
|
(17
|
)
|
|
$
|
299
|
|
2018:
|
|
|
|
|
|
||||||
Net income
|
$
|
341
|
|
|
$
|
(82
|
)
|
|
$
|
259
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Pension and other postretirement benefits
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total other comprehensive income
|
1
|
|
|
—
|
|
|
1
|
|
|||
Comprehensive income
|
$
|
342
|
|
|
$
|
(82
|
)
|
|
$
|
260
|
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||
CONDENSED BALANCE SHEETS
|
|||||||
(Dollars in millions)
|
|||||||
|
June 30,
2019 |
|
December 31,
2018(1) |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
28
|
|
|
$
|
18
|
|
Accounts receivable – trade, net
|
381
|
|
|
634
|
|
||
Accounts receivable – other, net
|
80
|
|
|
97
|
|
||
Due from unconsolidated affiliates
|
35
|
|
|
7
|
|
||
Inventories
|
75
|
|
|
134
|
|
||
Regulatory assets
|
7
|
|
|
12
|
|
||
Greenhouse gas allowances
|
39
|
|
|
37
|
|
||
Other
|
48
|
|
|
31
|
|
||
Total current assets
|
693
|
|
|
970
|
|
||
|
|
|
|
||||
Other assets:
|
|
|
|
||||
Regulatory assets
|
1,211
|
|
|
1,051
|
|
||
Insurance receivable for Aliso Canyon costs
|
381
|
|
|
461
|
|
||
Greenhouse gas allowances
|
216
|
|
|
116
|
|
||
Right-of-use assets – operating leases
|
105
|
|
|
—
|
|
||
Sundry
|
356
|
|
|
352
|
|
||
Total other assets
|
2,269
|
|
|
1,980
|
|
||
|
|
|
|
||||
Property, plant and equipment:
|
|
|
|
||||
Property, plant and equipment
|
18,646
|
|
|
18,138
|
|
||
Less accumulated depreciation and amortization
|
(5,841
|
)
|
|
(5,699
|
)
|
||
Property, plant and equipment, net
|
12,805
|
|
|
12,439
|
|
||
Total assets
|
$
|
15,767
|
|
|
$
|
15,389
|
|
(1)
|
Derived from audited financial statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||
CONDENSED BALANCE SHEETS (CONTINUED)
|
|||||||
(Dollars in millions)
|
|||||||
|
June 30,
2019 |
|
December 31,
2018(1) |
||||
|
(unaudited)
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
—
|
|
|
$
|
256
|
|
Accounts payable – trade
|
363
|
|
|
556
|
|
||
Accounts payable – other
|
120
|
|
|
93
|
|
||
Due to unconsolidated affiliates
|
—
|
|
|
34
|
|
||
Accrued compensation and benefits
|
134
|
|
|
159
|
|
||
Regulatory liabilities
|
310
|
|
|
52
|
|
||
Current portion of long-term debt and finance leases
|
4
|
|
|
3
|
|
||
Customer deposits
|
67
|
|
|
101
|
|
||
Reserve for Aliso Canyon costs
|
46
|
|
|
160
|
|
||
Greenhouse gas obligations
|
39
|
|
|
37
|
|
||
Asset retirement obligations
|
89
|
|
|
90
|
|
||
Other
|
204
|
|
|
217
|
|
||
Total current liabilities
|
1,376
|
|
|
1,758
|
|
||
|
|
|
|
||||
Long-term debt and finance leases
|
3,780
|
|
|
3,427
|
|
||
|
|
|
|
||||
Deferred credits and other liabilities:
|
|
|
|
||||
Pension obligation, net of plan assets
|
755
|
|
|
760
|
|
||
Deferred income taxes
|
1,210
|
|
|
1,177
|
|
||
Deferred investment tax credits
|
8
|
|
|
8
|
|
||
Regulatory liabilities
|
1,510
|
|
|
1,612
|
|
||
Asset retirement obligations
|
2,001
|
|
|
1,973
|
|
||
Greenhouse gas obligations
|
145
|
|
|
86
|
|
||
Deferred credits and other
|
428
|
|
|
330
|
|
||
Total deferred credits and other liabilities
|
6,057
|
|
|
5,946
|
|
||
|
|
|
|
||||
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
|
3,686
|
|
|
3,390
|
|
||
Accumulated other comprehensive income (loss)
|
(20
|
)
|
|
(20
|
)
|
||
Total shareholders’ equity
|
4,554
|
|
|
4,258
|
|
||
Total liabilities and shareholders’ equity
|
$
|
15,767
|
|
|
$
|
15,389
|
|
(1)
|
Derived from audited financial statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||||||||||||||||
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
Preferred
stock |
|
Common
stock |
|
Retained
earnings |
|
Accumulated
other comprehensive income (loss) |
|
Total
shareholders’ equity |
||||||||||
|
(unaudited)
|
||||||||||||||||||
|
Three months ended June 30, 2019
|
||||||||||||||||||
Balance at March 31, 2019
|
$
|
22
|
|
|
$
|
866
|
|
|
$
|
3,656
|
|
|
$
|
(24
|
)
|
|
$
|
4,520
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
|
|
|
31
|
|
|
|
|
|
31
|
|
|||||||
Other comprehensive income
|
|
|
|
|
|
|
4
|
|
|
4
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock dividends declared ($0.37/share)
|
|
|
|
|
(1
|
)
|
|
|
|
|
(1
|
)
|
|||||||
Balance at June 30, 2019
|
$
|
22
|
|
|
$
|
866
|
|
|
$
|
3,686
|
|
|
$
|
(20
|
)
|
|
$
|
4,554
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three months ended June 30, 2018
|
||||||||||||||||||
Balance at March 31, 2018
|
$
|
22
|
|
|
$
|
866
|
|
|
$
|
3,265
|
|
|
$
|
(21
|
)
|
|
$
|
4,132
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
|
|
|
34
|
|
|
|
|
|
34
|
|
|||||||
Other comprehensive income
|
|
|
|
|
|
|
1
|
|
|
1
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock dividends declared ($0.37/share)
|
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
||||||||
Balance at June 30, 2018
|
$
|
22
|
|
|
$
|
866
|
|
|
$
|
3,298
|
|
|
$
|
(20
|
)
|
|
$
|
4,166
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Six months ended June 30, 2019
|
||||||||||||||||||
Balance at December 31, 2018
|
$
|
22
|
|
|
$
|
866
|
|
|
$
|
3,390
|
|
|
$
|
(20
|
)
|
|
$
|
4,258
|
|
Cumulative-effect adjustment from
|
|
|
|
|
|
|
|
|
|
||||||||||
change in accounting principle
|
|
|
|
|
2
|
|
|
(4
|
)
|
|
(2
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
|
|
|
295
|
|
|
|
|
|
295
|
|
|||||||
Other comprehensive income
|
|
|
|
|
|
|
4
|
|
|
4
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock dividends declared ($0.75/share)
|
|
|
|
|
(1
|
)
|
|
|
|
|
(1
|
)
|
|||||||
Balance at June 30, 2019
|
$
|
22
|
|
|
$
|
866
|
|
|
$
|
3,686
|
|
|
$
|
(20
|
)
|
|
$
|
4,554
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Six months ended June 30, 2018
|
||||||||||||||||||
Balance at December 31, 2017
|
$
|
22
|
|
|
$
|
866
|
|
|
$
|
3,040
|
|
|
$
|
(21
|
)
|
|
$
|
3,907
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
|
|
|
259
|
|
|
|
|
259
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
1
|
|
|
1
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock dividends declared ($0.75/share)
|
|
|
|
|
(1
|
)
|
|
|
|
|
(1
|
)
|
|||||||
Balance at June 30, 2018
|
$
|
22
|
|
|
$
|
866
|
|
|
$
|
3,298
|
|
|
$
|
(20
|
)
|
|
$
|
4,166
|
|
|
|
|
|
|
▪
|
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.
|
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
||||||
(Dollars in millions)
|
||||||
|
June 30,
|
December 31,
|
||||
|
2019
|
2018
|
||||
Sempra Energy Consolidated:
|
|
|
||||
Cash and cash equivalents
|
$
|
168
|
|
$
|
102
|
|
Restricted cash, current
|
50
|
|
35
|
|
||
Restricted cash, noncurrent
|
21
|
|
21
|
|
||
Cash, cash equivalents and restricted cash in discontinued operations
|
55
|
|
88
|
|
||
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows
|
$
|
294
|
|
$
|
246
|
|
SDG&E:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
3
|
|
$
|
8
|
|
Restricted cash, current
|
13
|
|
11
|
|
||
Restricted cash, noncurrent
|
18
|
|
18
|
|
||
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows
|
$
|
34
|
|
$
|
37
|
|
INVENTORY BALANCES
|
||||||||||||||||||||||||||||||||||
(Dollars in millions)
|
||||||||||||||||||||||||||||||||||
|
Natural gas
|
|
|
LNG
|
|
|
Materials and supplies
|
|
|
Total
|
||||||||||||||||||||||||
|
June
30, 2019
|
|
December 31, 2018
|
|
|
June
30, 2019
|
|
December 31, 2018
|
|
|
June
30, 2019
|
|
December 31, 2018
|
|
|
June
30, 2019
|
|
December 31, 2018
|
||||||||||||||||
SDG&E
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
96
|
|
|
$
|
102
|
|
|
|
$
|
96
|
|
|
$
|
102
|
|
SoCalGas
|
28
|
|
|
92
|
|
|
|
—
|
|
|
—
|
|
|
|
47
|
|
|
42
|
|
|
|
75
|
|
|
134
|
|
||||||||
Sempra Mexico
|
—
|
|
|
—
|
|
|
|
10
|
|
|
4
|
|
|
|
14
|
|
|
15
|
|
|
|
24
|
|
|
19
|
|
||||||||
Sempra LNG
|
19
|
|
|
3
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
19
|
|
|
3
|
|
||||||||
Sempra Energy Consolidated
|
$
|
47
|
|
|
$
|
95
|
|
|
|
$
|
10
|
|
|
$
|
4
|
|
|
|
$
|
157
|
|
|
$
|
159
|
|
|
|
$
|
214
|
|
|
$
|
258
|
|
CAPITALIZED FINANCING COSTS
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sempra Energy Consolidated
|
$
|
51
|
|
|
$
|
54
|
|
|
$
|
98
|
|
|
$
|
103
|
|
SDG&E
|
20
|
|
|
23
|
|
|
37
|
|
|
47
|
|
||||
SoCalGas
|
11
|
|
|
16
|
|
|
22
|
|
|
29
|
|
▪
|
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 the right to receive benefits that could be significant to the VIE.
|
AMOUNTS ASSOCIATED WITH OTAY MESA VIE
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of electric fuel and purchased power
|
$
|
(19
|
)
|
|
$
|
(16
|
)
|
|
$
|
(35
|
)
|
|
$
|
(32
|
)
|
Operation and maintenance
|
4
|
|
|
4
|
|
|
8
|
|
|
8
|
|
||||
Depreciation and amortization
|
8
|
|
|
7
|
|
|
15
|
|
|
15
|
|
||||
Total operating expenses
|
(7
|
)
|
|
(5
|
)
|
|
(12
|
)
|
|
(9
|
)
|
||||
Operating income
|
7
|
|
|
5
|
|
|
12
|
|
|
9
|
|
||||
Interest expense
|
(4
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
(10
|
)
|
||||
Income (loss) before income taxes/Net income (loss)
|
3
|
|
|
—
|
|
|
4
|
|
|
(1
|
)
|
||||
(Earnings) losses attributable to noncontrolling interest
|
(3
|
)
|
|
—
|
|
|
(4
|
)
|
|
1
|
|
||||
Earnings attributable to common shares
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
AMOUNTS ASSOCIATED WITH TAX EQUITY ARRANGEMENTS
|
|
|
|||||||||||||
(Dollars in millions)
|
|
|
|
|
|
||||||||||
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|||||||||||
|
|
2019
|
2018
|
|
2019
|
|
2018
|
||||||||
REVENUES
|
|
|
|
|
|
|
|||||||||
Energy-related businesses
|
$
|
2
|
|
$
|
32
|
|
|
$
|
8
|
|
|
$
|
49
|
|
|
EXPENSES
|
|
|
|
|
|
|
|||||||||
Operation and maintenance
|
—
|
|
(4
|
)
|
|
(2
|
)
|
|
(8
|
)
|
|||||
Depreciation and amortization
|
(1
|
)
|
(12
|
)
|
|
(4
|
)
|
|
(23
|
)
|
|||||
Income before income taxes
|
1
|
|
16
|
|
|
2
|
|
|
18
|
|
|||||
Income tax expense
|
(1
|
)
|
(7
|
)
|
|
—
|
|
|
(12
|
)
|
|||||
Net income
|
—
|
|
9
|
|
|
2
|
|
|
6
|
|
|||||
Losses (earnings) attributable to noncontrolling interests(1)
|
2
|
|
20
|
|
|
(1
|
)
|
|
41
|
|
|||||
Earnings attributable to common shares
|
$
|
2
|
|
$
|
29
|
|
|
$
|
1
|
|
|
$
|
47
|
|
(1)
|
Net income or loss attributable to NCI 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 June 30,
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
28
|
|
|
$
|
33
|
|
|
$
|
4
|
|
|
$
|
5
|
|
Interest cost
|
35
|
|
|
34
|
|
|
9
|
|
|
9
|
|
||||
Expected return on assets
|
(36
|
)
|
|
(40
|
)
|
|
(17
|
)
|
|
(17
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
7
|
|
|
10
|
|
|
(3
|
)
|
|
(1
|
)
|
||||
Settlement charges
|
22
|
|
|
25
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
59
|
|
|
64
|
|
|
(7
|
)
|
|
(4
|
)
|
||||
Regulatory adjustments
|
3
|
|
|
(35
|
)
|
|
7
|
|
|
5
|
|
||||
Total expense recognized
|
$
|
62
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
55
|
|
|
$
|
66
|
|
|
$
|
8
|
|
|
$
|
11
|
|
Interest cost
|
70
|
|
|
69
|
|
|
18
|
|
|
18
|
|
||||
Expected return on assets
|
(72
|
)
|
|
(82
|
)
|
|
(35
|
)
|
|
(35
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
6
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
21
|
|
|
19
|
|
|
(5
|
)
|
|
(2
|
)
|
||||
Settlement charges
|
22
|
|
|
39
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
102
|
|
|
116
|
|
|
(14
|
)
|
|
(8
|
)
|
||||
Regulatory adjustments
|
(33
|
)
|
|
(80
|
)
|
|
14
|
|
|
9
|
|
||||
Total expense recognized
|
$
|
69
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
1
|
|
NET PERIODIC BENEFIT COST – SDG&E
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||
|
Three months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
8
|
|
|
8
|
|
|
2
|
|
|
1
|
|
||||
Expected return on assets
|
(9
|
)
|
|
(12
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Actuarial loss
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Settlement charges
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
10
|
|
|
9
|
|
|
—
|
|
|
(1
|
)
|
||||
Regulatory adjustments
|
(1
|
)
|
|
(8
|
)
|
|
—
|
|
|
1
|
|
||||
Total expense recognized
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
15
|
|
|
$
|
16
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
17
|
|
|
17
|
|
|
4
|
|
|
3
|
|
||||
Expected return on assets
|
(20
|
)
|
|
(25
|
)
|
|
(6
|
)
|
|
(7
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
2
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Actuarial loss (gain)
|
7
|
|
|
3
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Settlement charges
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
21
|
|
|
28
|
|
|
—
|
|
|
(1
|
)
|
||||
Regulatory adjustments
|
(12
|
)
|
|
(27
|
)
|
|
—
|
|
|
1
|
|
||||
Total expense recognized
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NET PERIODIC BENEFIT COST – SOCALGAS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Pension benefits
|
|
Other postretirement benefits
|
||||||||||||
|
Three months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
18
|
|
|
$
|
21
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Interest cost
|
22
|
|
|
22
|
|
|
7
|
|
|
7
|
|
||||
Expected return on assets
|
(23
|
)
|
|
(25
|
)
|
|
(15
|
)
|
|
(14
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
2
|
|
|
6
|
|
|
(2
|
)
|
|
(1
|
)
|
||||
Settlement charges
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
21
|
|
|
49
|
|
|
(7
|
)
|
|
(4
|
)
|
||||
Regulatory adjustments
|
4
|
|
|
(27
|
)
|
|
7
|
|
|
4
|
|
||||
Total expense recognized
|
$
|
25
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Six months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
34
|
|
|
$
|
43
|
|
|
$
|
6
|
|
|
$
|
8
|
|
Interest cost
|
45
|
|
|
45
|
|
|
14
|
|
|
14
|
|
||||
Expected return on assets
|
(47
|
)
|
|
(51
|
)
|
|
(29
|
)
|
|
(28
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
||||||||
Prior service cost (credit)
|
4
|
|
|
4
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Actuarial loss (gain)
|
11
|
|
|
12
|
|
|
(4
|
)
|
|
(1
|
)
|
||||
Settlement charges
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
47
|
|
|
76
|
|
|
(14
|
)
|
|
(8
|
)
|
||||
Regulatory adjustments
|
(21
|
)
|
|
(53
|
)
|
|
14
|
|
|
8
|
|
||||
Total expense recognized
|
$
|
26
|
|
|
$
|
23
|
|
|
$
|
—
|
|
|
$
|
—
|
|
BENEFIT PLAN CONTRIBUTIONS
|
||||||||||||
(Dollars in millions)
|
||||||||||||
|
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||
Contributions through June 30, 2019:
|
|
|
|
|
|
|
||||||
Pension plans
|
|
$
|
93
|
|
|
$
|
8
|
|
|
$
|
26
|
|
Other postretirement benefit plans
|
|
5
|
|
|
—
|
|
|
—
|
|
|||
Total expected contributions in 2019:
|
|
|
|
|
|
|
||||||
Pension plans
|
|
$
|
234
|
|
|
$
|
40
|
|
|
$
|
118
|
|
Other postretirement benefit plans
|
|
8
|
|
|
—
|
|
|
1
|
|
EARNINGS (LOSSES) PER COMMON SHARE COMPUTATIONS
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions, except per share amounts; shares in thousands)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator for continuing operations:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of income tax
|
$
|
357
|
|
|
$
|
(585
|
)
|
|
$
|
917
|
|
|
$
|
(255
|
)
|
(Earnings) losses attributable to noncontrolling interests
|
(37
|
)
|
|
2
|
|
|
(69
|
)
|
|
26
|
|
||||
Mandatory convertible preferred stock dividends
|
(35
|
)
|
|
(25
|
)
|
|
(71
|
)
|
|
(53
|
)
|
||||
Preferred dividends of subsidiary
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Earnings (losses) from continuing operations attributable to common shares
|
$
|
284
|
|
|
$
|
(609
|
)
|
|
$
|
776
|
|
|
$
|
(283
|
)
|
|
|
|
|
|
|
|
|
||||||||
Numerator for discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Income from discontinued operations, net of income tax
|
$
|
78
|
|
|
$
|
55
|
|
|
$
|
36
|
|
|
$
|
83
|
|
Earnings attributable to noncontrolling interests
|
(8
|
)
|
|
(7
|
)
|
|
(17
|
)
|
|
(14
|
)
|
||||
Earnings from discontinued operations attributable to common shares
|
$
|
70
|
|
|
$
|
48
|
|
|
$
|
19
|
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
||||||||
Numerator for earnings:
|
|
|
|
|
|
|
|
||||||||
Earnings (losses) attributable to common shares
|
$
|
354
|
|
|
$
|
(561
|
)
|
|
$
|
795
|
|
|
$
|
(214
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding for basic EPS(1)
|
274,987
|
|
|
265,837
|
|
|
274,831
|
|
|
261,906
|
|
||||
Dilutive effect of stock options and RSUs(2)(3)
|
1,541
|
|
|
—
|
|
|
1,255
|
|
|
—
|
|
||||
Dilutive effect of common shares sold forward(2)
|
3,091
|
|
|
—
|
|
|
2,338
|
|
|
—
|
|
||||
Weighted-average common shares outstanding for diluted EPS
|
279,619
|
|
|
265,837
|
|
|
278,424
|
|
|
261,906
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic EPS:
|
|
|
|
|
|
|
|
||||||||
Earnings (losses) from continuing operations attributable to common shares
|
$
|
1.03
|
|
|
$
|
(2.29
|
)
|
|
$
|
2.82
|
|
|
$
|
(1.08
|
)
|
Earnings from discontinued operations attributable to common shares
|
$
|
0.26
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
|
$
|
0.26
|
|
Earnings (losses) attributable to common shares
|
$
|
1.29
|
|
|
$
|
(2.11
|
)
|
|
$
|
2.89
|
|
|
$
|
(0.82
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS:
|
|
|
|
|
|
|
|
||||||||
Earnings (losses) from continuing operations attributable to common shares
|
$
|
1.01
|
|
|
$
|
(2.29
|
)
|
|
$
|
2.78
|
|
|
$
|
(1.08
|
)
|
Earnings from discontinued operations attributable to common shares
|
$
|
0.25
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
|
$
|
0.26
|
|
Earnings (losses) attributable to common shares
|
$
|
1.26
|
|
|
$
|
(2.11
|
)
|
|
$
|
2.85
|
|
|
$
|
(0.82
|
)
|
(1)
|
Includes 613 and 640 average fully vested RSUs held in our Deferred Compensation Plan for the three months ended June 30, 2019 and 2018, respectively, and 613 and 634 of such RSUs for the six months ended June 30, 2019 and 2018, 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)
|
In the three months and six months ended June 30, 2018, the total weighted-average potentially dilutive stock options and RSUs was 986 and 931, respectively, and the total weighted-average potentially dilutive common stock shares sold forward was 714 and 746, respectively. However, these securities were not included in the computation of EPS since to do so would have decreased the loss per share.
|
(3)
|
Due to market fluctuations of both Sempra Energy common stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.
|
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Foreign
currency
translation
adjustments
|
|
Financial
instruments
|
|
Pension
and other
postretirement
benefits
|
|
Total
accumulated other
comprehensive
income (loss)
|
||||||||
|
Three months ended June 30, 2019 and 2018
|
||||||||||||||
Sempra Energy Consolidated(2):
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2019
|
$
|
(532
|
)
|
|
$
|
(153
|
)
|
|
$
|
(132
|
)
|
|
$
|
(817
|
)
|
OCI before reclassifications(3)
|
14
|
|
|
(67
|
)
|
|
(7
|
)
|
|
(60
|
)
|
||||
Amounts reclassified from AOCI(3)
|
—
|
|
|
7
|
|
|
22
|
|
|
29
|
|
||||
Net OCI
|
14
|
|
|
(60
|
)
|
|
15
|
|
|
(31
|
)
|
||||
Balance as of June 30, 2019
|
$
|
(518
|
)
|
|
$
|
(213
|
)
|
|
$
|
(117
|
)
|
|
$
|
(848
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2018
|
$
|
(396
|
)
|
|
$
|
(67
|
)
|
|
$
|
(82
|
)
|
|
$
|
(545
|
)
|
OCI before reclassifications
|
(86
|
)
|
|
19
|
|
|
1
|
|
|
(66
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
8
|
|
|
2
|
|
|
10
|
|
||||
Net OCI
|
(86
|
)
|
|
27
|
|
|
3
|
|
|
(56
|
)
|
||||
Balance as of June 30, 2018
|
$
|
(482
|
)
|
|
$
|
(40
|
)
|
|
$
|
(79
|
)
|
|
$
|
(601
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2019
|
|
|
|
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
||||
Amounts reclassified from AOCI
|
|
|
|
|
1
|
|
|
1
|
|
||||||
Net OCI
|
|
|
|
|
1
|
|
|
1
|
|
||||||
Balance as of June 30, 2019
|
|
|
|
|
$
|
(11
|
)
|
|
$
|
(11
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2018 and June 30, 2018
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
||||
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2019
|
|
|
$
|
(14
|
)
|
|
$
|
(10
|
)
|
|
$
|
(24
|
)
|
||
Amounts reclassified from AOCI(3)
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||
Net OCI
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||
Balance as of June 30, 2019
|
|
|
$
|
(14
|
)
|
|
$
|
(6
|
)
|
|
$
|
(20
|
)
|
||
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2018
|
|
|
$
|
(13
|
)
|
|
$
|
(8
|
)
|
|
$
|
(21
|
)
|
||
Amounts reclassified from AOCI
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Net OCI
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Balance as of June 30, 2018
|
|
|
$
|
(13
|
)
|
|
$
|
(7
|
)
|
|
$
|
(20
|
)
|
(1)
|
All amounts are net of income tax, if subject to tax, and exclude NCI.
|
(2)
|
Includes discontinued operations.
|
(3)
|
Pension and Other Postretirement Benefits and Total AOCI include a $4 million transfer of liabilities from SoCalGas to Sempra Energy related to the nonqualified pension plan.
|
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) (CONTINUED)
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Foreign
currency
translation
adjustments
|
|
Financial
instruments
|
|
Pension
and other
postretirement
benefits
|
|
Total
accumulated other
comprehensive
income (loss)
|
||||||||
|
Six months ended June 30, 2019 and 2018
|
||||||||||||||
Sempra Energy Consolidated(2):
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2018
|
$
|
(564
|
)
|
|
$
|
(82
|
)
|
|
$
|
(118
|
)
|
|
$
|
(764
|
)
|
Cumulative-effect adjustment from change in accounting principle
|
—
|
|
|
(25
|
)
|
|
(17
|
)
|
|
(42
|
)
|
||||
OCI before reclassifications(3)
|
46
|
|
|
(112
|
)
|
|
(6
|
)
|
|
(72
|
)
|
||||
Amounts reclassified from AOCI(3)
|
—
|
|
|
6
|
|
|
24
|
|
|
30
|
|
||||
Net OCI
|
46
|
|
|
(106
|
)
|
|
18
|
|
|
(42
|
)
|
||||
Balance as of June 30, 2019
|
$
|
(518
|
)
|
|
$
|
(213
|
)
|
|
$
|
(117
|
)
|
|
$
|
(848
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2017
|
$
|
(420
|
)
|
|
$
|
(122
|
)
|
|
$
|
(84
|
)
|
|
$
|
(626
|
)
|
Cumulative-effect adjustment from change in accounting principle
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||
OCI before reclassifications
|
(62
|
)
|
|
85
|
|
|
1
|
|
|
24
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||
Net OCI
|
(62
|
)
|
|
85
|
|
|
5
|
|
|
28
|
|
||||
Balance as of June 30, 2018
|
$
|
(482
|
)
|
|
$
|
(40
|
)
|
|
$
|
(79
|
)
|
|
$
|
(601
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2018
|
|
|
|
|
$
|
(10
|
)
|
|
$
|
(10
|
)
|
||||
Cumulative-effect adjustment from change in accounting principle
|
|
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Amounts reclassified from AOCI
|
|
|
|
|
1
|
|
|
1
|
|
||||||
Net OCI
|
|
|
|
|
1
|
|
|
1
|
|
||||||
Balance as of June 30, 2019
|
|
|
|
|
$
|
(11
|
)
|
|
$
|
(11
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2017 and June 30, 2018
|
|
|
|
|
$
|
(8
|
)
|
|
$
|
(8
|
)
|
||||
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2018
|
|
|
$
|
(12
|
)
|
|
$
|
(8
|
)
|
|
$
|
(20
|
)
|
||
Cumulative-effect adjustment from change in accounting principle
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|||||
Amounts reclassified from AOCI(3)
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||
Net OCI
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||
Balance as of June 30, 2019
|
|
|
$
|
(14
|
)
|
|
$
|
(6
|
)
|
|
$
|
(20
|
)
|
||
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2017
|
|
|
$
|
(13
|
)
|
|
$
|
(8
|
)
|
|
$
|
(21
|
)
|
||
Amounts reclassified from AOCI
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Net OCI
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Balance as of June 30, 2018
|
|
|
$
|
(13
|
)
|
|
$
|
(7
|
)
|
|
$
|
(20
|
)
|
(1)
|
All amounts are net of income tax, if subject to tax, and exclude NCI.
|
(2)
|
Includes discontinued operations.
|
(3)
|
Pension and Other Postretirement Benefits and Total AOCI include a $4 million transfer of liabilities from SoCalGas to Sempra Energy related to the nonqualified pension plan.
|
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|||||||||
(Dollars in millions)
|
|||||||||
Details about accumulated other
comprehensive income (loss) components |
Amounts reclassified
from accumulated other comprehensive income (loss) |
|
Affected line item on Condensed
Consolidated Statements of Operations |
||||||
|
Three months ended June 30,
|
|
|
||||||
|
2019
|
|
2018
|
|
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate and foreign exchange instruments(1)
|
$
|
—
|
|
|
$
|
1
|
|
|
Interest Expense
|
|
(2
|
)
|
|
18
|
|
|
Other Income (Expense), Net
|
||
Interest rate instruments
|
10
|
|
|
—
|
|
|
Gain on Sale of Assets
|
||
Interest rate and foreign exchange instruments
|
—
|
|
|
1
|
|
|
Equity Earnings (Losses)
|
||
Foreign exchange instruments
|
—
|
|
|
(1
|
)
|
|
Revenues: Energy-Related Businesses
|
||
Total before income tax
|
8
|
|
|
19
|
|
|
|
||
|
(1
|
)
|
|
(4
|
)
|
|
Income Tax (Expense) Benefit
|
||
Net of income tax
|
7
|
|
|
15
|
|
|
|
||
|
—
|
|
|
(7
|
)
|
|
(Earnings) Losses Attributable to Noncontrolling Interests
|
||
|
$
|
7
|
|
|
$
|
8
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of actuarial loss(2)
|
$
|
2
|
|
|
$
|
3
|
|
|
Other Income (Expense), Net
|
Settlements(2)
|
22
|
|
|
—
|
|
|
Other Income (Expense), Net
|
||
Total before income tax
|
24
|
|
|
3
|
|
|
|
||
|
(6
|
)
|
|
(1
|
)
|
|
Income Tax (Expense) Benefit
|
||
Net of income tax
|
$
|
18
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
$
|
25
|
|
|
$
|
10
|
|
|
|
SDG&E:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate instruments(1)
|
$
|
1
|
|
|
$
|
1
|
|
|
Interest Expense
|
|
(1
|
)
|
|
(1
|
)
|
|
(Earnings) Losses Attributable to Noncontrolling Interest
|
||
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of prior service cost(2)
|
$
|
1
|
|
|
$
|
—
|
|
|
Other Income, Net
|
|
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
$
|
1
|
|
|
$
|
—
|
|
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
||
Amortization of actuarial loss(2)
|
$
|
—
|
|
|
$
|
1
|
|
|
Other Income, Net
|
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) (CONTINUED)
|
|||||||||
(Dollars in millions)
|
|||||||||
Details about accumulated other
comprehensive income (loss) components |
Amounts reclassified
from accumulated other comprehensive income (loss) |
|
Affected line item on Condensed
Consolidated Statements of Operations |
||||||
|
Six months ended June 30,
|
|
|
||||||
|
2019
|
|
2018
|
|
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate and foreign exchange instruments(1)
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
Interest Expense
|
|
(5
|
)
|
|
—
|
|
|
Other Income (Expense), Net
|
||
Interest rate instruments
|
10
|
|
|
—
|
|
|
Gain on Sale of Assets
|
||
Interest rate and foreign exchange instruments
|
1
|
|
|
5
|
|
|
Equity Earnings (Losses)
|
||
Foreign exchange instruments
|
1
|
|
|
(1
|
)
|
|
Revenues: Energy-Related Businesses
|
||
Total before income tax
|
8
|
|
|
3
|
|
|
|
||
|
(1
|
)
|
|
(1
|
)
|
|
Income Tax (Expense) Benefit
|
||
Net of income tax
|
7
|
|
|
2
|
|
|
|
||
|
(1
|
)
|
|
(2
|
)
|
|
(Earnings) Losses Attributable to Noncontrolling Interests
|
||
|
$
|
6
|
|
|
$
|
—
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of actuarial loss(2)
|
$
|
4
|
|
|
$
|
6
|
|
|
Other Income (Expense), Net
|
Amortization of prior service cost(2)
|
1
|
|
|
—
|
|
|
Other Income (Expense), Net
|
||
Settlements(2)
|
22
|
|
|
—
|
|
|
Other Income (Expense), Net
|
||
Total before income tax
|
27
|
|
|
6
|
|
|
|
||
|
(7
|
)
|
|
(2
|
)
|
|
Income Tax (Expense) Benefit
|
||
Net of income tax
|
$
|
20
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
$
|
26
|
|
|
$
|
4
|
|
|
|
SDG&E:
|
|
|
|
|
|
||||
Financial instruments:
|
|
|
|
|
|
||||
Interest rate instruments(1)
|
$
|
2
|
|
|
$
|
4
|
|
|
Interest Expense
|
|
(2
|
)
|
|
(4
|
)
|
|
(Earnings) Losses Attributable to Noncontrolling Interest
|
||
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
||||
Amortization of prior service cost(2)
|
$
|
1
|
|
|
$
|
—
|
|
|
Other Income, Net
|
|
|
|
|
|
|
||||
Total reclassifications for the period, net of tax
|
$
|
1
|
|
|
$
|
—
|
|
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
||
Amortization of actuarial loss(2)
|
$
|
—
|
|
|
$
|
1
|
|
|
Other Income, Net
|
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).
|
OTHER NONCONTROLLING INTERESTS
|
|||||||||||
(Dollars in millions)
|
|
|
|||||||||
|
Percent ownership held by noncontrolling interests
|
|
Equity (deficit) held by
noncontrolling interests
|
||||||||
|
June 30,
2019 |
|
December 31,
2018 |
|
June 30,
2019 |
|
December 31,
2018 |
||||
SDG&E:
|
|
|
|
|
|
|
|
||||
Otay Mesa VIE
|
100
|
%
|
100
|
%
|
$
|
103
|
|
|
$
|
100
|
|
Sempra Mexico:
|
|
|
|
|
|
|
|
||||
IEnova
|
33.4
|
|
33.5
|
|
1,637
|
|
|
1,592
|
|
||
IEnova subsidiaries(1)
|
10.0 – 47.6
|
|
10.0 – 49.0
|
|
13
|
|
|
13
|
|
||
Sempra Renewables:
|
|
|
|
|
|
|
|
||||
Tax equity arrangements – wind(2)
|
—
|
|
NA
|
|
—
|
|
|
158
|
|
||
PXiSE Energy Solutions, LLC(3)
|
11.1
|
|
11.1
|
|
—
|
|
|
1
|
|
||
Sempra LNG:
|
|
|
|
|
|
|
|
||||
Bay Gas
|
—
|
|
9.1
|
|
—
|
|
|
18
|
|
||
Liberty Gas Storage, LLC
|
24.6
|
|
24.6
|
|
(12
|
)
|
|
(12
|
)
|
||
Discontinued Operations:
|
|
|
|
|
|
|
|
||||
Chilquinta Energía subsidiaries(1)
|
19.7 – 43.4
|
|
19.7 – 43.4
|
|
24
|
|
|
23
|
|
||
Luz del Sur
|
16.4
|
|
16.4
|
|
205
|
|
|
193
|
|
||
Tecsur
|
9.8
|
|
9.8
|
|
4
|
|
|
4
|
|
||
Total Sempra Energy
|
|
|
|
|
$
|
1,974
|
|
|
$
|
2,090
|
|
(1)
|
IEnova and Chilquinta Energía have subsidiaries with NCI held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.
|
(2)
|
Net income or loss attributable to NCI is computed using the HLBV method and is not based on ownership percentages.
|
(3)
|
In April 2019, PXiSE Energy Solutions, LLC was subsumed into Parent and other. At June 30, 2019, equity held by NCI was negligible.
|
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
|
|||||||
(Dollars in millions)
|
|||||||
|
June 30,
2019 |
|
December 31,
2018 |
||||
Sempra Energy Consolidated:
|
|
|
|
||||
Total due from various unconsolidated affiliates – current
|
$
|
23
|
|
|
$
|
37
|
|
|
|
|
|
||||
Sempra Mexico(1):
|
|
|
|
||||
IMG – Note due March 15, 2022(2)
|
$
|
710
|
|
|
$
|
641
|
|
Energía Sierra Juárez – Note(3)
|
—
|
|
|
3
|
|
||
Total due from unconsolidated affiliates – noncurrent
|
$
|
710
|
|
|
$
|
644
|
|
|
|
|
|
||||
Total due to various unconsolidated affiliates – current
|
$
|
(9
|
)
|
|
$
|
(10
|
)
|
|
|
|
|
||||
Sempra Mexico(1):
|
|
|
|
||||
Total due to unconsolidated affiliates – noncurrent – TAG – Note due December 20, 2021(4)
|
$
|
(38
|
)
|
|
$
|
(37
|
)
|
SDG&E:
|
|
|
|
||||
Sempra Energy
|
$
|
(78
|
)
|
|
$
|
(43
|
)
|
SoCalGas
|
(9
|
)
|
|
(6
|
)
|
||
Various affiliates
|
(9
|
)
|
|
(12
|
)
|
||
Total due to unconsolidated affiliates – current
|
$
|
(96
|
)
|
|
$
|
(61
|
)
|
|
|
|
|
||||
Income taxes due from Sempra Energy(5)
|
$
|
44
|
|
|
$
|
5
|
|
SoCalGas:
|
|
|
|
||||
Sempra Energy(6)
|
$
|
26
|
|
|
$
|
—
|
|
SDG&E
|
9
|
|
|
6
|
|
||
Various affiliates
|
—
|
|
|
1
|
|
||
Total due from unconsolidated affiliates – current
|
$
|
35
|
|
|
$
|
7
|
|
|
|
|
|
||||
Total due to unconsolidated affiliates – current – Sempra Energy
|
$
|
—
|
|
|
$
|
(34
|
)
|
|
|
|
|
||||
Income taxes due to Sempra Energy(5)
|
$
|
(7
|
)
|
|
$
|
(4
|
)
|
(1)
|
Amounts include principal balances plus accumulated interest outstanding.
|
(2)
|
Mexican peso-denominated revolving line of credit for up to 14.2 billion Mexican pesos or approximately $737 million U.S. dollar-equivalent, at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 bps (10.68 percent at June 30, 2019), to finance construction of the natural gas marine pipeline.
|
(3)
|
U.S. dollar-denominated loan, at a variable interest rate based on the 30-day LIBOR plus 637.5 bps (8.89 percent at December 31, 2018).
|
(4)
|
U.S. dollar-denominated loan, at a variable interest rate based on the 6-month LIBOR plus 290 bps (5.10 percent at June 30, 2019).
|
(5)
|
SDG&E and SoCalGas are included in the consolidated income tax return of Sempra Energy and their respective income tax expense is computed as an amount equal to that which would result from each company having always filed a separate return.
|
(6)
|
At June 30, 2019, net receivable includes outstanding advances to Sempra Energy of $94 million at an interest rate of 2.57 percent.
|
REVENUES AND COST OF SALES FROM UNCONSOLIDATED AFFILIATES
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sempra Energy Consolidated
|
$
|
13
|
|
|
$
|
16
|
|
|
$
|
27
|
|
|
$
|
32
|
|
SDG&E
|
2
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
SoCalGas
|
17
|
|
|
15
|
|
|
34
|
|
|
32
|
|
||||
Cost of Sales:
|
|
|
|
|
|
|
|
||||||||
Sempra Energy Consolidated
|
$
|
14
|
|
|
$
|
15
|
|
|
$
|
28
|
|
|
$
|
27
|
|
SDG&E
|
20
|
|
|
16
|
|
|
40
|
|
|
35
|
|
||||
SoCalGas
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
OTHER INCOME (EXPENSE), NET
|
|
|
|
|
|
|
|||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Allowance for equity funds used during construction
|
$
|
23
|
|
|
$
|
29
|
|
|
$
|
44
|
|
|
$
|
56
|
|
Investment gains(1)
|
11
|
|
|
6
|
|
|
37
|
|
|
5
|
|
||||
Gains (losses) on interest rate and foreign exchange instruments, net
|
11
|
|
|
(55
|
)
|
|
24
|
|
|
7
|
|
||||
Foreign currency transaction gains (losses), net(2)
|
4
|
|
|
(42
|
)
|
|
11
|
|
|
(12
|
)
|
||||
Non-service component of net periodic benefit (cost) credit
|
(30
|
)
|
|
8
|
|
|
(6
|
)
|
|
40
|
|
||||
Penalties related to billing practices OII
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||
Interest on regulatory balancing accounts, net
|
6
|
|
|
1
|
|
|
5
|
|
|
1
|
|
||||
Sundry, net
|
3
|
|
|
(3
|
)
|
|
3
|
|
|
(1
|
)
|
||||
Total
|
$
|
28
|
|
|
$
|
(56
|
)
|
|
$
|
110
|
|
|
$
|
96
|
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Allowance for equity funds used during construction
|
$
|
15
|
|
|
$
|
16
|
|
|
$
|
27
|
|
|
$
|
34
|
|
Non-service component of net periodic benefit (cost) credit
|
(1
|
)
|
|
8
|
|
|
8
|
|
|
17
|
|
||||
Interest on regulatory balancing accounts, net
|
6
|
|
|
2
|
|
|
6
|
|
|
2
|
|
||||
Sundry, net
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
19
|
|
|
$
|
25
|
|
|
$
|
41
|
|
|
$
|
53
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Allowance for equity funds used during construction
|
$
|
8
|
|
|
$
|
13
|
|
|
$
|
16
|
|
|
$
|
22
|
|
Non-service component of net periodic benefit (cost) credit
|
(4
|
)
|
|
3
|
|
|
14
|
|
|
28
|
|
||||
Penalties related to billing practices OII
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||
Interest on regulatory balancing accounts, net
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Sundry, net
|
(3
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
Total
|
$
|
1
|
|
|
$
|
13
|
|
|
$
|
17
|
|
|
$
|
46
|
|
(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 O&M on the Condensed Consolidated Statements of Operations.
|
(2)
|
Includes gains of $7 million and $17 million in the three months and six months ended June 30, 2019, respectively, and losses of $47 million and $8 million in the three months and six months ended June 30, 2018, respectively, from translation to U.S. dollars of a Mexican peso-denominated loan to the IMG JV, which are offset by corresponding amounts included in Equity Earnings (Losses) on the Condensed Consolidated Statements of Operations.
|
INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Income tax expense (benefit) from continuing operations
|
$
|
47
|
|
|
$
|
(602
|
)
|
|
$
|
89
|
|
|
$
|
(360
|
)
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations before income taxes
|
|
|
|
|
|
|
|
||||||||
and equity earnings (losses)
|
$
|
286
|
|
|
$
|
(1,183
|
)
|
|
$
|
787
|
|
|
$
|
(590
|
)
|
Equity earnings (losses), before income tax(1)
|
2
|
|
|
(189
|
)
|
|
7
|
|
|
(184
|
)
|
||||
Pretax income (loss)
|
$
|
288
|
|
|
$
|
(1,372
|
)
|
|
$
|
794
|
|
|
$
|
(774
|
)
|
|
|
|
|
|
|
|
|
||||||||
Effective income tax rate
|
16
|
%
|
|
44
|
%
|
|
11
|
%
|
|
47
|
%
|
||||
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
$
|
35
|
|
|
$
|
42
|
|
|
$
|
40
|
|
|
$
|
98
|
|
Income before income taxes
|
$
|
181
|
|
|
$
|
188
|
|
|
$
|
363
|
|
|
$
|
413
|
|
Effective income tax rate
|
19
|
%
|
|
22
|
%
|
|
11
|
%
|
|
24
|
%
|
||||
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Income tax (benefit) expense
|
$
|
(4
|
)
|
|
$
|
23
|
|
|
$
|
15
|
|
|
$
|
82
|
|
Income before income taxes
|
$
|
27
|
|
|
$
|
57
|
|
|
$
|
310
|
|
|
$
|
341
|
|
Effective income tax rate
|
(15
|
)%
|
|
40
|
%
|
|
5
|
%
|
|
24
|
%
|
(1)
|
We discuss how we recognize equity earnings in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.
|
▪
|
repairs expenditures related to a certain portion of utility plant fixed assets;
|
▪
|
the equity portion of AFUDC, which is non-taxable;
|
▪
|
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; and
|
▪
|
state income taxes.
|
▪
|
$103 million income tax expense related to outside basis differences existing as of the January 25, 2019 approval of our plan to sell our South American businesses; and
|
▪
|
$20 million income tax expense related to the increase in outside basis differences from 2019 earnings since January 25, 2019.
|
|
|
|
|
|
IMPACT FROM ADOPTION OF THE LEASE STANDARD
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Sempra Energy Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||
Assets held for sale
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Sundry
|
(71
|
)
|
|
—
|
|
|
—
|
|
|||
Property, plant and equipment, net
|
(147
|
)
|
|
—
|
|
|
—
|
|
|||
Right-of-use assets – operating leases
|
603
|
|
|
130
|
|
|
116
|
|
|||
Deferred income tax assets
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||
Other current liabilities
|
80
|
|
|
20
|
|
|
23
|
|
|||
Long-term debt
|
(138
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred credits and other
|
436
|
|
|
110
|
|
|
93
|
|
|||
Retained earnings
|
17
|
|
|
—
|
|
|
—
|
|
▪
|
Sempra Energy: increase of $40 million to beginning Retained Earnings, $2 million to noncurrent Regulatory Liabilities and $42 million to Accumulated Other Comprehensive Loss;
|
▪
|
SDG&E: increase of $2 million to beginning Retained Earnings and Accumulated Other Comprehensive Loss; and
|
▪
|
SoCalGas: increase of $2 million to beginning Retained Earnings, $2 million to noncurrent Regulatory Liabilities and $4 million to Accumulated Other Comprehensive Loss.
|
|
|
|
|
|
DISAGGREGATED REVENUES
|
|||||||||||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||||||||||
|
Three months ended June 30, 2019
|
||||||||||||||||||||||||||
|
SDG&E
|
|
SoCalGas
|
|
Sempra Mexico
|
|
Sempra Renewables
|
|
Sempra LNG
|
|
Consolidating adjustments
|
|
Sempra Energy Consolidated
|
||||||||||||||
By major service line:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Utilities
|
$
|
998
|
|
|
$
|
877
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
|
$
|
1,870
|
|
Midstream
|
—
|
|
|
—
|
|
|
143
|
|
|
—
|
|
|
19
|
|
|
(11
|
)
|
|
151
|
|
|||||||
Renewables
|
—
|
|
|
—
|
|
|
30
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
30
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
29
|
|
|||||||
Revenues from contracts with customers
|
$
|
998
|
|
|
$
|
877
|
|
|
$
|
217
|
|
|
$
|
1
|
|
|
$
|
21
|
|
|
$
|
(34
|
)
|
|
$
|
2,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
By market:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gas
|
$
|
102
|
|
|
$
|
877
|
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
(29
|
)
|
|
$
|
1,127
|
|
Electric
|
896
|
|
|
—
|
|
|
59
|
|
|
1
|
|
|
2
|
|
|
(5
|
)
|
|
953
|
|
|||||||
Revenues from contracts with customers
|
$
|
998
|
|
|
$
|
877
|
|
|
$
|
217
|
|
|
$
|
1
|
|
|
$
|
21
|
|
|
$
|
(34
|
)
|
|
$
|
2,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenues from contracts with customers
|
$
|
998
|
|
|
$
|
877
|
|
|
$
|
217
|
|
|
$
|
1
|
|
|
$
|
21
|
|
|
$
|
(34
|
)
|
|
$
|
2,080
|
|
Utilities regulatory revenues
|
96
|
|
|
(71
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||||
Other revenues
|
—
|
|
|
—
|
|
|
101
|
|
|
2
|
|
|
65
|
|
|
(43
|
)
|
|
125
|
|
|||||||
Total revenues
|
$
|
1,094
|
|
|
$
|
806
|
|
|
$
|
318
|
|
|
$
|
3
|
|
|
$
|
86
|
|
|
$
|
(77
|
)
|
|
$
|
2,230
|
|
|
Six months ended June 30, 2019
|
||||||||||||||||||||||||||
By major service line:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Utilities
|
$
|
2,234
|
|
|
$
|
2,405
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
4,643
|
|
Midstream
|
—
|
|
|
—
|
|
|
314
|
|
|
—
|
|
|
86
|
|
|
(70
|
)
|
|
330
|
|
|||||||
Renewables
|
—
|
|
|
—
|
|
|
50
|
|
|
5
|
|
|
—
|
|
|
(1
|
)
|
|
54
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
3
|
|
|
(2
|
)
|
|
96
|
|
|||||||
Revenues from contracts with customers
|
$
|
2,234
|
|
|
$
|
2,405
|
|
|
$
|
501
|
|
|
$
|
5
|
|
|
$
|
89
|
|
|
$
|
(111
|
)
|
|
$
|
5,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
By market:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gas
|
$
|
341
|
|
|
$
|
2,405
|
|
|
$
|
356
|
|
|
$
|
—
|
|
|
$
|
86
|
|
|
$
|
(105
|
)
|
|
$
|
3,083
|
|
Electric
|
1,893
|
|
|
—
|
|
|
145
|
|
|
5
|
|
|
3
|
|
|
(6
|
)
|
|
2,040
|
|
|||||||
Revenues from contracts with customers
|
$
|
2,234
|
|
|
$
|
2,405
|
|
|
$
|
501
|
|
|
$
|
5
|
|
|
$
|
89
|
|
|
$
|
(111
|
)
|
|
$
|
5,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenues from contracts with customers
|
$
|
2,234
|
|
|
$
|
2,405
|
|
|
$
|
501
|
|
|
$
|
5
|
|
|
$
|
89
|
|
|
$
|
(111
|
)
|
|
$
|
5,123
|
|
Utilities regulatory revenues
|
5
|
|
|
(238
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(233
|
)
|
|||||||
Other revenues
|
—
|
|
|
—
|
|
|
200
|
|
|
5
|
|
|
138
|
|
|
(105
|
)
|
|
238
|
|
|||||||
Total revenues
|
$
|
2,239
|
|
|
$
|
2,167
|
|
|
$
|
701
|
|
|
$
|
10
|
|
|
$
|
227
|
|
|
$
|
(216
|
)
|
|
$
|
5,128
|
|
DISAGGREGATED REVENUES (CONTINUED)
|
|||||||||||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||||||||||
|
Three months ended June 30, 2018
|
||||||||||||||||||||||||||
|
SDG&E
|
|
SoCalGas
|
|
Sempra Mexico
|
|
Sempra Renewables
|
|
Sempra LNG
|
|
Consolidating adjustments
|
|
Sempra Energy Consolidated
|
||||||||||||||
By major service line:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Utilities
|
$
|
999
|
|
|
$
|
729
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(16
|
)
|
|
$
|
1,725
|
|
Midstream
|
—
|
|
|
—
|
|
|
147
|
|
|
—
|
|
|
35
|
|
|
(13
|
)
|
|
169
|
|
|||||||
Renewables
|
—
|
|
|
—
|
|
|
31
|
|
|
12
|
|
|
—
|
|
|
1
|
|
|
44
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
31
|
|
|||||||
Revenues from contracts with customers
|
$
|
999
|
|
|
$
|
729
|
|
|
$
|
221
|
|
|
$
|
12
|
|
|
$
|
37
|
|
|
$
|
(29
|
)
|
|
$
|
1,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
By market:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gas
|
$
|
113
|
|
|
$
|
729
|
|
|
$
|
159
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
(28
|
)
|
|
$
|
1,007
|
|
Electric
|
886
|
|
|
—
|
|
|
62
|
|
|
12
|
|
|
3
|
|
|
(1
|
)
|
|
962
|
|
|||||||
Revenues from contracts with customers
|
$
|
999
|
|
|
$
|
729
|
|
|
$
|
221
|
|
|
$
|
12
|
|
|
$
|
37
|
|
|
$
|
(29
|
)
|
|
$
|
1,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenues from contracts with customers
|
$
|
999
|
|
|
$
|
729
|
|
|
$
|
221
|
|
|
$
|
12
|
|
|
$
|
37
|
|
|
$
|
(29
|
)
|
|
$
|
1,969
|
|
Utilities regulatory revenues
|
52
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|||||||
Other revenues
|
—
|
|
|
—
|
|
|
89
|
|
|
28
|
|
|
42
|
|
|
(48
|
)
|
|
111
|
|
|||||||
Total revenues
|
$
|
1,051
|
|
|
$
|
772
|
|
|
$
|
310
|
|
|
$
|
40
|
|
|
$
|
79
|
|
|
$
|
(77
|
)
|
|
$
|
2,175
|
|
|
Six months ended June 30, 2018
|
||||||||||||||||||||||||||
By major service line:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Utilities
|
$
|
2,130
|
|
|
$
|
1,810
|
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(35
|
)
|
|
$
|
3,946
|
|
Midstream
|
—
|
|
|
—
|
|
|
290
|
|
|
—
|
|
|
89
|
|
|
(34
|
)
|
|
345
|
|
|||||||
Renewables
|
—
|
|
|
—
|
|
|
53
|
|
|
23
|
|
|
1
|
|
|
—
|
|
|
77
|
|
|||||||
Other
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
4
|
|
|
(3
|
)
|
|
72
|
|
|||||||
Revenues from contracts with customers
|
$
|
2,130
|
|
|
$
|
1,810
|
|
|
$
|
455
|
|
|
$
|
23
|
|
|
$
|
94
|
|
|
$
|
(72
|
)
|
|
$
|
4,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
By market:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gas
|
$
|
281
|
|
|
$
|
1,810
|
|
|
$
|
331
|
|
|
$
|
—
|
|
|
$
|
89
|
|
|
$
|
(67
|
)
|
|
$
|
2,444
|
|
Electric
|
1,849
|
|
|
—
|
|
|
124
|
|
|
23
|
|
|
5
|
|
|
(5
|
)
|
|
1,996
|
|
|||||||
Revenues from contracts with customers
|
$
|
2,130
|
|
|
$
|
1,810
|
|
|
$
|
455
|
|
|
$
|
23
|
|
|
$
|
94
|
|
|
$
|
(72
|
)
|
|
$
|
4,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenues from contracts with customers
|
$
|
2,130
|
|
|
$
|
1,810
|
|
|
$
|
455
|
|
|
$
|
23
|
|
|
$
|
94
|
|
|
$
|
(72
|
)
|
|
$
|
4,440
|
|
Utilities regulatory revenues
|
(24
|
)
|
|
88
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|||||||
Other revenues
|
—
|
|
|
—
|
|
|
163
|
|
|
42
|
|
|
89
|
|
|
(87
|
)
|
|
207
|
|
|||||||
Total revenues
|
$
|
2,106
|
|
|
$
|
1,898
|
|
|
$
|
618
|
|
|
$
|
65
|
|
|
$
|
183
|
|
|
$
|
(159
|
)
|
|
$
|
4,711
|
|
REMAINING PERFORMANCE OBLIGATIONS(1)
|
|
|
||||
(Dollars in millions)
|
|
|
||||
|
Sempra Energy Consolidated
|
SDG&E
|
||||
2019 (excluding first six months of 2019)
|
$
|
255
|
|
$
|
1
|
|
2020
|
511
|
|
3
|
|
||
2021
|
512
|
|
3
|
|
||
2022
|
515
|
|
3
|
|
||
2023
|
509
|
|
3
|
|
||
Thereafter
|
2,784
|
|
52
|
|
||
Total revenues to be recognized
|
$
|
5,086
|
|
$
|
65
|
|
(1)
|
Excludes intercompany transactions.
|
CONTRACT LIABILITIES
|
|
||
(Dollars in millions)
|
|
||
Balance at January 1, 2019
|
$
|
(70
|
)
|
Revenue from performance obligations satisfied during reporting period
|
1
|
|
|
Payments received in advance
|
(3
|
)
|
|
Balance at June 30, 2019(1)
|
$
|
(72
|
)
|
|
|
||
Balance at January 1, 2018
|
$
|
—
|
|
Adoption of ASC 606 adjustment
|
(61
|
)
|
|
Revenue from performance obligations satisfied during reporting period
|
6
|
|
|
Payments received in advance
|
(8
|
)
|
|
Balance at June 30, 2018
|
$
|
(63
|
)
|
(1)
|
Includes a negligible amount in Other Current Liabilities and $72 million in Deferred Credits and Other on the Sempra Energy Condensed Consolidated Balance Sheet.
|
RECEIVABLES FROM REVENUES FROM CONTRACTS WITH CUSTOMERS
|
|
|
|||||
(Dollars in millions)
|
|
|
|
||||
|
June 30, 2019
|
|
December 31, 2018
|
||||
Sempra Energy Consolidated:
|
|
|
|
||||
Accounts receivable – trade, net
|
$
|
817
|
|
|
$
|
1,106
|
|
Accounts receivable – other, net
|
14
|
|
|
11
|
|
||
Due from unconsolidated affiliates – current(1)
|
5
|
|
|
4
|
|
||
Assets held for sale
|
—
|
|
|
6
|
|
||
Total
|
$
|
836
|
|
|
$
|
1,127
|
|
SDG&E:
|
|
|
|
||||
Accounts receivable – trade, net
|
$
|
374
|
|
|
$
|
368
|
|
Accounts receivable – other, net
|
7
|
|
|
6
|
|
||
Due from unconsolidated affiliates – current(1)
|
3
|
|
|
3
|
|
||
Total
|
$
|
384
|
|
|
$
|
377
|
|
SoCalGas:
|
|
|
|
||||
Accounts receivable – trade, net
|
$
|
381
|
|
|
$
|
634
|
|
Accounts receivable – other, net
|
7
|
|
|
5
|
|
||
Total
|
$
|
388
|
|
|
$
|
639
|
|
(1)
|
Amount is presented net of amounts due to unconsolidated affiliates on the Condensed Consolidated Balance Sheets, when right of offset exists.
|
|
|
|
|
|
REGULATORY ASSETS (LIABILITIES)
|
|||||||
(Dollars in millions)
|
|||||||
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
|
||||||
SDG&E:
|
|
|
|
||||
Fixed-price contracts and other derivatives
|
$
|
(122
|
)
|
|
$
|
(150
|
)
|
Deferred income taxes refundable in rates
|
(150
|
)
|
|
(236
|
)
|
||
Pension and other postretirement benefit plan obligations
|
188
|
|
|
186
|
|
||
Removal obligations
|
(1,982
|
)
|
|
(1,848
|
)
|
||
Unamortized loss on reacquired debt
|
6
|
|
|
7
|
|
||
Environmental costs
|
27
|
|
|
28
|
|
||
Sunrise Powerlink fire mitigation
|
119
|
|
|
120
|
|
||
Regulatory balancing accounts(1)
|
|
|
|
||||
Commodity – electric
|
135
|
|
|
(8
|
)
|
||
Gas transportation
|
8
|
|
|
45
|
|
||
Safety and reliability
|
82
|
|
|
70
|
|
||
Public purpose programs
|
(98
|
)
|
|
(62
|
)
|
||
Other balancing accounts
|
122
|
|
|
145
|
|
||
Other regulatory liabilities, net(2)
|
(222
|
)
|
|
(177
|
)
|
||
Total SDG&E
|
(1,887
|
)
|
|
(1,880
|
)
|
||
SoCalGas:
|
|
|
|
|
|
||
Pension and other postretirement benefit plan obligations
|
466
|
|
|
470
|
|
||
Employee benefit costs
|
49
|
|
|
49
|
|
||
Removal obligations
|
(779
|
)
|
|
(833
|
)
|
||
Deferred income taxes refundable in rates
|
(233
|
)
|
|
(336
|
)
|
||
Unamortized loss on reacquired debt
|
6
|
|
|
7
|
|
||
Environmental costs
|
28
|
|
|
28
|
|
||
Workers’ compensation
|
9
|
|
|
9
|
|
||
Regulatory balancing accounts(1)
|
|
|
|
||||
Commodity – gas, including transportation
|
(33
|
)
|
|
196
|
|
||
Safety and reliability
|
365
|
|
|
332
|
|
||
Public purpose programs
|
(352
|
)
|
|
(325
|
)
|
||
Other balancing accounts
|
54
|
|
|
(68
|
)
|
||
Other regulatory liabilities, net(2)
|
(182
|
)
|
|
(130
|
)
|
||
Total SoCalGas
|
(602
|
)
|
|
(601
|
)
|
||
Sempra Mexico:
|
|
|
|
||||
Deferred income taxes recoverable in rates
|
81
|
|
|
81
|
|
||
Other regulatory assets
|
8
|
|
|
6
|
|
||
Total Sempra Energy Consolidated
|
$
|
(2,400
|
)
|
|
$
|
(2,394
|
)
|
(1)
|
At June 30, 2019 and December 31, 2018, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $106 million and $78 million, respectively, and for SoCalGas was $337 million and $185 million, respectively.
|
(2)
|
Includes regulatory assets earning a rate of return.
|
|
|
|
|
|
DISCONTINUED OPERATIONS
|
|||||||||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues
|
$
|
403
|
|
|
$
|
389
|
|
|
$
|
824
|
|
|
$
|
815
|
|
Cost of sales
|
(251
|
)
|
|
(255
|
)
|
|
(516
|
)
|
|
(548
|
)
|
||||
Operating expenses
|
(40
|
)
|
|
(56
|
)
|
|
(85
|
)
|
|
(110
|
)
|
||||
Interest and other
|
(6
|
)
|
|
(4
|
)
|
|
(9
|
)
|
|
(9
|
)
|
||||
Income before income taxes and equity earnings
|
106
|
|
|
74
|
|
|
214
|
|
|
148
|
|
||||
Income tax expense
|
(29
|
)
|
|
(19
|
)
|
|
(180
|
)
|
|
(66
|
)
|
||||
Equity earnings
|
1
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Income from discontinued operations, net of income tax
|
78
|
|
|
55
|
|
|
36
|
|
|
83
|
|
||||
Earnings attributable to noncontrolling interests
|
(8
|
)
|
|
(7
|
)
|
|
(17
|
)
|
|
(14
|
)
|
||||
Earnings from discontinued operations attributable to common shares
|
$
|
70
|
|
|
$
|
48
|
|
|
$
|
19
|
|
|
$
|
69
|
|
ASSETS HELD FOR SALE IN DISCONTINUED OPERATIONS
|
|||||||
(Dollars in millions)
|
|
|
|
||||
|
June 30,
2019 |
|
December 31, 2018
|
||||
Cash and cash equivalents
|
$
|
54
|
|
|
$
|
88
|
|
Restricted cash(1)
|
1
|
|
|
—
|
|
||
Accounts receivable, net
|
311
|
|
|
315
|
|
||
Due from unconsolidated affiliates
|
16
|
|
|
2
|
|
||
Inventories
|
41
|
|
|
38
|
|
||
Other current assets
|
22
|
|
|
16
|
|
||
Current assets
|
$
|
445
|
|
|
$
|
459
|
|
|
|
|
|
||||
Due from unconsolidated affiliates
|
$
|
48
|
|
|
$
|
44
|
|
Goodwill and other intangible assets
|
838
|
|
|
819
|
|
||
Property, plant and equipment, net
|
2,528
|
|
|
2,357
|
|
||
Other noncurrent assets
|
39
|
|
|
39
|
|
||
Noncurrent assets
|
$
|
3,453
|
|
|
$
|
3,259
|
|
|
|
|
|
||||
Short-term debt
|
$
|
38
|
|
|
$
|
55
|
|
Accounts payable
|
175
|
|
|
176
|
|
||
Current portion of long-term debt and finance leases
|
22
|
|
|
29
|
|
||
Other current liabilities
|
101
|
|
|
108
|
|
||
Current liabilities
|
$
|
336
|
|
|
$
|
368
|
|
|
|
|
|
||||
Long-term debt and finance leases
|
$
|
753
|
|
|
$
|
708
|
|
Deferred income taxes
|
273
|
|
|
250
|
|
||
Other noncurrent liabilities
|
64
|
|
|
55
|
|
||
Noncurrent liabilities
|
$
|
1,090
|
|
|
$
|
1,013
|
|
(1)
|
Primarily represents funds held in accordance with Peruvian tax law.
|
|
|
|
|
|
SUMMARIZED FINANCIAL INFORMATION – ONCOR HOLDINGS
|
|
||||||||||||
(Dollars in millions)
|
|
||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30, 2019
|
March 9 - June 30, 2018
|
|||||||||
|
2019
|
2018
|
|
||||||||||
Operating revenues
|
$
|
1,041
|
|
$
|
1,021
|
|
|
$
|
2,057
|
|
$
|
1,257
|
|
Operating expense
|
(757
|
)
|
(730
|
)
|
|
(1,532
|
)
|
(915
|
)
|
||||
Income from operations
|
284
|
|
291
|
|
|
525
|
|
342
|
|
||||
Interest expense
|
(93
|
)
|
(87
|
)
|
|
(179
|
)
|
(109
|
)
|
||||
Income tax expense
|
(30
|
)
|
(45
|
)
|
|
(53
|
)
|
(52
|
)
|
||||
Net income
|
136
|
|
141
|
|
|
250
|
|
160
|
|
||||
Noncontrolling interest held by TTI
|
(27
|
)
|
(28
|
)
|
|
(50
|
)
|
(32
|
)
|
||||
Earnings attributable to Sempra Energy
|
109
|
|
113
|
|
|
200
|
|
128
|
|
|
|
|
|
|
PRIMARY U.S. COMMITTED LINES OF CREDIT
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|||||||||||
|
|
|
June 30, 2019
|
||||||||||
|
|
|
Total facility
|
|
Commercial paper outstanding(1)
|
|
Available unused credit
|
||||||
Sempra Energy(2)
|
|
$
|
1,250
|
|
|
$
|
—
|
|
|
$
|
1,250
|
|
|
Sempra Global(3)
|
|
3,185
|
|
|
(1,447
|
)
|
|
1,738
|
|
||||
SDG&E(4)
|
|
1,500
|
|
|
(18
|
)
|
|
1,482
|
|
||||
SoCalGas(4)
|
|
750
|
|
|
—
|
|
|
750
|
|
||||
Total
|
|
$
|
6,685
|
|
|
$
|
(1,465
|
)
|
|
$
|
5,220
|
|
(1)
|
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.
|
(2)
|
The facility also provides for issuance of $200 million of letters of credit on behalf of Sempra Energy with the amount of borrowings otherwise available under the facility reduced by the amount of outstanding letters of credit. Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, Sempra Energy has the right to increase the letter of credit commitment up to $500 million. No letters of credit were outstanding at June 30, 2019.
|
(3)
|
Commercial paper outstanding is before reductions of unamortized discount of $3 million. Sempra Energy guarantees Sempra Global’s obligations under the credit facility.
|
(4)
|
The facility also provides for issuance of $100 million of letters of credit on behalf of the borrowing utility with the amount of borrowings otherwise available under the facility reduced by the amount of outstanding letters of credit. Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, the borrowing utility has the right to increase the letter of credit commitment up to $250 million. No letters of credit were outstanding at June 30, 2019.
|
▪
|
on or after October 1, 2024, at a redemption price equal to 100 percent of the principal amount, plus accrued and unpaid interest;
|
▪
|
before October 1, 2024, if the U.S. federal tax law or regulations are amended or certain other events occur such that there is more than insubstantial risk that interest payable on the notes would no longer be deductible for federal income tax purposes, at a redemption price equal to 100 percent of the principal amount, plus accrued and unpaid interest; or
|
▪
|
before October 1, 2024, if a credit rating agency publicly changes certain equity credit methodology for securities such as these notes that results in a shortening of the length of time for equity credit initially assigned or lowers the equity credit initially assigned, at a redemption price equal to 102 percent of the principal amount, plus accrued and unpaid interest.
|
|
|
|
|
|
▪
|
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 and Sempra LNG 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 Energy-Related Businesses Cost of Sales 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 distribution operations. These derivatives, which are recorded as commodity costs that are offset by regulatory account balances and recovered in rates, are recognized in Cost of Natural Gas on the Condensed Consolidated Statements of Operations.
|
▪
|
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 and GHG allowances.
|
NET ENERGY DERIVATIVE VOLUMES
|
|||||||
(Quantities in millions)
|
|||||||
Commodity
|
Unit of measure
|
|
June 30,
2019 |
|
December 31,
2018 |
||
Sempra Energy Consolidated:
|
|
|
|
|
|
||
Natural gas
|
MMBtu
|
|
41
|
|
|
35
|
|
Electricity
|
MWh
|
|
2
|
|
|
2
|
|
Congestion revenue rights
|
MWh
|
|
48
|
|
|
52
|
|
SDG&E:
|
|
|
|
|
|
||
Natural gas
|
MMBtu
|
|
43
|
|
|
33
|
|
Electricity
|
MWh
|
|
2
|
|
|
2
|
|
Congestion revenue rights
|
MWh
|
|
48
|
|
|
52
|
|
INTEREST RATE DERIVATIVES
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
|
Notional debt
|
|
Maturities
|
|
Notional debt
|
|
Maturities
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||
Cash flow hedges(1)
|
$
|
1,433
|
|
|
2019-2032
|
|
$
|
594
|
|
|
2019-2032
|
SDG&E:
|
|
|
|
|
|
|
|
||||
Cash flow hedge(1)
|
159
|
|
|
2019
|
|
142
|
|
|
2019
|
(1)
|
Includes Otay Mesa VIE. All of SDG&E’s interest rate derivatives relate to Otay Mesa VIE. In December 2018, OMEC LLC entered into a swaption with a notional amount of $142 million effective October 31, 2019 through October 31, 2023.
|
FOREIGN CURRENCY DERIVATIVES
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
|
Notional amount
|
|
Maturities
|
|
Notional amount
|
|
Maturities
|
||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||
Cross-currency swaps
|
$
|
306
|
|
|
2019-2023
|
|
$
|
306
|
|
|
2019-2023
|
Other foreign currency derivatives
|
1,060
|
|
|
2019-2020
|
|
1,158
|
|
|
2019-2020
|
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
June 30, 2019
|
||||||||||||||
|
Current
assets: Other(1) |
|
Other
assets: Sundry |
|
Current liabilities:
Other |
|
Deferred
credits and other liabilities: Deferred credits and other |
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign exchange instruments(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
$
|
(154
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange instruments
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commodity contracts not subject to rate recovery
|
39
|
|
|
7
|
|
|
(42
|
)
|
|
(6
|
)
|
||||
Associated offsetting commodity contracts
|
(34
|
)
|
|
(2
|
)
|
|
34
|
|
|
2
|
|
||||
Commodity contracts subject to rate recovery
|
37
|
|
|
239
|
|
|
(59
|
)
|
|
(60
|
)
|
||||
Associated offsetting commodity contracts
|
(4
|
)
|
|
(2
|
)
|
|
4
|
|
|
2
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
9
|
|
|
6
|
|
||||
Net amounts presented on the balance sheet
|
59
|
|
|
242
|
|
|
(65
|
)
|
|
(210
|
)
|
||||
Additional cash collateral for commodity contracts
not subject to rate recovery
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(3)
|
$
|
94
|
|
|
$
|
242
|
|
|
$
|
(65
|
)
|
|
$
|
(210
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
32
|
|
|
$
|
238
|
|
|
$
|
(57
|
)
|
|
$
|
(60
|
)
|
Associated offsetting commodity contracts
|
(4
|
)
|
|
(2
|
)
|
|
4
|
|
|
2
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
9
|
|
|
6
|
|
||||
Net amounts presented on the balance sheet
|
28
|
|
|
236
|
|
|
(44
|
)
|
|
(52
|
)
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(3)
|
$
|
43
|
|
|
$
|
236
|
|
|
$
|
(44
|
)
|
|
$
|
(52
|
)
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
Net amounts presented on the balance sheet
|
5
|
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
December 31, 2018
|
||||||||||||||
|
Current
assets: Other(1) |
|
Other
assets: Sundry |
|
Current liabilities:
Other |
|
Deferred
credits and other liabilities: Deferred credits and other |
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign exchange instruments(2)
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(147
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts not subject to rate recovery
|
153
|
|
|
7
|
|
|
(164
|
)
|
|
(6
|
)
|
||||
Associated offsetting commodity contracts
|
(133
|
)
|
|
(3
|
)
|
|
133
|
|
|
3
|
|
||||
Commodity contracts subject to rate recovery
|
64
|
|
|
233
|
|
|
(42
|
)
|
|
(72
|
)
|
||||
Associated offsetting commodity contracts
|
(6
|
)
|
|
(2
|
)
|
|
6
|
|
|
2
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Net amounts presented on the balance sheet
|
80
|
|
|
235
|
|
|
(70
|
)
|
|
(218
|
)
|
||||
Additional cash collateral for commodity contracts
not subject to rate recovery
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(3)
|
$
|
132
|
|
|
$
|
235
|
|
|
$
|
(70
|
)
|
|
$
|
(218
|
)
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
60
|
|
|
233
|
|
|
(37
|
)
|
|
(72
|
)
|
||||
Associated offsetting commodity contracts
|
(6
|
)
|
|
(2
|
)
|
|
6
|
|
|
2
|
|
||||
Associated offsetting cash collateral
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Net amounts presented on the balance sheet
|
54
|
|
|
231
|
|
|
(32
|
)
|
|
(68
|
)
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total(3)
|
$
|
82
|
|
|
$
|
231
|
|
|
$
|
(32
|
)
|
|
$
|
(68
|
)
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
Net amounts presented on the balance sheet
|
4
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||||
Additional cash collateral for commodity contracts
subject to rate recovery
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
(1)
|
Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
|
UNDESIGNATED DERIVATIVE IMPACTS
|
|
|
|
|
||||||||||||
(Dollars in millions)
|
|
|
|
|
||||||||||||
|
|
Pretax gain (loss) on derivatives recognized in earnings
|
||||||||||||||
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
Location
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange instruments
|
Other Income (Expense), Net
|
$
|
9
|
|
|
$
|
(37
|
)
|
|
$
|
19
|
|
|
$
|
7
|
|
Commodity contracts not subject
to rate recovery
|
Revenues: Energy-Related
Businesses
|
17
|
|
|
—
|
|
|
17
|
|
|
(9
|
)
|
||||
Commodity contracts subject
to rate recovery
|
Cost of Electric Fuel
and Purchased Power
|
(27
|
)
|
|
6
|
|
|
(25
|
)
|
|
8
|
|
||||
Commodity contracts subject
to rate recovery
|
Cost of Natural Gas
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Total
|
|
$
|
(1
|
)
|
|
$
|
(31
|
)
|
|
$
|
13
|
|
|
$
|
7
|
|
SDG&E:
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject
to rate recovery
|
Cost of Electric Fuel
and Purchased Power
|
$
|
(27
|
)
|
|
$
|
6
|
|
|
$
|
(25
|
)
|
|
$
|
8
|
|
SoCalGas:
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject
to rate recovery
|
Cost of Natural Gas
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
|
|
|
|
▪
|
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 or income approach with market participant assumptions to value these derivatives. Market participant assumptions include those about risk, and the risk inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable. We have exchange-traded derivatives that are valued based on quoted prices in active markets for the identical instruments (Level 1). We also may have other commodity derivatives that are valued using industry standard models that consider quoted forward prices for commodities, time value, current market and contractual prices for the underlying instruments, volatility factors, and other relevant economic measures (Level 2). Level 3 recurring items relate to CRRs and long-term, fixed-price electricity positions at SDG&E, as we discuss below in “Level 3 Information.”
|
▪
|
Rabbi Trust investments include marketable securities that we value using a market approach based on closing prices reported in the active market in which the identical security is traded (Level 1). These investments in marketable securities were negligible at both June 30, 2019 and December 31, 2018.
|
RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Fair value at June 30, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
462
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
467
|
|
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
36
|
|
|
10
|
|
|
—
|
|
|
46
|
|
||||
Municipal bonds
|
—
|
|
|
289
|
|
|
—
|
|
|
289
|
|
||||
Other securities
|
—
|
|
|
236
|
|
|
—
|
|
|
236
|
|
||||
Total debt securities
|
36
|
|
|
535
|
|
|
—
|
|
|
571
|
|
||||
Total nuclear decommissioning trusts(1)
|
498
|
|
|
540
|
|
|
—
|
|
|
1,038
|
|
||||
Interest rate and foreign exchange instruments
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Commodity contracts not subject to rate recovery
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Effect of netting and allocation of collateral(2)
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Commodity contracts subject to rate recovery
|
—
|
|
|
8
|
|
|
262
|
|
|
270
|
|
||||
Effect of netting and allocation of collateral(2)
|
10
|
|
|
—
|
|
|
6
|
|
|
16
|
|
||||
Total
|
$
|
527
|
|
|
$
|
579
|
|
|
$
|
268
|
|
|
$
|
1,374
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign exchange instruments
|
$
|
—
|
|
|
$
|
165
|
|
|
$
|
—
|
|
|
$
|
165
|
|
Commodity contracts not subject to rate recovery
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Commodity contracts subject to rate recovery
|
15
|
|
|
12
|
|
|
86
|
|
|
113
|
|
||||
Effect of netting and allocation of collateral(2)
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
86
|
|
|
$
|
275
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fair value at December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
407
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
411
|
|
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
43
|
|
|
10
|
|
|
—
|
|
|
53
|
|
||||
Municipal bonds
|
—
|
|
|
269
|
|
|
—
|
|
|
269
|
|
||||
Other securities
|
—
|
|
|
234
|
|
|
—
|
|
|
234
|
|
||||
Total debt securities
|
43
|
|
|
513
|
|
|
—
|
|
|
556
|
|
||||
Total nuclear decommissioning trusts(1)
|
450
|
|
|
517
|
|
|
—
|
|
|
967
|
|
||||
Interest rate and foreign exchange instruments
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Commodity contracts not subject to rate recovery
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
||||
Effect of netting and allocation of collateral(2)
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Commodity contracts subject to rate recovery
|
2
|
|
|
9
|
|
|
278
|
|
|
289
|
|
||||
Effect of netting and allocation of collateral(2)
|
28
|
|
|
—
|
|
|
5
|
|
|
33
|
|
||||
Total
|
$
|
499
|
|
|
$
|
552
|
|
|
$
|
283
|
|
|
$
|
1,334
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate and foreign exchange instruments
|
$
|
—
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
150
|
|
Commodity contracts not subject to rate recovery
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
||||
Commodity contracts subject to rate recovery
|
2
|
|
|
5
|
|
|
99
|
|
|
106
|
|
||||
Effect of netting and allocation of collateral(2)
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
99
|
|
|
$
|
288
|
|
(1)
|
Excludes cash balances and cash equivalents.
|
(2)
|
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.
|
RECURRING FAIR VALUE MEASURES – SDG&E
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Fair value at June 30, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
462
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
467
|
|
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
36
|
|
|
10
|
|
|
—
|
|
|
46
|
|
||||
Municipal bonds
|
—
|
|
|
289
|
|
|
—
|
|
|
289
|
|
||||
Other securities
|
—
|
|
|
236
|
|
|
—
|
|
|
236
|
|
||||
Total debt securities
|
36
|
|
|
535
|
|
|
—
|
|
|
571
|
|
||||
Total nuclear decommissioning trusts(1)
|
498
|
|
|
540
|
|
|
—
|
|
|
1,038
|
|
||||
Commodity contracts subject to rate recovery
|
—
|
|
|
2
|
|
|
262
|
|
|
264
|
|
||||
Effect of netting and allocation of collateral(2)
|
9
|
|
|
—
|
|
|
6
|
|
|
15
|
|
||||
Total
|
$
|
507
|
|
|
$
|
542
|
|
|
$
|
268
|
|
|
$
|
1,317
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
15
|
|
|
$
|
10
|
|
|
$
|
86
|
|
|
$
|
111
|
|
Effect of netting and allocation of collateral(2)
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
86
|
|
|
$
|
96
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fair value at December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
407
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
411
|
|
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
43
|
|
|
10
|
|
|
—
|
|
|
53
|
|
||||
Municipal bonds
|
—
|
|
|
269
|
|
|
—
|
|
|
269
|
|
||||
Other securities
|
—
|
|
|
234
|
|
|
—
|
|
|
234
|
|
||||
Total debt securities
|
43
|
|
|
513
|
|
|
—
|
|
|
556
|
|
||||
Total nuclear decommissioning trusts(1)
|
450
|
|
|
517
|
|
|
—
|
|
|
967
|
|
||||
Commodity contracts subject to rate recovery
|
1
|
|
|
6
|
|
|
278
|
|
|
285
|
|
||||
Effect of netting and allocation of collateral(2)
|
23
|
|
|
—
|
|
|
5
|
|
|
28
|
|
||||
Total
|
$
|
474
|
|
|
$
|
523
|
|
|
$
|
283
|
|
|
$
|
1,280
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Interest rate instruments
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Commodity contracts subject to rate recovery
|
2
|
|
|
—
|
|
|
99
|
|
|
101
|
|
||||
Effect of netting and allocation of collateral(2)
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
99
|
|
|
$
|
100
|
|
(1)
|
Excludes cash balances and cash equivalents.
|
(2)
|
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.
|
RECURRING FAIR VALUE MEASURES – SOCALGAS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Fair value at June 30, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
Effect of netting and allocation of collateral(1)
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Total
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fair value at December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Effect of netting and allocation of collateral(1)
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Total
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity contracts subject to rate recovery
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Total
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
(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(1)
|
|||||||
(Dollars in millions)
|
|||||||
|
Three months ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Balance at April 1
|
$
|
182
|
|
|
$
|
(40
|
)
|
Realized and unrealized (losses) gains
|
(13
|
)
|
|
11
|
|
||
Settlements
|
7
|
|
|
(2
|
)
|
||
Balance at June 30
|
$
|
176
|
|
|
$
|
(31
|
)
|
Change in unrealized (losses) gains relating to instruments still held at June 30
|
$
|
(3
|
)
|
|
$
|
3
|
|
|
Six months ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Balance at January 1
|
$
|
179
|
|
|
$
|
(28
|
)
|
Realized and unrealized (losses) gains
|
(8
|
)
|
|
15
|
|
||
Allocated transmission instruments
|
—
|
|
|
3
|
|
||
Settlements
|
5
|
|
|
(21
|
)
|
||
Balance at June 30
|
$
|
176
|
|
|
$
|
(31
|
)
|
Change in unrealized gains (losses) relating to instruments still held at June 30
|
$
|
9
|
|
|
$
|
(4
|
)
|
(1)
|
Excludes the effect of the contractual ability to settle contracts under master netting agreements.
|
CONGESTION REVENUE RIGHTS AUCTION PRICE INPUTS
|
||||||||||
|
|
|||||||||
Settlement year
|
Price per MWh
|
Median price per MWh
|
||||||||
2019
|
$
|
(8.57
|
)
|
to
|
$
|
35.21
|
|
$
|
(2.94
|
)
|
2018
|
(7.25
|
)
|
to
|
11.99
|
|
0.09
|
|
LONG-TERM, FIXED-PRICE ELECTRICITY POSITIONS PRICE INPUTS
|
|
|
||||||||
|
|
|
||||||||
Settlement year
|
|
Price per MWh
|
|
Weighted-average price per MWh
|
||||||
2019
|
$
|
22.00
|
|
to
|
$
|
62.65
|
|
$
|
41.50
|
|
2018
|
|
19.75
|
|
to
|
|
54.25
|
|
|
37.27
|
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||
|
June 30, 2019
|
||||||||||||||||||
|
Carrying
amount |
|
Fair value
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term amounts due from unconsolidated affiliates
|
$
|
710
|
|
|
$
|
—
|
|
|
$
|
729
|
|
|
$
|
—
|
|
|
$
|
729
|
|
Long-term amounts due to unconsolidated affiliates
|
38
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
|||||
Total long-term debt(1)(2)
|
22,303
|
|
|
—
|
|
|
22,690
|
|
|
237
|
|
|
22,927
|
|
|||||
SDG&E:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total long-term debt(2)(3)
|
$
|
5,370
|
|
|
$
|
—
|
|
|
$
|
5,474
|
|
|
$
|
211
|
|
|
$
|
5,685
|
|
SoCalGas:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total long-term debt(4)
|
$
|
3,809
|
|
|
$
|
—
|
|
|
$
|
4,047
|
|
|
$
|
—
|
|
|
$
|
4,047
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31, 2018
|
||||||||||||||||||
|
Carrying
amount |
|
Fair value
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term amounts due from unconsolidated affiliates
|
$
|
644
|
|
|
$
|
—
|
|
|
$
|
648
|
|
|
$
|
4
|
|
|
$
|
652
|
|
Long-term amounts due to unconsolidated affiliates
|
37
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
|||||
Total long-term debt(2)(5)
|
21,340
|
|
|
—
|
|
|
20,616
|
|
|
247
|
|
|
20,863
|
|
|||||
SDG&E:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total long-term debt(2)(6)
|
$
|
4,996
|
|
|
$
|
—
|
|
|
$
|
4,897
|
|
|
$
|
220
|
|
|
$
|
5,117
|
|
SoCalGas:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total long-term debt(7)
|
$
|
3,459
|
|
|
$
|
—
|
|
|
$
|
3,505
|
|
|
$
|
—
|
|
|
$
|
3,505
|
|
(1)
|
Before reductions of unamortized discount and debt issuance costs of $228 million and excluding finance lease obligations of $1,280 million.
|
(2)
|
Level 3 instruments includes $211 million and $220 million at June 30, 2019 and December 31, 2018, respectively, related to Otay Mesa VIE.
|
(3)
|
Before reductions of unamortized discount and debt issuance costs of $52 million and excluding finance lease obligations of $1,270 million.
|
(4)
|
Before reductions of unamortized discount and debt issuance costs of $35 million and excluding finance lease obligations of $10 million.
|
(5)
|
Before reductions of unamortized discount and debt issuance costs of $206 million and excluding build-to-suit and capital lease obligations of $1,413 million.
|
(6)
|
Before reductions of unamortized discount and debt issuance costs of $49 million and excluding capital lease obligations of $1,272 million.
|
(7)
|
Before reductions of unamortized discount and debt issuance costs of $32 million and excluding capital lease obligations of $3 million.
|
|
|
|
|
|
NUCLEAR DECOMMISSIONING TRUSTS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Estimated
fair
value
|
||||||||
At June 30, 2019:
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies(1)
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46
|
|
Municipal bonds(2)
|
278
|
|
|
11
|
|
|
—
|
|
|
289
|
|
||||
Other securities(3)
|
230
|
|
|
7
|
|
|
(1
|
)
|
|
236
|
|
||||
Total debt securities
|
554
|
|
|
18
|
|
|
(1
|
)
|
|
571
|
|
||||
Equity securities
|
164
|
|
|
310
|
|
|
(7
|
)
|
|
467
|
|
||||
Cash and cash equivalents
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total
|
$
|
724
|
|
|
$
|
328
|
|
|
$
|
(8
|
)
|
|
$
|
1,044
|
|
At December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||||
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
$
|
52
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
53
|
|
Municipal bonds
|
266
|
|
|
4
|
|
|
(1
|
)
|
|
269
|
|
||||
Other securities
|
238
|
|
|
1
|
|
|
(5
|
)
|
|
234
|
|
||||
Total debt securities
|
556
|
|
|
6
|
|
|
(6
|
)
|
|
556
|
|
||||
Equity securities
|
168
|
|
|
253
|
|
|
(10
|
)
|
|
411
|
|
||||
Cash and cash equivalents
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Total
|
$
|
731
|
|
|
$
|
259
|
|
|
$
|
(16
|
)
|
|
$
|
974
|
|
(1)
|
Maturity dates are 2020-2049.
|
(2)
|
Maturity dates are 2020-2056.
|
(3)
|
Maturity dates are 2019-2064.
|
SALES OF SECURITIES IN THE NDT
|
|
|
|
|
|||||||||||
(Dollars in millions)
|
|
|
|
|
|||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Proceeds from sales
|
$
|
272
|
|
|
$
|
277
|
|
|
$
|
497
|
|
|
$
|
487
|
|
Gross realized gains
|
8
|
|
|
25
|
|
|
13
|
|
|
29
|
|
||||
Gross realized losses
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
|
|
|
|
LESSEE INFORMATION ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
June 30, 2019
|
||||||||||
|
Sempra Energy Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||
Right-of-use assets:
|
|
|
|
|
|
||||||
Operating leases:
|
|
|
|
|
|
||||||
Right-of-use assets
|
$
|
600
|
|
|
$
|
132
|
|
|
$
|
105
|
|
|
|
|
|
|
|
||||||
Finance leases:
|
|
|
|
|
|
||||||
Property, plant and equipment
|
1,331
|
|
|
1,317
|
|
|
14
|
|
|||
Accumulated depreciation
|
(51
|
)
|
|
(47
|
)
|
|
(4
|
)
|
|||
Property, plant and equipment, net
|
1,280
|
|
|
1,270
|
|
|
10
|
|
|||
Total right-of-use assets
|
$
|
1,880
|
|
|
$
|
1,402
|
|
|
$
|
115
|
|
|
|
|
|
|
|
||||||
Lease liabilities:
|
|
|
|
|
|
||||||
Operating leases:
|
|
|
|
|
|
||||||
Other current liabilities
|
$
|
49
|
|
|
$
|
22
|
|
|
$
|
21
|
|
Deferred credits and other
|
450
|
|
|
108
|
|
|
84
|
|
|||
|
499
|
|
|
130
|
|
|
105
|
|
|||
Finance leases:
|
|
|
|
|
|
||||||
Current portion of long-term debt and finance leases
|
23
|
|
|
19
|
|
|
4
|
|
|||
Long-term debt and finance leases
|
1,257
|
|
|
1,251
|
|
|
6
|
|
|||
|
1,280
|
|
|
1,270
|
|
|
10
|
|
|||
Total lease liabilities
|
$
|
1,779
|
|
|
$
|
1,400
|
|
|
$
|
115
|
|
|
|
|
|
|
|
||||||
Weighted-average remaining lease term (in years):
|
|
|
|
|
|
||||||
Operating leases
|
14
|
|
|
7
|
|
|
6
|
|
|||
Finance leases
|
20
|
|
|
20
|
|
|
5
|
|
|||
Weighted-average discount rate:
|
|
|
|
|
|
||||||
Operating leases
|
5.90
|
%
|
|
3.69
|
%
|
|
3.75
|
%
|
|||
Finance leases
|
14.86
|
%
|
|
14.90
|
%
|
|
3.68
|
%
|
LESSEE INFORMATION ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(1)
|
|||||||||||||||||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|||||||||||||||||
|
Three months ended June 30, 2019
|
|
Six months ended June 30, 2019
|
||||||||||||||||||||
|
Sempra Energy Consolidated
|
|
SDG&E
|
|
SoCalGas
|
|
Sempra Energy Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||||||||
Operating lease costs
|
$
|
25
|
|
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
49
|
|
|
$
|
17
|
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finance lease costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of ROU assets
|
6
|
|
|
5
|
|
|
1
|
|
|
11
|
|
|
9
|
|
|
2
|
|
||||||
Interest on lease liabilities
|
47
|
|
|
47
|
|
|
—
|
|
|
94
|
|
|
94
|
|
|
—
|
|
||||||
Total finance lease costs
|
53
|
|
|
52
|
|
|
1
|
|
|
105
|
|
|
103
|
|
|
2
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Short-term lease costs(2)
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Variable lease costs(2)
|
148
|
|
|
144
|
|
|
4
|
|
|
240
|
|
|
234
|
|
|
6
|
|
||||||
Total lease costs
|
$
|
227
|
|
|
$
|
205
|
|
|
$
|
12
|
|
|
$
|
396
|
|
|
$
|
354
|
|
|
$
|
22
|
|
(1)
|
Includes costs capitalized in PP&E.
|
(2)
|
Short-term leases with variable lease costs are recorded and presented as variable lease costs.
|
LESSEE INFORMATION ON THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Six months ended June 30, 2019
|
||||||||||
|
Sempra Energy Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Cash paid for operating leases
|
$
|
59
|
|
|
$
|
17
|
|
|
$
|
14
|
|
Cash paid for finance leases
|
87
|
|
|
87
|
|
|
—
|
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Cash paid for finance leases
|
11
|
|
|
9
|
|
|
2
|
|
|||
Increase in operating lease obligations for right-of-use assets
|
559
|
|
|
146
|
|
|
117
|
|
|||
Increase in finance lease obligations for investment in PP&E
|
16
|
|
|
7
|
|
|
9
|
|
LESSEE MATURITY ANALYSIS OF LIABILITIES
|
|||||||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||||||
|
June 30, 2019
|
||||||||||||||||||||||
|
Sempra Energy Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||||||||||||||
|
Operating leases
|
|
Finance leases
|
|
Operating leases
|
|
Finance leases
|
|
Operating leases
|
|
Finance leases
|
||||||||||||
2019 (excluding first six months of 2019)
|
$
|
39
|
|
|
$
|
98
|
|
|
$
|
15
|
|
|
$
|
95
|
|
|
$
|
12
|
|
|
$
|
3
|
|
2020
|
70
|
|
|
192
|
|
|
26
|
|
|
189
|
|
|
23
|
|
|
3
|
|
||||||
2021
|
67
|
|
|
190
|
|
|
26
|
|
|
189
|
|
|
20
|
|
|
1
|
|
||||||
2022
|
60
|
|
|
190
|
|
|
21
|
|
|
189
|
|
|
17
|
|
|
1
|
|
||||||
2023
|
51
|
|
|
190
|
|
|
17
|
|
|
189
|
|
|
13
|
|
|
1
|
|
||||||
Thereafter
|
481
|
|
|
2,807
|
|
|
43
|
|
|
2,805
|
|
|
32
|
|
|
2
|
|
||||||
Total undiscounted lease payments
|
768
|
|
|
3,667
|
|
|
148
|
|
|
3,656
|
|
|
117
|
|
|
11
|
|
||||||
Less: imputed interest
|
(269
|
)
|
|
(2,387
|
)
|
|
(18
|
)
|
|
(2,386
|
)
|
|
(12
|
)
|
|
(1
|
)
|
||||||
Total lease liabilities
|
499
|
|
|
1,280
|
|
|
130
|
|
|
1,270
|
|
|
105
|
|
|
10
|
|
||||||
Less: current lease liabilities
|
(49
|
)
|
|
(23
|
)
|
|
(22
|
)
|
|
(19
|
)
|
|
(21
|
)
|
|
(4
|
)
|
||||||
Long-term lease liabilities
|
$
|
450
|
|
|
$
|
1,257
|
|
|
$
|
108
|
|
|
$
|
1,251
|
|
|
$
|
84
|
|
|
$
|
6
|
|
FUTURE MINIMUM LEASE PAYMENTS
|
|||||||||||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||||||||||
|
December 31, 2018
|
||||||||||||||||||||||||||
|
Sempra Energy Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||||||||||||||||||
|
Build-to-suit lease
|
|
Operating leases
|
|
Capital leases
|
|
Operating leases
|
|
Capital leases
|
|
Operating leases
|
|
Capital leases
|
||||||||||||||
2019
|
$
|
10
|
|
|
$
|
77
|
|
|
$
|
215
|
|
|
$
|
23
|
|
|
$
|
212
|
|
|
$
|
26
|
|
|
$
|
3
|
|
2020
|
11
|
|
|
55
|
|
|
210
|
|
|
22
|
|
|
210
|
|
|
22
|
|
|
—
|
|
|||||||
2021
|
11
|
|
|
53
|
|
|
211
|
|
|
22
|
|
|
211
|
|
|
21
|
|
|
—
|
|
|||||||
2022
|
11
|
|
|
50
|
|
|
211
|
|
|
21
|
|
|
211
|
|
|
20
|
|
|
—
|
|
|||||||
2023
|
11
|
|
|
42
|
|
|
211
|
|
|
17
|
|
|
211
|
|
|
16
|
|
|
—
|
|
|||||||
Thereafter
|
217
|
|
|
253
|
|
|
3,196
|
|
|
48
|
|
|
3,196
|
|
|
28
|
|
|
—
|
|
|||||||
Total undiscounted lease payments
|
$
|
271
|
|
|
$
|
530
|
|
|
4,254
|
|
|
$
|
153
|
|
|
4,251
|
|
|
$
|
133
|
|
|
3
|
|
|||
Less: estimated executory costs
|
|
|
|
|
(480
|
)
|
|
|
|
(480
|
)
|
|
|
|
—
|
|
|||||||||||
Less: imputed interest
|
|
|
|
|
(2,483
|
)
|
|
|
|
(2,483
|
)
|
|
|
|
—
|
|
|||||||||||
Total future minimum lease payments
|
|
|
|
|
$
|
1,291
|
|
|
|
|
$
|
1,288
|
|
|
|
|
$
|
3
|
|
LESSOR INFORMATION – SEMPRA ENERGY
|
|
||
(Dollars in millions)
|
|
||
|
June 30, 2019
|
||
Assets subject to operating leases:
|
|
||
Property, plant and equipment(1)
|
$
|
1,033
|
|
Accumulated depreciation
|
(160
|
)
|
|
Property, plant and equipment, net
|
$
|
873
|
|
Maturity analysis of operating lease payments:
|
|
||
2019 (excluding first six months of 2019)
|
$
|
106
|
|
2020
|
200
|
|
|
2021
|
200
|
|
|
2022
|
200
|
|
|
2023
|
200
|
|
|
Thereafter
|
2,615
|
|
|
Total undiscounted cash flows
|
$
|
3,521
|
|
(1)
|
Included in Machinery and Equipment — Pipelines and Storage within the major functional categories of PP&E.
|
LESSOR INFORMATION ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – SEMPRA ENERGY
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Minimum lease payments
|
$
|
49
|
|
|
$
|
47
|
|
|
$
|
99
|
|
|
$
|
96
|
|
Variable lease payments
|
2
|
|
|
24
|
|
|
6
|
|
|
37
|
|
||||
Total revenues from operating leases
|
$
|
51
|
|
|
$
|
71
|
|
|
$
|
105
|
|
|
$
|
133
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation expense
|
$
|
10
|
|
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
36
|
|
|
|
|
|
|
▪
|
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 Texas Utilities holds our investment in Oncor Holdings, which owns an 80.25-percent interest in Oncor, a regulated electric transmission and distribution utility serving customers in the north-central, eastern and western parts of Texas, and our 50-percent interest in Sharyland Holdings, which owns a regulated electric transmission and distribution utility serving customers near the Texas-Mexico border. As we discuss in Note 5, we acquired an indirect 50-percent interest in Sharyland Holdings in May 2019.
|
▪
|
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.
|
▪
|
Sempra LNG (previously known as Sempra LNG & Midstream) develops, owns and operates, or holds interests in, terminals for the import and export of LNG and sale of natural gas, natural gas pipelines and marketing operations, all within the U.S. and Mexico. In February 2019, we completed the sale of our natural gas storage assets at Mississippi Hub and Bay Gas.
|
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
1,094
|
|
|
$
|
1,051
|
|
|
$
|
2,239
|
|
|
$
|
2,106
|
|
SoCalGas
|
806
|
|
|
772
|
|
|
2,167
|
|
|
1,898
|
|
||||
Sempra Mexico
|
318
|
|
|
310
|
|
|
701
|
|
|
618
|
|
||||
Sempra Renewables
|
3
|
|
|
40
|
|
|
10
|
|
|
65
|
|
||||
Sempra LNG
|
86
|
|
|
79
|
|
|
227
|
|
|
183
|
|
||||
Adjustments and eliminations
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Intersegment revenues(1)
|
(76
|
)
|
|
(76
|
)
|
|
(215
|
)
|
|
(157
|
)
|
||||
Total
|
$
|
2,230
|
|
|
$
|
2,175
|
|
|
$
|
5,128
|
|
|
$
|
4,711
|
|
INTEREST EXPENSE
|
|
|
|
|
|
|
|
||||||||
SDG&E(2)
|
$
|
102
|
|
|
$
|
53
|
|
|
$
|
205
|
|
|
$
|
105
|
|
SoCalGas
|
34
|
|
|
26
|
|
|
68
|
|
|
53
|
|
||||
Sempra Mexico
|
29
|
|
|
30
|
|
|
59
|
|
|
60
|
|
||||
Sempra Renewables
|
—
|
|
|
5
|
|
|
3
|
|
|
10
|
|
||||
Sempra LNG
|
3
|
|
|
7
|
|
|
7
|
|
|
15
|
|
||||
All other
|
110
|
|
|
137
|
|
|
219
|
|
|
249
|
|
||||
Intercompany eliminations
|
(20
|
)
|
|
(30
|
)
|
|
(43
|
)
|
|
(58
|
)
|
||||
Total
|
$
|
258
|
|
|
$
|
228
|
|
|
$
|
518
|
|
|
$
|
434
|
|
INTEREST INCOME
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
SoCalGas
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Sempra Mexico
|
19
|
|
|
16
|
|
|
38
|
|
|
31
|
|
||||
Sempra Renewables
|
1
|
|
|
2
|
|
|
11
|
|
|
4
|
|
||||
Sempra LNG
|
16
|
|
|
13
|
|
|
30
|
|
|
26
|
|
||||
All other
|
—
|
|
|
(3
|
)
|
|
1
|
|
|
13
|
|
||||
Intercompany eliminations
|
(17
|
)
|
|
(12
|
)
|
|
(41
|
)
|
|
(30
|
)
|
||||
Total
|
$
|
21
|
|
|
$
|
18
|
|
|
$
|
42
|
|
|
$
|
47
|
|
DEPRECIATION AND AMORTIZATION
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
189
|
|
|
$
|
169
|
|
|
$
|
375
|
|
|
$
|
335
|
|
SoCalGas
|
148
|
|
|
138
|
|
|
295
|
|
|
273
|
|
||||
Sempra Mexico
|
46
|
|
|
43
|
|
|
90
|
|
|
86
|
|
||||
Sempra Renewables
|
—
|
|
|
14
|
|
|
—
|
|
|
27
|
|
||||
Sempra LNG
|
3
|
|
|
11
|
|
|
5
|
|
|
22
|
|
||||
All other
|
3
|
|
|
2
|
|
|
7
|
|
|
6
|
|
||||
Total
|
$
|
389
|
|
|
$
|
377
|
|
|
$
|
772
|
|
|
$
|
749
|
|
INCOME TAX EXPENSE (BENEFIT)
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
35
|
|
|
$
|
42
|
|
|
$
|
40
|
|
|
$
|
98
|
|
SoCalGas
|
(4
|
)
|
|
23
|
|
|
15
|
|
|
82
|
|
||||
Sempra Mexico
|
44
|
|
|
(55
|
)
|
|
116
|
|
|
100
|
|
||||
Sempra Renewables
|
14
|
|
|
(58
|
)
|
|
4
|
|
|
(65
|
)
|
||||
Sempra LNG
|
2
|
|
|
(506
|
)
|
|
6
|
|
|
(494
|
)
|
||||
All other
|
(44
|
)
|
|
(48
|
)
|
|
(92
|
)
|
|
(81
|
)
|
||||
Total
|
$
|
47
|
|
|
$
|
(602
|
)
|
|
$
|
89
|
|
|
$
|
(360
|
)
|
EQUITY EARNINGS (LOSSES)
|
|
|
|
|
|
|
|
||||||||
Equity earnings (losses), before income tax:
|
|
|
|
|
|
|
|
||||||||
Sempra Texas Utilities
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Sempra Renewables
|
2
|
|
|
(187
|
)
|
|
5
|
|
|
(182
|
)
|
||||
Sempra LNG
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
|
||||
All other
|
(1
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
||||
|
2
|
|
|
(189
|
)
|
|
7
|
|
|
(184
|
)
|
||||
Equity earnings, net of income tax:
|
|
|
|
|
|
|
|
||||||||
Sempra Texas Utilities
|
112
|
|
|
114
|
|
|
206
|
|
|
129
|
|
||||
Sempra Mexico
|
4
|
|
|
71
|
|
|
6
|
|
|
30
|
|
||||
|
116
|
|
|
185
|
|
|
212
|
|
|
159
|
|
||||
Total
|
$
|
118
|
|
|
$
|
(4
|
)
|
|
$
|
219
|
|
|
$
|
(25
|
)
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
EARNINGS (LOSSES) ATTRIBUTABLE TO COMMON SHARES
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
$
|
143
|
|
|
$
|
146
|
|
|
$
|
319
|
|
|
$
|
316
|
|
SoCalGas
|
30
|
|
|
33
|
|
|
294
|
|
|
258
|
|
||||
Sempra Texas Utilities
|
113
|
|
|
114
|
|
|
207
|
|
|
129
|
|
||||
Sempra Mexico
|
73
|
|
|
97
|
|
|
130
|
|
|
117
|
|
||||
Sempra Renewables
|
46
|
|
|
(109
|
)
|
|
59
|
|
|
(88
|
)
|
||||
Sempra LNG
|
6
|
|
|
(764
|
)
|
|
11
|
|
|
(780
|
)
|
||||
Discontinued operations
|
70
|
|
|
48
|
|
|
19
|
|
|
69
|
|
||||
All other
|
(127
|
)
|
|
(126
|
)
|
|
(244
|
)
|
|
(235
|
)
|
||||
Total
|
$
|
354
|
|
|
$
|
(561
|
)
|
|
$
|
795
|
|
|
$
|
(214
|
)
|
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
|
|
|
|
|
|
|
|||||||||
SDG&E
|
|
|
|
|
|
|
$
|
708
|
|
|
$
|
851
|
|
||
SoCalGas
|
|
|
|
|
|
|
659
|
|
|
783
|
|
||||
Sempra Mexico
|
|
|
|
|
|
|
240
|
|
|
140
|
|
||||
Sempra Renewables
|
|
|
|
|
|
|
2
|
|
|
37
|
|
||||
Sempra LNG
|
|
|
|
|
|
|
40
|
|
|
13
|
|
||||
All other
|
|
|
|
|
|
|
2
|
|
|
10
|
|
||||
Total
|
|
|
|
|
|
|
$
|
1,651
|
|
|
$
|
1,834
|
|
||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
June 30,
2019
|
|
December 31, 2018
|
||||||||
ASSETS
|
|
|
|
|
|||||||||||
SDG&E
|
|
|
|
|
$
|
19,888
|
|
|
$
|
19,225
|
|
||||
SoCalGas
|
|
|
|
|
15,767
|
|
|
15,389
|
|
||||||
Sempra Texas Utilities
|
|
|
|
|
11,033
|
|
|
9,652
|
|
||||||
Sempra Mexico
|
|
|
|
|
9,609
|
|
|
9,165
|
|
||||||
Sempra Renewables
|
|
|
|
|
—
|
|
|
2,549
|
|
||||||
Sempra LNG
|
|
|
|
|
3,736
|
|
|
4,060
|
|
||||||
Discontinued operations
|
|
|
|
|
3,898
|
|
|
3,718
|
|
||||||
All other
|
|
|
|
|
1,196
|
|
|
1,070
|
|
||||||
Intersegment receivables
|
|
|
|
|
(2,400
|
)
|
|
(4,190
|
)
|
||||||
Total
|
|
|
|
|
$
|
62,727
|
|
|
$
|
60,638
|
|
||||
EQUITY METHOD AND OTHER INVESTMENTS
|
|
|
|
|
|||||||||||
Sempra Texas Utilities
|
|
|
|
|
$
|
11,033
|
|
|
$
|
9,652
|
|
||||
Sempra Mexico
|
|
|
|
|
729
|
|
|
747
|
|
||||||
Sempra Renewables
|
|
|
|
|
—
|
|
|
291
|
|
||||||
Sempra LNG
|
|
|
|
|
1,244
|
|
|
1,271
|
|
||||||
All other
|
|
|
|
|
6
|
|
|
11
|
|
||||||
Total
|
|
|
|
|
$
|
13,012
|
|
|
$
|
11,972
|
|
(1)
|
Revenues for reportable segments include intersegment revenues of $2 million, $17 million, $32 million and $25 million for the three months ended June 30, 2019; $3 million, $34 million, $60 million and $118 million for the six months ended June 30, 2019; $1 million, $15 million, $28 million and $32 million for the three months ended June 30, 2018; and $2 million, $32 million, $57 million, and $66 million for the six months ended June 30, 2018 for SDG&E, SoCalGas, Sempra Mexico and Sempra LNG, respectively.
|
(2)
|
As we discuss in Note 2, in accordance with adoption of the lease standard on January 1, 2019, on a prospective basis, a significant portion of finance lease costs for PPAs that have historically been presented in Cost of Electric Fuel and Purchased Power are now presented in Interest Expense.
|
|
|
|
|
|
|
|
|
|
|
▪
|
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.
|
|
|
|
|
|
▪
|
Overall results of our operations
|
▪
|
Segment results
|
▪
|
Adjusted earnings and adjusted EPS
|
▪
|
Significant changes in revenues, costs and earnings between periods
|
▪
|
Impact of foreign currency and inflation rates on our results of operations
|
SEMPRA ENERGY EARNINGS (LOSSES) BY SEGMENT
|
|
|
|||||||||||||
(Dollars in millions)
|
|
|
|||||||||||||
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
SDG&E
|
$
|
143
|
|
|
$
|
146
|
|
|
$
|
319
|
|
|
$
|
316
|
|
SoCalGas
|
30
|
|
|
33
|
|
|
294
|
|
|
258
|
|
||||
Sempra Texas Utilities
|
113
|
|
|
114
|
|
|
207
|
|
|
129
|
|
||||
Sempra Mexico
|
73
|
|
|
97
|
|
|
130
|
|
|
117
|
|
||||
Sempra Renewables
|
46
|
|
|
(109
|
)
|
|
59
|
|
|
(88
|
)
|
||||
Sempra LNG
|
6
|
|
|
(764
|
)
|
|
11
|
|
|
(780
|
)
|
||||
Parent and other(1)
|
(127
|
)
|
|
(126
|
)
|
|
(244
|
)
|
|
(235
|
)
|
||||
Discontinued operations
|
70
|
|
|
48
|
|
|
19
|
|
|
69
|
|
||||
Earnings (losses) attributable to common shares
|
$
|
354
|
|
|
$
|
(561
|
)
|
|
$
|
795
|
|
|
$
|
(214
|
)
|
(1)
|
Includes after-tax interest expense ($80 million and $100 million for the three months ended June 30, 2019 and 2018, respectively, and $159 million and $181 million for the six months ended June 30, 2019 and 2018, respectively), intercompany eliminations recorded in consolidation and certain corporate costs.
|
▪
|
$15 million lower CPUC base operating margin in 2019 due to the delay in the 2019 GRC decision while absorbing higher operating costs, including higher wildfire insurance premiums; offset by
|
▪
|
$12 million higher earnings from electric transmission operations.
|
▪
|
$31 million income tax benefit from the release of a regulatory liability established in connection with 2017 tax reform for excess deferred income tax balances that the CPUC directed be allocated to shareholders in a January 2019 decision; and
|
▪
|
$21 million higher earnings from electric transmission operations; offset by
|
▪
|
$42 million lower CPUC base operating margin in 2019 due to the delay in the 2019 GRC decision while absorbing higher operating costs, including higher wildfire insurance premiums; and
|
▪
|
$7 million higher net interest expense.
|
▪
|
$11 million lower CPUC base operating margin in 2019 due to the delay in the 2019 GRC decision while absorbing higher operating costs;
|
▪
|
$6 million higher net interest expense; and
|
▪
|
$5 million lower AFUDC related to equity; offset by
|
▪
|
$22 million from impacts associated with Aliso Canyon natural gas storage facility litigation in 2018.
|
▪
|
$38 million income tax benefit from the impact of the January 2019 CPUC decision allocating certain excess deferred income tax balances to shareholders;
|
▪
|
$22 million from impacts associated with Aliso Canyon natural gas storage facility litigation in 2018; and
|
▪
|
$5 million higher regulatory awards; offset by
|
▪
|
$11 million higher net interest expense;
|
▪
|
$11 million lower CPUC base operating margin in 2019 due to the delay in the 2019 GRC decision while absorbing higher operating costs; and
|
▪
|
$8 million in penalties related to the SoCalGas billing practices OII that we discuss in Note 4 of the Notes to Condensed Consolidated Financial Statements.
|
▪
|
$78 million unfavorable impact from foreign currency and inflation effects net of foreign currency derivatives effects, comprised of:
|
◦
|
in 2019, $20 million unfavorable foreign currency and inflation effects, offset by a $7 million gain from foreign currency derivatives, and
|
◦
|
in 2018, $91 million favorable foreign currency and inflation effects, offset by a $26 million loss from foreign currency derivatives. We discuss these effects below in “Impact of Foreign Currency and Inflation Rates on Results of Operations;” offset by
|
▪
|
$30 million lower income tax expense in 2019 primarily from the outside basis differences in JV investments and a two-year tax abatement that expires in 2020; and
|
▪
|
$36 million earnings attributable to NCI at IEnova in 2019 compared to $64 million earnings in 2018.
|
▪
|
$38 million lower income tax expense in 2019 primarily from the outside basis differences in JV investments and a two-year tax abatement that expires in 2020; and
|
▪
|
$12 million improved operating results at TdM mainly due to higher power prices and volumes; offset by
|
▪
|
$33 million unfavorable impact from foreign currency and inflation effects net of foreign currency derivatives effects, comprised of:
|
◦
|
in 2019, $45 million unfavorable foreign currency and inflation effects, offset by a $14 million gain from foreign currency derivatives, and
|
◦
|
in 2018, $4 million unfavorable foreign currency and inflation effects, offset by a $6 million gain from foreign currency derivatives.
|
▪
|
$145 million other-than-temporary impairment of certain U.S. wind equity method investments in 2018; and
|
▪
|
$45 million gain on sale of wind assets in 2019; offset by
|
▪
|
lower earnings from assets sold in December 2018 and April 2019, net of lower general and administrative and other costs due to the wind-down of this business.
|
▪
|
$801 million impairment of certain non-utility natural gas storage assets in the southeast U.S. in 2018; and
|
▪
|
$19 million higher earnings from our marketing operations primarily driven by optimization of natural gas transport contracts; offset by
|
▪
|
$46 million losses attributable to NCI in 2018 related to the impairment.
|
▪
|
$801 million impairment of certain non-utility natural gas storage assets in 2018;
|
▪
|
$34 million higher earnings from our marketing operations primarily driven by optimization of natural gas transport contracts; and
|
▪
|
$9 million unfavorable adjustment in 2018 to TCJA provisional amounts recorded in 2017 related to the remeasurement of deferred income taxes; offset by
|
▪
|
$46 million losses attributable to NCI in 2018 related to the impairment.
|
▪
|
$16 million primarily related to settlement charges from our non-qualified pension plan; and
|
▪
|
$10 million increase in mandatory convertible preferred stock dividends primarily from the issuance of series B preferred stock in July 2018; offset by
|
▪
|
$11 million lower net interest expense; and
|
▪
|
$8 million higher investment gains in 2019 on dedicated assets in support of our employee non-qualified benefit plan obligations, net of deferred compensation expenses.
|
▪
|
$18 million increase in mandatory convertible preferred stock dividends primarily from the issuance of series B preferred stock in July 2018;
|
▪
|
$16 million primarily related to settlement charges from our non-qualified pension plan; and
|
▪
|
$6 million higher net interest expense; offset by
|
▪
|
$27 million higher investment gains in 2019 on dedicated assets in support of our employee non-qualified benefit plan obligations, net of deferred compensation expenses; and
|
▪
|
$10 million income tax benefit in 2019 to reduce a valuation allowance against certain NOL carryforwards as a result of our decision to sell our South American businesses.
|
▪
|
$96 million higher income tax expense primarily due to:
|
◦
|
$103 million income tax expense in 2019 from outside basis differences in our South American businesses primarily related to the change in our indefinite reinvestment assertion from our decision on January 25, 2019 to hold those businesses for sale, and
|
◦
|
$20 million income tax expense related to the increase in outside basis differences from 2019 earnings since January 25, 2019, offset by
|
◦
|
$16 million income tax expense in 2018 to adjust TCJA provisional amounts recorded in 2017 primarily related to withholding tax on our expected future repatriation of foreign undistributed earnings; offset by
|
▪
|
$51 million higher earnings from South American operations primarily from higher rates, lower cost of purchased power at Peru, and including $16 million lower depreciation expense due to assets classified as held for sale.
|
SEMPRA ENERGY ADJUSTED EARNINGS AND ADJUSTED EPS
|
|||||||||||||||||||
(Dollars in millions, except per share amounts; shares in thousands)
|
|||||||||||||||||||
|
Pretax amount
|
|
Income tax expense (benefit)(1)
|
|
Non-controlling interests
|
|
Earnings (losses)
|
|
Diluted EPS
|
||||||||||
|
Three months ended June 30, 2019
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
354
|
|
|
$
|
1.26
|
|
||||||
Excluded item:
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on sale of certain Sempra Renewables assets
|
$
|
(61
|
)
|
|
$
|
16
|
|
|
$
|
—
|
|
|
(45
|
)
|
|
(0.16
|
)
|
||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
309
|
|
|
$
|
1.10
|
|
||||||
Weighted-average common shares outstanding, diluted – GAAP
|
|
|
|
|
|
|
|
|
279,619
|
|
|||||||||
|
Three months ended June 30, 2018
|
||||||||||||||||||
Sempra Energy GAAP Losses
|
|
|
|
|
|
|
$
|
(561
|
)
|
|
$
|
(2.11
|
)
|
||||||
Impact of dilutive shares excluded from GAAP EPS(2)
|
|
|
|
|
|
|
|
|
|
|
0.02
|
|
|||||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of non-utility natural gas storage assets
|
$
|
1,300
|
|
|
$
|
(499
|
)
|
|
$
|
(46
|
)
|
|
755
|
|
|
2.82
|
|
||
Impairment of U.S. wind equity method investments
|
200
|
|
|
(55
|
)
|
|
—
|
|
|
145
|
|
|
0.54
|
|
|||||
Impacts associated with Aliso Canyon litigation
|
1
|
|
|
21
|
|
|
—
|
|
|
22
|
|
|
0.08
|
|
|||||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
361
|
|
|
$
|
1.35
|
|
||||||
Weighted-average common shares outstanding, diluted – GAAP(2)
|
|
|
|
|
|
|
|
|
267,536
|
|
|||||||||
|
Six months ended June 30, 2019
|
||||||||||||||||||
Sempra Energy GAAP Earnings
|
|
|
|
|
|
|
$
|
795
|
|
|
$
|
2.85
|
|
||||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on sale of certain Sempra Renewables assets
|
$
|
(61
|
)
|
|
$
|
16
|
|
|
$
|
—
|
|
|
(45
|
)
|
|
(0.16
|
)
|
||
Associated with holding the South American businesses for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Change in indefinite reinvestment assertion of basis differences in discontinued operations
|
—
|
|
|
103
|
|
|
—
|
|
|
103
|
|
|
0.37
|
|
|||||
Reduction in tax valuation allowance against certain NOL carryforwards
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|
(0.03
|
)
|
|||||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
843
|
|
|
$
|
3.03
|
|
||||||
Weighted-average common shares outstanding, diluted – GAAP
|
|
|
|
|
|
|
|
|
|
|
278,424
|
|
|||||||
|
Six months ended June 30, 2018
|
||||||||||||||||||
Sempra Energy GAAP Losses
|
|
|
|
|
|
|
$
|
(214
|
)
|
|
$
|
(0.82
|
)
|
||||||
Impact of dilutive shares excluded from GAAP EPS(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|||||
Excluded items:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment of non-utility natural gas storage assets
|
$
|
1,300
|
|
|
$
|
(499
|
)
|
|
$
|
(46
|
)
|
|
755
|
|
|
2.86
|
|
||
Impairment of U.S. wind equity method investments
|
200
|
|
|
(55
|
)
|
|
—
|
|
|
145
|
|
|
0.55
|
|
|||||
Impacts associated with Aliso Canyon litigation
|
1
|
|
|
21
|
|
|
—
|
|
|
22
|
|
|
0.08
|
|
|||||
Impact from the TCJA
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|
0.10
|
|
|||||
Sempra Energy Adjusted Earnings
|
|
|
|
|
|
|
$
|
733
|
|
|
$
|
2.78
|
|
||||||
Weighted-average common shares outstanding, diluted – GAAP(2)
|
|
|
|
|
|
|
|
|
263,584
|
|
(1)
|
Except for adjustments that are solely income tax and tax related to outside basis differences, income taxes on pretax amounts were primarily calculated based on applicable statutory tax rates.
|
(2)
|
In both the three months and six months ended June 30, 2018, total weighted-average potentially dilutive securities of 1.7 million were not included in the computation of GAAP losses per common share since to do so would have decreased the loss per share.
|
SOCALGAS ADJUSTED EARNINGS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Pretax amount
|
|
Income tax expense(1)
|
|
Earnings
|
||||||
|
Three months ended June 30, 2018
|
||||||||||
SoCalGas GAAP Earnings
|
|
|
|
|
$
|
33
|
|
||||
Excluded item:
|
|
|
|
|
|
||||||
Impacts associated with Aliso Canyon litigation
|
$
|
1
|
|
|
$
|
21
|
|
|
22
|
|
|
SoCalGas Adjusted Earnings
|
|
|
|
|
$
|
55
|
|
||||
|
Six months ended June 30, 2018
|
||||||||||
SoCalGas GAAP Earnings
|
|
|
|
|
$
|
258
|
|
||||
Excluded item:
|
|
|
|
|
|
||||||
Impacts associated with Aliso Canyon litigation
|
$
|
1
|
|
|
$
|
21
|
|
|
22
|
|
|
SoCalGas Adjusted Earnings
|
|
|
|
|
$
|
280
|
|
(1)
|
Except for adjustments that are solely income tax, income taxes on pretax amounts were primarily calculated based on applicable statutory tax 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 3 of the Notes to Condensed Consolidated Financial Statements herein and in “Item 1. Business – Ratemaking Mechanisms” in the Annual Report.
|
▪
|
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 or refunded in subsequent periods through rates.
|
▪
|
permits the California Utilities to recover certain expenses for programs authorized by the CPUC, or “refundable programs.”
|
UTILITIES REVENUES AND COST OF SALES
|
|
|
|
|
|
|
|
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Natural gas revenues:
|
|
|
|
|
|
|
|
|
||||||||
SoCalGas
|
|
$
|
806
|
|
|
$
|
772
|
|
|
$
|
2,167
|
|
|
$
|
1,898
|
|
SDG&E
|
|
121
|
|
|
113
|
|
|
326
|
|
|
284
|
|
||||
Sempra Mexico
|
|
15
|
|
|
13
|
|
|
42
|
|
|
41
|
|
||||
Eliminations and adjustments
|
|
(19
|
)
|
|
(16
|
)
|
|
(36
|
)
|
|
(33
|
)
|
||||
Total
|
|
923
|
|
|
882
|
|
|
2,499
|
|
|
2,190
|
|
||||
Electric revenues:
|
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
|
973
|
|
|
938
|
|
|
1,913
|
|
|
1,822
|
|
||||
Eliminations and adjustments
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Total
|
|
972
|
|
|
938
|
|
|
1,911
|
|
|
1,820
|
|
||||
Total utilities revenues
|
|
$
|
1,895
|
|
|
$
|
1,820
|
|
|
$
|
4,410
|
|
|
$
|
4,010
|
|
Cost of natural gas:
|
|
|
|
|
|
|
|
|
||||||||
SoCalGas
|
|
$
|
104
|
|
|
$
|
150
|
|
|
$
|
559
|
|
|
$
|
439
|
|
SDG&E
|
|
34
|
|
|
30
|
|
|
113
|
|
|
80
|
|
||||
Sempra Mexico
|
|
3
|
|
|
2
|
|
|
8
|
|
|
15
|
|
||||
Eliminations and adjustments
|
|
(5
|
)
|
|
(3
|
)
|
|
(13
|
)
|
|
(7
|
)
|
||||
Total
|
|
$
|
136
|
|
|
$
|
179
|
|
|
$
|
667
|
|
|
$
|
527
|
|
Cost of electric fuel and purchased power:
|
|
|
|
|
|
|
|
|
||||||||
SDG&E
|
|
$
|
265
|
|
|
$
|
323
|
|
|
$
|
523
|
|
|
$
|
597
|
|
Eliminations and adjustments
|
|
(2
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
(6
|
)
|
||||
Total
|
|
$
|
263
|
|
|
$
|
320
|
|
|
$
|
519
|
|
|
$
|
591
|
|
▪
|
$34 million increase at SoCalGas, which included:
|
◦
|
$54 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are offset in O&M, and
|
◦
|
$15 million higher net revenues from capital projects, offset by
|
◦
|
$46 million decrease in cost of natural gas sold, which we discuss below; and
|
▪
|
$8 million increase at SDG&E, including a $4 million increase in cost of natural gas sold, which we discuss below.
|
▪
|
$46 million decrease at SoCalGas primarily due to lower average natural gas prices; offset by
|
▪
|
$4 million increase at SDG&E due to higher average natural gas prices.
|
▪
|
$269 million increase at SoCalGas, which included:
|
◦
|
$120 million increase in cost of natural gas sold, which we discuss below,
|
◦
|
$63 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are offset in O&M,
|
◦
|
$32 million higher net revenues from capital projects,
|
◦
|
$14 million lower non-service component of net periodic benefit credit in 2019, which fully offsets in Other Income (Expense), Net,
|
◦
|
$9 million decrease in charges in 2019 associated with tracking the income tax benefit from flow-through items in relation to forecasted amounts in the 2016 GRC FD, and
|
◦
|
$7 million GCIM award approved by the CPUC in February 2019; and
|
▪
|
$42 million increase at SDG&E primarily due to an increase in cost of natural gas sold, which we discuss below.
|
▪
|
$120 million increase at SoCalGas, comprising of $72 million due to higher average natural gas prices and $48 million from higher volumes driven by weather; and
|
▪
|
$33 million increase at SDG&E, including $22 million from higher average natural gas prices and $11 million from higher volumes driven by weather.
|
▪
|
$23 million higher revenues from transmission operations; and
|
▪
|
$17 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are offset in O&M.
|
▪
|
$50 million of finance lease costs for PPAs in 2018. Similar amounts are now included in Interest Expense and Depreciation and Amortization Expense as a result of the 2019 adoption of the lease standard, which we discuss in Note 2 of the Notes to Condensed Consolidated Financial Statements; and
|
▪
|
$8 million lower cost of electric fuel and purchased power primarily due to lower electricity market costs, offset by an additional capacity contract.
|
▪
|
$44 million higher revenues from transmission operations;
|
▪
|
$30 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are offset in O&M; and
|
▪
|
$27 million higher cost of electric fuel and purchased power, which we discuss below.
|
▪
|
$101 million of finance lease costs for PPAs in 2018. Similar amounts are now included in Interest Expense and Depreciation and Amortization Expense as a result of the 2019 adoption of the lease standard; offset by
|
▪
|
$27 million higher cost of electric fuel and purchased power primarily due to higher electricity market costs and an additional capacity contract.
|
ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES
|
||||||||||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
||||||||
Sempra Mexico
|
|
$
|
303
|
|
|
$
|
297
|
|
|
$
|
659
|
|
|
$
|
577
|
|
Sempra Renewables
|
|
3
|
|
|
40
|
|
|
10
|
|
|
65
|
|
||||
Sempra LNG
|
|
86
|
|
|
79
|
|
|
227
|
|
|
183
|
|
||||
Eliminations and adjustments
|
|
(57
|
)
|
|
(61
|
)
|
|
(178
|
)
|
|
(124
|
)
|
||||
Total revenues
|
|
$
|
335
|
|
|
$
|
355
|
|
|
$
|
718
|
|
|
$
|
701
|
|
COST OF SALES(1)
|
|
|
|
|
|
|
|
|
||||||||
Sempra Mexico
|
|
$
|
64
|
|
|
$
|
66
|
|
|
$
|
185
|
|
|
$
|
127
|
|
Sempra LNG
|
|
54
|
|
|
59
|
|
|
157
|
|
|
129
|
|
||||
Eliminations and adjustments
|
|
(55
|
)
|
|
(55
|
)
|
|
(171
|
)
|
|
(117
|
)
|
||||
Total cost of sales
|
|
$
|
63
|
|
|
$
|
70
|
|
|
$
|
171
|
|
|
$
|
139
|
|
(1)
|
Excludes depreciation and amortization, which are presented separately on the Sempra Energy Condensed Consolidated Statements of Operations.
|
▪
|
$37 million decrease at Sempra Renewables primarily due to the sale of assets in December 2018 and April 2019; offset by
|
▪
|
$7 million increase at Sempra LNG primarily from natural gas marketing activities due to optimization of natural gas transport contracts, net of a decrease due to the sale of storage assets in February 2019.
|
▪
|
$82 million increase at Sempra Mexico primarily due to:
|
◦
|
$50 million from the marketing business, primarily from higher natural gas prices and volumes, including higher volumes due to new regulations that went into effect on March 1, 2018 that require high consumption end users (previously serviced by Ecogas and other natural gas utilities) to procure their natural gas needs from natural gas marketers, including Sempra Mexico’s marketing business, and
|
◦
|
$20 million at TdM due to higher prices and volumes; and
|
▪
|
$44 million increase at Sempra LNG primarily due to:
|
◦
|
$48 million from natural gas marketing activities due to optimization of natural gas transport contracts, and
|
◦
|
$30 million higher natural gas sales to Sempra Mexico due to higher natural gas prices and volumes, offset by
|
◦
|
$24 million lower natural gas storage revenues primarily due to the sale of storage assets in February 2019, and
|
◦
|
$12 million from LNG sales to Cameron LNG JV in January 2018; offset by
|
▪
|
$55 million decrease at Sempra Renewables primarily due to the sale of assets in December 2018 and April 2019; and
|
▪
|
$54 million primarily from higher intercompany eliminations associated with sales between Sempra LNG and Sempra Mexico.
|
▪
|
$58 million increase at Sempra Mexico mainly associated with higher revenues from the marketing business as a result of higher natural gas prices and volumes, including higher volumes due to new regulations that went into effect in 2018. The increase at Sempra Mexico was also due to higher prices and volumes at TdM; and
|
▪
|
$28 million increase at Sempra LNG mainly from natural gas marketing activities primarily from higher natural gas purchases; offset by
|
▪
|
$54 million from higher intercompany eliminations associated with sales between Sempra LNG and Sempra Mexico.
|
▪
|
$72 million increase at SoCalGas, which included:
|
◦
|
$54 million higher expenses associated with CPUC-authorized refundable programs for which costs incurred are recovered in revenue (refundable program expenses), and
|
◦
|
$13 million higher non-refundable operating costs, including higher insurance and administrative and support costs; and
|
▪
|
$25 million increase at SDG&E, which included:
|
◦
|
$20 million higher expenses associated with CPUC-authorized refundable programs, and
|
◦
|
$8 million higher non-refundable operating costs, including wildfire insurance premiums and administrative and support costs; offset by
|
▪
|
$14 million decrease at Sempra Renewables primarily due to lower general and administrative and other costs due to the wind-down of the business.
|
▪
|
$98 million increase at SoCalGas, which included:
|
◦
|
$63 million higher expenses associated with CPUC-authorized refundable programs, and
|
◦
|
$30 million higher non-refundable operating costs, including weather related impacts, higher insurance and administrative and support costs;
|
▪
|
$63 million increase at SDG&E, which included:
|
◦
|
$36 million higher expenses associated with CPUC-authorized refundable programs, and
|
◦
|
$24 million higher non-refundable operating costs, including wildfire insurance premiums and administrative and support costs;
|
▪
|
$20 million increase at Sempra Mexico primarily due to operating lease costs and expenses associated with growth in the business; and
|
▪
|
$16 million increase at Parent and other primarily from higher deferred compensation expenses; offset by
|
▪
|
$23 million decrease at Sempra Renewables primarily due to lower general and administrative and other costs due to the wind-down of the business.
|
▪
|
$15 million net gains in 2019 from interest rate and foreign exchange instruments and foreign currency transactions compared to $97 million net losses for the same period in 2018 primarily due to:
|
◦
|
$7 million foreign currency gains in 2019 compared to $47 million foreign currency losses in 2018 on a Mexican peso-denominated loan to the IMG JV, which is offset in Equity Earnings (Losses), and
|
◦
|
$9 million gains in 2019 compared to $37 million losses in 2018 on foreign currency derivatives as a result of fluctuation of the Mexican peso in 2019; offset by
|
▪
|
$30 million non-service component of net periodic benefit cost in 2019 compared to an $8 million credit in 2018, including $22 million settlement charges in 2019 for lump sum payments from our non-qualified pension plan.
|
▪
|
$35 million net gains in 2019 from interest rate and foreign exchange instruments and foreign currency transactions compared to $5 million net losses for the same period in 2018 primarily due to:
|
◦
|
$17 million foreign currency gains in 2019 compared to $8 million foreign currency losses in 2018 on a Mexican peso-denominated loan to the IMG JV, which is offset in Equity Earnings (Losses), and
|
◦
|
$12 million higher gains on foreign currency derivatives as a result of fluctuation of the Mexican peso; and
|
▪
|
$32 million higher investment gains in 2019 on dedicated assets in support of our executive retirement and deferred compensation plans; offset by
|
▪
|
$6 million non-service component of net periodic benefit cost in 2019 compared to a $40 million credit in 2018, including $22 million settlement charges in 2019 for lump sum payments from our non-qualified pension plan;
|
▪
|
$12 million decrease in equity-related AFUDC, including $7 million at SDG&E and $6 million at SoCalGas; and
|
▪
|
$8 million in penalties related to the SoCalGas billing practices OII.
|
(1)
|
We discuss how we recognize equity earnings in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.
|
▪
|
$131 million income tax benefit in 2018 resulting from the reduced outside basis difference in Sempra LNG as a result of the impairment of certain non-utility natural gas storage assets; and
|
▪
|
$16 million income tax expense in 2019 compared to a $99 million income tax benefit in 2018 from foreign currency and inflation effects primarily as a result of fluctuation of the Mexican peso; offset by
|
▪
|
$21 million income tax expense in 2018 associated with Aliso Canyon natural gas storage facility litigation.
|
▪
|
$131 million income tax benefit in 2018 resulting from the reduced outside basis difference in Sempra LNG as a result of the impairment of certain non-utility natural gas storage assets; and
|
▪
|
$39 million income tax expense in 2019 compared to a $5 million income tax benefit in 2018 from foreign currency and inflation effects primarily as a result of fluctuation of the Mexican peso; offset by
|
▪
|
$69 million total income tax benefits from the release of regulatory liabilities at SDG&E and SoCalGas established in connection with 2017 tax reform for excess deferred income tax balances that the CPUC directed be allocated to shareholders in a January 2019 decision;
|
▪
|
$21 million income tax expense in 2018 associated with Aliso Canyon natural gas storage facility litigation;
|
▪
|
$11 million lower income tax expense related to share based compensation;
|
▪
|
$10 million income tax benefit from a reduction in a valuation allowance against certain NOL carryforwards as a result of our decision to sell our South American businesses; and
|
▪
|
$9 million income tax expense in 2018 to adjust provisional estimates recorded in 2017 for the effects of tax reform.
|
▪
|
$31 million income tax benefit from the release of a regulatory liability established in connection with 2017 tax reform for excess deferred income tax balances that the CPUC directed be allocated to shareholders in a January 2019 decision; and
|
▪
|
higher income tax benefits from forecasted flow-through deductions.
|
▪
|
$38 million income tax benefit from the release of a regulatory liability established in connection with 2017 tax reform for excess deferred income tax balances that the CPUC directed be allocated to shareholders in a January 2019 decision; and
|
▪
|
$21 million income tax expense in 2018 associated with Aliso Canyon natural gas storage facility litigation.
|
▪
|
$200 million other-than-temporary impairment of certain wind equity method investments at Sempra Renewables in 2018; offset by
|
▪
|
$67 million lower equity earnings at Sempra Mexico, which included:
|
◦
|
$7 million foreign currency losses in 2019 compared to $47 million foreign currency gains in 2018 at the IMG JV on its Mexican peso-denominated loans from its JV owners, which is fully offset in Other Income (Expense), Net, and
|
◦
|
$13 million lower equity earnings at the TAG JV primarily due to higher income tax expense.
|
▪
|
$200 million other-than-temporary impairment of certain wind equity method investments at Sempra Renewables in 2018; and
|
▪
|
$77 million higher equity earnings, net of income tax, from our investment in Oncor Holdings, which we acquired in March 2018; offset by
|
▪
|
$17 million foreign currency losses in 2019 compared to $8 million foreign currency gains in 2018 at the IMG JV on its Mexican peso-denominated loans from its JV owners, which is fully offset in Other Income (Expense), Net.
|
▪
|
$46 million losses attributable to NCI at Sempra LNG in 2018 related to the impairment of certain non-utility natural gas storage assets; and
|
▪
|
$18 million lower losses attributable to NCI at Sempra Renewables primarily due to the sales of our tax equity investments in December 2018 and April 2019; offset by
|
▪
|
$28 million lower earnings attributable to NCI at Sempra Mexico.
|
▪
|
$46 million losses attributable to NCI at Sempra LNG in 2018 related to the impairment of certain non-utility natural gas storage assets; and
|
▪
|
$1 million earnings attributable to NCI at Sempra Renewables in 2019 compared to $41 million losses in 2018 primarily due to the sales of our tax equity investments in December 2018 and April 2019.
|
TRANSACTIONAL GAINS (LOSSES) FROM FOREIGN CURRENCY AND INFLATION
|
||||||||||||||||
(Dollars in millions)
|
||||||||||||||||
|
Total reported amounts
|
|
|
Transactional gains (losses) included
in reported amounts
|
||||||||||||
|
Three months ended June 30,
|
|||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
||||||||
Other income (expense), net
|
$
|
28
|
|
|
$
|
(56
|
)
|
|
|
$
|
15
|
|
|
$
|
(97
|
)
|
Income tax (expense) benefit
|
(47
|
)
|
|
602
|
|
|
|
(16
|
)
|
|
99
|
|
||||
Equity earnings (losses)
|
118
|
|
|
(4
|
)
|
|
|
(10
|
)
|
|
54
|
|
||||
Income (loss) from continuing operations, net of income tax
|
357
|
|
|
(585
|
)
|
|
|
(13
|
)
|
|
67
|
|
||||
Income from discontinued operations, net of income tax
|
78
|
|
|
55
|
|
|
|
1
|
|
|
—
|
|
||||
Earnings (losses) attributable to common shares
|
354
|
|
|
(561
|
)
|
|
|
(5
|
)
|
|
35
|
|
||||
|
Six months ended June 30,
|
|||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
||||||||
Other income, net
|
$
|
110
|
|
|
$
|
96
|
|
|
|
$
|
35
|
|
|
$
|
(5
|
)
|
Income tax (expense) benefit
|
(89
|
)
|
|
360
|
|
|
|
(39
|
)
|
|
5
|
|
||||
Equity earnings (losses)
|
219
|
|
|
(25
|
)
|
|
|
(22
|
)
|
|
3
|
|
||||
Income (loss) from continuing operations, net of income tax
|
917
|
|
|
(255
|
)
|
|
|
(31
|
)
|
|
2
|
|
||||
Income from discontinued operations, net of income tax
|
36
|
|
|
83
|
|
|
|
1
|
|
|
1
|
|
||||
Earnings (losses) attributable to common shares
|
795
|
|
|
(214
|
)
|
|
|
(15
|
)
|
|
4
|
|
|
|
|
|
|
AVAILABLE FUNDS AT JUNE 30, 2019
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||
Unrestricted cash and cash equivalents(1)
|
$
|
168
|
|
|
$
|
3
|
|
|
$
|
28
|
|
Available unused credit(2)(3)
|
5,220
|
|
|
1,482
|
|
|
750
|
|
(1)
|
Amounts at Sempra Energy Consolidated included $102 million held in non-U.S. jurisdictions. We discuss repatriation in Note 1 of the Notes to Condensed Consolidated Financial Statements.
|
(2)
|
Available unused credit is the total available on Sempra Energy’s, Sempra Global’s, SDG&E’s and SoCalGas’ credit facilities that we discuss in Note 7 of the Notes to Condensed Consolidated Financial Statements.
|
(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 dividends;
|
▪
|
fund new business or asset acquisitions or start-ups;
|
▪
|
fund capital contribution requirements;
|
▪
|
repay maturing long-term debt; and
|
▪
|
fund expenditures related to the natural gas leak at SoCalGas’ Aliso Canyon natural gas storage facility.
|
CASH PROVIDED BY OPERATING ACTIVITIES
|
||||||||||||||||
(Dollars in millions)
|
||||||||||||||||
|
Six months ended
June 30, 2019 |
|
|
2019 change
|
|
|
Six months ended
June 30, 2018 |
|||||||||
Sempra Energy Consolidated
|
$
|
1,704
|
|
|
|
$
|
31
|
|
|
2
|
%
|
|
|
$
|
1,673
|
|
SDG&E
|
620
|
|
|
|
(24
|
)
|
|
(4
|
)
|
|
|
644
|
|
|||
SoCalGas
|
674
|
|
|
|
(75
|
)
|
|
(10
|
)
|
|
|
749
|
|
▪
|
$361 million decrease in accounts receivable in 2019 compared to a $186 million decrease in 2018;
|
▪
|
$80 million net decrease in Insurance Receivable for Aliso Canyon Costs in 2019 compared to an $84 million net increase in 2018. The $80 million net decrease in 2019 includes $106 million in insurance proceeds received, offset by $27 million of additional accruals; and
|
▪
|
$108 million distribution of earnings received from Oncor in 2019; offset by
|
▪
|
$105 million net decrease in Reserve for Aliso Canyon Costs in 2019 compared to a $56 million net increase in 2018. The $105 million net decrease in 2019 includes $132 million of cash paid, offset by $27 million of additional accruals;
|
▪
|
$10 million decrease in interest payable in 2019 compared to an $88 million increase in 2018;
|
▪
|
$60 million increase in net overcollected regulatory balancing accounts (including long-term amounts included in regulatory assets) at SoCalGas in 2019 compared to a $138 million increase in 2018; and
|
▪
|
$76 million increase in net undercollected regulatory balancing accounts (including long-term amounts included in regulatory assets) at SDG&E in 2019 compared to a $16 million increase in 2018.
|
▪
|
$76 million increase in net undercollected regulatory balancing accounts (including long-term amounts included in regulatory assets) in 2019 compared to a $16 million increase in 2018; and
|
▪
|
$12 million increase in accounts payable in 2019 compared to a $52 million increase in 2018; offset by
|
▪
|
$24 million in purchases of GHG allowances in 2019 compared to $62 million in 2018; and
|
▪
|
$26 million decrease in accounts receivable in 2019 compared to a $1 million increase in 2018.
|
▪
|
$105 million net decrease in Reserve for Aliso Canyon Costs in 2019 compared to a $56 million net increase in 2018. The $105 million net decrease in 2019 includes $132 million of cash paid, offset by $27 million of additional accruals;
|
▪
|
$85 million lower net income, adjusted for noncash items included in earnings, in 2019 compared to 2018; and
|
▪
|
$60 million increase in net overcollected regulatory balancing accounts (including long-term amounts included in regulatory assets) in 2019 compared to a $138 million increase in 2018; offset by
|
▪
|
$80 million net decrease in Insurance Receivable for Aliso Canyon Costs in 2019 compared to an $84 million net increase in 2018. The $80 million net decrease in 2019 includes $106 million in insurance proceeds received, offset by $27 million of additional accruals; and
|
▪
|
$265 million decrease in accounts receivable in 2019 compared to a $187 million decrease in 2018.
|
CASH USED IN INVESTING ACTIVITIES
|
||||||||||||||||
(Dollars in millions)
|
||||||||||||||||
|
Six months ended
June 30, 2019 |
|
|
2019 change
|
|
|
Six months ended
June 30, 2018 |
|||||||||
Sempra Energy Consolidated
|
$
|
(2,267
|
)
|
|
|
$
|
(9,550
|
)
|
|
(81
|
)%
|
|
|
$
|
(11,817
|
)
|
SDG&E
|
(708
|
)
|
|
|
(137
|
)
|
|
(16
|
)
|
|
|
(845
|
)
|
|||
SoCalGas
|
(751
|
)
|
|
|
(28
|
)
|
|
(4
|
)
|
|
|
(779
|
)
|
▪
|
$9.57 billion paid, including $9.45 billion of Merger Consideration, for the acquisition of our investment in Oncor Holdings in March 2018, as we discuss in Note 5 of the Notes to Condensed Consolidated Financial Statements;
|
▪
|
$569 million net proceeds from the April 2019 sale of Sempra Renewables’ remaining wind assets and investments;
|
▪
|
$327 million net proceeds from the February 2019 sale of Sempra LNG’s non-utility natural gas storage assets; and
|
▪
|
$183 million decrease in capital expenditures; offset by
|
▪
|
$1.1 billion higher cash contributions to Oncor Holdings primarily to fund Oncor’s purchase of InfraREIT in May 2019; and
|
▪
|
$102 million paid for the acquisition of our investment in Sharyland Holdings in May 2019.
|
▪
|
$124 million decrease in capital expenditures; offset by
|
▪
|
$94 million increase in net advances to Sempra Energy in 2019.
|
EXPENDITURES FOR PROPERTY, PLANT AND EQUIPMENT
|
|||||||
(Dollars in millions)
|
|||||||
|
Six months ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
SDG&E:
|
|
|
|
||||
Improvements to electric and natural gas distribution systems, including certain pipeline safety
|
|
|
|
|
|
||
and generation systems, plant and equipment
|
$
|
517
|
|
|
$
|
588
|
|
PSEP
|
12
|
|
|
12
|
|
||
Improvements to electric transmission systems
|
179
|
|
|
251
|
|
||
SoCalGas:
|
|
|
|
|
|
||
Improvements to natural gas distribution, transmission and storage systems, and for certain
|
|
|
|
||||
pipeline safety
|
582
|
|
|
702
|
|
||
PSEP
|
77
|
|
|
81
|
|
||
Sempra Mexico:
|
|
|
|
|
|
||
Construction of liquid fuels terminal
|
71
|
|
|
43
|
|
||
Construction of natural gas pipeline projects and other capital expenditures
|
51
|
|
|
48
|
|
||
Construction of renewables projects
|
118
|
|
|
49
|
|
||
Sempra Renewables:
|
|
|
|
||||
Construction costs for wind and solar projects
|
2
|
|
|
37
|
|
||
Sempra LNG:
|
|
|
|
|
|
||
LNG liquefaction development costs
|
39
|
|
|
11
|
|
||
Other
|
1
|
|
|
2
|
|
||
Parent and other
|
2
|
|
|
10
|
|
||
Total
|
$
|
1,651
|
|
|
$
|
1,834
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|||||||||||||
(Dollars in millions)
|
|||||||||||||
|
Six months ended
June 30, 2019 |
|
|
2019 change
|
|
|
Six months ended June 30, 2018
|
||||||
Sempra Energy Consolidated
|
$
|
611
|
|
|
|
$
|
(9,499
|
)
|
|
|
$
|
10,110
|
|
SDG&E
|
85
|
|
|
|
(112
|
)
|
|
|
197
|
|
|||
SoCalGas
|
87
|
|
|
|
(18
|
)
|
|
|
105
|
|
▪
|
$4.7 billion lower issuances of debt with maturities greater than 90 days, including:
|
◦
|
$4.3 billion for long-term debt ($1.5 billion in 2019 compared to $5.8 billion in 2018 primarily to fund the acquisition of our investment in Oncor Holdings), and
|
◦
|
$444 million for commercial paper and other short-term debt ($1.1 billion in 2019 compared to $1.6 billion in 2018);
|
▪
|
$2.1 billion proceeds, net of $38 million in offering costs, from the issuances of common stock in 2018;
|
▪
|
$1.7 billion proceeds, net of $32 million in offering costs, from the issuance of series A preferred stock in 2018; and
|
▪
|
$444 million decrease in short-term debt in 2019 compared to a $1.3 billion increase in 2018; offset by
|
▪
|
$928 million lower payments of debt with maturities greater than 90 days and finance leases, including:
|
◦
|
$557 million for long-term debt and finance leases ($569 million in 2019 compared to $1.1 billion in 2018), and
|
◦
|
$371 million for commercial paper and other short-term debt ($302 million in 2019 compared to $673 million in 2018).
|
▪
|
$256 million decrease in short-term debt in 2019 compared to a $210 million increase in 2018; and
|
▪
|
$51 million lower issuances of long-term debt in 2019; offset by
|
▪
|
$498 million lower payments of long-term debt and finance leases in 2019.
|
|
|
|
|
|
CAPITAL PROJECTS PENDING REGULATORY RESOLUTION – SDG&E
|
||||
|
|
|
|
|
Project description
|
Estimated capital cost
(in millions)
|
|
Status
|
|
Electric Vehicle Charging
|
|
|
|
|
§
|
January 2018 application, pursuant to SB 350, to make investments to support medium-duty and heavy-duty electric vehicles with an estimated implementation cost of $34 million of O&M.
|
$121
|
§
|
In July 2019, the CPUC issued a proposed decision approving the settlement agreement filed in November 2018.
|
Energy Storage Projects
|
|
|
|
|
§
|
February 2018 application, pursuant to AB 2868, to make investments to accelerate the widespread deployment of distributed energy storage systems. SDG&E’s application requests approval of 100 MW of utility-owned energy storage.
|
$161
|
§
|
In June 2019, the CPUC declined to approve SDG&E’s application and provided guidance on future solicitations and filings for energy storage resources.
|
▪
|
Creation of a Wildfire Safety Division and its advisory board, initially within the CPUC, to review and approve or deny the Wildfire Mitigation Plans (WMPs) of the IOUs.
|
▪
|
Creation of a Liquidity Fund administered by the state – The fund will provide liquidity to pay IOU wildfire-related claims, subject to review by the fund administrator, within 45 days of the fund administrator’s approval.
|
▪
|
$5 billion of capital investment by IOUs to support wildfire mitigation – The IOUs will (i) make these capital investments, which will be included in their WMPs, and (ii) recover their securitized financing costs without a ROE, with SDG&E’s share to be $215 million, or 4.3 percent of the $5 billion capital investment.
|
▪
|
Annual Safety Certification – The IOUs, subject to meeting various requirements, will receive an Annual Safety Certification from the CPUC.
|
▪
|
Retained insured exposures – The IOUs will continue to procure reasonable amounts of insurance or amounts determined by the fund administrator. Only claims in excess of the greater of $1 billion or the amount of insurance coverage required by the fund administrator are eligible for coverage by the Wildfire Fund.
|
▪
|
Creation of a Wildfire Fund – The fund will be initially established using the SMIF loan described above, with a similar repayment arrangement using proceeds anticipated from the issuance of new DWR bonds, and IOU shareholder contributions, as we describe below. The Wildfire Fund will provide liquidity to the participating IOUs to pay wildfire-related claims, subject to review by the fund administrator.
|
▪
|
IOU shareholder liability cap and obligation to reimburse – The Wildfire Fund provides clarified standards for the CPUC to apply in its prudency review, described below, in the event of wildfire losses. To the extent the IOU losses are found to be prudently incurred, the Wildfire Fund would absorb those losses. To the extent the IOU losses are found to be imprudently incurred, IOU shareholders would reimburse such losses to the Wildfire Fund, subject to a Liability Cap described below.
|
▪
|
Liability Cap – Subject to the IOU holding a valid Annual Safety Certification, a shareholder liability cap would limit, on a rolling three-year basis, the amount shareholders must pay for losses found to be imprudently incurred to 20 percent of the IOU’s Electric Transmission and Distribution Equity Rate Base, as published by the wildfire fund administrator annually. These payments, if any, would be used to reimburse the Wildfire Fund.
|
▪
|
Prudency standard of review – The prudency standard of review will be modified to require that, when reviewing wildfire liability losses paid, the CPUC apply clearer standards, similar to the FERC standard, when determining the reasonableness of a utility’s conduct related to an ignition. Under this standard, the conduct under review related to the ignition may consider factors within and beyond the utility’s control, including humidity, temperature and winds. Costs and expenses may be allocated for cost recovery in full or in part. Also, under this standard, an IOU’s conduct will be deemed reasonable if a valid Annual Safety Certification is in place, unless a serious doubt is raised, in which case the utility must dispel it.
|
▪
|
Insurance subrogation claim limit – The fund administrator will generally limit payments of subrogation claims to 40 percent of the claim value.
|
▪
|
Electric Rate Reform – California Assembly Bill 327
|
▪
|
Potential Impacts of Community Choice Aggregation and Direct Access
|
▪
|
Renewable Energy Procurement
|
▪
|
Local Community Mitigation Efforts
|
▪
|
Civil and Criminal Litigation
|
▪
|
Regulatory Proceedings
|
▪
|
Governmental Investigations and Orders and Additional Regulation
|
▪
|
Insurance
|
JOINT CAPITAL PROJECTS PENDING REGULATORY RESOLUTION – CALIFORNIA UTILITIES
|
||||
|
|
|
|
|
Project description
|
Estimated capital cost
(in millions)
|
|
Status
|
|
Line 1600 Test or Replacement Project
|
||||
§
|
Pursuant to a CPUC order, in September 2018, SDG&E and SoCalGas submitted a plan to the CPUC to address Line 1600 PSEP requirements by replacing 37 miles of Line 1600 predominately in populated areas and testing 13 miles of Line 1600 in rural areas.
|
$671
|
§
|
In January 2019, the CPUC approved the proposed plan to address Line 1600 PSEP requirements. Cost recovery will be addressed in future GRCs.
|
§
|
Estimated O&M implementation cost of $45 million and cost to retire portions of Line 1600 of $14 million at SDG&E.
|
|
§
|
In May 2019, certain intervenors filed a petition to re-open the proceeding and review the proposed plan.
|
Mobile Home Park Utility Upgrade Program
|
|
|
|
|
§
|
In April 2018, the CPUC opened an OIR to evaluate the Mobile Home Park Program to convert eligible units to direct utility service and determine if it should be extended beyond the initial three-year pilot to a permanent program, and if extended, to adopt programmatic modifications.
|
$471 to $508
|
§
|
A final decision in the OIR is expected by the end of 2019.
|
§
|
In March 2019, the CPUC issued a resolution approving the extension of the pilot program through the earlier of 2021 or the issuance of a CPUC decision on pending proceedings.
|
|
|
|
PIPELINE SAFETY ENHANCEMENT PLAN – COST SUMMARY
|
|
|
|||||||||||||
(Dollars in millions)
|
|
|
|||||||||||||
|
2011 through June 30, 2019
|
||||||||||||||
|
Total
invested(1)
|
|
CPUC review
completed(2)
|
|
CPUC review
pending(3)
|
|
2019 and future applications(4)(5)
|
||||||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
||||||||
Capital
|
$
|
1,767
|
|
|
$
|
213
|
|
|
$
|
853
|
|
|
$
|
701
|
|
Operation and maintenance
|
212
|
|
|
82
|
|
|
85
|
|
|
45
|
|
||||
Total
|
$
|
1,979
|
|
|
$
|
295
|
|
|
$
|
938
|
|
|
$
|
746
|
|
SoCalGas:
|
|
|
|
|
|
|
|
||||||||
Capital
|
$
|
1,397
|
|
|
$
|
199
|
|
|
$
|
731
|
|
|
$
|
467
|
|
Operation and maintenance
|
203
|
|
|
81
|
|
|
78
|
|
|
44
|
|
||||
Total
|
$
|
1,600
|
|
|
$
|
280
|
|
|
$
|
809
|
|
|
$
|
511
|
|
SDG&E:
|
|
|
|
|
|
|
|
||||||||
Capital
|
$
|
370
|
|
|
$
|
14
|
|
|
$
|
122
|
|
|
$
|
234
|
|
Operation and maintenance
|
9
|
|
|
1
|
|
|
7
|
|
|
1
|
|
||||
Total
|
$
|
379
|
|
|
$
|
15
|
|
|
$
|
129
|
|
|
$
|
235
|
|
(1)
|
Excludes certain pressure testing and pipeline replacement costs incurred through June 30, 2019 that were not eligible for recovery based on prior CPUC decisions. Also excludes $45 million incurred for the Line 1600 Test or Replacement Project.
|
(2)
|
Includes costs approved in the 2017 Forecast Application. Excludes $2 million of PSEP-specific insurance costs for which SoCalGas and SDG&E are authorized to request recovery in a future filing.
|
(3)
|
Costs for completed projects pursuant to the 2018 Reasonableness Review Application filed in November 2018, with a decision expected in 2020.
|
(4)
|
Remaining costs not the subject of prior applications are to be included in subsequent GRCs.
|
(5)
|
Authorized to recover 50 percent of the Phase 1 revenue requirement annually, subject to refund.
|
CAPITAL PROJECTS – SEMPRA MEXICO – GAS BUSINESS
|
||||
|
|
|
|
|
Project description
|
Our share of
estimated capital cost
(in millions)
|
|
Status
|
|
Sur de Texas-Tuxpan Marine Pipeline
|
|
|
|
|
§
|
IMG was awarded the right to build, own and operate the natural gas marine pipeline in June 2016 by the CFE.
|
$992
|
§
|
Completed in June 2019; pending acceptance of the in-service date by the CFE.
|
§
|
Sempra Mexico has a 40-percent interest in IMG, a JV with TC Energy, which owns the remaining 60-percent interest.
|
|
§
|
In June 2019, the CFE sent IMG a request for arbitration over certain contract terms relating to force majeure clauses and fixed capacity payments applicable to such events.
|
§
|
Natural gas transportation services agreement for a 25-year term, denominated in U.S. dollars.
|
|
|
|
Manzanillo Terminal
|
|
|
|
|
§
|
Plan to develop, construct and operate a marine terminal for the receipt, storage and delivery of refined products in Manzanillo, Colima.
|
$149 to $235
|
§
|
Estimated completion: first quarter of 2021.
|
§
|
Increased storage capacity to 2.2 million barrels is fully contracted under long-term, U.S. dollar-denominated agreements with British Petroleum, Trafigura Mexico, S.A. de C.V. and Marathon Petroleum Corporation.
|
|
|
|
§
|
Sempra Mexico has a 52.4-percent interest in TP Terminals, S. de. R.L. de C.V., a JV with Trafigura Mexico, S.A. de C.V., which owns the remaining 47.6-percent interest. Sempra Mexico has the option to increase its ownership interest up to 82.5 percent.
|
|
|
|
Ecogas
|
|
|
|
|
§
|
Expansion plan to connect approximately 40 thousand new customers in the next two years.
|
$78
|
§
|
Estimated completion: 2019 through 2021 as portions are completed.
|
CAPITAL PROJECTS – SEMPRA MEXICO – POWER BUSINESS
|
||||
|
|
|
|
|
Project description
|
Our share of
estimated capital cost
(in millions)
|
|
Status
|
|
La Rumorosa Solar Complex
|
|
|
|
|
§
|
Awarded 41-MW photovoltaic solar energy project located in Baja California, Mexico, in an auction conducted by Mexico’s National Center of Electricity Control (Centro Nacional de Control de Energía) in September 2016.
|
$50
|
§
|
Completed in June 2019.
|
§
|
Contracted by the CFE under a 15-year renewable energy agreement and a 20-year clean energy certificate agreement, denominated in U.S. dollars.
|
|
|
|
Tepezalá II Solar Complex
|
|
|
|
|
§
|
Awarded 100-MW photovoltaic solar energy project located in Aguascalientes, Mexico, in an auction conducted by Mexico’s National Center of Electricity Control in September 2016.
|
$90
|
§
|
Estimated completion: third quarter of 2019.
|
§
|
Contracted by the CFE under 15-year renewable energy and capacity agreements and a 20-year clean energy certificate agreement, denominated in U.S. dollars.
|
|
|
|
§
|
Trina Solar owns a 10-percent interest in the project. Sempra Mexico has the option to purchase, and Trina Solar has the option to sell, Trina Solar’s ownership interest at the end of the construction period, before operations commence.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINAL AMOUNT OF DEBT(1)
|
|||||||||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
|
Sempra Energy
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
||||||||||||
Short-term:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
California Utilities
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
547
|
|
|
$
|
291
|
|
|
$
|
256
|
|
Other
|
2,380
|
|
|
—
|
|
|
—
|
|
|
1,477
|
|
|
—
|
|
|
—
|
|
||||||
Long-term:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
California Utilities fixed-rate
|
$
|
9,127
|
|
|
$
|
5,318
|
|
|
$
|
3,809
|
|
|
$
|
8,377
|
|
|
$
|
4,918
|
|
|
$
|
3,459
|
|
California Utilities variable-rate
|
52
|
|
|
52
|
|
|
—
|
|
|
78
|
|
|
78
|
|
|
—
|
|
||||||
Other fixed-rate
|
11,888
|
|
|
—
|
|
|
—
|
|
|
10,804
|
|
|
—
|
|
|
—
|
|
||||||
Other variable-rate
|
1,246
|
|
|
—
|
|
|
—
|
|
|
2,091
|
|
|
—
|
|
|
—
|
|
(1)
|
After the effects of interest rate swaps. Before the effects of acquisition-related fair value adjustments and reductions for unamortized discount and debt issuance costs, and excluding finance lease obligations and build-to-suit lease.
|
▪
|
Moody’s issuer rating was Baa1 with a negative outlook for Sempra Energy, Baa1 with a negative outlook for SDG&E and A1 with a negative outlook for SoCalGas;
|
▪
|
S&P’s issuer credit rating was BBB+ with a negative outlook for Sempra Energy, BBB+ with a negative outlook for SDG&E and A with a negative outlook for SoCalGas; and
|
▪
|
Fitch long-term issuer default rating was BBB+ with a stable outlook for Sempra Energy, BBB+ with a negative outlook for SDG&E and A with a stable outlook for SoCalGas.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sempra Energy:
|
||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
||
|
|
SEMPRA ENERGY,
(Registrant)
|
|
|
|
Date: August 2, 2019
|
|
By: /s/ Peter R. Wall
|
|
|
Peter R. Wall
Vice President, Controller and
Chief Accounting Officer
|
San Diego Gas & Electric Company:
|
||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
||
|
|
SAN DIEGO GAS & ELECTRIC COMPANY,
(Registrant)
|
|
|
|
Date: August 2, 2019
|
|
By: /s/ Bruce A. Folkmann
|
|
|
Bruce A. Folkmann
Vice President, Controller, Chief Financial Officer and Chief Accounting Officer
|
Southern California Gas Company:
|
||
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
||
|
|
SOUTHERN CALIFORNIA GAS COMPANY,
(Registrant)
|
|
|
|
Date: August 2, 2019
|
|
By: /s/ Mia L. DeMontigny
|
|
|
Mia L. DeMontigny
Vice President, Controller, Chief Financial Officer and Chief Accounting Officer
|
You have been granted a restricted stock unit award representing the right to receive the number of shares of Sempra Energy Common Stock set forth below, subject to the vesting conditions set forth below. The restricted stock units, and dividend equivalents with respect to the restricted stock units, under your award may not be sold or assigned. They will be subject to forfeiture unless and until they vest in accordance with the terms and conditions of the award. Shares of Common Stock will be distributed to you after the completion of the service periods ending in <MONTH> <YEAR> through <MONTH> <YEAR>, if the restricted stock units vest under the terms and conditions of your award.
The terms and conditions of your award are set forth in the attached Year <YEAR> Restricted Stock Unit Award Agreement (the “Award Agreement”) and in the Sempra Energy <YEAR> Long Term Incentive Plan (the “Plan”), which has been provided to you. The summary below highlights selected terms and conditions but it is not complete and you should carefully read the attachments to fully understand the terms and conditions of your award.
|
|||||
|
SUMMARY
|
|
|||
|
|
||||
Date of Award:
|
<DATE>, <YEAR>
|
||||
Name of Recipient:
|
<NAME>
|
||||
Recipient’s Employee Number:
|
<EMPLOYEE ID>
|
||||
Number of Restricted Stock Units (prior to any dividend equivalents):
|
<# RSUs>
|
||||
|
|
||||
Restricted Stock Units:
|
|||||
Your restricted stock units represent the right to receive shares of Common Stock in the future, subject to the terms and conditions of your award. Your restricted stock units are not shares of Common Stock.
|
|||||
Vesting/Forfeiture of Restricted Stock Units:
|
|||||
If not previously forfeited, your restricted stock units will vest in equal annual installments of one-fifth of the original number of units covered by this award (together with related dividend equivalents) on the first five anniversaries of the award date, subject to your continued employment by Sempra Energy or its Subsidiaries through the applicable Vesting Date. Subject to certain exceptions set forth in the Award Agreement, if your employment terminates prior to the applicable Vesting Date, your restricted stock units will be forfeited effective immediately following such termination.
|
|||||
Transfer Restrictions:
|
|||||
Your restricted stock units may not be sold or otherwise transferred and will remain subject to forfeiture conditions until they vest.
|
|||||
Termination of Employment:
|
|||||
Subject to certain exceptions set forth in the Award Agreement, your restricted stock units will be forfeited if your employment terminates before such units vest effective immediately following such termination.
|
|||||
Dividend Equivalents:
|
|||||
You also have been awarded dividend equivalents with respect to your restricted stock units. Your dividend equivalents represent the right to receive additional shares of Common Stock in the future, subject to the terms and conditions of your award. Your dividend equivalents will be determined based on the dividends that you would have received had you held shares of Common Stock equal to the vested number of your restricted stock units from the date of your award to the date of the distribution of shares of Common Stock following the vesting of your restricted stock units, and assuming that the dividends were reinvested in Common Stock (and any dividends on such shares were reinvested in Common Stock). The dividends will be deemed reinvested in Common Stock in the same manner as dividends reinvested pursuant to the terms of the Sempra Dividend Reinvestment Plan. Your dividend equivalents will be subject to the same transfer restrictions and forfeiture and vesting conditions as the shares represented by your restricted stock units.
|
|||||
Distribution of Shares:
|
|||||
Shares of Common Stock will be distributed to you to the extent your restricted stock units (and accompanying dividend equivalents) vest. Except as provided otherwise in the Award Agreement, the shares will be distributed to you after the completion of the applicable service period. The shares of Common Stock will include the additional shares to be distributed pursuant to your vested dividend equivalents.
|
|||||
|
Taxes:
|
|||||
Upon distribution of shares of Common Stock to you, you will be subject to income taxes on the value of the distributed shares at the time of distribution and must pay applicable withholding taxes.
|
|||||
By your acceptance of this award, you agree to all of the terms and conditions set forth in this Cover Page/Summary, the Award Agreement and the Plan. You will be deemed to have accepted this award unless you affirmatively reject the award in accordance with the procedures described herein or unless you fail to execute the Arbitration Agreement, if any, provided to you in connection with this award.
|
|||||
Sempra Energy:
|
|
<SIGNATURE>
|
|||
Title:
|
|
<CEO NAME>
<TITLE>
|
Award:
|
You have been granted a restricted stock unit award under Sempra Energy’s <YEAR> Long Term Incentive Plan (the “Plan”). The award consists of the number of restricted stock units set forth on the Cover Page/Summary to this Award Agreement, and dividend equivalents with respect to the restricted stock units (described below). Capitalized terms used in this Award Agreement and not defined shall have the meaning set forth in the Plan.
Your restricted stock units represent the right to receive shares of Common Stock in the future, subject to the terms and conditions of your award. Your restricted stock units are not shares of Common Stock.
Each restricted stock unit represents the right to receive one share of Common Stock upon the vesting of the unit.
Unless and until they vest, your restricted stock units and any dividend equivalents will be subject to transfer restrictions and forfeiture and vesting conditions.
Subject to certain exceptions set forth herein, your restricted stock units (and dividend equivalents) will be forfeited effective immediately following such termination if your employment terminates before they vest; provided, however, that the Compensation Committee, in its sole discretion, may determine to vest you in all or a portion of such restricted stock units (subject to Code Section 409A requirements and the terms of the Plan).
See “Vesting/Forfeiture,” “Transfer Restrictions,” and “Termination of Employment” below.
|
Vesting/Forfeiture:
|
Subject to the provisions below relating to the treatment of your restricted stock units in connection with a Change in Control, your restricted stock units (and dividend equivalents) will vest in equal annual installments of one-fifth of the original number of units covered by this award (together with related dividend equivalents) on the first five anniversaries of the award date, subject to your continued employment by Sempra Energy or its Subsidiaries through the applicable vesting date and the terms of this Award Agreement.
Certificates for the shares will be transferred to your brokerage account unless you specifically instruct otherwise. When the shares of Common Stock are issued to you, your restricted stock units (vested and unvested) and your dividend equivalents will terminate.
|
Transfer Restrictions:
|
You may not sell or otherwise transfer or assign your restricted stock units (or your dividend equivalents).
|
Dividend Equivalents:
|
You also have been awarded dividend equivalents with respect to your restricted stock units. Your dividend equivalents represent the right to receive additional shares of Common Stock in the future, subject to the terms and conditions of your award. Your dividend equivalents will be determined based on the dividends that you would have received had you held shares of Common Stock equal to the vested number of your restricted stock units from the date of your award to the date of the distribution of shares of Common Stock following the vesting of your restricted stock units, and assuming that the dividends were reinvested in Common Stock (and any dividends on such shares were reinvested in Common Stock). The dividends will be deemed reinvested in Common Stock in the same manner as dividends reinvested pursuant to the terms of the Sempra Dividend Reinvestment Plan.
Your dividend equivalents will be subject to the same transfer restrictions and forfeiture and vesting conditions as your restricted stock units. They will vest when and to the extent that your restricted stock units vest.
Also, your restricted stock units (and dividend equivalents), including the terms and conditions thereof, will be adjusted to prevent dilution or enlargement of your rights in the event of a stock dividend on shares of Common Stock or as the result of a stock-split, recapitalization, reorganization or other similar transaction in accordance with the terms and conditions of the Plan. Any additional restricted stock units (and dividend equivalents) awarded to you as a result of such an adjustment also will be subject to the same transfer restrictions, forfeiture and vesting conditions and other terms and conditions that are applicable to your restricted stock units (and dividend equivalents).
|
No Shareholder Rights:
|
Your restricted stock units (and dividend equivalents) are not shares of Common Stock. You will have no rights as a shareholder unless and until shares of Common Stock are issued to you following the vesting of your restricted stock units (and dividend equivalents) as provided in this Award Agreement and the Plan.
|
Distribution of Shares:
|
Following the vesting of your restricted stock units, you will receive the number of shares of Common Stock equal to the number of your restricted stock units that have vested. However, in no event will you receive under this award, and other awards granted to you under the Plan in the same fiscal year of Sempra Energy, more than the maximum number of shares of Common Stock permitted under the Plan. Also, you will receive the number of shares of Common Stock equal to your vested dividend equivalents.
You will receive the shares as soon as reasonably practicable following each vesting date (and in no event later than March 15 of the year following the applicable vesting date). Once you receive the shares of Common Stock, your restricted stock units (and dividend equivalents) will terminate.
|
Termination of Employment:
|
|
Termination:
|
If your employment with Sempra Energy and its Subsidiaries terminates for any reason other than by reason of your death prior to the vesting of your restricted stock units (and dividend equivalents), all of your restricted stock units (and dividend equivalents) will be forfeited effective immediately following such termination; provided, however, that the Compensation Committee in its sole discretion may determine to vest you in all or a portion of such restricted stock units (subject to Code Section 409A requirements and the terms of the Plan). If your employment terminates by reason of your death prior to the vesting of your restricted stock units (and dividend equivalents), all of your restricted stock units (and dividend equivalents) will vest upon your death.
|
Change in Control:
|
In the event of a Change in Control, the following terms shall apply:
§ If (i) you have achieved age 55 and have completed at least five years of continuous service with Sempra Energy and its Subsidiaries as of the date of a Change in Control and your restricted stock units have not been forfeited prior to the Change in Control, (ii) your outstanding restricted stock units as of the date of a Change in Control are not subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A and/or (iii) your outstanding restricted stock units are not assumed or substituted with one or more Replacement Awards (as defined in the Plan), then in each case your outstanding restricted stock units and any associated dividend equivalents will vest immediately prior to the Change in Control. If the foregoing terms apply, immediately prior to the date of the Change in Control you will receive a number of shares of Common Stock equal to the number of your restricted stock units and dividend equivalents that have vested.
§ If your outstanding restricted stock awards are assumed or substituted with one or more Replacement Awards, then, except as provided otherwise in an individual severance agreement or employment agreement to which you are a party, the terms set forth in the Plan shall apply with respect to such Replacement Award following the Change in Control. If the foregoing terms apply and the Replacement Award vests upon your separation from service or death, on such date, you will receive a number of shares or other property in settlement of the Replacement Awards.
|
Further Actions:
|
You agree to take all actions and execute all documents appropriate to carry out the provisions of this Award Agreement.
You shall be deemed to have accepted this award unless you affirmatively reject it in writing addressed to the Corporate Secretary of the Company no later than March 31, <YEAR>; provided, however, that you shall not be deemed to have accepted this award if you fail to execute the Arbitration Agreement, if any, provided to you in connection with this award.
You also appoint as your attorney-in-fact each individual who at the time of so acting is the Secretary or an Assistant Secretary of Sempra Energy with full authority to effect any transfer of any shares of Common Stock distributable to you, including any transfer to pay withholding taxes, that is authorized by this Award Agreement.
|
Applicable Law:
|
This Award Agreement will be interpreted and enforced under the laws of the State of California.
|
Disputes:
Other Agreements:
|
Any and all disputes between you and the Company relating to or arising out of the Plan or your restricted stock unit award shall be subject to the Arbitration Agreement, if any, provided with this Award Agreement, including, but not limited to, any disputes referenced in the applicable provisions of the Plan.
In the event of any conflict between the terms of this Award Agreement and any written employment, severance or other employment-related agreement between you and Sempra Energy, the terms of this Award Agreement, or the terms of such other agreement, whichever are more favorable to you, shall prevail, provided that in each case a conflict shall be resolved in a manner consistent with the intent that your restricted stock units comply with Code Section 409A. In the event of a conflict between the terms of this Award Agreement and the Plan, the Plan document shall prevail.
|
You have been granted a restricted stock unit award representing the right to receive the number of shares of Sempra Energy Common Stock set forth below, subject to the vesting conditions set forth below. The restricted stock units, and dividend equivalents with respect to the restricted stock units, under your award may not be sold or assigned. They will be subject to forfeiture unless and until they vest on the date of the <YEAR> Annual Meeting of Shareholders. Shares of Common Stock will be distributed to you when the restricted stock units vest under the terms and conditions of your award.
The terms and conditions of your award are set forth herein and in the Sempra Energy <YEAR> Long Term Incentive Plan (the “Plan”), which has been provided to you.
|
||||||
Date of Award:
|
<DATE>
|
|||||
Name of Recipient:
|
<NAME>
|
|||||
Number of Restricted Stock Units (prior to any reinvested dividend equivalents):
|
<NUMBER> units
|
|||||
|
|
|||||
You have been granted a restricted stock unit award under the Plan. Your restricted stock units represent the right to receive one share of Sempra Energy Common Stock (together with reinvested dividend equivalents) for each restricted stock unit upon the vesting of your award, subject to the terms and conditions of your award.
Your restricted stock units are not shares of Common Stock. You will have no rights as a shareholder unless and until shares of Common Stock are issued to you upon the vesting of your restricted stock units.
Your restricted stock units (and reinvested dividend equivalents) are subject to transfer restrictions and will be forfeited if your Sempra Energy board service terminates before your units vest, subject to certain exceptions. See “Vesting/Forfeiture of Restricted Stock Units”, “Transfer Restrictions”, and “Termination of Board Service” below.
|
||||||
|
||||||
Vesting/Forfeiture of Restricted Stock Units:
|
||||||
Subject to the provisions below relating to the treatment of your restricted stock units in connection with a Change in Control, if not previously forfeited, your restricted stock units (together with related dividend equivalents) will vest on the date of the <YEAR> Annual Meeting of Shareholders or upon your earlier termination of board service by reason of your death, disability, or removal from the board without cause.
Your restricted stock units will be forfeited upon your termination of board service before the date of the <YEAR> Annual Meeting of Shareholders for any reason other than your death, disability, or removal from the board without cause.
|
||||||
|
||||||
Transfer Restrictions:
|
||||||
Your restricted stock units may not be sold or otherwise transferred and will remain subject to forfeiture conditions until they vest.
|
||||||
|
||||||
Termination of Board Service:
|
||||||
If your Sempra Energy board service terminates for any reason prior to the date of the <YEAR> Annual Meeting of Shareholders (other than by reason of your death, disability, or removal from the board without cause), all of your restricted stock units will be forfeited.
If your board service terminates by reason of your death, disability, or removal from the board without cause, your restricted stock units (and reinvested dividend equivalents) will immediately vest.
|
||||||
|
||||||
Dividend Equivalents:
|
You also have been awarded dividend equivalents with respect to your restricted stock units. Your dividend equivalents represent the right to receive additional shares of Common Stock in the future, subject to the terms and conditions of your award. Your dividend equivalents will be determined based on the dividends that you would have received, had you held shares of Common Stock equal to the vested number of your restricted stock units from the date of your award to the date of the distribution of shares following the vesting of your restricted stock units, and assuming that the dividends were reinvested in Common Stock (and any dividends on such shares were reinvested in Common Stock). The dividends will be deemed reinvested in the same manner as dividends reinvested pursuant to the terms of the Sempra Energy Dividend Reinvestment Plan. Your dividend equivalents will be subject to the same transfer restrictions and forfeiture and vesting conditions as the shares represented by your restricted stock units.
|
||||||
|
||||||
Also, your restricted stock units (and dividend equivalents), including the terms and conditions thereof, will be adjusted to prevent dilution or enlargement of your rights in the event of a stock dividend on shares of Common Stock or as the result of a stock-split, recapitalization, reorganization or other similar transaction in accordance with the terms and conditions of the Plan. Any additional restricted stock units (and dividend equivalents) awarded to you as a result of such an adjustment also will be subject to the same transfer restrictions, forfeiture and vesting conditions and other terms and conditions that are applicable to your restricted stock units (and dividend equivalents).
|
||||||
|
||||||
Distribution of Shares:
|
||||||
Following the vesting of your restricted stock units, you will receive the number of shares of Common Stock equal to the number of your restricted stock units that have vested. Also, you will receive the number of shares of Common Stock equal to your vested dividend equivalents. You will receive the shares as soon as reasonably practicable following the vesting date but in no event more than 2-1/2 months following the calendar year in which the vesting date occurs (or such other date as determined under the Sempra Energy Employee and Director Savings Plan or any other deferred compensation plan maintained by Sempra Energy). Once you receive the shares of Common Stock, your restricted stock units (and dividend equivalents) will terminate.
|
||||||
|
||||||
Taxes:
|
||||||
Upon the distribution of your units (and related dividend equivalents) in shares of Common Stock, you will realize taxable income based on the fair market value of the shares on the distribution date and, if applicable, you must pay any applicable withholding (or other) taxes.
If you are subject to withholding (or other) taxes, prior to the taxable or tax withholding event, as applicable, you must pay, or make adequate arrangements satisfactory to Sempra Energy to pay these taxes. In this regard, unless you instruct otherwise and pay or make arrangements satisfactory to Sempra Energy to pay these taxes, upon the distribution of your shares, Sempra Energy will withhold a sufficient number of shares of common stock that you would otherwise be entitled to receive to cover the minimum required withholding taxes and transfer to you only the remaining balance of your shares.
|
||||||
|
||||||
Change in Control:
|
||||||
A change in control shall be governed in accordance with the terms of the Plan.
|
||||||
|
||||||
Further Actions:
|
||||||
You agree to take all actions and execute all documents appropriate to carry out the provisions of this Agreement.
You shall be deemed to have accepted this award unless you affirmatively reject it in writing addressed to the Corporate Secretary of the Company no later than 90 days following the Date of Award.
You also appoint as your attorney-in-fact each individual who at the time of so acting is the Secretary or an Assistant Secretary of Sempra Energy with full authority to effect any transfer of any shares of Common Stock distributable to you, including any transfer to pay withholding taxes (if applicable), that is authorized by this Agreement.
|
||||||
|
||||||
Applicable Law:
|
This Agreement will be interpreted and enforced under the laws of the State of California.
|
||||||
|
||||||
Other Agreements:
|
||||||
In the event of a conflict between the terms of this Agreement and the Plan, the plan document shall prevail.
|
||||||
By your acceptance of this award, you agree to all of the terms and conditions set forth herein and in the Plan. You will be deemed to have accepted this award unless you affirmatively reject the award in accordance with the procedures described herein.
|
You have been granted a restricted stock unit award representing the right to receive the number of shares of Sempra Energy Common Stock set forth below, subject to the vesting conditions set forth below. The restricted stock units, and dividend equivalents with respect to the restricted stock units, under your award may not be sold or assigned. They will be subject to forfeiture unless and until they vest as provided herein. Shares of Common Stock will be distributed to you when the restricted stock units vest under the terms and conditions of your award.
The terms and conditions of your award are set forth herein and in the Sempra Energy <YEAR> Long Term Incentive Plan (the “Plan”), which has been provided to you.
|
|||
|
|
|
|
|
|
|
|
Date of Award:
|
<DATE>
|
||
Name of Recipient:
|
<NAME>
|
||
Number of Restricted Stock Units (prior to any reinvested dividend equivalents):
|
<NUMBER> units
|
||
|
|
||
You have been granted a restricted stock unit award under the Plan. Your restricted stock units represent the right to receive one share of Sempra Energy Common Stock (together with reinvested dividend equivalents) for each restricted stock unit upon the vesting of your award, subject to the terms and conditions of your award.
Your restricted stock units are not shares of Common Stock. You will have no rights as a shareholder unless and until shares of Common Stock are issued to you upon the vesting of your restricted stock units.
Your restricted stock units (and reinvested dividend equivalents) are subject to transfer restrictions and will be forfeited if your Sempra Energy board service terminates before your units vest, subject to certain exceptions. See “Vesting/Forfeiture of Restricted Stock Units”, “Transfer Restrictions”, and “Termination of Board Service” below.
|
|||
|
|||
Vesting/Forfeiture of Restricted Stock Units:
|
|||
Subject to the provisions below relating to the treatment of your restricted stock units in connection with a Change in Control, if not previously forfeited, your restricted stock units will vest (together with related dividend equivalents) on the first anniversary of the award date or upon your earlier termination of board service by reason of your death, disability, or removal from the board without cause.
Your unvested restricted stock units will be forfeited upon your termination of board service for any reason other than your death, disability, or removal from the board without cause.
|
|||
|
|||
Transfer Restrictions:
|
|||
Your restricted stock units may not be sold or otherwise transferred and will remain subject to forfeiture conditions until they vest.
|
|||
|
|||
Termination of Board Service:
|
|||
If your Sempra Energy board service terminates for any reason prior to the vesting of your award (other than by reason of your death, disability, or removal from the board without cause), all of your unvested restricted stock units will be forfeited.
If your board service terminates by reason of your death, disability, or removal from the board without cause, all unvested restricted stock units (and reinvested dividend equivalents) will immediately vest.
|
|||
|
|||
Dividend Equivalents:
|
|||
You also have been awarded dividend equivalents with respect to your restricted stock units. Your dividend equivalents represent the right to receive additional shares of Common Stock in the future, subject to the terms and conditions of your award. Your dividend equivalents will be determined based on the dividends that you would have received, had you held shares of Common Stock equal to the vested number of your restricted stock units from the date of your award to the date of the distribution of shares following the vesting of your restricted stock units, and assuming that the dividends were reinvested in Common Stock (and any dividends on such shares were reinvested in Common Stock). The dividends will be deemed reinvested in the same manner as dividends reinvested pursuant to the terms of the Sempra Energy Dividend Reinvestment Plan. Your dividend equivalents will be subject to the same transfer restrictions and forfeiture and vesting conditions as the shares represented by your restricted stock units.
|
Also, your restricted stock units (and dividend equivalents), including the terms and conditions thereof, will be adjusted to prevent dilution or enlargement of your rights in the event of a stock dividend on shares of Common Stock or as the result of a stock-split, recapitalization, reorganization or other similar transaction in accordance with the terms and conditions of the Plan. Any additional restricted stock units (and dividend equivalents) awarded to you as a result of such an adjustment also will be subject to the same transfer restrictions, forfeiture and vesting conditions and other terms and conditions that are applicable to your restricted stock units (and dividend equivalents).
|
|||
|
|||
Distribution of Shares:
|
|||
Following the vesting of your restricted stock units, you will receive the number of shares of Common Stock equal to the number of your restricted stock units that have vested. Also, you will receive the number of shares of Common Stock equal to your vested dividend equivalents. You will receive the shares as soon as reasonably practicable following the vesting date but in no event more than 2-1/2 months following the calendar year in which the vesting date occurs (or such other date as determined under the Sempra Energy Employee and Director Savings Plan or any other deferred compensation plan maintained by Sempra Energy). Once you receive all of the shares of Common Stock, your restricted stock units (and dividend equivalents) will terminate.
|
|||
|
|||
Taxes:
|
|||
Upon the distribution of your units (and related dividend equivalents) in shares of Common Stock, you will realize taxable income based on the fair market value of the shares on the distribution date and, if applicable, you must pay any applicable withholding (or other) taxes.
If you are subject to withholding (or other) taxes, prior to the taxable or tax withholding event, as applicable, you must pay, or make adequate arrangements satisfactory to Sempra Energy to pay these taxes. In this regard, unless you instruct otherwise and pay or make arrangements satisfactory to Sempra Energy to pay these taxes, upon the distribution of your shares, Sempra Energy will withhold a sufficient number of shares of common stock that you would otherwise be entitled to receive to cover the minimum required withholding taxes and transfer to you only the remaining balance of your shares.
|
|||
|
|||
Change in Control:
|
|||
A change in control shall be governed in accordance with the terms of the Plan.
|
|||
|
|||
Further Actions:
|
|||
You agree to take all actions and execute all documents appropriate to carry out the provisions of this Agreement.
You shall be deemed to have accepted this award unless you affirmatively reject it in writing addressed to the Corporate Secretary of the Company no later than 90 days following the Date of Award.
You also appoint as your attorney-in-fact each individual who at the time of so acting is the Secretary or an Assistant Secretary of Sempra Energy with full authority to effect any transfer of any shares of Common Stock distributable to you, including any transfers to pay withholding taxes (if applicable), that is authorized by this Agreement.
|
|||
|
|||
Applicable Law:
|
|||
This Agreement will be interpreted and enforced under the laws of the State of California.
|
|||
|
|||
Other Agreements:
|
|||
In the event of a conflict between the terms of this Agreement and the Plan, the plan document shall prevail.
|
|||
|
|||
By your acceptance of this award, you agree to all of the terms and conditions set forth herein and in the Plan. You will be deemed to have accepted this award unless you affirmatively reject the award in accordance with the procedures described herein.
|
Sempra Energy:
|
|
<SIGNATURE>
|
Title:
|
|
<CEO>
<TITLE>
|
Award:
|
You have been granted a restricted stock unit award under Sempra Energy’s <YEAR> Long Term Incentive Plan (the “Plan”). The award consists of the number of restricted stock units set forth on the Cover Page/Summary to this Award Agreement, and dividend equivalents with respect to the restricted stock units (described below). Capitalized terms used in this Award Agreement and not defined shall have the meaning set forth in the Plan.
Your restricted stock units represent the right to receive shares of Common Stock in the future, subject to the terms and conditions of your award. Your restricted stock units are not shares of Common Stock.
Each restricted stock unit represents the right to receive one share of Common Stock upon the vesting of the unit.
Unless and until they vest, your restricted stock units and any dividend equivalents will be subject to transfer restrictions and forfeiture and vesting conditions.
Subject to certain exceptions set forth herein, your restricted stock units (and dividend equivalents) will be forfeited effective immediately following such termination if your employment terminates before they vest; provided, however, that the Compensation Committee, in its sole discretion, may determine to vest you in all or a portion of such restricted stock units (subject to Code Section 409A requirements and the terms of the Plan).
See “Vesting/Forfeiture,” “Transfer Restrictions,” and “Termination of Employment” below.
|
Vesting/Forfeiture:
|
Subject to the provisions below relating to the treatment of your restricted stock units in connection with a Change in Control, your restricted stock units (and dividend equivalents) will vest (together with related dividend equivalents) on the first New York Stock Exchange trading day of <YEAR>, subject to your continued employment by Sempra Energy or its Subsidiaries through the vesting date and the terms of this Award Agreement.
Certificates for the shares will transferred to your brokerage account unless you specifically instruct otherwise. When the shares of Common Stock are issued to you, your restricted stock units (vested and unvested) and your dividend equivalents will terminate.
|
Transfer Restrictions:
|
You may not sell or otherwise transfer or assign your restricted stock units (or your dividend equivalents).
|
Dividend Equivalents:
|
You also have been awarded dividend equivalents with respect to your restricted stock units. Your dividend equivalents represent the right to receive additional shares of Common Stock in the future, subject to the terms and conditions of your award. Your dividend equivalents will be determined based on the dividends that you would have received had you held shares of Common Stock equal to the vested number of your restricted stock units from the date of your award to the date of the distribution of shares of Common Stock following the vesting of your restricted stock units, and assuming that the dividends were reinvested in Common Stock (and any dividends on such shares were reinvested in Common Stock). The dividends will be deemed reinvested in Common Stock in the same manner as dividends reinvested pursuant to the terms of the Sempra Dividend Reinvestment Plan.
Your dividend equivalents will be subject to the same transfer restrictions and forfeiture and vesting conditions as your restricted stock units. They will vest when and to the extent that your restricted stock units vest.
Also, your restricted stock units (and dividend equivalents), including the terms and conditions thereof, will be adjusted to prevent dilution or enlargement of your rights in the event of a stock dividend on shares of Common Stock or as the result of a stock-split, recapitalization, reorganization or other similar transaction in accordance with the terms and conditions of the Plan. Any additional restricted stock units (and dividend equivalents) awarded to you as a result of such an adjustment also will be subject to the same transfer restrictions, forfeiture and vesting conditions and other terms and conditions that are applicable to your restricted stock units (and dividend equivalents).
|
No Shareholder Rights:
|
Your restricted stock units (and dividend equivalents) are not shares of Common Stock. You will have no rights as a shareholder unless and until shares of Common Stock are issued to you following the vesting of your restricted stock units (and dividend equivalents) as provided in this Award Agreement and the Plan.
|
Distribution of Shares:
|
Following the vesting of your restricted stock units, you will receive the number of shares of Common Stock equal to the number of your restricted stock units that have vested. However, in no event will you receive under this award, and other awards granted to you under the Plan in the same fiscal year of Sempra Energy, more than the maximum number of shares of Common Stock permitted under the Plan. Also, you will receive the number of shares of Common Stock equal to your vested dividend equivalents.
You will receive the shares as soon as reasonably practicable following each vesting date (and in no event later than March 15 of the year following the vesting date). Once you receive the shares of Common Stock, your restricted stock units (and dividend equivalents) will terminate.
|
Termination of Employment:
|
|
Termination:
|
If your employment with Sempra Energy and its Subsidiaries terminates for any reason other than by reason of your death prior to the vesting of your restricted stock units (and dividend equivalents), all of your restricted stock units (and dividend equivalents) will be forfeited effective immediately following such termination; provided, however, that the Compensation Committee in its sole discretion may determine to vest you in all or a portion of such restricted stock units (subject to Code Section 409A requirements and the terms of the Plan). If your employment terminates by reason of your death prior to the vesting of your restricted stock units (and dividend equivalents), all of your restricted stock units (and dividend equivalents) will vest upon your death.
|
Change in Control:
|
In the event of a Change in Control, the following terms shall apply:
§ If (i) you have achieved age 55 and have completed at least five years of continuous service with Sempra Energy and its Subsidiaries as of the date of a Change in Control and your restricted stock units have not been forfeited prior to the Change in Control, (ii) your outstanding restricted stock units as of the date of a Change in Control are not subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A and/or (iii) your outstanding restricted stock units are not assumed or substituted with one or more Replacement Awards (as defined in the Plan), then in each case your outstanding restricted stock units and any associated dividend equivalents will vest immediately prior to the Change in Control. If the foregoing terms apply, immediately prior to the date of the Change in Control you will receive a number of shares of Common Stock equal to the number of your restricted stock units and dividend equivalents that have vested.
§ If your outstanding restricted stock awards are assumed or substituted with one or more Replacement Awards, then, except as provided otherwise in an individual severance agreement or employment agreement to which you are a party, the terms set forth in the Plan shall apply with respect to such Replacement Award following the Change in Control. If the foregoing terms apply and the Replacement Award vests upon your separation from service or death, on such date, you will receive a number of shares or other property in settlement of the Replacement Awards.
|
Further Actions:
|
You agree to take all actions and execute all documents appropriate to carry out the provisions of this Award Agreement.
You shall be deemed to have accepted this award unless you affirmatively reject it in writing addressed to the Corporate Secretary of the Company no later than March 31, <YEAR>; provided, however, that you shall not be deemed to have accepted this award if you fail to execute the Arbitration Agreement, if any, provided to you in connection with this award.
You also appoint as your attorney-in-fact each individual who at the time of so acting is the Secretary or an Assistant Secretary of Sempra Energy with full authority to effect any transfer of any shares of Common Stock distributable to you, including any transfer to pay withholding taxes, that is authorized by this Award Agreement.
|
Applicable Law:
|
This Award Agreement will be interpreted and enforced under the laws of the State of California.
|
Disputes:
Other Agreements:
|
Any and all disputes between you and the Company relating to or arising out of the Plan or your restricted stock unit award shall be subject to the Arbitration Agreement, if any, provided with this Award Agreement, including, but not limited to, any disputes referenced in the applicable provisions of the Plan.
In the event of any conflict between the terms of this Award Agreement and any written employment, severance or other employment-related agreement between you and Sempra Energy, the terms of this Award Agreement, or the terms of such other agreement, whichever are more favorable to you, shall prevail, provided that in each case a conflict shall be resolved in a manner consistent with the intent that your restricted stock units comply with Code Section 409A. In the event of a conflict between the terms of this Award Agreement and the Plan, the Plan document shall prevail.
|
|
|
|
SEMPRA ENERGY
|
|
|
|
|
|
|
|
/s/ Randall L. Clark
|
|
|
|
Randall L. Clark
|
|
|
|
Deputy General Counsel and Chief Human
|
|
|
|
Resources Officer
|
|
|
|
|
|
|
|
July 3, 2019
|
|
|
|
Date
|
|
|
|
|
|
|
|
EXECUTIVE
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Mia DeMontigny
|
|
|
|
Mia DeMontigny
|
|
|
|
Vice President, Controller and Chief Financial
|
|
|
|
Officer - Southern California Gas Company
|
|
|
|
|
|
|
|
June 18, 2019
|
|
|
|
Date
|
|
|
SEMPRA ENERGY
|
|
|
|
|
|
/s/ G. Joyce Rowland
|
|
|
G. Joyce Rowland
|
|
|
Senior Vice President, Chief Human Resources and Administrative Officer
|
|
|
|
|
|
May 8, 2017
|
|
|
Date
|
|
|
|
|
|
EXECUTIVE
|
|
|
|
|
|
/s/ Maryam S. Brown
|
|
|
Maryam S. Brown
|
|
|
Vice President - Federal Gvtl Affairs
|
|
|
|
|
|
April 8, 2017
|
|
|
Date
|
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.
|
August 2, 2019
|
/s/ J. Walker Martin
|
|
J. Walker Martin
|
|
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.
|
August 2, 2019
|
/s/ Trevor I. Mihalik
|
|
Trevor I. Mihalik
|
|
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.
|
August 2, 2019
|
/s/ Kevin C. Sagara
|
|
Kevin C. Sagara
|
|
Chief Executive 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.
|
August 2, 2019
|
/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)
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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.
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August 2, 2019
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/s/ J. Bret Lane
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J. Bret Lane
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Chief Executive Officer
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1.
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I have reviewed this report on Form 10-Q of Southern California Gas Company;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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August 2, 2019
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/s/ Mia L. DeMontigny
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Mia L. DeMontigny
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Chief Financial Officer
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(i)
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the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended June 30, 2019 (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
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(ii)
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the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 2, 2019
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/s/ J. Walker Martin
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J. Walker Martin
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Chief Executive Officer
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(i)
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the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended June 30, 2019 (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
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(ii)
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the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 2, 2019
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/s/ Trevor I. Mihalik
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Trevor I. Mihalik
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Chief Financial Officer
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(i)
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the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended June 30, 2019 (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
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(ii)
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the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 2, 2019
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/s/ Kevin C. Sagara
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Kevin C. Sagara
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Chief Executive Officer
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(i)
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the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended June 30, 2019 (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
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(ii)
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the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 2, 2019
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/s/ Bruce A. Folkmann
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Bruce A. Folkmann
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Chief Financial Officer
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(i)
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the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended June 30, 2019 (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
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(ii)
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the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 2, 2019
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/s/ J. Bret Lane
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J. Bret Lane
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Chief Executive Officer
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(i)
|
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended June 30, 2019 (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
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(ii)
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the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 2, 2019
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/s/ Mia L. DeMontigny
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Mia L. DeMontigny
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Chief Financial Officer
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