UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | |||||||||||||||||||||||
FORM 10-Q | |||||||||||||||||||||||
(Mark One) | |||||||||||||||||||||||
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||||||||||||||
For the quarterly period ended | March 31, | ||||||||||||||||||||||
or | |||||||||||||||||||||||
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||||||||||||||
For the transition period from | to | ||||||||||||||||||||||
Commission File No. | Exact Name of Registrants as Specified in their Charters, Address and Telephone Number | States of Incorporation | I.R.S. Employer Identification Nos. | Former name, former address and former fiscal year, if changed since last report | |||||||||||||||||||
1-14201 | SEMPRA ENERGY | California | 33-0732627 | No change | |||||||||||||||||||
488 8th Avenue | |||||||||||||||||||||||
San Diego, California 92101 | |||||||||||||||||||||||
(619)696-2000 | |||||||||||||||||||||||
1-03779 | SAN DIEGO GAS & ELECTRIC COMPANY | California | 95-1184800 | No change | |||||||||||||||||||
8326 Century Park Court | |||||||||||||||||||||||
San Diego, California 92123 | |||||||||||||||||||||||
(619)696-2000 | |||||||||||||||||||||||
1-01402 | SOUTHERN CALIFORNIA GAS COMPANY | California | 95-1240705 | No change | |||||||||||||||||||
555 West Fifth Street | |||||||||||||||||||||||
Los Angeles, California 90013 | |||||||||||||||||||||||
(213)244-1200 | |||||||||||||||||||||||
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. | ||||||||||||||||||||||
Yes | X | No |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | ||||||||||||||||||||||
Sempra Energy | Yes | X | No | |||||||||||||||||||
San Diego Gas & Electric Company | Yes | X | No | |||||||||||||||||||
Southern California Gas Company | Yes | X | No | |||||||||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, |
Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging growth company | ||||||||
Sempra Energy | [ X ] | [ ] | [ ] | [ ] | [ ] | |||||||
San Diego Gas & Electric Company | [ ] | [ ] | [ X ] | [ ] | [ ] | |||||||
Southern California Gas Company | [ ] | [ ] | [ X ] | [ ] | [ ] |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ||||||||||||||||||||||
Sempra Energy | Yes | No | ||||||||||||||||||||
San Diego Gas & Electric Company | Yes | No | ||||||||||||||||||||
Southern California Gas Company | Yes | No | ||||||||||||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | ||||||||||||||||||||||
Sempra Energy | Yes | No | X | |||||||||||||||||||
San Diego Gas & Electric Company | Yes | No | X | |||||||||||||||||||
Southern California Gas Company | Yes | No | X | |||||||||||||||||||
Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date. | ||||||||||||||||||||||
Common stock outstanding on |
Sempra Energy | |||||||
San Diego Gas & Electric Company | Wholly owned by Enova Corporation, which is wholly owned by Sempra Energy | ||||||
Southern California Gas Company | Wholly owned by Pacific Enterprises, which is wholly owned by Sempra Energy |
SEMPRA ENERGY FORM 10-Q SAN DIEGO GAS & ELECTRIC COMPANY FORM 10-Q SOUTHERN CALIFORNIA GAS COMPANY FORM 10-Q TABLE OF CONTENTS | |||
Page | |||
PART I – FINANCIAL INFORMATION | |||
Item 1. | |||
Item 2. | 71 | ||
Item 3. | 102 | ||
Item 4. | 103 | ||
PART II – OTHER INFORMATION | |||
Item 1. | |||
Item 1A. | |||
Item 6. | |||
actions and the timing of actions, including |
▪ | the timing and success of business development efforts and construction |
▪ | the resolution of civil and criminal litigation and regulatory |
▪ | deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and |
▪ | the availability of electric power, natural gas and liquefied natural gas, and natural gas pipeline and storage capacity, including disruptions caused by failures in the |
▪ | changes in energy markets; |
▪ | risks posed by |
▪ | weather conditions, |
▪ | cybersecurity threats to the energy grid, |
▪ | capital markets and economic conditions, including the availability of credit and the liquidity of our investments; and fluctuations in inflation, interest and currency exchange rates and our ability to effectively hedge the risk of such fluctuations; |
▪ | changes in the tax code as a result of potential federal tax reform, such as the elimination of the deduction for interest and non-deductibility of all, or a portion of, the cost of imported materials, equipment and commodities; |
▪ | changes in foreign and domestic trade policies and laws, including border tariffs, revisions to favorable international trade agreements, and changes that |
▪ | the ability to win competitively bid infrastructure projects against a number of strong and aggressive competitors |
expropriation of assets by foreign governments and title and other property |
▪ | the impact on reliability of San Diego Gas & Electric Company’s (SDG&E) electric transmission and distribution system due to increased amount and variability of power supply from renewable energy sources |
▪ | the impact on competitive customer rates |
other uncertainties, |
SEMPRA ENERGY | |||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
(Dollars in millions, except per share amounts) | |||||
Three months ended March 31, | |||||
2016 | 2015 | ||||
(unaudited) | |||||
REVENUES | |||||
Utilities | $ | 2,442 | $ | 2,422 | |
Energy-related businesses | 180 | 260 | |||
Total revenues | 2,622 | 2,682 | |||
EXPENSES AND OTHER INCOME | |||||
Utilities: | |||||
Cost of natural gas | (311) | (346) | |||
Cost of electric fuel and purchased power | (515) | (481) | |||
Energy-related businesses: | |||||
Cost of natural gas, electric fuel and purchased power | (56) | (98) | |||
Other cost of sales | (35) | (35) | |||
Operation and maintenance | (701) | (658) | |||
Depreciation and amortization | (328) | (303) | |||
Franchise fees and other taxes | (111) | (107) | |||
Plant closure adjustment | ― | 21 | |||
Equity (losses) earnings, before income tax | (22) | 19 | |||
Other income, net | 49 | 39 | |||
Interest income | 6 | 7 | |||
Interest expense | (143) | (134) | |||
Income before income taxes and equity earnings | |||||
of certain unconsolidated subsidiaries | 455 | 606 | |||
Income tax expense | (142) | (163) | |||
Equity earnings, net of income tax | 17 | 15 | |||
Net income | 330 | 458 | |||
Earnings attributable to noncontrolling interests | (11) | (21) | |||
Earnings | $ | 319 | $ | 437 | |
Basic earnings per common share | $ | 1.28 | $ | 1.76 | |
Weighted-average number of shares outstanding, basic (thousands) | 249,734 | 247,722 | |||
Diluted earnings per common share | $ | 1.27 | $ | 1.74 | |
Weighted-average number of shares outstanding, diluted (thousands) | 251,412 | 251,206 | |||
Dividends declared per share of common stock | $ | 0.76 | $ | 0.70 | |
See Notes to Condensed Consolidated Financial Statements. |
SEMPRA ENERGY | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||
(Dollars in millions) | |||||||||||
Three months ended March 31, 2016 and 2015 | |||||||||||
(unaudited) | |||||||||||
Sempra Energy shareholders' equity | |||||||||||
Pretax | Income tax | Net-of-tax | Noncontrolling | ||||||||
amount | (expense) benefit | amount | interests (after-tax) | Total | |||||||
2016: | |||||||||||
Net income | $ | 461 | $ | (142) | $ | 319 | $ | 11 | $ | 330 | |
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments | 68 | ― | 68 | 5 | 73 | ||||||
Financial instruments | (159) | 75 | (84) | (5) | (89) | ||||||
Pension and other postretirement benefits | 2 | (1) | 1 | ― | 1 | ||||||
Total other comprehensive loss | (89) | 74 | (15) | ― | (15) | ||||||
Comprehensive income | $ | 372 | $ | (68) | $ | 304 | $ | 11 | $ | 315 | |
2015: | |||||||||||
Net income | $ | 600 | $ | (163) | $ | 437 | $ | 21 | $ | 458 | |
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments | (62) | ― | (62) | (8) | (70) | ||||||
Financial instruments | (89) | 34 | (55) | (5) | (60) | ||||||
Pension and other postretirement benefits | 2 | (1) | 1 | ― | 1 | ||||||
Total other comprehensive loss | (149) | 33 | (116) | (13) | (129) | ||||||
Comprehensive income | $ | 451 | $ | (130) | $ | 321 | $ | 8 | $ | 329 | |
See Notes to Condensed Consolidated Financial Statements. |
SEMPRA ENERGY | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Dollars in millions) | |||||
March 31, | December 31, | ||||
2016 | 2015(1) | ||||
(unaudited) | |||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 376 | $ | 403 | |
Restricted cash | 23 | 27 | |||
Accounts receivable – trade, net | 1,100 | 1,283 | |||
Accounts receivable – other | 177 | 190 | |||
Due from unconsolidated affiliates | 7 | 6 | |||
Income taxes receivable | 49 | 30 | |||
Inventories | 231 | 298 | |||
Regulatory balancing accounts – undercollected | 256 | 307 | |||
Fixed-price contracts and other derivatives | 88 | 80 | |||
Assets held for sale, power plant | 303 | ― | |||
Other | 273 | 267 | |||
Total current assets | 2,883 | 2,891 | |||
Other assets: | |||||
Restricted cash | 20 | 20 | |||
Due from unconsolidated affiliates | 186 | 186 | |||
Regulatory assets | 3,336 | 3,273 | |||
Nuclear decommissioning trusts | 1,082 | 1,063 | |||
Investments | 2,727 | 2,905 | |||
Goodwill | 849 | 819 | |||
Other intangible assets | 402 | 404 | |||
Dedicated assets in support of certain benefit plans | 432 | 464 | |||
Insurance receivable for Aliso Canyon costs | 660 | 325 | |||
Sundry | 825 | 761 | |||
Total other assets | 10,519 | 10,220 | |||
Property, plant and equipment: | |||||
Property, plant and equipment | 38,541 | 38,200 | |||
Less accumulated depreciation and amortization | (10,108) | (10,161) | |||
Property, plant and equipment, net ($376 and $383 at March 31, 2016 and December 31, 2015, respectively, related to VIE) | 28,433 | 28,039 | |||
Total assets | $ | 41,835 | $ | 41,150 | |
(1) | Derived from audited financial statements. | ||||
See Notes to Condensed Consolidated Financial Statements. |
SEMPRA ENERGY | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) | |||||
(Dollars in millions) | |||||
March 31, | December 31, | ||||
2016 | 2015(1) | ||||
(unaudited) | |||||
LIABILITIES AND EQUITY | |||||
Current liabilities: | |||||
Short-term debt | $ | 1,177 | $ | 622 | |
Accounts payable – trade | 1,028 | 1,133 | |||
Accounts payable – other | 129 | 142 | |||
Due to unconsolidated affiliates | 13 | 14 | |||
Dividends and interest payable | 360 | 303 | |||
Accrued compensation and benefits | 259 | 423 | |||
Regulatory balancing accounts – overcollected | 45 | 34 | |||
Current portion of long-term debt | 1,066 | 907 | |||
Fixed-price contracts and other derivatives | 57 | 56 | |||
Customer deposits | 147 | 153 | |||
Reserve for Aliso Canyon costs | 302 | 274 | |||
Other | 549 | 551 | |||
Total current liabilities | 5,132 | 4,612 | |||
Long-term debt ($300 and $303 at March 31, 2016 and December 31, 2015, respectively, related to VIE) | 12,975 | 13,134 | |||
Deferred credits and other liabilities: | |||||
Customer advances for construction | 148 | 149 | |||
Pension and other postretirement benefit plan obligations, net of plan assets | 1,165 | 1,152 | |||
Deferred income taxes | 3,222 | 3,157 | |||
Deferred investment tax credits | 32 | 32 | |||
Regulatory liabilities arising from removal obligations | 2,850 | 2,793 | |||
Asset retirement obligations | 2,151 | 2,126 | |||
Fixed-price contracts and other derivatives | 248 | 240 | |||
Deferred credits and other | 1,188 | 1,176 | |||
Total deferred credits and other liabilities | 11,004 | 10,825 | |||
Commitments and contingencies (Note 11) | |||||
Equity: | |||||
Preferred stock (50 million shares authorized; none issued) | ― | ― | |||
Common stock (750 million shares authorized; 249 million and 248 million shares | |||||
outstanding at March 31, 2016 and December 31, 2015, respectively; no par value) | 2,642 | 2,621 | |||
Retained earnings | 10,125 | 9,994 | |||
Accumulated other comprehensive income (loss) | (821) | (806) | |||
Total Sempra Energy shareholders’ equity | 11,946 | 11,809 | |||
Preferred stock of subsidiary | 20 | 20 | |||
Other noncontrolling interests | 758 | 750 | |||
Total equity | 12,724 | 12,579 | |||
Total liabilities and equity | $ | 41,835 | $ | 41,150 | |
(1) | Derived from audited financial statements. | ||||
See Notes to Condensed Consolidated Financial Statements. |
SEMPRA ENERGY | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(Dollars in millions, except per share amounts) | |||||||
Three months ended March 31, | |||||||
2017 | 2016(1) | ||||||
(unaudited) | |||||||
REVENUES | |||||||
Utilities | $ | 2,698 | $ | 2,442 | |||
Energy-related businesses | 333 | 180 | |||||
Total revenues | 3,031 | 2,622 | |||||
EXPENSES AND OTHER INCOME | |||||||
Utilities: | |||||||
Cost of electric fuel and purchased power | (527 | ) | (515 | ) | |||
Cost of natural gas | (485 | ) | (311 | ) | |||
Energy-related businesses: | |||||||
Cost of natural gas, electric fuel and purchased power | (67 | ) | (56 | ) | |||
Other cost of sales | (22 | ) | (35 | ) | |||
Operation and maintenance | (714 | ) | (701 | ) | |||
Depreciation and amortization | (360 | ) | (328 | ) | |||
Franchise fees and other taxes | (110 | ) | (111 | ) | |||
Equity earnings (losses), before income tax | 3 | (22 | ) | ||||
Other income, net | 169 | 49 | |||||
Interest income | 6 | 6 | |||||
Interest expense | (169 | ) | (143 | ) | |||
Income before income taxes and equity (losses) earnings of certain unconsolidated subsidiaries | 755 | 455 | |||||
Income tax expense | (295 | ) | (108 | ) | |||
Equity (losses) earnings, net of income tax | (8 | ) | 17 | ||||
Net income | 452 | 364 | |||||
Earnings attributable to noncontrolling interests | (11 | ) | (11 | ) | |||
Earnings | $ | 441 | $ | 353 | |||
Basic earnings per common share | $ | 1.76 | $ | 1.41 | |||
Weighted-average number of shares outstanding, basic (thousands) | 251,131 | 249,734 | |||||
Diluted earnings per common share | $ | 1.75 | $ | 1.40 | |||
Weighted-average number of shares outstanding, diluted (thousands) | 252,246 | 251,487 | |||||
Dividends declared per share of common stock | $ | 0.82 | $ | 0.76 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SEMPRA ENERGY | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(Dollars in millions) | |||||
Three months ended March 31, | |||||
2016 | 2015 | ||||
(unaudited) | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net income | $ | 330 | $ | 458 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 328 | 303 | |||
Deferred income taxes and investment tax credits | 112 | 131 | |||
Plant closure adjustment | ― | (21) | |||
Equity losses (earnings) | 5 | (34) | |||
Fixed-price contracts and other derivatives | 4 | 11 | |||
Other | 2 | (27) | |||
Net change in other working capital components | 165 | 19 | |||
Insurance receivable for Aliso Canyon costs | (335) | ― | |||
Changes in other assets | (29) | (42) | |||
Changes in other liabilities | 10 | 13 | |||
Net cash provided by operating activities | 592 | 811 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Expenditures for property, plant and equipment | (971) | (780) | |||
Expenditures for investments and acquisition of business | (30) | (34) | |||
Distributions from investments | 9 | 1 | |||
Purchases of nuclear decommissioning and other trust assets | (94) | (95) | |||
Proceeds from sales by nuclear decommissioning and other trusts | 93 | 94 | |||
Increases in restricted cash | (16) | (18) | |||
Decreases in restricted cash | 20 | 25 | |||
Advances to unconsolidated affiliates | (6) | (5) | |||
Repayments of advances to unconsolidated affiliates | 9 | 33 | |||
Other | (3) | 9 | |||
Net cash used in investing activities | (989) | (770) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Common dividends paid | (161) | (149) | |||
Issuances of common stock | 15 | 17 | |||
Repurchases of common stock | (54) | (65) | |||
Issuances of debt (maturities greater than 90 days) | 55 | 938 | |||
Payments on debt (maturities greater than 90 days) | (54) | (654) | |||
Increase (decrease) in short-term debt, net | 531 | (363) | |||
Tax benefit related to share-based compensation | 34 | 52 | |||
Other | (2) | (7) | |||
Net cash provided by (used in) financing activities | 364 | (231) | |||
Effect of exchange rate changes on cash and cash equivalents | 6 | (3) | |||
Decrease in cash and cash equivalents | (27) | (193) | |||
Cash and cash equivalents, January 1 | 403 | 570 | |||
Cash and cash equivalents, March 31 | $ | 376 | $ | 377 | |
See Notes to Condensed Consolidated Financial Statements. |
SEMPRA ENERGY | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) | |||||
(Dollars in millions) | |||||
Three months ended March 31, | |||||
2016 | 2015 | ||||
(unaudited) | |||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||
Interest payments, net of amounts capitalized | $ | 97 | $ | 83 | |
Income tax payments, net of refunds | 41 | 42 | |||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||||
Acquisition of business: | |||||
Assets acquired | $ | ― | $ | 10 | |
Liabilities assumed | ― | (2) | |||
Accrued purchase price | ― | (6) | |||
Cash paid | $ | ― | $ | 2 | |
Accrued capital expenditures | $ | 423 | $ | 272 | |
Financing of build-to-suit property | ― | 27 | |||
Common dividends issued in stock | 13 | 13 | |||
Dividends declared but not paid | 197 | 181 | |||
See Notes to Condensed Consolidated Financial Statements. |
SAN DIEGO GAS & ELECTRIC COMPANY | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(Dollars in millions) | ||||
Three months ended March 31, | ||||
2016 | 2015 | |||
(unaudited) | ||||
Operating revenues | ||||
Electric | $ | 843 | $ | 805 |
Natural gas | 148 | 161 | ||
Total operating revenues | 991 | 966 | ||
Operating expenses | ||||
Cost of electric fuel and purchased power | 248 | 228 | ||
Cost of natural gas | 39 | 54 | ||
Operation and maintenance | 246 | 217 | ||
Depreciation and amortization | 159 | 145 | ||
Franchise fees and other taxes | 63 | 61 | ||
Plant closure adjustment | ― | (21) | ||
Total operating expenses | 755 | 684 | ||
Operating income | 236 | 282 | ||
Other income, net | 14 | 9 | ||
Interest expense | (48) | (52) | ||
Income before income taxes | 202 | 239 | ||
Income tax expense | (72) | (88) | ||
Net income | 130 | 151 | ||
Earnings attributable to noncontrolling interest | (1) | (4) | ||
Earnings attributable to common shares | $ | 129 | $ | 147 |
See Notes to Condensed Consolidated Financial Statements. |
SEMPRA ENERGY | |||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Sempra Energy shareholders’ equity | |||||||||||||||||||
Pretax amount | Income tax (expense) benefit | Net-of-tax amount | Noncontrolling interests (after-tax) | Total | |||||||||||||||
Three months ended March 31, 2017 and 2016 | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
2017: | |||||||||||||||||||
Net income | $ | 736 | $ | (295 | ) | $ | 441 | $ | 11 | $ | 452 | ||||||||
Other comprehensive income (loss): | |||||||||||||||||||
Foreign currency translation adjustments | 46 | — | 46 | 9 | 55 | ||||||||||||||
Financial instruments | 7 | (3 | ) | 4 | 2 | 6 | |||||||||||||
Pension and other postretirement benefits | 3 | (1 | ) | 2 | — | 2 | |||||||||||||
Total other comprehensive income | 56 | (4 | ) | 52 | 11 | 63 | |||||||||||||
Comprehensive income | $ | 792 | $ | (299 | ) | $ | 493 | $ | 22 | $ | 515 | ||||||||
2016(1): | |||||||||||||||||||
Net income | $ | 461 | $ | (108 | ) | $ | 353 | $ | 11 | $ | 364 | ||||||||
Other comprehensive income (loss): | |||||||||||||||||||
Foreign currency translation adjustments | 68 | — | 68 | 5 | 73 | ||||||||||||||
Financial instruments | (159 | ) | 75 | (84 | ) | (5 | ) | (89 | ) | ||||||||||
Pension and other postretirement benefits | 2 | (1 | ) | 1 | — | 1 | |||||||||||||
Total other comprehensive loss | (89 | ) | 74 | (15 | ) | — | (15 | ) | |||||||||||
Comprehensive income | $ | 372 | $ | (34 | ) | $ | 338 | $ | 11 | $ | 349 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SAN DIEGO GAS & ELECTRIC COMPANY | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||
(Dollars in millions) | ||||||||||
Three months ended March 31, 2016 and 2015 | ||||||||||
(unaudited) | ||||||||||
SDG&E shareholder's equity | ||||||||||
Pretax | Income tax | Net-of-tax | Noncontrolling | |||||||
amount | expense | amount | interest (after-tax) | Total | ||||||
2016: | ||||||||||
Net income | $ | 201 | $ | (72) | $ | 129 | $ | 1 | $ | 130 |
Other comprehensive income (loss): | ||||||||||
Financial instruments | ― | ― | ― | (2) | (2) | |||||
Total other comprehensive loss | ― | ― | ― | (2) | (2) | |||||
Comprehensive income (loss) | $ | 201 | $ | (72) | $ | 129 | $ | (1) | $ | 128 |
2015: | ||||||||||
Net income | $ | 235 | $ | (88) | $ | 147 | $ | 4 | $ | 151 |
Other comprehensive income (loss): | ||||||||||
Financial instruments | ― | ― | ― | (2) | (2) | |||||
Total other comprehensive loss | ― | ― | ― | (2) | (2) | |||||
Comprehensive income | $ | 235 | $ | (88) | $ | 147 | $ | 2 | $ | 149 |
See Notes to Condensed Consolidated Financial Statements. |
SAN DIEGO GAS & ELECTRIC COMPANY | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Dollars in millions) | |||||
March 31, | December 31, | ||||
2016 | 2015(1) | ||||
(unaudited) | |||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 36 | $ | 20 | |
Restricted cash | 21 | 23 | |||
Accounts receivable – trade, net | 300 | 331 | |||
Accounts receivable – other | 18 | 17 | |||
Due from unconsolidated affiliates | 1 | 1 | |||
Inventories | 72 | 75 | |||
Regulatory balancing accounts – net undercollected | 256 | 307 | |||
Regulatory assets | 119 | 107 | |||
Fixed-price contracts and other derivatives | 50 | 53 | |||
Other | 64 | 70 | |||
Total current assets | 937 | 1,004 | |||
Other assets: | |||||
Restricted cash | 2 | ― | |||
Deferred taxes recoverable in rates | 921 | 914 | |||
Other regulatory assets | 968 | 977 | |||
Nuclear decommissioning trusts | 1,082 | 1,063 | |||
Sundry | 331 | 301 | |||
Total other assets | 3,304 | 3,255 | |||
Property, plant and equipment: | |||||
Property, plant and equipment | 16,668 | 16,458 | |||
Less accumulated depreciation and amortization | (4,284) | (4,202) | |||
Property, plant and equipment, net ($376 and $383 at March 31, 2016 and December 31, 2015, respectively, related to VIE) | 12,384 | 12,256 | |||
Total assets | $ | 16,625 | $ | 16,515 | |
(1) | Derived from audited financial statements. | ||||
See Notes to Condensed Consolidated Financial Statements. |
SAN DIEGO GAS & ELECTRIC COMPANY | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) | |||||
(Dollars in millions) | |||||
March 31, | December 31, | ||||
2016 | 2015(1) | ||||
(unaudited) | |||||
LIABILITIES AND EQUITY | |||||
Current liabilities: | |||||
Short-term debt | $ | 166 | $ | 168 | |
Accounts payable | 295 | 377 | |||
Due to unconsolidated affiliates | 49 | 55 | |||
Income taxes payable | 59 | ― | |||
Interest payable | 39 | 39 | |||
Accrued compensation and benefits | 67 | 129 | |||
Accrued franchise fees | 46 | 66 | |||
Current portion of long-term debt | 191 | 50 | |||
Asset retirement obligations | 63 | 99 | |||
Fixed-price contracts and other derivatives | 53 | 51 | |||
Customer deposits | 71 | 72 | |||
Other | 130 | 101 | |||
Total current liabilities | 1,229 | 1,207 | |||
Long-term debt ($300 and $303 at March 31, 2016 and December 31, 2015, respectively, related to VIE) | 4,294 | 4,455 | |||
Deferred credits and other liabilities: | |||||
Customer advances for construction | 44 | 46 | |||
Pension and other postretirement benefit plan obligations, net of plan assets | 216 | 212 | |||
Deferred income taxes | 2,497 | 2,472 | |||
Deferred investment tax credits | 20 | 19 | |||
Regulatory liabilities arising from removal obligations | 1,692 | 1,629 | |||
Asset retirement obligations | 745 | 729 | |||
Fixed-price contracts and other derivatives | 107 | 106 | |||
Deferred credits and other | 378 | 364 | |||
Total deferred credits and other liabilities | 5,699 | 5,577 | |||
Commitments and contingencies (Note 11) | |||||
Equity: | |||||
Common stock (255 million shares authorized; 117 million shares outstanding; | |||||
no par value) | 1,338 | 1,338 | |||
Retained earnings | 4,022 | 3,893 | |||
Accumulated other comprehensive income (loss) | (8) | (8) | |||
Total SDG&E shareholder's equity | 5,352 | 5,223 | |||
Noncontrolling interest | 51 | 53 | |||
Total equity | 5,403 | 5,276 | |||
Total liabilities and equity | $ | 16,625 | $ | 16,515 | |
(1) | Derived from audited financial statements. | ||||
See Notes to Condensed Consolidated Financial Statements. |
SEMPRA ENERGY | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in millions) | |||||||
March 31, 2017 | December 31, 2016(1) | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 290 | $ | 349 | |||
Restricted cash | 72 | 66 | |||||
Accounts receivable – trade, net | 1,267 | 1,390 | |||||
Accounts receivable – other, net | 201 | 164 | |||||
Due from unconsolidated affiliates | 24 | 26 | |||||
Income taxes receivable | 65 | 43 | |||||
Inventories | 210 | 258 | |||||
Regulatory balancing accounts – undercollected | 202 | 259 | |||||
Fixed-price contracts and other derivatives | 161 | 83 | |||||
Assets held for sale | 196 | 201 | |||||
Other | 265 | 271 | |||||
Total current assets | 2,953 | 3,110 | |||||
Other assets: | |||||||
Restricted cash | 5 | 10 | |||||
Due from unconsolidated affiliates | 187 | 201 | |||||
Regulatory assets | 3,503 | 3,414 | |||||
Nuclear decommissioning trusts | 1,062 | 1,026 | |||||
Investments | 2,120 | 2,097 | |||||
Goodwill | 2,380 | 2,364 | |||||
Other intangible assets | 544 | 548 | |||||
Dedicated assets in support of certain benefit plans | 412 | 430 | |||||
Insurance receivable for Aliso Canyon costs | 621 | 606 | |||||
Deferred income taxes | 188 | 234 | |||||
Sundry | 817 | 815 | |||||
Total other assets | 11,839 | 11,745 | |||||
Property, plant and equipment: | |||||||
Property, plant and equipment | 44,404 | 43,624 | |||||
Less accumulated depreciation and amortization | (10,912 | ) | (10,693 | ) | |||
Property, plant and equipment, net ($342 and $354 at March 31, 2017 and December 31, 2016, respectively, related to VIE) | 33,492 | 32,931 | |||||
Total assets | $ | 48,284 | $ | 47,786 |
(1) | Derived from audited financial statements. |
SAN DIEGO GAS & ELECTRIC COMPANY | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(Dollars in millions) | ||||
Three months ended March 31, | ||||
2016 | 2015 | |||
(unaudited) | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | $ | 130 | $ | 151 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 159 | 145 | ||
Deferred income taxes and investment tax credits | 20 | 56 | ||
Plant closure adjustment | ― | (21) | ||
Fixed-price contracts and other derivatives | (1) | (1) | ||
Other | (9) | (1) | ||
Net change in other working capital components | 103 | 7 | ||
Changes in other assets | (34) | (48) | ||
Changes in other liabilities | 1 | 11 | ||
Net cash provided by operating activities | 369 | 299 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Expenditures for property, plant and equipment | (329) | (355) | ||
Purchases of nuclear decommissioning trust assets | (93) | (94) | ||
Proceeds from sales by nuclear decommissioning trusts | 93 | 94 | ||
Increases in restricted cash | (10) | (10) | ||
Decreases in restricted cash | 10 | 10 | ||
Increase in loans to affiliates, net | ― | (66) | ||
Other | (1) | ― | ||
Net cash used in investing activities | (330) | (421) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Issuances of debt (maturities greater than 90 days) | ― | 388 | ||
Payments on debt (maturities greater than 90 days) | (20) | (3) | ||
Decrease in short-term debt, net | (2) | (246) | ||
Capital distributions made by Otay Mesa VIE | (1) | (2) | ||
Net cash (used in) provided by financing activities | (23) | 137 | ||
Increase in cash and cash equivalents | 16 | 15 | ||
Cash and cash equivalents, January 1 | 20 | 8 | ||
Cash and cash equivalents, March 31 | $ | 36 | $ | 23 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||
Interest payments, net of amounts capitalized | $ | 46 | $ | 39 |
Income tax (refunds) payments, net | (8) | 31 | ||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITY | ||||
Accrued capital expenditures | $ | 104 | $ | 103 |
See Notes to Condensed Consolidated Financial Statements. |
SOUTHERN CALIFORNIA GAS COMPANY | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(Dollars in millions) | ||||
Three months ended March 31, | ||||
2016 | 2015 | |||
(unaudited) | ||||
Operating revenues | $ | 1,033 | $ | 1,048 |
Operating expenses | ||||
Cost of natural gas | 253 | 267 | ||
Operation and maintenance | 327 | 314 | ||
Depreciation and amortization | 122 | 113 | ||
Franchise fees and other taxes | 37 | 34 | ||
Total operating expenses | 739 | 728 | ||
Operating income | 294 | 320 | ||
Other income, net | 10 | 8 | ||
Interest expense | (22) | (19) | ||
Income before income taxes | 282 | 309 | ||
Income tax expense | (87) | (95) | ||
Net income/Earnings attributable to common shares | $ | 195 | $ | 214 |
See Notes to Condensed Consolidated Financial Statements. |
SOUTHERN CALIFORNIA GAS COMPANY | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||
(Dollars in millions) | ||||||
Three months ended March 31, 2016 and 2015 | ||||||
(unaudited) | ||||||
Pretax | Income tax | Net-of-tax | ||||
amount | expense | amount | ||||
2016: | ||||||
Net income/Comprehensive income | $ | 282 | $ | (87) | $ | 195 |
2015: | ||||||
Net income/Comprehensive income | $ | 309 | $ | (95) | $ | 214 |
See Notes to Condensed Consolidated Financial Statements. |
SOUTHERN CALIFORNIA GAS COMPANY | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Dollars in millions) | |||||
March 31, | December 31, | ||||
2016 | 2015(1) | ||||
(unaudited) | |||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 14 | $ | 58 | |
Accounts receivable – trade, net | 445 | 635 | |||
Accounts receivable – other | 99 | 99 | |||
Due from unconsolidated affiliates | 8 | 48 | |||
Inventories | 33 | 79 | |||
Regulatory assets | 8 | 7 | |||
Other | 44 | 40 | |||
Total current assets | 651 | 966 | |||
Other assets: | |||||
Regulatory assets arising from pension obligations | 715 | 699 | |||
Other regulatory assets | 686 | 636 | |||
Insurance receivable for Aliso Canyon costs | 660 | 325 | |||
Sundry | 252 | 207 | |||
Total other assets | 2,313 | 1,867 | |||
Property, plant and equipment: | |||||
Property, plant and equipment | 14,359 | 14,171 | |||
Less accumulated depreciation and amortization | (4,896) | (4,900) | |||
Property, plant and equipment, net | 9,463 | 9,271 | |||
Total assets | $ | 12,427 | $ | 12,104 | |
(1) | Derived from audited financial statements. | ||||
See Notes to Condensed Consolidated Financial Statements. |
SOUTHERN CALIFORNIA GAS COMPANY | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) | |||||
(Dollars in millions) | |||||
March 31, | December 31, | ||||
2016 | 2015(1) | ||||
(unaudited) | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
Current liabilities: | |||||
Short-term debt | $ | 5 | $ | ― | |
Accounts payable – trade | 351 | 422 | |||
Accounts payable – other | 77 | 76 | |||
Due to unconsolidated affiliate | 34 | ― | |||
Income taxes payable | 27 | 3 | |||
Accrued compensation and benefits | 110 | 160 | |||
Regulatory balancing accounts – net overcollected | 45 | 34 | |||
Current portion of long-term debt | 9 | 9 | |||
Customer deposits | 70 | 76 | |||
Reserve for Aliso Canyon costs | 302 | 274 | |||
Other | 193 | 184 | |||
Total current liabilities | 1,223 | 1,238 | |||
Long-term debt | 2,481 | 2,481 | |||
Deferred credits and other liabilities: | |||||
Customer advances for construction | 104 | 103 | |||
Pension obligation, net of plan assets | 733 | 716 | |||
Deferred income taxes | 1,643 | 1,532 | |||
Deferred investment tax credits | 13 | 14 | |||
Regulatory liabilities arising from removal obligations | 1,139 | 1,145 | |||
Asset retirement obligations | 1,367 | 1,354 | |||
Deferred credits and other | 380 | 372 | |||
Total deferred credits and other liabilities | 5,379 | 5,236 | |||
Commitments and contingencies (Note 11) | |||||
Shareholders' equity: | |||||
Preferred stock | 22 | 22 | |||
Common stock (100 million shares authorized; 91 million shares outstanding; | |||||
no par value) | 866 | 866 | |||
Retained earnings | 2,475 | 2,280 | |||
Accumulated other comprehensive income (loss) | (19) | (19) | |||
Total shareholders’ equity | 3,344 | 3,149 | |||
Total liabilities and shareholders’ equity | $ | 12,427 | $ | 12,104 | |
(1) | Derived from audited financial statements. | ||||
See Notes to Condensed Consolidated Financial Statements. |
SOUTHERN CALIFORNIA GAS COMPANY | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(Dollars in millions) | ||||
Three months ended March 31, | ||||
2016 | 2015 | |||
(unaudited) | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | $ | 195 | $ | 214 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 122 | 113 | ||
Deferred income taxes and investment tax credits | 59 | (9) | ||
Other | (7) | (6) | ||
Net change in other working capital components | 243 | 85 | ||
Insurance receivable for Aliso Canyon costs | (335) | ― | ||
Changes in other assets | (37) | (19) | ||
Changes in other liabilities | 1 | (3) | ||
Net cash provided by operating activities | 241 | 375 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Expenditures for property, plant and equipment | (340) | (315) | ||
Decrease (increase) in loans to affiliate, net | 50 | (74) | ||
Net cash used in investing activities | (290) | (389) | ||
CASH FLOWS FROM FINANCING ACTIVITY | ||||
Increase (decrease) in short-term debt, net | 5 | (50) | ||
Net cash provided by (used in) financing activity | 5 | (50) | ||
Decrease in cash and cash equivalents | (44) | (64) | ||
Cash and cash equivalents, January 1 | 58 | 85 | ||
Cash and cash equivalents, March 31 | $ | 14 | $ | 21 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||
Interest payments, net of amounts capitalized | $ | 17 | $ | 17 |
Income tax payments (refunds), net | 3 | (3) | ||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITY | ||||
Accrued capital expenditures | $ | 148 | $ | 129 |
See Notes to Condensed Consolidated Financial Statements. |
SEMPRA ENERGY | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) | |||||||
(Dollars in millions) | |||||||
March 31, 2017 | December 31, 2016(1) | ||||||
(unaudited) | |||||||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt | $ | 2,054 | $ | 1,779 | |||
Accounts payable – trade | 969 | 1,346 | |||||
Accounts payable – other | 123 | 130 | |||||
Due to unconsolidated affiliates | 13 | 11 | |||||
Dividends and interest payable | 382 | 319 | |||||
Accrued compensation and benefits | 239 | 409 | |||||
Regulatory balancing accounts – overcollected | 189 | 122 | |||||
Current portion of long-term debt | 839 | 913 | |||||
Fixed-price contracts and other derivatives | 115 | 83 | |||||
Customer deposits | 160 | 158 | |||||
Reserve for Aliso Canyon costs | 49 | 53 | |||||
Liabilities held for sale | 40 | 47 | |||||
Other | 640 | 557 | |||||
Total current liabilities | 5,812 | 5,927 | |||||
Long-term debt ($291 and $293 at March 31, 2017 and December 31, 2016, respectively, related to VIE) | 14,409 | 14,429 | |||||
Deferred credits and other liabilities: | |||||||
Customer advances for construction | 145 | 152 | |||||
Pension and other postretirement benefit plan obligations, net of plan assets | 1,212 | 1,208 | |||||
Deferred income taxes | 4,025 | 3,745 | |||||
Deferred investment tax credits | 26 | 28 | |||||
Regulatory liabilities arising from removal obligations | 2,761 | 2,697 | |||||
Asset retirement obligations | 2,455 | 2,431 | |||||
Fixed-price contracts and other derivatives | 343 | 405 | |||||
Deferred credits and other | 1,527 | 1,523 | |||||
Total deferred credits and other liabilities | 12,494 | 12,189 | |||||
Commitments and contingencies (Note 11) | |||||||
Equity: | |||||||
Preferred stock (50 million shares authorized; none issued) | — | — | |||||
Common stock (750 million shares authorized; 251 million and 250 million shares outstanding at March 31, 2017 and December 31, 2016, respectively; no par value) | 3,008 | 2,982 | |||||
Retained earnings | 10,952 | 10,717 | |||||
Accumulated other comprehensive income (loss) | (696 | ) | (748 | ) | |||
Total Sempra Energy shareholders’ equity | 13,264 | 12,951 | |||||
Preferred stock of subsidiary | 20 | 20 | |||||
Other noncontrolling interests | 2,285 | 2,270 | |||||
Total equity | 15,569 | 15,241 | |||||
Total liabilities and equity | $ | 48,284 | $ | 47,786 |
(1) | Derived from audited financial statements. |
SEMPRA ENERGY | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016(1) | ||||||
(unaudited) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 452 | $ | 364 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 360 | 328 | |||||
Deferred income taxes and investment tax credits | 268 | 78 | |||||
Equity losses | 5 | 5 | |||||
Fixed-price contracts and other derivatives | (106 | ) | 4 | ||||
Other | (22 | ) | 36 | ||||
Net change in other working capital components | 84 | 165 | |||||
Insurance receivable for Aliso Canyon costs | (15 | ) | (335 | ) | |||
Changes in other assets | (41 | ) | (29 | ) | |||
Changes in other liabilities | 19 | 10 | |||||
Net cash provided by operating activities | 1,004 | 626 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Expenditures for property, plant and equipment | (992 | ) | (971 | ) | |||
Expenditures for investments | (59 | ) | (30 | ) | |||
Distributions from investments | 17 | 9 | |||||
Purchases of nuclear decommissioning and other trust assets | (350 | ) | (94 | ) | |||
Proceeds from sales by nuclear decommissioning and other trusts | 357 | 93 | |||||
Increases in restricted cash | (93 | ) | (16 | ) | |||
Decreases in restricted cash | 93 | 20 | |||||
Advances to unconsolidated affiliates | (5 | ) | (6 | ) | |||
Repayments of advances to unconsolidated affiliates | 2 | 9 | |||||
Other | 4 | (3 | ) | ||||
Net cash used in investing activities | (1,026 | ) | (989 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Common dividends paid | (176 | ) | (161 | ) | |||
Issuances of common stock | 17 | 15 | |||||
Repurchases of common stock | (14 | ) | (54 | ) | |||
Issuances of debt (maturities greater than 90 days) | 542 | 55 | |||||
Payments on debt (maturities greater than 90 days) | (313 | ) | (54 | ) | |||
(Decrease) increase in short-term debt, net | (97 | ) | 531 | ||||
Other | (5 | ) | (2 | ) | |||
Net cash (used in) provided by financing activities | (46 | ) | 330 | ||||
Effect of exchange rate changes on cash and cash equivalents | 9 | 6 | |||||
Decrease in cash and cash equivalents | (59 | ) | (27 | ) | |||
Cash and cash equivalents, January 1 | 349 | 403 | |||||
Cash and cash equivalents, March 31 | $ | 290 | $ | 376 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SEMPRA ENERGY | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016(1) | ||||||
(unaudited) | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||
Interest payments, net of amounts capitalized | $ | 106 | $ | 97 | |||
Income tax payments, net of refunds | 47 | 41 | |||||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||||||
Accrued capital expenditures | $ | 378 | $ | 423 | |||
Equitization of note receivable due from unconsolidated affiliate | 19 | — | |||||
Common dividends issued in stock | 13 | 13 | |||||
Dividends declared but not paid | 216 | 197 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SAN DIEGO GAS & ELECTRIC COMPANY | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016(1) | ||||||
(unaudited) | |||||||
Operating revenues | |||||||
Electric | $ | 875 | $ | 843 | |||
Natural gas | 182 | 148 | |||||
Total operating revenues | 1,057 | 991 | |||||
Operating expenses | |||||||
Cost of electric fuel and purchased power | 261 | 248 | |||||
Cost of natural gas | 65 | 39 | |||||
Operation and maintenance | 227 | 246 | |||||
Depreciation and amortization | 163 | 159 | |||||
Franchise fees and other taxes | 63 | 63 | |||||
Total operating expenses | 779 | 755 | |||||
Operating income | 278 | 236 | |||||
Other income, net | 18 | 14 | |||||
Interest expense | (49 | ) | (48 | ) | |||
Income before income taxes | 247 | 202 | |||||
Income tax expense | (90 | ) | (65 | ) | |||
Net income | 157 | 137 | |||||
Earnings attributable to noncontrolling interest | (2 | ) | (1 | ) | |||
Earnings attributable to common shares | $ | 155 | $ | 136 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SAN DIEGO GAS & ELECTRIC COMPANY | |||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
SDG&E shareholder’s equity | |||||||||||||||||||
Pretax amount | Income tax expense | Net-of-tax amount | Noncontrolling interest (after-tax) | Total | |||||||||||||||
Three months ended March 31, 2017 and 2016 | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
2017: | |||||||||||||||||||
Net income | $ | 245 | $ | (90 | ) | $ | 155 | $ | 2 | $ | 157 | ||||||||
Other comprehensive income (loss): | |||||||||||||||||||
Financial instruments | — | — | — | 3 | 3 | ||||||||||||||
Total other comprehensive income | — | — | — | 3 | 3 | ||||||||||||||
Comprehensive income | $ | 245 | $ | (90 | ) | $ | 155 | $ | 5 | $ | 160 | ||||||||
2016(1): | |||||||||||||||||||
Net income | $ | 201 | $ | (65 | ) | $ | 136 | $ | 1 | $ | 137 | ||||||||
Other comprehensive income (loss): | |||||||||||||||||||
Financial instruments | — | — | — | (2 | ) | (2 | ) | ||||||||||||
Total other comprehensive loss | — | — | — | (2 | ) | (2 | ) | ||||||||||||
Comprehensive income (loss) | $ | 201 | $ | (65 | ) | $ | 136 | $ | (1 | ) | $ | 135 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SAN DIEGO GAS & ELECTRIC COMPANY | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in millions) | |||||||
March 31, 2017 | December 31, 2016(1) | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18 | $ | 8 | |||
Restricted cash | 13 | 11 | |||||
Accounts receivable – trade, net | 359 | 354 | |||||
Accounts receivable – other, net | 23 | 17 | |||||
Due from unconsolidated affiliates | — | 4 | |||||
Income taxes receivable | 85 | 122 | |||||
Inventories | 82 | 80 | |||||
Prepaid expenses | 46 | 59 | |||||
Regulatory balancing accounts – net undercollected | 202 | 259 | |||||
Regulatory assets | 99 | 81 | |||||
Fixed-price contracts and other derivatives | 39 | 58 | |||||
Other | 19 | 19 | |||||
Total current assets | 985 | 1,072 | |||||
Other assets: | |||||||
Restricted cash | — | 1 | |||||
Deferred income taxes recoverable in rates | 1,013 | 1,014 | |||||
Other regulatory assets | 1,018 | 998 | |||||
Nuclear decommissioning trusts | 1,062 | 1,026 | |||||
Sundry | 355 | 358 | |||||
Total other assets | 3,448 | 3,397 | |||||
Property, plant and equipment: | |||||||
Property, plant and equipment | 18,144 | 17,844 | |||||
Less accumulated depreciation and amortization | (4,677 | ) | (4,594 | ) | |||
Property, plant and equipment, net ($342 and $354 at March 31, 2017 and December 31, 2016, respectively, related to VIE) | 13,467 | 13,250 | |||||
Total assets | $ | 17,900 | $ | 17,719 |
(1) | Derived from audited financial statements. |
SAN DIEGO GAS & ELECTRIC COMPANY | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) | |||||||
(Dollars in millions) | |||||||
March 31, 2017 | December 31, 2016(1) | ||||||
(unaudited) | |||||||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt | $ | 343 | $ | — | |||
Accounts payable | 350 | 460 | |||||
Due to unconsolidated affiliates | 45 | 15 | |||||
Interest payable | 47 | 40 | |||||
Accrued compensation and benefits | 57 | 121 | |||||
Accrued franchise fees | 54 | 43 | |||||
Current portion of long-term debt | 51 | 191 | |||||
Asset retirement obligations | 79 | 79 | |||||
Fixed-price contracts and other derivatives | 65 | 61 | |||||
Customer deposits | 76 | 76 | |||||
Other | 93 | 82 | |||||
Total current liabilities | 1,260 | 1,168 | |||||
Long-term debt ($291 and $293 at March 31, 2017 and December 31, 2016, respectively, related to VIE) | 4,638 | 4,658 | |||||
Deferred credits and other liabilities: | |||||||
Customer advances for construction | 50 | 52 | |||||
Pension and other postretirement benefit plan obligations, net of plan assets | 238 | 232 | |||||
Deferred income taxes | 2,871 | 2,829 | |||||
Deferred investment tax credits | 15 | 16 | |||||
Regulatory liabilities arising from removal obligations | 1,790 | 1,725 | |||||
Asset retirement obligations | 762 | 751 | |||||
Fixed-price contracts and other derivatives | 197 | 189 | |||||
Deferred credits and other | 419 | 421 | |||||
Total deferred credits and other liabilities | 6,342 | 6,215 | |||||
Commitments and contingencies (Note 11) | |||||||
Equity: | |||||||
Preferred stock (45 million shares authorized; none issued) | — | — | |||||
Common stock (255 million shares authorized; 117 million shares outstanding; no par value) | 1,338 | 1,338 | |||||
Retained earnings | 4,291 | 4,311 | |||||
Accumulated other comprehensive income (loss) | (8 | ) | (8 | ) | |||
Total SDG&E shareholder’s equity | 5,621 | 5,641 | |||||
Noncontrolling interest | 39 | 37 | |||||
Total equity | 5,660 | 5,678 | |||||
Total liabilities and equity | $ | 17,900 | $ | 17,719 |
(1) | Derived from audited financial statements. |
SAN DIEGO GAS & ELECTRIC COMPANY | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016(1) | ||||||
(unaudited) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 157 | $ | 137 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 163 | 159 | |||||
Deferred income taxes and investment tax credits | 34 | 13 | |||||
Fixed-price contracts and other derivatives | — | (1 | ) | ||||
Other | (12 | ) | (9 | ) | |||
Net change in other working capital components | 84 | 103 | |||||
Changes in other assets | (34 | ) | (34 | ) | |||
Changes in other liabilities | (6 | ) | 1 | ||||
Net cash provided by operating activities | 386 | 369 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Expenditures for property, plant and equipment | (418 | ) | (329 | ) | |||
Purchases of nuclear decommissioning trust assets | (350 | ) | (93 | ) | |||
Proceeds from sales by nuclear decommissioning trusts | 357 | 93 | |||||
Increases in restricted cash | (10 | ) | (10 | ) | |||
Decreases in restricted cash | 9 | 10 | |||||
Decrease in loans to affiliate, net | 31 | — | |||||
Other | — | (1 | ) | ||||
Net cash used in investing activities | (381 | ) | (330 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Common dividends paid | (175 | ) | — | ||||
Payments on debt (maturities greater than 90 days) | (160 | ) | (20 | ) | |||
Increase (decrease) in short-term debt, net | 343 | (2 | ) | ||||
Capital distributions made by VIE | (3 | ) | (1 | ) | |||
Net cash provided by (used in) financing activities | 5 | (23 | ) | ||||
Increase in cash and cash equivalents | 10 | 16 | |||||
Cash and cash equivalents, January 1 | 8 | 20 | |||||
Cash and cash equivalents, March 31 | $ | 18 | $ | 36 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||
Interest payments, net of amounts capitalized | $ | 40 | $ | 46 | |||
Income tax refunds, net | — | (8 | ) | ||||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITY | |||||||
Accrued capital expenditures | $ | 126 | $ | 104 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SOUTHERN CALIFORNIA GAS COMPANY | |||||||
CONDENSED STATEMENTS OF OPERATIONS | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016(1) | ||||||
(unaudited) | |||||||
Operating revenues | $ | 1,241 | $ | 1,033 | |||
Operating expenses | |||||||
Cost of natural gas | 408 | 253 | |||||
Operation and maintenance | 353 | 327 | |||||
Depreciation and amortization | 126 | 122 | |||||
Franchise fees and other taxes | 39 | 37 | |||||
Total operating expenses | 926 | 739 | |||||
Operating income | 315 | 294 | |||||
Other income, net | 11 | 10 | |||||
Interest expense | (25 | ) | (22 | ) | |||
Income before income taxes | 301 | 282 | |||||
Income tax expense | (98 | ) | (83 | ) | |||
Net income/Earnings attributable to common shares | $ | 203 | $ | 199 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SOUTHERN CALIFORNIA GAS COMPANY | |||||||||||
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||
(Dollars in millions) | |||||||||||
Pretax amount | Income tax expense | Net-of-tax amount | |||||||||
Three months ended March 31, 2017 and 2016 | |||||||||||
(unaudited) | |||||||||||
2017: | |||||||||||
Net income/Comprehensive income | $ | 301 | $ | (98 | ) | $ | 203 | ||||
2016(1): | |||||||||||
Net income/Comprehensive income | $ | 282 | $ | (83 | ) | $ | 199 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SOUTHERN CALIFORNIA GAS COMPANY | |||||||
CONDENSED BALANCE SHEETS | |||||||
(Dollars in millions) | |||||||
March 31, 2017 | December 31, 2016(1) | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 21 | $ | 12 | |||
Accounts receivable – trade, net | 503 | 608 | |||||
Accounts receivable – other, net | 95 | 77 | |||||
Due from unconsolidated affiliates | 16 | 8 | |||||
Income taxes receivable | — | 2 | |||||
Inventories | 43 | 58 | |||||
Regulatory assets | 6 | 8 | |||||
Other | 52 | 63 | |||||
Total current assets | 736 | 836 | |||||
Other assets: | |||||||
Regulatory assets arising from pension obligations | 741 | 742 | |||||
Other regulatory assets | 661 | 589 | |||||
Insurance receivable for Aliso Canyon costs | 621 | 606 | |||||
Sundry | 400 | 399 | |||||
Total other assets | 2,423 | 2,336 | |||||
Property, plant and equipment: | |||||||
Property, plant and equipment | 15,599 | 15,344 | |||||
Less accumulated depreciation and amortization | (5,156 | ) | (5,092 | ) | |||
Property, plant and equipment, net | 10,443 | 10,252 | |||||
Total assets | $ | 13,602 | $ | 13,424 |
(1) | Derived from audited financial statements. |
SOUTHERN CALIFORNIA GAS COMPANY | |||||||
CONDENSED BALANCE SHEETS (CONTINUED) | |||||||
(Dollars in millions) | |||||||
March 31, 2017 | December 31, 2016(1) | ||||||
(unaudited) | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt | $ | — | $ | 62 | |||
Accounts payable – trade | 330 | 481 | |||||
Accounts payable – other | 73 | 74 | |||||
Due to unconsolidated affiliates | — | 28 | |||||
Income taxes payable | 16 | — | |||||
Accrued compensation and benefits | 95 | 150 | |||||
Regulatory balancing accounts – net overcollected | 189 | 122 | |||||
Customer deposits | 77 | 76 | |||||
Reserve for Aliso Canyon costs | 49 | 53 | |||||
Other | 247 | 195 | |||||
Total current liabilities | 1,076 | 1,241 | |||||
Long-term debt | 2,983 | 2,982 | |||||
Deferred credits and other liabilities: | |||||||
Customer advances for construction | 96 | 99 | |||||
Pension obligation, net of plan assets | 761 | 762 | |||||
Deferred income taxes | 1,836 | 1,709 | |||||
Deferred investment tax credits | 11 | 12 | |||||
Regulatory liabilities arising from removal obligations | 971 | 972 | |||||
Asset retirement obligations | 1,628 | 1,616 | |||||
Deferred credits and other | 527 | 521 | |||||
Total deferred credits and other liabilities | 5,830 | 5,691 | |||||
Commitments and contingencies (Note 11) | |||||||
Shareholders’ equity: | |||||||
Preferred stock (11 million shares authorized; 1 million shares outstanding) | 22 | 22 | |||||
Common stock (100 million shares authorized; 91 million shares outstanding; | |||||||
no par value) | 866 | 866 | |||||
Retained earnings | 2,847 | 2,644 | |||||
Accumulated other comprehensive income (loss) | (22 | ) | (22 | ) | |||
Total shareholders’ equity | 3,713 | 3,510 | |||||
Total liabilities and shareholders’ equity | $ | 13,602 | $ | 13,424 |
(1) | Derived from audited financial statements. |
SOUTHERN CALIFORNIA GAS COMPANY | |||||||
CONDENSED STATEMENTS OF CASH FLOWS | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016(1) | ||||||
(unaudited) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 203 | $ | 199 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 126 | 122 | |||||
Deferred income taxes and investment tax credits | 80 | 55 | |||||
Other | (5 | ) | (7 | ) | |||
Net change in other working capital components | 96 | 243 | |||||
Insurance receivable for Aliso Canyon costs | (15 | ) | (335 | ) | |||
Changes in other assets | (21 | ) | (37 | ) | |||
Changes in other liabilities | (1 | ) | 1 | ||||
Net cash provided by operating activities | 463 | 241 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Expenditures for property, plant and equipment | (357 | ) | (340 | ) | |||
(Increase) decrease in loans to affiliate, net | (35 | ) | 50 | ||||
Net cash used in investing activities | (392 | ) | (290 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITY | |||||||
(Decrease) increase in short-term debt, net | (62 | ) | 5 | ||||
Net cash (used in) provided by financing activity | (62 | ) | 5 | ||||
Increase (decrease) in cash and cash equivalents | 9 | (44 | ) | ||||
Cash and cash equivalents, January 1 | 12 | 58 | |||||
Cash and cash equivalents, March 31 | $ | 21 | $ | 14 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||
Interest payments, net of amounts capitalized | $ | 16 | $ | 17 | |||
Income tax payments, net | — | 3 | |||||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITY | |||||||
Accrued capital expenditures | $ | 147 | $ | 148 |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
▪ | Sempra Utilities, which includes our San Diego Gas & Electric Company (SDG&E) |
▪ | Sempra |
▪ | the Condensed Consolidated Financial Statements and related Notes of Sempra Energy and its subsidiaries and VIEs; |
▪ | the Condensed Consolidated Financial Statements and related Notes of SDG&E and its VIE; and |
▪ | the Condensed Financial Statements and related Notes of SoCalGas. |
IMPACT FROM ADOPTION OF ASU 2016-09 | |||||||||||
(Dollars in millions, except per share amounts) | |||||||||||
Three months ended March 31, 2016 | |||||||||||
As previously reported | Effect of adoption | As adjusted | |||||||||
Sempra Energy Consolidated: | |||||||||||
Condensed Consolidated Statement of Operations: | |||||||||||
Income tax expense | $ | (142 | ) | $ | 34 | $ | (108 | ) | |||
Net income | 330 | 34 | 364 | ||||||||
Earnings | 319 | 34 | 353 | ||||||||
Basic earnings per common share | $ | 1.28 | $ | 0.13 | $ | 1.41 | |||||
Diluted earnings per common share | $ | 1.27 | $ | 0.13 | $ | 1.40 | |||||
Weighted-average number of shares outstanding, diluted (thousands) | 251,412 | 75 | 251,487 | ||||||||
Condensed Consolidated Statement of Comprehensive Income (Loss): | |||||||||||
Net income | $ | 330 | $ | 34 | $ | 364 | |||||
Comprehensive income | 315 | 34 | 349 | ||||||||
Condensed Consolidated Statement of Cash Flows: | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 330 | $ | 34 | $ | 364 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Deferred income taxes and investment tax credits | 112 | (34 | ) | 78 | |||||||
Other | 2 | 34 | 36 | ||||||||
Net cash provided by operating activities | 592 | 34 | 626 | ||||||||
Cash flows from financing activities: | |||||||||||
Tax benefit related to share-based compensation | 34 | (34 | ) | — | |||||||
Net cash provided by financing activities | 364 | (34 | ) | 330 | |||||||
SDG&E: | |||||||||||
Condensed Consolidated Statement of Operations: | |||||||||||
Income tax expense | $ | (72 | ) | $ | 7 | $ | (65 | ) | |||
Net income | 130 | 7 | 137 | ||||||||
Earnings attributable to common shares | 129 | 7 | 136 | ||||||||
Condensed Consolidated Statement of Comprehensive Income (Loss): | |||||||||||
Net income | $ | 130 | $ | 7 | $ | 137 | |||||
Comprehensive income | 128 | 7 | 135 | ||||||||
Condensed Consolidated Statement of Cash Flows: | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 130 | $ | 7 | $ | 137 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Deferred income taxes and investment tax credits | 20 | (7 | ) | 13 | |||||||
SoCalGas: | |||||||||||
Condensed Statement of Operations: | |||||||||||
Income tax expense | $ | (87 | ) | $ | 4 | $ | (83 | ) | |||
Net income | 195 | 4 | 199 | ||||||||
Condensed Statement of Comprehensive Income (Loss): | |||||||||||
Net income/Comprehensive income | $ | 195 | $ | 4 | $ | 199 | |||||
Condensed Statement of Cash Flows: | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 195 | $ | 4 | $ | 199 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Deferred income taxes and investment tax credits | 59 | (4 | ) | 55 |
ASSETS HELD FOR SALE AT MARCH 31, 2017 | |||
(Dollars in millions) | |||
Termoeléctrica de Mexicali | |||
Cash | $ | 1 | |
Inventories | 11 | ||
Other current assets | 31 | ||
Deferred income taxes | 9 | ||
Property, plant and equipment, net | 120 | ||
Other noncurrent assets | 24 | ||
Total assets held for sale | $ | 196 | |
Accounts payable | $ | 6 | |
Other current liabilities | 4 | ||
Asset retirement obligations | 4 | ||
Other noncurrent liabilities | 26 | ||
Total liabilities held for sale | $ | 40 |
ASSETS HELD FOR SALE, POWER PLANT | |||
(Dollars in millions) | |||
March 31, 2016 | |||
Cash and cash equivalents | $ | 1 | |
Inventories | 8 | ||
Other current assets | 29 | ||
Other assets | 15 | ||
Property, plant and equipment, net | 250 | ||
Total assets held for sale | $ | 303 | |
Accounts payable | $ | 1 | |
Other current liabilities | 7 | ||
Deferred income taxes | 16 | ||
Asset retirement obligations | 4 | ||
Other liabilities | 15 | ||
Total liabilities held for sale(1) | $ | 43 | |
(1) | Included in Other Current Liabilities on the Sempra Energy Condensed Consolidated Balance Sheet. |
INVENTORY BALANCES | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||||||||
Natural gas | Liquefied natural gas | Materials and supplies | Total | |||||||||||||||||||||||||||||||
March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | |||||||||||||||||||||||||||
SDG&E | $ | — | $ | 2 | $ | — | $ | — | $ | 82 | $ | 78 | $ | 82 | $ | 80 | ||||||||||||||||||
SoCalGas(1) | — | 11 | — | — | 43 | 47 | 43 | 58 | ||||||||||||||||||||||||||
Sempra South American Utilities | — | — | — | — | 28 | 27 | 28 | 27 | ||||||||||||||||||||||||||
Sempra Mexico | — | — | 9 | 6 | 2 | 1 | 11 | 7 | ||||||||||||||||||||||||||
Sempra Renewables | — | — | — | — | 4 | 4 | 4 | 4 | ||||||||||||||||||||||||||
Sempra LNG & Midstream | 39 | 79 | 3 | 3 | — | — | 42 | 82 | ||||||||||||||||||||||||||
Sempra Energy Consolidated | $ | 39 | $ | 92 | $ | 12 | $ | 9 | $ | 159 | $ | 157 | $ | 210 | $ | 258 |
(1) | At March 31, 2017 and December 31, 2016, SoCalGas’ natural gas inventory for core customers is net of an inventory loss related to the Aliso Canyon natural gas leak, which we discuss in Note 11. |
INVENTORY BALANCES | ||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||
Natural gas | Liquefied natural gas | Materials and supplies | Total | |||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2016 | December 31, 2015 | March 31, 2016 | December 31, 2015 | March 31, 2016 | December 31, 2015 | |||||||||||
SDG&E | $ | 3 | $ | 6 | $ | ― | $ | ― | $ | 69 | $ | 69 | $ | 72 | $ | 75 | ||
SoCalGas(1) | ― | 49 | ― | ― | 33 | 30 | 33 | 79 | ||||||||||
Sempra South American Utilities | ― | ― | ― | ― | 37 | 30 | 37 | 30 | ||||||||||
Sempra Mexico | ― | ― | 6 | 3 | 2 | 10 | 8 | 13 | ||||||||||
Sempra Renewables | ― | ― | ― | ― | 3 | 3 | 3 | 3 | ||||||||||
Sempra Natural Gas | 74 | 94 | 3 | 3 | 1 | 1 | 78 | 98 | ||||||||||
Sempra Energy Consolidated | $ | 77 | $ | 149 | $ | 9 | $ | 6 | $ | 145 | $ | 143 | $ | 231 | $ | 298 | ||
(1) | At both March 31, 2016 and December 31, 2015, SoCalGas' natural gas inventory for core customers is net of the estimated inventory loss related to the Aliso Canyon natural gas leak, which we discuss in Note 11. |
GHG ALLOWANCES AND OBLIGATIONS | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
Sempra Energy Consolidated | SDG&E | SoCalGas | |||||||||||||||||||||
March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | ||||||||||||||||||
Assets: | |||||||||||||||||||||||
Other current assets | $ | 40 | $ | 40 | $ | 16 | $ | 16 | $ | 24 | $ | 24 | |||||||||||
Sundry | 307 | 295 | 184 | 182 | 119 | 109 | |||||||||||||||||
Total assets | $ | 347 | $ | 335 | $ | 200 | $ | 198 | $ | 143 | $ | 133 | |||||||||||
Liabilities: | |||||||||||||||||||||||
Other current liabilities | $ | 40 | $ | 40 | $ | 16 | $ | 16 | $ | 24 | $ | 24 | |||||||||||
Deferred credits and other | 183 | 171 | 80 | 72 | 99 | 96 | |||||||||||||||||
Total liabilities | $ | 223 | $ | 211 | $ | 96 | $ | 88 | $ | 123 | $ | 120 |
▪ | the purpose and design of the VIE; |
▪ | the nature of the VIE’s risks and the risks we absorb; |
▪ | the power to direct activities that most significantly impact the economic performance of the VIE; and |
▪ | the obligation to absorb losses or right to receive benefits that could be significant to the VIE. |
AMOUNTS ASSOCIATED WITH OTAY MESA VIE | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Operating expenses | |||||||
Cost of electric fuel and purchased power | $ | (18 | ) | $ | (17 | ) | |
Operation and maintenance | 4 | 4 | |||||
Depreciation and amortization | 7 | 7 | |||||
Total operating expenses | (7 | ) | (6 | ) | |||
Operating income | 7 | 6 | |||||
Interest expense | (5 | ) | (5 | ) | |||
Income before income taxes/Net income | 2 | 1 | |||||
Earnings attributable to noncontrolling interest | (2 | ) | (1 | ) | |||
Earnings attributable to common shares | $ | — | $ | — |
AMOUNTS ASSOCIATED WITH OTAY MESA VIE | ||||
(Dollars in millions) | ||||
Three months ended March 31, | ||||
2016 | 2015 | |||
Operating expenses | ||||
Cost of electric fuel and purchased power | $ | (17) | $ | (18) |
Operation and maintenance | 4 | 4 | ||
Depreciation and amortization | 7 | 6 | ||
Total operating expenses | (6) | (8) | ||
Operating income | 6 | 8 | ||
Interest expense | (5) | (4) | ||
Income before income taxes/Net income | 1 | 4 | ||
Earnings attributable to noncontrolling interest | (1) | (4) | ||
Earnings attributable to common shares | $ | ― | $ | ― |
AMOUNTS ASSOCIATED WITH TAX EQUITY ARRANGEMENTS | ||||
(Dollars in millions) | ||||
Three months ended March 31, 2017 | ||||
REVENUES | ||||
Energy-related businesses | $ | 13 | ||
EXPENSES | ||||
Operation and maintenance | (2 | ) | ||
Depreciation and amortization | (8 | ) | ||
Income before income taxes | 3 | |||
Income tax expense | (2 | ) | ||
Net income | 1 | |||
Losses attributable to noncontrolling interests(1) | 3 | |||
Earnings | $ | 4 | ||
(1) | Net income or loss attributable to the noncontrolling interests is computed using the hypothetical liquidation at book value (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 March 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Service cost | $ | 28 | $ | 28 | $ | 6 | $ | 5 | |||||||
Interest cost | 37 | 40 | 9 | 11 | |||||||||||
Expected return on assets | (40 | ) | (42 | ) | (16 | ) | (17 | ) | |||||||
Amortization of: | |||||||||||||||
Prior service cost | 3 | 3 | — | — | |||||||||||
Actuarial loss (gain) | 8 | 6 | (1 | ) | — | ||||||||||
Regulatory adjustment | (12 | ) | (28 | ) | 2 | 2 | |||||||||
Total net periodic benefit cost | $ | 24 | $ | 7 | $ | — | $ | 1 |
NET PERIODIC BENEFIT COST – SDG&E | |||||||||||||||
(Dollars in millions) | |||||||||||||||
Pension benefits | Other postretirement benefits | ||||||||||||||
Three months ended March 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Service cost | $ | 8 | $ | 7 | $ | 1 | $ | 1 | |||||||
Interest cost | 9 | 10 | 2 | 2 | |||||||||||
Expected return on assets | (11 | ) | (12 | ) | (3 | ) | (3 | ) | |||||||
Amortization of: | |||||||||||||||
Prior service cost | — | — | 1 | 1 | |||||||||||
Actuarial loss | 2 | 3 | — | — | |||||||||||
Regulatory adjustment | (7 | ) | (7 | ) | (1 | ) | (1 | ) | |||||||
Total net periodic benefit cost | $ | 1 | $ | 1 | $ | — | $ | — |
NET PERIODIC BENEFIT COST – SOCALGAS | |||||||||||||||
(Dollars in millions) | |||||||||||||||
Pension benefits | Other postretirement benefits | ||||||||||||||
Three months ended March 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Service cost | $ | 18 | $ | 17 | $ | 4 | $ | 4 | |||||||
Interest cost | 24 | 25 | 7 | 8 | |||||||||||
Expected return on assets | (26 | ) | (25 | ) | (13 | ) | (14 | ) | |||||||
Amortization of: | |||||||||||||||
Prior service cost (credit) | 2 | 2 | (1 | ) | (1 | ) | |||||||||
Actuarial loss | 4 | 3 | — | — | |||||||||||
Regulatory adjustment | (5 | ) | (21 | ) | 3 | 3 | |||||||||
Total net periodic benefit cost | $ | 17 | $ | 1 | $ | — | $ | — |
NET PERIODIC BENEFIT COST – SEMPRA ENERGY CONSOLIDATED | ||||||||
(Dollars in millions) | ||||||||
Pension benefits | Other postretirement benefits | |||||||
Three months ended March 31, | ||||||||
2016 | 2015 | 2016 | 2015 | |||||
Service cost | $ | 28 | $ | 30 | $ | 5 | $ | 7 |
Interest cost | 40 | 39 | 11 | 12 | ||||
Expected return on assets | (42) | (44) | (17) | (17) | ||||
Amortization of: | ||||||||
Prior service cost (credit) | 3 | 3 | ― | (1) | ||||
Actuarial loss | 6 | 8 | ― | ― | ||||
Regulatory adjustment | (28) | (29) | 2 | ― | ||||
Total net periodic benefit cost | $ | 7 | $ | 7 | $ | 1 | $ | 1 |
NET PERIODIC BENEFIT COST – SDG&E | ||||||||
(Dollars in millions) | ||||||||
Pension benefits | Other postretirement benefits | |||||||
Three months ended March 31, | ||||||||
2016 | 2015 | 2016 | 2015 | |||||
Service cost | $ | 7 | $ | 8 | $ | 1 | $ | 2 |
Interest cost | 10 | 10 | 2 | 2 | ||||
Expected return on assets | (12) | (14) | (3) | (3) | ||||
Amortization of: | ||||||||
Prior service cost | ― | ― | 1 | 1 | ||||
Actuarial loss | 3 | 2 | ― | ― | ||||
Regulatory adjustment | (7) | (5) | (1) | (2) | ||||
Total net periodic benefit cost | $ | 1 | $ | 1 | $ | ― | $ | ― |
NET PERIODIC BENEFIT COST – SOCALGAS | ||||||||
(Dollars in millions) | ||||||||
Pension benefits | Other postretirement benefits | |||||||
Three months ended March 31, | ||||||||
2016 | 2015 | 2016 | 2015 | |||||
Service cost | $ | 17 | $ | 19 | $ | 4 | $ | 5 |
Interest cost | 25 | 25 | 8 | 9 | ||||
Expected return on assets | (25) | (27) | (14) | (14) | ||||
Amortization of: | ||||||||
Prior service cost (credit) | 2 | 2 | (1) | (2) | ||||
Actuarial loss | 3 | 5 | ― | ― | ||||
Regulatory adjustment | (21) | (24) | 3 | 2 | ||||
Total net periodic benefit cost | $ | 1 | $ | ― | $ | ― | $ | ― |
BENEFIT PLAN CONTRIBUTIONS | ||||||||||||
(Dollars in millions) | ||||||||||||
Sempra Energy Consolidated | SDG&E | SoCalGas | ||||||||||
Contributions through March 31, 2017: | ||||||||||||
Pension plans | $ | 26 | $ | 2 | $ | 17 | ||||||
Other postretirement benefit plans | 1 | — | — | |||||||||
Total expected contributions in 2017: | ||||||||||||
Pension plans | $ | 181 | $ | 38 | $ | 90 | ||||||
Other postretirement benefit plans | 8 | 4 | 1 |
BENEFIT PLAN CONTRIBUTIONS | ||||||
(Dollars in millions) | ||||||
Sempra Energy | ||||||
Consolidated | SDG&E | SoCalGas | ||||
Contributions through March 31, 2016: | ||||||
Pension plans | $ | 15 | $ | 2 | $ | ― |
Other postretirement benefit plans | 1 | ― | ― | |||
Total expected contributions in 2016: | ||||||
Pension plans | $ | 123 | $ | 4 | $ | 77 |
Other postretirement benefit plans | 6 | 2 | 1 |
EARNINGS PER SHARE COMPUTATIONS | EARNINGS PER SHARE COMPUTATIONS | |||||||||||
(Dollars in millions, except per share amounts; shares in thousands) | (Dollars in millions, except per share amounts; shares in thousands) | |||||||||||
Three months ended March 31, | Three months ended March 31, | |||||||||||
2016 | 2015 | 2017 | 2016(1) | |||||||||
Numerator: | Numerator: | |||||||||||
Earnings/Income attributable to common shares | Earnings/Income attributable to common shares | $ | 319 | $ | 437 | $ | 441 | $ | 353 | |||
Denominator: | Denominator: | |||||||||||
Weighted-average common shares outstanding for basic EPS(1) | 249,734 | 247,722 | ||||||||||
Dilutive effect of stock options, restricted stock awards and restricted stock units | 1,678 | 3,484 | ||||||||||
Weighted-average common shares outstanding for basic EPS(2) | 251,131 | 249,734 | ||||||||||
Dilutive effect of stock options, restricted stock awards and restricted stock units(3) | 1,115 | 1,753 | ||||||||||
Weighted-average common shares outstanding for diluted EPS | Weighted-average common shares outstanding for diluted EPS | 251,412 | 251,206 | 252,246 | 251,487 | |||||||
Earnings per share: | Earnings per share: | |||||||||||
Basic | Basic | $ | 1.28 | $ | 1.76 | $ | 1.76 | $ | 1.41 | |||
Diluted | Diluted | $ | 1.27 | $ | 1.74 | 1.75 | 1.40 | |||||
(1) | Includes 555 and 452 average fully vested restricted stock units held in our Deferred Compensation Plan for the three months ended March 31, 2016 and 2015, respectively. These fully vested restricted stock units 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. |
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2. |
(2) | Includes 600 and 555 average fully vested restricted stock units held in our Deferred Compensation Plan for the three months ended March 31, 2017 and 2016, respectively. These fully vested restricted stock units are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued. |
(3) | Due to market fluctuations of both Sempra Energy stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based restricted stock units, which we discuss in Note 8 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive restricted stock units may vary widely from period-to-period. |
CAPITALIZED FINANCING COSTS | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Sempra Energy Consolidated | $ | 82 | $ | 52 | |||
SDG&E | 20 | 15 | |||||
SoCalGas | 15 | 13 |
CAPITALIZED FINANCING COSTS | |||||
(Dollars in millions) | |||||
Three months ended March 31, | |||||
2016 | 2015 | ||||
Sempra Energy Consolidated: | |||||
AFUDC related to debt | $ | 7 | $ | 6 | |
AFUDC related to equity | 27 | 27 | |||
Other capitalized interest | 18 | 17 | |||
Total Sempra Energy Consolidated | $ | 52 | $ | 50 | |
SDG&E: | |||||
AFUDC related to debt | $ | 4 | $ | 3 | |
AFUDC related to equity | 11 | 8 | |||
Total SDG&E | $ | 15 | $ | 11 | |
SoCalGas: | |||||
AFUDC related to debt | $ | 3 | $ | 3 | |
AFUDC related to equity | 10 | 9 | |||
Total SoCalGas | $ | 13 | $ | 12 |
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 March 31, 2017 and 2016 | ||||||||||||||||
Sempra Energy Consolidated: | ||||||||||||||||
Balance as of December 31, 2016 | $ | (527 | ) | $ | (125 | ) | $ | (96 | ) | $ | (748 | ) | ||||
OCI before reclassifications | 46 | (2 | ) | — | 44 | |||||||||||
Amounts reclassified from AOCI | — | 6 | 2 | 8 | ||||||||||||
Net OCI | 46 | 4 | 2 | 52 | ||||||||||||
Balance as of March 31, 2017 | $ | (481 | ) | $ | (121 | ) | $ | (94 | ) | $ | (696 | ) | ||||
Balance as of December 31, 2015 | $ | (582 | ) | $ | (137 | ) | $ | (87 | ) | $ | (806 | ) | ||||
OCI before reclassifications | 68 | (82 | ) | — | (14 | ) | ||||||||||
Amounts reclassified from AOCI | — | (2 | ) | 1 | (1 | ) | ||||||||||
Net OCI | 68 | (84 | ) | 1 | (15 | ) | ||||||||||
Balance as of March 31, 2016 | $ | (514 | ) | $ | (221 | ) | $ | (86 | ) | $ | (821 | ) | ||||
SDG&E: | ||||||||||||||||
Balance as of December 31, 2016 and March 31, 2017 | $ | (8 | ) | $ | (8 | ) | ||||||||||
Balance as of December 31, 2015 and March 31, 2016 | $ | (8 | ) | $ | (8 | ) | ||||||||||
SoCalGas: | ||||||||||||||||
Balance as of December 31, 2016 and March 31, 2017 | $ | (13 | ) | $ | (9 | ) | $ | (22 | ) | |||||||
Balance as of December 31, 2015 and March 31, 2016 | $ | (14 | ) | $ | (5 | ) | $ | (19 | ) |
(1) | All amounts are net of income tax, if subject to tax, and exclude noncontrolling interests. |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) | |||||||||
SEMPRA ENERGY CONSOLIDATED | |||||||||
(Dollars in millions) | |||||||||
Three months ended March 31, 2016 and 2015 | |||||||||
Foreign | Total | ||||||||
currency | Pension and other | accumulated other | |||||||
translation | Financial | postretirement | comprehensive | ||||||
adjustments | instruments | benefits | income (loss) | ||||||
2016: | |||||||||
Balance as of December 31, 2015 | $ | (582) | $ | (137) | $ | (87) | $ | (806) | |
Other comprehensive income (loss) before | |||||||||
reclassifications | 68 | (82) | ― | (14) | |||||
Amounts reclassified from accumulated other | |||||||||
comprehensive income | ― | (2) | 1 | (1) | |||||
Net other comprehensive income (loss) | 68 | (84) | 1 | (15) | |||||
Balance as of March 31, 2016 | $ | (514) | $ | (221) | $ | (86) | $ | (821) | |
2015: | |||||||||
Balance as of December 31, 2014 | $ | (322) | $ | (90) | $ | (85) | $ | (497) | |
Other comprehensive loss before | |||||||||
reclassifications | (62) | (54) | ― | (116) | |||||
Amounts reclassified from accumulated other | |||||||||
comprehensive income | ― | (1) | 1 | ― | |||||
Net other comprehensive (loss) income | (62) | (55) | 1 | (116) | |||||
Balance as of March 31, 2015 | $ | (384) | $ | (145) | $ | (84) | $ | (613) | |
(1) | All amounts are net of income tax, if subject to tax, and exclude noncontrolling interests. |
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||
(Dollars in millions) | ||||||||||||
Amounts reclassified | ||||||||||||
Details about accumulated | from accumulated other | Affected line item on Condensed | ||||||||||
other comprehensive income (loss) components | comprehensive income (loss) | Consolidated Statements of Operations | ||||||||||
Three months ended March 31, | ||||||||||||
2016 | 2015 | |||||||||||
Sempra Energy Consolidated: | ||||||||||||
Financial instruments: | ||||||||||||
Interest rate and foreign exchange instruments | $ | 4 | $ | 6 | Interest Expense | |||||||
Interest rate instruments | 3 | 3 | Equity (Losses) Earnings, Before Income Tax | |||||||||
Interest rate and foreign exchange instruments | 1 | ― | Equity Earnings, Net of Income Tax | |||||||||
Commodity contracts not subject to rate recovery | (7) | (7) | Revenues: Energy-Related Businesses | |||||||||
Total before income tax | 1 | 2 | ||||||||||
― | 1 | Income Tax Expense | ||||||||||
Net of income tax | 1 | 3 | ||||||||||
(3) | (4) | Earnings Attributable to Noncontrolling Interests | ||||||||||
$ | (2) | $ | (1) | |||||||||
Pension and other postretirement benefits: | ||||||||||||
Amortization of actuarial loss | $ | 2 | $ | 2 | See note (1) below | |||||||
(1) | (1) | Income Tax Expense | ||||||||||
Net of income tax | $ | 1 | $ | 1 | ||||||||
Total reclassifications for the period, net of tax | $ | (1) | $ | ― | ||||||||
SDG&E: | ||||||||||||
Financial instruments: | ||||||||||||
Interest rate instruments | $ | 3 | $ | 3 | Interest Expense | |||||||
(3) | (3) | Earnings Attributable to Noncontrolling Interest | ||||||||||
Total reclassifications for the period | $ | ― | $ | ― | ||||||||
(1) | Amounts are included in the computation of net periodic benefit cost (see "Pension and Other Postretirement Benefits" above). |
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||
(Dollars in millions) | |||||||||
Details about accumulated other comprehensive income (loss) components | Amounts reclassified from accumulated other comprehensive income (loss) | Affected line item on Condensed Consolidated Statements of Operations | |||||||
Three months ended March 31, | |||||||||
2017 | 2016 | ||||||||
Sempra Energy Consolidated: | |||||||||
Financial instruments: | |||||||||
Interest rate and foreign exchange instruments | $ | (3 | ) | $ | 4 | Interest Expense | |||
Interest rate instruments | 2 | 3 | Equity Earnings (Losses), Before Income Tax | ||||||
Interest rate and foreign exchange instruments | 2 | 1 | Equity (Losses) Earnings, Net of Income Tax | ||||||
Foreign exchange instruments | 2 | — | Revenues: Energy-Related Businesses | ||||||
Commodity contracts not subject to rate recovery | 9 | (7 | ) | Revenues: Energy-Related Businesses | |||||
Total before income tax | 12 | 1 | |||||||
(4 | ) | — | Income Tax Expense | ||||||
Net of income tax | 8 | 1 | |||||||
(2 | ) | (3 | ) | Earnings Attributable to Noncontrolling Interests | |||||
$ | 6 | $ | (2 | ) | |||||
Pension and other postretirement benefits: | |||||||||
Amortization of actuarial loss | $ | 3 | $ | 2 | See note (1) below | ||||
(1 | ) | (1 | ) | Income Tax Expense | |||||
Net of income tax | $ | 2 | $ | 1 | |||||
Total reclassifications for the period, net of tax | $ | 8 | $ | (1 | ) | ||||
SDG&E: | |||||||||
Financial instruments: | |||||||||
Interest rate instruments | $ | 3 | $ | 3 | Interest Expense | ||||
(3 | ) | (3 | ) | Earnings Attributable to Noncontrolling Interest | |||||
Total reclassifications for the period | $ | — | $ | — |
(1) | Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above). |
SHAREHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS – SEMPRA ENERGY CONSOLIDATED | |||||||||||
(Dollars in millions) | |||||||||||
Sempra Energy shareholders’ equity(1) | Non- controlling interests(2) | Total equity(1) | |||||||||
Balance at December 31, 2016 | $ | 12,951 | $ | 2,290 | $ | 15,241 | |||||
Comprehensive income | 493 | 22 | 515 | ||||||||
Share-based compensation expense | 10 | — | 10 | ||||||||
Common stock dividends declared | (206 | ) | — | (206 | ) | ||||||
Issuances of common stock | 30 | — | 30 | ||||||||
Repurchases of common stock | (14 | ) | — | (14 | ) | ||||||
Distributions to noncontrolling interests | — | (7 | ) | (7 | ) | ||||||
Balance at March 31, 2017 | $ | 13,264 | $ | 2,305 | $ | 15,569 | |||||
Balance at December 31, 2015 | $ | 11,809 | $ | 770 | $ | 12,579 | |||||
Cumulative-effect adjustment from change in accounting principle | 107 | — | 107 | ||||||||
Comprehensive income | 338 | 11 | 349 | ||||||||
Share-based compensation expense | 13 | — | 13 | ||||||||
Common stock dividends declared | (188 | ) | — | (188 | ) | ||||||
Issuances of common stock | 28 | — | 28 | ||||||||
Repurchases of common stock | (54 | ) | — | (54 | ) | ||||||
Distributions to noncontrolling interests | — | (3 | ) | (3 | ) | ||||||
Balance at March 31, 2016 | $ | 12,053 | $ | 778 | $ | 12,831 |
(1) | Amounts for the three months ended March 31, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2. |
(2) | Noncontrolling interests include the preferred stock of SoCalGas and other noncontrolling interests as listed in the table below under “Other Noncontrolling Interests.” |
SHAREHOLDER’S EQUITY AND NONCONTROLLING INTEREST – SDG&E | |||||||||||
(Dollars in millions) | |||||||||||
SDG&E shareholder’s equity(1) | Non- controlling interest | Total equity(1) | |||||||||
Balance at December 31, 2016 | $ | 5,641 | $ | 37 | $ | 5,678 | |||||
Comprehensive income | 155 | 5 | 160 | ||||||||
Common stock dividends declared | (175 | ) | — | (175 | ) | ||||||
Distributions to noncontrolling interest | — | (3 | ) | (3 | ) | ||||||
Balance at March 31, 2017 | $ | 5,621 | $ | 39 | $ | 5,660 | |||||
Balance at December 31, 2015 | $ | 5,223 | $ | 53 | $ | 5,276 | |||||
Cumulative-effect adjustment from change in accounting principle | 23 | — | 23 | ||||||||
Comprehensive income (loss) | 136 | (1 | ) | 135 | |||||||
Distributions to noncontrolling interest | — | (1 | ) | (1 | ) | ||||||
Balance at March 31, 2016 | $ | 5,382 | $ | 51 | $ | 5,433 |
(1) | Amounts for the three months ended March 31, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2. |
SHAREHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS – SEMPRA ENERGY CONSOLIDATED | |||||||
(Dollars in millions) | |||||||
Sempra Energy | Non- | ||||||
shareholders’ | controlling | Total | |||||
equity | interests(1) | equity | |||||
Balance at December 31, 2015 | $ | 11,809 | $ | 770 | $ | 12,579 | |
Comprehensive income | 304 | 11 | 315 | ||||
Share-based compensation expense | 13 | ― | 13 | ||||
Common stock dividends declared | (188) | ― | (188) | ||||
Issuances of common stock | 28 | ― | 28 | ||||
Repurchases of common stock | (54) | ― | (54) | ||||
Tax benefit related to share-based compensation | 34 | ― | 34 | ||||
Distributions to noncontrolling interests | ― | (3) | (3) | ||||
Balance at March 31, 2016 | $ | 11,946 | $ | 778 | $ | 12,724 | |
Balance at December 31, 2014 | $ | 11,326 | $ | 774 | $ | 12,100 | |
Comprehensive income | 321 | 8 | 329 | ||||
Share-based compensation expense | 13 | ― | 13 | ||||
Common stock dividends declared | (173) | ― | (173) | ||||
Issuances of common stock | 30 | ― | 30 | ||||
Repurchases of common stock | (65) | ― | (65) | ||||
Tax benefit related to share-based compensation | 52 | ― | 52 | ||||
Distributions to noncontrolling interests | ― | (5) | (5) | ||||
Balance at March 31, 2015 | $ | 11,504 | $ | 777 | $ | 12,281 | |
(1) | Noncontrolling interests include the preferred stock of SoCalGas and other noncontrolling interests as listed in the table below under "Other Noncontrolling Interests." |
SHAREHOLDER'S EQUITY AND NONCONTROLLING INTEREST – SDG&E | ||||||
(Dollars in millions) | ||||||
SDG&E | Non- | |||||
shareholder’s | controlling | Total | ||||
equity | interest | equity | ||||
Balance at December 31, 2015 | $ | 5,223 | $ | 53 | $ | 5,276 |
Comprehensive income (loss) | 129 | (1) | 128 | |||
Distributions to noncontrolling interest | ― | (1) | (1) | |||
Balance at March 31, 2016 | $ | 5,352 | $ | 51 | $ | 5,403 |
Balance at December 31, 2014 | $ | 4,932 | $ | 60 | $ | 4,992 |
Comprehensive income | 147 | 2 | 149 | |||
Distributions to noncontrolling interest | ― | (3) | (3) | |||
Balance at March 31, 2015 | $ | 5,079 | $ | 59 | $ | 5,138 |
SHAREHOLDERS’ EQUITY – SOCALGAS | |||
(Dollars in millions) | |||
Total equity(1) | |||
Balance at December 31, 2016 | $ | 3,510 | |
Comprehensive income | 203 | ||
Balance at March 31, 2017 | $ | 3,713 | |
Balance at December 31, 2015 | $ | 3,149 | |
Cumulative-effect adjustment from change in accounting principle | 15 | ||
Comprehensive income | 199 | ||
Balance at March 31, 2016 | $ | 3,363 |
(1) | Amounts for the three months ended March 31, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2. |
OTHER NONCONTROLLING INTERESTS | |||||||||||
(Dollars in millions) | |||||||||||
Percent ownership held by noncontrolling interests | Equity held by noncontrolling interests | ||||||||||
March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | ||||||||
SDG&E: | |||||||||||
Otay Mesa VIE | 100 | % | 100 | % | $ | 39 | $ | 37 | |||
Sempra South American Utilities: | |||||||||||
Chilquinta Energía subsidiaries(1) | 22.9 – 43.4 | 23.1 – 43.4 | 23 | 22 | |||||||
Luz del Sur | 16.4 | 16.4 | 182 | 173 | |||||||
Tecsur | 9.8 | 9.8 | 4 | 4 | |||||||
Sempra Mexico: | |||||||||||
IEnova | 33.6 | 33.6 | 1,531 | 1,524 | |||||||
Sempra Renewables: | |||||||||||
Tax equity arrangement – wind(2) | NA | NA | 93 | 92 | |||||||
Tax equity arrangement – solar(2) | NA | NA | 371 | 376 | |||||||
Sempra LNG & Midstream: | |||||||||||
Bay Gas Storage Company, Ltd. | 9.1 | 9.1 | 27 | 27 | |||||||
Liberty Gas Storage, LLC | 23.3 | 23.3 | 14 | 14 | |||||||
Southern Gas Transmission Company | 49.0 | 49.0 | 1 | 1 | |||||||
Total Sempra Energy | $ | 2,285 | $ | 2,270 |
(1) | Chilquinta Energía has four subsidiaries with noncontrolling interests held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries. |
(2) | Net income or loss attributable to the noncontrolling interests is computed using the HLBV method and is not based on ownership percentages, as we discuss in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report. |
OTHER NONCONTROLLING INTERESTS | |||||||||
(Dollars in millions) | |||||||||
Percent ownership held by others | |||||||||
March 31, | December 31, | March 31, | December 31, | ||||||
2016 | 2015 | 2016 | 2015 | ||||||
SDG&E: | |||||||||
Otay Mesa VIE | 100 | % | 100 | % | $ | 51 | $ | 53 | |
Sempra South American Utilities: | |||||||||
Chilquinta Energía subsidiaries(1) | 23.5 – 43.4 | 23.5 – 43.4 | 22 | 21 | |||||
Luz del Sur | 16.4 | 16.4 | 171 | 164 | |||||
Tecsur | 9.8 | 9.8 | 4 | 4 | |||||
Sempra Mexico: | |||||||||
IEnova | 18.9 | 18.9 | 470 | 468 | |||||
Sempra Natural Gas: | |||||||||
Bay Gas Storage Company, Ltd. | 9.1 | 9.1 | 25 | 25 | |||||
Liberty Gas Storage, LLC | 23.2 | 23.2 | 14 | 14 | |||||
Southern Gas Transmission Company | 49.0 | 49.0 | 1 | 1 | |||||
Total Sempra Energy | $ | 758 | $ | 750 | |||||
(1) | Chilquinta Energía has four subsidiaries with noncontrolling interests held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries. |
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES | |||||
(Dollars in millions) | |||||
March 31, 2016 | December 31, 2015 | ||||
Sempra Energy Consolidated: | |||||
Total due from various unconsolidated affiliates - current | $ | 7 | $ | 6 | |
Sempra South American Utilities(1): | |||||
Eletrans S.A. and Eletrans II S.A.: | |||||
4% Note(2) | $ | 76 | $ | 72 | |
Other related party receivables | 1 | ― | |||
Sempra Mexico(1): | |||||
Affiliate of joint venture with PEMEX: | |||||
Note due November 13, 2017(3) | 3 | 3 | |||
Note due November 14, 2018(3) | 42 | 42 | |||
Note due November 14, 2018(3) | 34 | 34 | |||
Note due November 14, 2018(3) | 8 | 8 | |||
Energía Sierra Juárez: | |||||
Note due June 15, 2018(4) | 17 | 24 | |||
Sempra Natural Gas: | |||||
Cameron LNG JV | 5 | 3 | |||
Total due from unconsolidated affiliates - noncurrent | $ | 186 | $ | 186 | |
Total due to various unconsolidated affiliates - current | $ | (13) | $ | (14) | |
SDG&E: | |||||
Total due from various unconsolidated affiliates - current | $ | 1 | $ | 1 | |
Sempra Energy | $ | (35) | $ | (34) | |
SoCalGas | (8) | (13) | |||
Affiliate | (6) | (8) | |||
Total due to unconsolidated affiliates - current | $ | (49) | $ | (55) | |
Income taxes due (to) from Sempra Energy(5) | $ | (32) | $ | 28 | |
SoCalGas: | |||||
Sempra Energy(6) | $ | ― | $ | 35 | |
SDG&E | 8 | 13 | |||
Total due from unconsolidated affiliates - current | $ | 8 | $ | 48 | |
Sempra Energy | $ | (34) | $ | ― | |
Total due to unconsolidated affiliate - current | $ | (34) | $ | ― | |
Income taxes due (to) from Sempra Energy(5) | $ | (23) | $ | 1 | |
(1) | Amounts include principal balances plus accumulated interest outstanding. | ||||
(2) | U.S. dollar-denominated loan, at a fixed interest rate with no stated maturity date, to provide project financing for the construction of transmission lines at Eletrans S.A. and Eletrans II S.A., both of which are joint ventures at Chilquinta Energía. | ||||
(3) | U.S. dollar-denominated loan, at a variable interest rate based on a 30-day LIBOR plus 450 basis points (4.94 percent at March 31, 2016), to finance the Los Ramones Norte pipeline project. | ||||
(4) | U.S. dollar-denominated loan, at a variable interest rate based on a 30-day LIBOR plus 637.5 basis points (6.81 percent at March 31, 2016), to finance the first phase of the Energía Sierra Juárez wind project. | ||||
(5) | SDG&E and SoCalGas are included in the consolidated income tax return of Sempra Energy and are allocated income tax expense from Sempra Energy in an amount equal to that which would result from each company having always filed a separate return. | ||||
(6) | At December 31, 2015, net receivable included outstanding advances to Sempra Energy of $50 million at an interest rate of 0.11 percent. |
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES | |||||||
(Dollars in millions) | |||||||
March 31, 2017 | December 31, 2016 | ||||||
Sempra Energy Consolidated: | |||||||
Total due from various unconsolidated affiliates – current | $ | 24 | $ | 26 | |||
Sempra South American Utilities(1): | |||||||
Eletrans S.A. and Eletrans II S.A. – 4% Note(2) | $ | 82 | $ | 96 | |||
Other related party receivables | 1 | 1 | |||||
Sempra Mexico(1): | |||||||
Affiliate of joint venture with Ductos y Energéticos del Norte: | |||||||
Note due November 14, 2018(3) | 2 | 2 | |||||
Note due November 14, 2018(3) | 44 | 44 | |||||
Note due November 14, 2018(3) | 36 | 35 | |||||
Note due November 14, 2018(3) | 9 | 9 | |||||
Energía Sierra Juárez – Note(4) | 13 | 14 | |||||
Total due from unconsolidated affiliates – noncurrent | $ | 187 | $ | 201 | |||
Total due to various unconsolidated affiliates – current | $ | (13 | ) | $ | (11 | ) | |
SDG&E: | |||||||
Sempra Energy(5) | $ | — | $ | 3 | |||
Various affiliates | — | 1 | |||||
Total due from various unconsolidated affiliates – current | $ | — | $ | 4 | |||
Sempra Energy | $ | (28 | ) | $ | — | ||
SoCalGas | (9 | ) | (8 | ) | |||
Various affiliates | (8 | ) | (7 | ) | |||
Total due to various unconsolidated affiliates – current | $ | (45 | ) | $ | (15 | ) | |
Income taxes due from Sempra Energy(6) | $ | 109 | $ | 159 | |||
SoCalGas: | |||||||
Sempra Energy(7) | $ | 7 | $ | — | |||
SDG&E | 9 | 8 | |||||
Total due from unconsolidated affiliates – current | $ | 16 | $ | 8 | |||
Sempra Energy | $ | — | $ | (28 | ) | ||
Total due to unconsolidated affiliates – current | $ | — | $ | (28 | ) | ||
Income taxes due (to) from Sempra Energy(6) | $ | (13 | ) | $ | 5 |
(1) | Amounts include principal balances plus accumulated interest outstanding. |
(2) | U.S. dollar-denominated loan, at a fixed interest rate with no stated maturity date, to provide project financing for the construction of transmission lines at Eletrans S.A. and Eletrans II S.A. (collectively, Eletrans), which is a joint venture of Chilquinta Energía. |
(3) | U.S. dollar-denominated loan, at a variable interest rate based on the 30-day LIBOR plus 450 basis points (5.48 percent at March 31, 2017), to finance the Los Ramones Norte pipeline. |
(4) | U.S. dollar-denominated loan, at a variable interest rate based on the 30-day LIBOR plus 637.5 basis points (7.36 percent at March 31, 2017) with no stated maturity date, to finance the first phase of the Energía Sierra Juárez wind project, which is a joint venture of IEnova. |
(5) | At December 31, 2016, net receivable included outstanding advances to Sempra Energy of $31 million at an interest rate of 0.68 percent. |
(6) | SDG&E and SoCalGas are included in the consolidated income tax return of Sempra Energy and are allocated income tax expense from Sempra Energy in an amount equal to that which would result from each company having always filed a separate return. |
(7) | At March 31, 2017, net receivable included outstanding advances to Sempra Energy of $35 million at an interest rate of 0.95 percent. |
REVENUES AND COST OF SALES FROM UNCONSOLIDATED AFFILIATES | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Revenues: | |||||||
Sempra Energy Consolidated | $ | 7 | $ | 5 | |||
SDG&E | 2 | 3 | |||||
SoCalGas | 18 | 17 | |||||
Cost of Sales: | |||||||
Sempra Energy Consolidated | $ | 14 | $ | 30 | |||
SDG&E | 20 | 14 |
REVENUES AND COST OF SALES FROM UNCONSOLIDATED AFFILIATES | ||||
(Dollars in millions) | ||||
Three months ended March 31, | ||||
2016 | 2015 | |||
REVENUES | ||||
Sempra Energy Consolidated | $ | 5 | $ | 8 |
SDG&E | 3 | 3 | ||
SoCalGas | 17 | 19 | ||
COST OF SALES | ||||
Sempra Energy Consolidated | $ | 30 | $ | 19 |
SDG&E | 14 | 5 |
OTHER INCOME, NET | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Sempra Energy Consolidated: | |||||||
Allowance for equity funds used during construction | $ | 72 | $ | 27 | |||
Investment gains(1) | 16 | 10 | |||||
Gains on interest rate and foreign exchange instruments, net | 63 | 3 | |||||
Foreign currency transaction gains (losses) | 10 | (2 | ) | ||||
Sale of other investments | — | 1 | |||||
Electrical infrastructure relocation income(2) | — | 1 | |||||
Regulatory interest, net(3) | 2 | 2 | |||||
Sundry, net | 6 | 7 | |||||
Total | $ | 169 | $ | 49 | |||
SDG&E: | |||||||
Allowance for equity funds used during construction | $ | 15 | $ | 11 | |||
Regulatory interest, net(3) | 2 | 2 | |||||
Sundry, net | 1 | 1 | |||||
Total | $ | 18 | $ | 14 | |||
SoCalGas: | |||||||
Allowance for equity funds used during construction | $ | 11 | $ | 10 | |||
Total | $ | 11 | $ | 10 |
(1) | Represents investment gains on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are partially offset by corresponding changes in compensation expense related to the plans, recorded in Operation and Maintenance on the Condensed Consolidated Statements of Operations. |
(2) | Income at Luz del Sur associated with the relocation of electrical infrastructure. |
(3) | Interest on regulatory balancing accounts. |
OTHER INCOME, NET | |||||
(Dollars in millions) | |||||
Three months ended March 31, | |||||
2016 | 2015 | ||||
Sempra Energy Consolidated: | |||||
Allowance for equity funds used during construction | $ | 27 | $ | 27 | |
Investment gains(1) | 10 | 9 | |||
Electrical infrastructure relocation income(2) | 1 | ― | |||
Gains on interest rate and foreign exchange instruments, net | 3 | ― | |||
Sale of other investments | 1 | ― | |||
Foreign currency transaction losses | (2) | (1) | |||
Regulatory interest, net(3) | 2 | 1 | |||
Sundry, net | 7 | 3 | |||
Total | $ | 49 | $ | 39 | |
SDG&E: | |||||
Allowance for equity funds used during construction | $ | 11 | $ | 8 | |
Regulatory interest, net(3) | 2 | 1 | |||
Sundry, net | 1 | ― | |||
Total | $ | 14 | $ | 9 | |
SoCalGas: | |||||
Allowance for equity funds used during construction | $ | 10 | $ | 9 | |
Sundry, net | ― | (1) | |||
Total | $ | 10 | $ | 8 | |
(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. | ||||
(2) | Income at Luz del Sur associated with the relocation of electrical infrastructure. | ||||
(3) | Interest on regulatory balancing accounts. |
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES | |||||||||||||
(Dollars in millions) | |||||||||||||
Income tax expense | Effective income tax rate | Income tax expense | Effective income tax rate | ||||||||||
Three months ended March 31, | |||||||||||||
2017 | 2016(1) | ||||||||||||
Sempra Energy Consolidated | $ | 295 | 39 | % | $ | 108 | 24 | % | |||||
SDG&E | 90 | 36 | 65 | 32 | |||||||||
SoCalGas | 98 | 33 | 83 | 29 |
(1) | Reflects the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2. |
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES | |||||||||||
(Dollars in millions) | |||||||||||
Effective | Effective | ||||||||||
Income tax | income | Income tax | income | ||||||||
expense | tax rate | expense | tax rate | ||||||||
Three months ended March 31, | |||||||||||
2016 | 2015 | ||||||||||
Sempra Energy Consolidated | $ | 142 | 31 | % | $ | 163 | 27 | % | |||
SDG&E | 72 | 36 | 88 | 37 | |||||||
SoCalGas | 87 | 31 | 95 | 31 | |||||||
▪ | repairs expenditures related to a certain portion of utility plant assets |
▪ | the equity portion of AFUDC |
▪ | a portion of the cost of removal of utility plant assets |
▪ | utility self-developed software expenditures |
▪ | depreciation on a certain portion of utility plant assets |
▪ | state income taxes |
PRIMARY U.S. COMMITTED LINES OF CREDIT | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
At March 31, 2017 | |||||||||||||||||||||
Total facility | Commercial paper outstanding | Adjustment for combined limit | Letters of credit outstanding | Available unused credit | |||||||||||||||||
Sempra Energy(1) | $ | 1,000 | $ | — | $ | — | $ | (65 | ) | $ | 935 | ||||||||||
Sempra Global(2) | 2,335 | (1,197 | ) | — | — | 1,138 | |||||||||||||||
California Utilities(3): | |||||||||||||||||||||
SDG&E | 750 | (343 | ) | — | — | 407 | |||||||||||||||
SoCalGas | 750 | — | (93 | ) | — | 657 | |||||||||||||||
Less: combined limit of $1 billion for both utilities | (500 | ) | — | 93 | — | (407 | ) | ||||||||||||||
1,000 | (343 | ) | — | — | 657 | ||||||||||||||||
Total | $ | 4,335 | $ | (1,540 | ) | $ | — | $ | (65 | ) | $ | 2,730 |
CREDIT FACILITIES IN SOUTH AMERICA AND MEXICO | |||||||||||||||
(U.S. dollar equivalent in millions) | |||||||||||||||
At March 31, 2017 | |||||||||||||||
Denominated in | Total facility | Amount outstanding | Available unused credit | ||||||||||||
Sempra South American Utilities(1): | |||||||||||||||
Peru(2) | Peruvian sol | $ | 392 | $ | (155 | ) | (3) | $ | 237 | ||||||
Chile | Chilean peso | 115 | — | 115 | |||||||||||
Sempra Mexico: | |||||||||||||||
IEnova(4) | U.S. dollar | 1,170 | (446 | ) | 724 | ||||||||||
Total | $ | 1,677 | $ | (601 | ) | $ | 1,076 |
▪ | The California Utilities use |
▪ | SDG&E is allocated and may purchase congestion revenue rights (CRRs), which serve to reduce the regional electricity price volatility risk that may result from local transmission capacity constraints. Unrealized gains and losses do not impact earnings, as they are offset by regulatory account balances. Realized gains and losses associated with CRRs, which are recoverable in rates, are recorded in Cost of Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. |
▪ | Sempra Mexico, Sempra LNG & Midstream, and Sempra |
▪ | From time to time, our various businesses, including the California Utilities, may use other energy derivatives to hedge exposures such as the price of vehicle fuel. |
NET ENERGY DERIVATIVE VOLUMES | |||||||
(Quantities in millions) | |||||||
Commodity | Unit of measure | March 31, 2017 | December 31, 2016 | ||||
California Utilities: | |||||||
SDG&E: | |||||||
Natural gas | MMBtu(1) | 44 | 48 | ||||
Electricity | MWh(2) | 4 | 4 | ||||
Congestion revenue rights | MWh | 45 | 48 | ||||
SoCalGas – natural gas | MMBtu | — | 1 | ||||
Energy-Related Businesses: | |||||||
Sempra LNG & Midstream – natural gas | MMBtu | 16 | 31 |
(1) | Million British thermal units |
(2) | Megawatt hours |
NET ENERGY DERIVATIVE VOLUMES | |||||
(Quantities in millions) | |||||
March 31, | December 31, | ||||
Segment and Commodity | Unit of measure | 2016 | 2015 | ||
California Utilities: | |||||
SDG&E: | |||||
Natural gas | MMBtu(1) | 60 | 70 | ||
Electricity | MWh(2) | ― | 1 | ||
Congestion revenue rights | MWh | 33 | 36 | ||
SoCalGas – natural gas | MMBtu | ― | 1 | ||
Energy-Related Businesses: | |||||
Sempra Natural Gas – natural gas | MMBtu | 39 | 43 | ||
(1) | Million British thermal units | ||||
(2) | Megawatt hours |
INTEREST RATE DERIVATIVES | |||||||||||
(Dollars in millions) | |||||||||||
March 31, 2017 | December 31, 2016 | ||||||||||
Notional debt | Maturities | Notional debt | Maturities | ||||||||
Sempra Energy Consolidated: | |||||||||||
Cash flow hedges(1) | $ | 910 | 2017-2032 | $ | 924 | 2017-2032 | |||||
SDG&E: | |||||||||||
Cash flow hedges(1) | 302 | 2017-2019 | 305 | 2017-2019 |
INTEREST RATE DERIVATIVES | |||||||
(Dollars in millions) | |||||||
March 31, 2016 | December 31, 2015 | ||||||
Notional debt | Maturities | Notional debt | Maturities | ||||
Sempra Energy Consolidated: | |||||||
Cash flow hedges(1) | $ | 381 | 2016-2028 | $ | 384 | 2016-2028 | |
Fair value hedges | 300 | 2016 | 300 | 2016 | |||
SDG&E: | |||||||
Cash flow hedge(1) | 312 | 2016-2019 | 315 | 2016-2019 | |||
(1) | Includes Otay Mesa VIE. All of SDG&E’s interest rate derivatives relate to Otay Mesa VIE. |
(1) | Includes Otay Mesa VIE. All of SDG&E’s interest rate derivatives relate to Otay Mesa VIE. |
FOREIGN CURRENCY DERIVATIVES | |||||||
(Dollars in millions) | |||||||
March 31, 2016 | December 31, 2015 | ||||||
Notional debt | Maturities | Notional debt | Maturities | ||||
Sempra Mexico: | |||||||
Cross-currency swaps | $ | 408 | 2018-2023 | $ | 408 | 2018-2023 | |
Other foreign currency derivatives | 550 | 2016 | ― | ― |
FOREIGN CURRENCY DERIVATIVES | |||||||||||
(Dollars in millions) | |||||||||||
March 31, 2017 | December 31, 2016 | ||||||||||
Notional amount | Maturities | Notional amount | Maturities | ||||||||
Sempra Energy Consolidated: | |||||||||||
Cross-currency swaps | $ | 408 | 2017-2023 | $ | 408 | 2017-2023 | |||||
Other foreign currency derivatives(1) | 922 | 2017-2018 | 86 | 2017-2018 |
(1) | In the three months ended March 31, 2017, we entered into foreign currency derivatives with notional amounts totaling $850 million that expire in December 2017. |
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||
(Dollars in millions) | |||||||||||||||
March 31, 2017 | |||||||||||||||
Current assets: Fixed-price contracts and other derivatives(1) | Other assets: Sundry | Current liabilities: Fixed-price contracts and other derivatives(2) | Deferred credits and other liabilities: Fixed-price contracts and other derivatives | ||||||||||||
Sempra Energy Consolidated: | |||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Interest rate and foreign exchange instruments(3) | $ | — | $ | 1 | $ | (56 | ) | $ | (155 | ) | |||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Foreign exchange instruments | 98 | — | — | — | |||||||||||
Commodity contracts not subject to rate recovery | 67 | 31 | (60 | ) | (21 | ) | |||||||||
Associated offsetting commodity contracts | (54 | ) | (21 | ) | 54 | 21 | |||||||||
Commodity contracts subject to rate recovery | 25 | 71 | (60 | ) | (163 | ) | |||||||||
Associated offsetting commodity contracts | (4 | ) | — | 4 | — | ||||||||||
Associated offsetting cash collateral | — | — | 9 | 15 | |||||||||||
Net amounts presented on the balance sheet | 132 | 82 | (109 | ) | (303 | ) | |||||||||
Additional cash collateral for commodity contracts not subject to rate recovery | 9 | — | — | — | |||||||||||
Additional cash collateral for commodity contracts subject to rate recovery | 20 | — | — | — | |||||||||||
Total(4) | $ | 161 | $ | 82 | $ | (109 | ) | $ | (303 | ) | |||||
SDG&E: | |||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Interest rate instruments(3) | $ | — | $ | — | $ | (13 | ) | $ | (9 | ) | |||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Commodity contracts subject to rate recovery | 23 | 71 | (59 | ) | (163 | ) | |||||||||
Associated offsetting commodity contracts | (4 | ) | — | 4 | — | ||||||||||
Associated offsetting cash collateral | — | — | 9 | 15 | |||||||||||
Net amounts presented on the balance sheet | 19 | 71 | (59 | ) | (157 | ) | |||||||||
Additional cash collateral for commodity contracts not subject to rate recovery | 1 | — | — | — | |||||||||||
Additional cash collateral for commodity contracts subject to rate recovery | 19 | — | — | — | |||||||||||
Total(4) | $ | 39 | $ | 71 | $ | (59 | ) | $ | (157 | ) | |||||
SoCalGas: | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Commodity contracts subject to rate recovery | $ | 2 | $ | — | $ | (1 | ) | $ | — | ||||||
Net amounts presented on the balance sheet | 2 | — | (1 | ) | — | ||||||||||
Additional cash collateral for commodity contracts subject to rate recovery | 1 | — | — | — | |||||||||||
Total | $ | 3 | $ | — | $ | (1 | ) | $ | — |
(1) | Included in Current Assets: Other for SoCalGas. |
(2) | Included in Current Liabilities: Other for SoCalGas. |
(3) | Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE. |
(4) | Normal purchase contracts previously measured at fair value are excluded. |
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS | (Dollars in millions) | |||||||||||||||||||||||
March 31, 2016 | ||||||||||||||||||||||||
Deferred | ||||||||||||||||||||||||
credits | ||||||||||||||||||||||||
Current | Current | and other | ||||||||||||||||||||||
assets: | liabilities: | liabilities: | ||||||||||||||||||||||
Fixed-price | Fixed-price | Fixed-price | ||||||||||||||||||||||
contracts | Other | contracts | contracts | |||||||||||||||||||||
and other | assets: | and other | and other | December 31, 2016 | ||||||||||||||||||||
derivatives(1) | Sundry | derivatives(2) | derivatives | Current assets: Fixed-price contracts and other derivatives(1) | Other assets: Sundry | Current liabilities: Fixed-price contracts and other derivatives(2) | Deferred credits and other liabilities: Fixed-price contracts and other derivatives | |||||||||||||||||
Sempra Energy Consolidated: | Sempra Energy Consolidated: | |||||||||||||||||||||||
Derivatives designated as hedging instruments: | Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Interest rate and foreign exchange instruments(3) | Interest rate and foreign exchange instruments(3) | $ | 5 | $ | ― | $ | (15) | $ | (166) | $ | 7 | $ | 2 | $ | (24 | ) | $ | (228 | ) | |||||
Commodity contracts not subject to rate recovery | — | — | (14 | ) | — | |||||||||||||||||||
Derivatives not designated as hedging instruments: | Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Interest rate and foreign exchange instruments | 3 | ― | ― | ― | ||||||||||||||||||||
Commodity contracts not subject to rate recovery | Commodity contracts not subject to rate recovery | 144 | 20 | (144) | (9) | 248 | 36 | (254 | ) | (28 | ) | |||||||||||||
Associated offsetting commodity contracts | Associated offsetting commodity contracts | (135) | (9) | 135 | 9 | (242 | ) | (27 | ) | 242 | 27 | |||||||||||||
Associated offsetting cash collateral | Associated offsetting cash collateral | ― | ― | 7 | ― | — | (1 | ) | 16 | 1 | ||||||||||||||
Commodity contracts subject to rate recovery | Commodity contracts subject to rate recovery | 23 | 51 | (68) | (61) | 37 | 73 | (57 | ) | (150 | ) | |||||||||||||
Associated offsetting commodity contracts | Associated offsetting commodity contracts | (4) | (1) | 4 | 1 | (9 | ) | (1 | ) | 9 | 1 | |||||||||||||
Associated offsetting cash collateral | Associated offsetting cash collateral | ― | ― | 31 | 24 | — | — | 5 | 13 | |||||||||||||||
Net amounts presented on the balance sheet | Net amounts presented on the balance sheet | 36 | 61 | (50) | (202) | 41 | 82 | (77 | ) | (364 | ) | |||||||||||||
Additional cash collateral for commodity contracts | ||||||||||||||||||||||||
not subject to rate recovery | 20 | ― | ― | ― | ||||||||||||||||||||
Additional cash collateral for commodity contracts | ||||||||||||||||||||||||
subject to rate recovery | 32 | ― | ― | ― | ||||||||||||||||||||
Additional cash collateral for commodity contracts not subject to rate recovery | 10 | — | — | — | ||||||||||||||||||||
Additional cash collateral for commodity contracts subject to rate recovery | 32 | — | — | — | ||||||||||||||||||||
Total(4) | Total(4) | $ | 88 | $ | 61 | $ | (50) | $ | (202) | $ | 83 | $ | 82 | $ | (77 | ) | $ | (364 | ) | |||||
SDG&E: | SDG&E: | |||||||||||||||||||||||
Derivatives designated as hedging instruments: | Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Interest rate instruments(3) | Interest rate instruments(3) | $ | ― | $ | ― | $ | (14) | $ | (25) | $ | — | $ | — | $ | (13 | ) | $ | (12 | ) | |||||
Derivatives not designated as hedging instruments: | Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Commodity contracts not subject to rate recovery | ― | ― | (1) | ― | ||||||||||||||||||||
Associated offsetting cash collateral | ― | ― | 1 | ― | ||||||||||||||||||||
Commodity contracts subject to rate recovery | Commodity contracts subject to rate recovery | 20 | 51 | (65) | (61) | 33 | 73 | (51 | ) | (150 | ) | |||||||||||||
Associated offsetting commodity contracts | Associated offsetting commodity contracts | (2) | (1) | 2 | 1 | (6 | ) | (1 | ) | 6 | 1 | |||||||||||||
Associated offsetting cash collateral | Associated offsetting cash collateral | ― | ― | 31 | 24 | — | — | 3 | 13 | |||||||||||||||
Net amounts presented on the balance sheet | Net amounts presented on the balance sheet | 18 | 50 | (46) | (61) | 27 | 72 | (55 | ) | (148 | ) | |||||||||||||
Additional cash collateral for commodity contracts | ||||||||||||||||||||||||
not subject to rate recovery | 2 | ― | ― | ― | ||||||||||||||||||||
Additional cash collateral for commodity contracts | ||||||||||||||||||||||||
subject to rate recovery | 30 | ― | ― | ― | ||||||||||||||||||||
Additional cash collateral for commodity contracts not subject to rate recovery | 1 | — | — | — | ||||||||||||||||||||
Additional cash collateral for commodity contracts subject to rate recovery | 30 | — | — | — | ||||||||||||||||||||
Total(4) | Total(4) | $ | 50 | $ | 50 | $ | (46) | $ | (61) | $ | 58 | $ | 72 | $ | (55 | ) | $ | (148 | ) | |||||
SoCalGas: | SoCalGas: | |||||||||||||||||||||||
Derivatives not designated as hedging instruments: | Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Commodity contracts not subject to rate recovery | $ | ― | $ | ― | $ | (1) | $ | ― | ||||||||||||||||
Associated offsetting cash collateral | ― | ― | 1 | ― | ||||||||||||||||||||
Commodity contracts subject to rate recovery | Commodity contracts subject to rate recovery | 3 | ― | (3) | ― | $ | 4 | $ | — | $ | (6 | ) | $ | — | ||||||||||
Associated offsetting commodity contracts | Associated offsetting commodity contracts | (2) | ― | 2 | ― | (3 | ) | — | 3 | — | ||||||||||||||
Associated offsetting cash collateral | — | — | 2 | — | ||||||||||||||||||||
Net amounts presented on the balance sheet | Net amounts presented on the balance sheet | 1 | ― | (1) | ― | 1 | — | (1 | ) | — | ||||||||||||||
Additional cash collateral for commodity contracts | ||||||||||||||||||||||||
not subject to rate recovery | 1 | ― | ― | ― | ||||||||||||||||||||
Additional cash collateral for commodity contracts | ||||||||||||||||||||||||
subject to rate recovery | 2 | ― | ― | ― | ||||||||||||||||||||
Additional cash collateral for commodity contracts not subject to rate recovery | 1 | — | — | — | ||||||||||||||||||||
Additional cash collateral for commodity contracts subject to rate recovery | 2 | — | — | — | ||||||||||||||||||||
Total | Total | $ | 4 | $ | ― | $ | (1) | $ | ― | $ | 4 | $ | — | $ | (1 | ) | $ | — | ||||||
(1) | Included in Current Assets: Other for SoCalGas. | |||||||||||||||||||||||
(2) | Included in Current Liabilities: Other for SoCalGas. | |||||||||||||||||||||||
(3) | Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE. | |||||||||||||||||||||||
(4) | Normal purchase contracts previously measured at fair value are excluded. |
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(Dollars in millions) | |||||||||
December 31, 2015 | |||||||||
Deferred | |||||||||
credits | |||||||||
Current | Current | and other | |||||||
assets: | liabilities: | liabilities: | |||||||
Fixed-price | Fixed-price | Fixed-price | |||||||
contracts | Other | contracts | contracts | ||||||
and other | assets: | and other | and other | ||||||
derivatives(1) | Sundry | derivatives(2) | derivatives | ||||||
Sempra Energy Consolidated: | |||||||||
Derivatives designated as hedging instruments: | |||||||||
Interest rate and foreign exchange instruments(3) | $ | 4 | $ | 1 | $ | (15) | $ | (156) | |
Commodity contracts not subject to rate recovery | 13 | ― | ― | ― | |||||
Derivatives not designated as hedging instruments: | |||||||||
Commodity contracts not subject to rate recovery | 245 | 32 | (239) | (21) | |||||
Associated offsetting commodity contracts | (232) | (20) | 232 | 20 | |||||
Associated offsetting cash collateral | (6) | ― | 4 | ― | |||||
Commodity contracts subject to rate recovery | 28 | 49 | (61) | (64) | |||||
Associated offsetting commodity contracts | (2) | (2) | 2 | 2 | |||||
Associated offsetting cash collateral | ― | ― | 28 | 26 | |||||
Net amounts presented on the balance sheet | 50 | 60 | (49) | (193) | |||||
Additional cash collateral for commodity contracts | |||||||||
not subject to rate recovery | 2 | ― | ― | ― | |||||
Additional cash collateral for commodity contracts | |||||||||
subject to rate recovery | 28 | ― | ― | ― | |||||
Total(4) | $ | 80 | $ | 60 | $ | (49) | $ | (193) | |
SDG&E: | |||||||||
Derivatives designated as hedging instruments: | |||||||||
Interest rate instruments(3) | $ | ― | $ | ― | $ | (14) | $ | (23) | |
Derivatives not designated as hedging instruments: | |||||||||
Commodity contracts not subject to rate recovery | ― | ― | (1) | ― | |||||
Associated offsetting cash collateral | ― | ― | 1 | ― | |||||
Commodity contracts subject to rate recovery | 27 | 49 | (60) | (64) | |||||
Associated offsetting commodity contracts | (2) | (2) | 2 | 2 | |||||
Associated offsetting cash collateral | ― | ― | 28 | 26 | |||||
Net amounts presented on the balance sheet | 25 | 47 | (44) | (59) | |||||
Additional cash collateral for commodity contracts | |||||||||
not subject to rate recovery | 1 | ― | ― | ― | |||||
Additional cash collateral for commodity contracts | |||||||||
subject to rate recovery | 27 | ― | ― | ― | |||||
Total(4) | $ | 53 | $ | 47 | $ | (44) | $ | (59) | |
SoCalGas: | |||||||||
Derivatives not designated as hedging instruments: | |||||||||
Commodity contracts not subject to rate recovery | $ | ― | $ | ― | $ | (1) | $ | ― | |
Associated offsetting cash collateral | ― | ― | 1 | ― | |||||
Commodity contracts subject to rate recovery | 1 | ― | (1) | ― | |||||
Net amounts presented on the balance sheet | 1 | ― | (1) | ― | |||||
Additional cash collateral for commodity contracts | |||||||||
subject to rate recovery | 1 | ― | ― | ― | |||||
Total | $ | 2 | $ | ― | $ | (1) | $ | ― | |
(1) | Included in Current Assets: Other for SoCalGas. | ||||||||
(2) | Included in Current Liabilities: Other for SoCalGas. | ||||||||
(3) | Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE. | ||||||||
(4) | Normal purchase contracts previously measured at fair value are excluded. |
FAIR VALUE HEDGE IMPACTS | |||||
(Dollars in millions) | |||||
Pretax gain on derivatives recognized in earnings | |||||
Three months ended | |||||
Location | March 31, 2016 | ||||
Sempra Energy Consolidated: | |||||
Interest rate instruments(1) | Interest Expense | $ | 2 | ||
(1) | There was no hedge ineffectiveness in the three months ended March 31, 2016. All other changes in the fair value of the interest rate swap agreements are exactly offset by changes in the fair value of the underlying long-term debt and recorded in Other Income, Net. |
CASH FLOW HEDGE IMPACTS | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
Pretax gain (loss) recognized in OCI | Pretax gain (loss) reclassified from AOCI into earnings | ||||||||||||||||
Three months ended March 31, | Three months ended March 31, | ||||||||||||||||
2017 | 2016 | Location | 2017 | 2016 | |||||||||||||
Sempra Energy Consolidated: | |||||||||||||||||
Interest rate and foreign exchange instruments(1) | $ | 16 | $ | (11 | ) | Interest Expense | $ | 3 | $ | (4 | ) | ||||||
Interest rate instruments | (5 | ) | (137 | ) | Equity Earnings (Losses), Before Income Tax | (2 | ) | (3 | ) | ||||||||
Interest rate and foreign exchange instruments | (9 | ) | (18 | ) | Equity (Losses) Earnings, Net of Income Tax | (2 | ) | (1 | ) | ||||||||
Foreign exchange instruments | (9 | ) | — | Revenues: Energy- Related Businesses | (2 | ) | — | ||||||||||
Commodity contracts not subject to rate recovery | 3 | 1 | Revenues: Energy- Related Businesses | (9 | ) | 7 | |||||||||||
Total(2) | $ | (4 | ) | $ | (165 | ) | $ | (12 | ) | $ | (1 | ) | |||||
SDG&E: | |||||||||||||||||
Interest rate instruments(1)(2) | $ | — | $ | (5 | ) | Interest Expense | $ | (3 | ) | $ | (3 | ) |
(1) | Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE. |
(2) | There was negligible hedge ineffectiveness related to these cash flow hedges in the three months ended March 31, 2017 and 2016. |
FAIR VALUE HEDGE IMPACTS | ||||||
(Dollars in millions) | ||||||
Pretax gain on derivatives | ||||||
recognized in earnings | ||||||
Three months ended March 31, | ||||||
Location | 2016 | 2015 | ||||
Sempra Energy Consolidated: | ||||||
Interest rate instruments | Interest Expense | $ | 2 | $ | 2 | |
Interest rate instruments | Other Income, Net | ― | 1 | |||
Total(1) | $ | 2 | $ | 3 | ||
(1) | There was no hedge ineffectiveness in either the three months ended March 31, 2016 or 2015. All other changes in the fair values of the interest rate swap agreements are exactly offset by changes in the fair value of the underlying long-term debt and recorded in Other Income, Net. |
CASH FLOW HEDGE IMPACTS | |||||||||||
(Dollars in millions) | |||||||||||
Pretax (loss) gain | Pretax (loss) gain reclassified | ||||||||||
recognized in OCI | from AOCI into earnings | ||||||||||
(effective portion) | (effective portion) | ||||||||||
Three months ended March 31, | Three months ended March 31, | ||||||||||
2016 | 2015 | Location | 2016 | 2015 | |||||||
Sempra Energy Consolidated: | |||||||||||
Interest rate and foreign | |||||||||||
exchange instruments(1) | $ | (11) | $ | (18) | Interest Expense | $ | (4) | $ | (6) | ||
Equity (Losses) Earnings, | |||||||||||
Interest rate instruments | (137) | (78) | Before Income Tax | (3) | (3) | ||||||
Interest rate and foreign | Equity Earnings, | ||||||||||
exchange instruments | (18) | ― | Net of Income Tax | (1) | ― | ||||||
Commodity contracts not | Revenues: Energy-Related | ||||||||||
subject to rate recovery | 1 | (1) | Businesses | 7 | 7 | ||||||
Total(2) | $ | (165) | $ | (97) | $ | (1) | $ | (2) | |||
SDG&E: | |||||||||||
Interest rate instruments(1)(2) | $ | (5) | $ | (5) | Interest Expense | $ | (3) | $ | (3) | ||
(1) | Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE. | ||||||||||
(2) | Amounts include negligible hedge ineffectiveness in the three months ended March 31, 2016 and 2015. |
UNDESIGNATED DERIVATIVE IMPACTS | ||||||||
(Dollars in millions) | ||||||||
Pretax gain (loss) on derivatives recognized in earnings | ||||||||
Three months ended March 31, | ||||||||
Location | 2017 | 2016 | ||||||
Sempra Energy Consolidated: | ||||||||
Foreign exchange instruments | Other Income, Net | $ | 65 | $ | 3 | |||
Foreign exchange instruments | Equity (Losses) Earnings, Net of Income Tax | — | 2 | |||||
Commodity contracts not subject to rate recovery | Revenues: Energy-Related Businesses | 14 | (1 | ) | ||||
Commodity contracts not subject to rate recovery | Operation and Maintenance | (1 | ) | — | ||||
Commodity contracts subject to rate recovery | Cost of Electric Fuel and Purchased Power | (29 | ) | (12 | ) | |||
Commodity contracts subject to rate recovery | Cost of Natural Gas | — | (1 | ) | ||||
Total | $ | 49 | $ | (9 | ) | |||
SDG&E: | ||||||||
Commodity contracts subject to rate recovery | Cost of Electric Fuel and Purchased Power | $ | (29 | ) | $ | (12 | ) | |
SoCalGas: | ||||||||
Commodity contracts not subject to rate recovery | Operation and Maintenance | $ | (1 | ) | $ | — | ||
Commodity contracts subject to rate recovery | Cost of Natural Gas | — | (1 | ) | ||||
Total | $ | (1 | ) | $ | (1 | ) |
UNDESIGNATED DERIVATIVE IMPACTS | ||||||
(Dollars in millions) | ||||||
Pretax gain (loss) on derivatives | ||||||
recognized in earnings | ||||||
Three months ended March 31, | ||||||
Location | 2016 | 2015 | ||||
Sempra Energy Consolidated: | ||||||
Foreign exchange instruments | Other Income, Net | $ | 3 | $ | ― | |
Foreign exchange instruments | Equity Earnings, | |||||
Net of Income Tax | 2 | (1) | ||||
Commodity contracts not subject | Revenues: Energy-Related | |||||
to rate recovery | Businesses | (1) | 3 | |||
Commodity contracts subject | Cost of Electric Fuel | |||||
to rate recovery | and Purchased Power | (12) | (20) | |||
Commodity contracts subject | ||||||
to rate recovery | Cost of Natural Gas | (1) | 1 | |||
Total | $ | (9) | $ | (17) | ||
SDG&E: | ||||||
Commodity contracts subject | Cost of Electric Fuel | |||||
to rate recovery | and Purchased Power | $ | (12) | $ | (20) | |
SoCalGas: | ||||||
Commodity contracts subject | ||||||
to rate recovery | Cost of Natural Gas | $ | (1) | $ | 1 |
▪ | Nuclear decommissioning trusts reflect the assets of SDG&E’s nuclear decommissioning trusts, 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. |
▪ | For commodity contracts, interest rate derivatives and foreign exchange instruments, we primarily use a market approach with market participant assumptions to value these derivatives. Market participant assumptions include those about risk, and the risk inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable. We have exchange-traded derivatives that are valued based on quoted prices in active markets for the identical instruments (Level 1). We also may have other commodity derivatives that are valued using industry standard models that consider quoted forward prices for commodities, time value, current market and contractual prices for the underlying instruments, volatility factors, and other relevant economic measures (Level 2). Level 3 recurring items relate to CRRs and long-term, fixed-price electricity positions at SDG&E, as we discuss below |
▪ | 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 March 31, |
RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED | |||||||||||
(Dollars in millions) | |||||||||||
Fair value at March 31, 2016 | |||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||
Assets: | |||||||||||
Nuclear decommissioning trusts: | |||||||||||
Equity securities | $ | 623 | $ | ― | $ | ― | $ | ― | $ | 623 | |
Debt securities: | |||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||
U.S. government corporations and agencies | 62 | 43 | ― | ― | 105 | ||||||
Municipal bonds | ― | 156 | ― | ― | 156 | ||||||
Other securities | ― | 190 | ― | ― | 190 | ||||||
Total debt securities | 62 | 389 | ― | ― | 451 | ||||||
Total nuclear decommissioning trusts(2) | 685 | 389 | ― | ― | 1,074 | ||||||
Interest rate and foreign exchange instruments | ― | 8 | ― | ― | 8 | ||||||
Commodity contracts not subject to rate recovery | 1 | 19 | ― | 20 | 40 | ||||||
Commodity contracts subject to rate recovery | ― | 1 | 68 | 32 | 101 | ||||||
Total | $ | 686 | $ | 417 | $ | 68 | $ | 52 | $ | 1,223 | |
Liabilities: | |||||||||||
Interest rate and foreign exchange instruments | $ | ― | $ | 181 | $ | ― | $ | ― | $ | 181 | |
Commodity contracts not subject to rate recovery | 3 | 6 | ― | (7) | 2 | ||||||
Commodity contracts subject to rate recovery | ― | 67 | 57 | (55) | 69 | ||||||
Total | $ | 3 | $ | 254 | $ | 57 | $ | (62) | $ | 252 | |
Fair value at December 31, 2015 | |||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||
Assets: | |||||||||||
Nuclear decommissioning trusts: | |||||||||||
Equity securities | $ | 619 | $ | ― | $ | ― | $ | ― | $ | 619 | |
Debt securities: | |||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||
U.S. government corporations and agencies | 47 | 44 | ― | ― | 91 | ||||||
Municipal bonds | ― | 156 | ― | ― | 156 | ||||||
Other securities | ― | 182 | ― | ― | 182 | ||||||
Total debt securities | 47 | 382 | ― | ― | 429 | ||||||
Total nuclear decommissioning trusts(2) | 666 | 382 | ― | ― | 1,048 | ||||||
Interest rate and foreign exchange instruments | ― | 5 | ― | ― | 5 | ||||||
Commodity contracts not subject to rate recovery | 22 | 16 | ― | (4) | 34 | ||||||
Commodity contracts subject to rate recovery | ― | 1 | 72 | 28 | 101 | ||||||
Total | $ | 688 | $ | 404 | $ | 72 | $ | 24 | $ | 1,188 | |
Liabilities: | |||||||||||
Interest rate and foreign exchange instruments | $ | ― | $ | 171 | $ | ― | $ | ― | $ | 171 | |
Commodity contracts not subject to rate recovery | 5 | 3 | ― | (4) | 4 | ||||||
Commodity contracts subject to rate recovery | ― | 68 | 53 | (54) | 67 | ||||||
Total | $ | 5 | $ | 242 | $ | 53 | $ | (58) | $ | 242 | |
(1) | Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset. | ||||||||||
(2) | Excludes cash balances and cash equivalents. |
RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Fair value at March 31, 2017 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Nuclear decommissioning trusts: | |||||||||||||||||||
Equity securities | $ | 606 | $ | 5 | $ | — | $ | — | $ | 611 | |||||||||
Debt securities: | |||||||||||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||||||||||
U.S. government corporations and agencies | 40 | 11 | — | — | 51 | ||||||||||||||
Municipal bonds | — | 221 | — | — | 221 | ||||||||||||||
Other securities | — | 167 | — | — | 167 | ||||||||||||||
Total debt securities | 40 | 399 | — | — | 439 | ||||||||||||||
Total nuclear decommissioning trusts(2) | 646 | 404 | — | — | 1,050 | ||||||||||||||
Interest rate and foreign exchange instruments | — | 99 | — | — | 99 | ||||||||||||||
Commodity contracts not subject to rate recovery | — | 23 | — | 9 | 32 | ||||||||||||||
Commodity contracts subject to rate recovery | — | 2 | 90 | 20 | 112 | ||||||||||||||
Total | $ | 646 | $ | 528 | $ | 90 | $ | 29 | $ | 1,293 | |||||||||
Liabilities: | |||||||||||||||||||
Interest rate and foreign exchange instruments | $ | — | $ | 211 | $ | — | $ | — | $ | 211 | |||||||||
Commodity contracts not subject to rate recovery | — | 6 | — | — | 6 | ||||||||||||||
Commodity contracts subject to rate recovery | 25 | 8 | 186 | (24 | ) | 195 | |||||||||||||
Total | $ | 25 | $ | 225 | $ | 186 | $ | (24 | ) | $ | 412 | ||||||||
Fair value at December 31, 2016 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Nuclear decommissioning trusts: | |||||||||||||||||||
Equity securities | $ | 508 | $ | — | $ | — | $ | — | $ | 508 | |||||||||
Debt securities: | |||||||||||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||||||||||
U.S. government corporations and agencies | 36 | 16 | — | — | 52 | ||||||||||||||
Municipal bonds | — | 206 | — | — | 206 | ||||||||||||||
Other securities | — | 141 | — | — | 141 | ||||||||||||||
Total debt securities | 36 | 363 | — | — | 399 | ||||||||||||||
Total nuclear decommissioning trusts(2) | 544 | 363 | — | — | 907 | ||||||||||||||
Interest rate and foreign exchange instruments | — | 9 | — | — | 9 | ||||||||||||||
Commodity contracts not subject to rate recovery | — | 15 | — | 9 | 24 | ||||||||||||||
Commodity contracts subject to rate recovery | 1 | 3 | 96 | 32 | 132 | ||||||||||||||
Total | $ | 545 | $ | 390 | $ | 96 | $ | 41 | $ | 1,072 | |||||||||
Liabilities: | |||||||||||||||||||
Interest rate and foreign exchange instruments | $ | — | $ | 252 | $ | — | $ | — | $ | 252 | |||||||||
Commodity contracts not subject to rate recovery | 16 | 11 | — | (17 | ) | 10 | |||||||||||||
Commodity contracts subject to rate recovery | 19 | 8 | 170 | (18 | ) | 179 | |||||||||||||
Total | $ | 35 | $ | 271 | $ | 170 | $ | (35 | ) | $ | 441 |
(1) | Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset. |
(2) | Excludes cash balances and cash equivalents. |
RECURRING FAIR VALUE MEASURES – SDG&E | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Fair value at March 31, 2017 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Nuclear decommissioning trusts: | |||||||||||||||||||
Equity securities | $ | 606 | $ | 5 | $ | — | $ | — | $ | 611 | |||||||||
Debt securities: | |||||||||||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||||||||||
U.S. government corporations and agencies | 40 | 11 | — | — | 51 | ||||||||||||||
Municipal bonds | — | 221 | — | — | 221 | ||||||||||||||
Other securities | — | 167 | — | — | 167 | ||||||||||||||
Total debt securities | 40 | 399 | — | — | 439 | ||||||||||||||
Total nuclear decommissioning trusts(2) | 646 | 404 | — | — | 1,050 | ||||||||||||||
Commodity contracts not subject to rate recovery | — | — | — | 1 | 1 | ||||||||||||||
Commodity contracts subject to rate recovery | — | — | 90 | 19 | 109 | ||||||||||||||
Total | $ | 646 | $ | 404 | $ | 90 | $ | 20 | $ | 1,160 | |||||||||
Liabilities: | |||||||||||||||||||
Interest rate instruments | $ | — | $ | 22 | $ | — | $ | — | $ | 22 | |||||||||
Commodity contracts subject to rate recovery | 25 | 7 | 186 | (24 | ) | 194 | |||||||||||||
Total | $ | 25 | $ | 29 | $ | 186 | $ | (24 | ) | $ | 216 | ||||||||
Fair value at December 31, 2016 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Nuclear decommissioning trusts: | |||||||||||||||||||
Equity securities | $ | 508 | $ | — | �� | $ | — | $ | — | $ | 508 | ||||||||
Debt securities: | |||||||||||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||||||||||
U.S. government corporations and agencies | 36 | 16 | — | — | 52 | ||||||||||||||
Municipal bonds | — | 206 | — | — | 206 | ||||||||||||||
Other securities | — | 141 | — | — | 141 | ||||||||||||||
Total debt securities | 36 | 363 | — | — | 399 | ||||||||||||||
Total nuclear decommissioning trusts(2) | 544 | 363 | — | — | 907 | ||||||||||||||
Commodity contracts not subject to rate recovery | — | — | — | 1 | 1 | ||||||||||||||
Commodity contracts subject to rate recovery | 1 | 2 | 96 | 30 | 129 | ||||||||||||||
Total | $ | 545 | $ | 365 | $ | 96 | $ | 31 | $ | 1,037 | |||||||||
Liabilities: | |||||||||||||||||||
Interest rate instruments | $ | — | $ | 25 | $ | — | $ | — | $ | 25 | |||||||||
Commodity contracts subject to rate recovery | 17 | 7 | 170 | (16 | ) | 178 | |||||||||||||
Total | $ | 17 | $ | 32 | $ | 170 | $ | (16 | ) | $ | 203 |
(1) | Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset. |
(2) | Excludes cash balances and cash equivalents. |
RECURRING FAIR VALUE MEASURES – SDG&E | |||||||||||
(Dollars in millions) | |||||||||||
Fair value at March 31, 2016 | |||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||
Assets: | |||||||||||
Nuclear decommissioning trusts: | |||||||||||
Equity securities | $ | 623 | $ | ― | $ | ― | $ | ― | $ | 623 | |
Debt securities: | |||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||
U.S. government corporations and agencies | 62 | 43 | ― | ― | 105 | ||||||
Municipal bonds | ― | 156 | ― | ― | 156 | ||||||
Other securities | ― | 190 | ― | ― | 190 | ||||||
Total debt securities | 62 | 389 | ― | ― | 451 | ||||||
Total nuclear decommissioning trusts(2) | 685 | 389 | ― | ― | 1,074 | ||||||
Commodity contracts not subject to rate recovery | ― | ― | ― | 2 | 2 | ||||||
Commodity contracts subject to rate recovery | ― | ― | 68 | 30 | 98 | ||||||
Total | $ | 685 | $ | 389 | $ | 68 | $ | 32 | $ | 1,174 | |
Liabilities: | |||||||||||
Interest rate instruments | $ | ― | $ | 39 | $ | ― | $ | ― | $ | 39 | |
Commodity contracts not subject to rate recovery | 1 | ― | ― | (1) | ― | ||||||
Commodity contracts subject to rate recovery | ― | 66 | 57 | (55) | 68 | ||||||
Total | $ | 1 | $ | 105 | $ | 57 | $ | (56) | $ | 107 | |
Fair value at December 31, 2015 | |||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||
Assets: | |||||||||||
Nuclear decommissioning trusts: | |||||||||||
Equity securities | $ | 619 | $ | ― | $ | ― | $ | ― | $ | 619 | |
Debt securities: | |||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||
U.S. government corporations and agencies | 47 | 44 | ― | ― | 91 | ||||||
Municipal bonds | ― | 156 | ― | ― | 156 | ||||||
Other securities | ― | 182 | ― | ― | 182 | ||||||
Total debt securities | 47 | 382 | ― | ― | 429 | ||||||
Total nuclear decommissioning trusts(2) | 666 | 382 | ― | ― | 1,048 | ||||||
Commodity contracts not subject to rate recovery | ― | ― | ― | 1 | 1 | ||||||
Commodity contracts subject to rate recovery | ― | ― | 72 | 27 | 99 | ||||||
Total | $ | 666 | $ | 382 | $ | 72 | $ | 28 | $ | 1,148 | |
Liabilities: | |||||||||||
Interest rate instruments | $ | ― | $ | 37 | $ | ― | $ | ― | $ | 37 | |
Commodity contracts not subject to rate recovery | 1 | ― | ― | (1) | ― | ||||||
Commodity contracts subject to rate recovery | ― | 67 | 53 | (54) | 66 | ||||||
Total | $ | 1 | $ | 104 | $ | 53 | $ | (55) | $ | 103 | |
(1) | Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset. | ||||||||||
(2) | Excludes cash balances and cash equivalents. |
RECURRING FAIR VALUE MEASURES – SOCALGAS | |||||||||||
(Dollars in millions) | |||||||||||
Fair value at March 31, 2016 | |||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||
Assets: | |||||||||||
Commodity contracts not subject to rate recovery | $ | ― | $ | ― | $ | ― | $ | 1 | $ | 1 | |
Commodity contracts subject to rate recovery | ― | 1 | ― | 2 | 3 | ||||||
Total | $ | ― | $ | 1 | $ | ― | $ | 3 | $ | 4 | |
Liabilities: | |||||||||||
Commodity contracts not subject to rate recovery | $ | 1 | $ | ― | $ | ― | $ | (1) | $ | ― | |
Commodity contracts subject to rate recovery | ― | 1 | ― | ― | 1 | ||||||
Total | $ | 1 | $ | 1 | $ | ― | $ | (1) | $ | 1 | |
Fair value at December 31, 2015 | |||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||
Assets: | |||||||||||
Commodity contracts subject to rate recovery | $ | ― | $ | 1 | $ | ― | $ | 1 | $ | 2 | |
Total | $ | ― | $ | 1 | $ | ― | $ | 1 | $ | 2 | |
Liabilities: | |||||||||||
Commodity contracts not subject to rate recovery | $ | 1 | $ | ― | $ | ― | $ | (1) | $ | ― | |
Commodity contracts subject to rate recovery | ― | 1 | ― | ― | 1 | ||||||
Total | $ | 1 | $ | 1 | $ | ― | $ | (1) | $ | 1 | |
(1) | Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset. |
RECURRING FAIR VALUE MEASURES – SOCALGAS | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Fair value at March 31, 2017 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Commodity contracts subject to rate recovery | $ | — | $ | 2 | $ | — | $ | 1 | $ | 3 | |||||||||
Total | $ | — | $ | 2 | $ | — | $ | 1 | $ | 3 | |||||||||
Liabilities: | |||||||||||||||||||
Commodity contracts subject to rate recovery | $ | — | $ | 1 | $ | — | $ | — | $ | 1 | |||||||||
Total | $ | — | $ | 1 | $ | — | $ | — | $ | 1 | |||||||||
Fair value at December 31, 2016 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Netting(1) | Total | |||||||||||||||
Assets: | |||||||||||||||||||
Commodity contracts not subject to rate recovery | $ | — | $ | — | $ | — | $ | 1 | $ | 1 | |||||||||
Commodity contracts subject to rate recovery | — | 1 | — | 2 | 3 | ||||||||||||||
Total | $ | — | $ | 1 | $ | — | $ | 3 | $ | 4 | |||||||||
Liabilities: | |||||||||||||||||||
Commodity contracts subject to rate recovery | $ | 2 | $ | 1 | $ | — | $ | (2 | ) | $ | 1 | ||||||||
Total | $ | 2 | $ | 1 | $ | — | $ | (2 | ) | $ | 1 |
(1) | Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset. |
LEVEL 3 RECONCILIATIONS | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Balance at January 1 | $ | (74 | ) | $ | 19 | ||
Realized and unrealized losses | (13 | ) | (1 | ) | |||
Settlements | (9 | ) | (7 | ) | |||
Balance at March 31 | $ | (96 | ) | $ | 11 | ||
Change in unrealized losses relating to | |||||||
instruments still held at March 31 | $ | (16 | ) | $ | (1 | ) |
LEVEL 3 RECONCILIATIONS | ||||
(Dollars in millions) | ||||
Three months ended March 31, | ||||
2016 | 2015 | |||
Balance as of January 1 | $ | 19 | $ | 107 |
Realized and unrealized (losses) gains | (1) | 6 | ||
Settlements | (7) | (11) | ||
Balance as of March 31 | $ | 11 | $ | 102 |
Change in unrealized (losses) gains relating to | ||||
instruments still held at March 31 | $ | (1) | $ | 1 |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
March 31, 2017 | |||||||||||||||||||
Carrying amount | Fair value | ||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Sempra Energy Consolidated: | |||||||||||||||||||
Long-term amounts due from unconsolidated affiliates(1) | $ | 168 | $ | — | $ | 78 | $ | 86 | $ | 164 | |||||||||
Total long-term debt(2)(3) | 14,971 | — | 15,123 | 496 | 15,619 | ||||||||||||||
SDG&E: | |||||||||||||||||||
Total long-term debt(3)(4) | $ | 4,493 | $ | — | $ | 4,546 | $ | 302 | $ | 4,848 | |||||||||
SoCalGas: | |||||||||||||||||||
Total long-term debt(5) | $ | 3,009 | $ | — | $ | 3,121 | $ | — | $ | 3,121 | |||||||||
December 31, 2016 | |||||||||||||||||||
Carrying amount | Fair value | ||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Sempra Energy Consolidated: | |||||||||||||||||||
Long-term amounts due from unconsolidated affiliates(1) | $ | 184 | $ | — | $ | 91 | $ | 84 | $ | 175 | |||||||||
Total long-term debt(2)(3) | 15,068 | — | 15,455 | 492 | 15,947 | ||||||||||||||
SDG&E: | |||||||||||||||||||
Total long-term debt(3)(4) | $ | 4,654 | $ | — | $ | 4,727 | $ | 305 | $ | 5,032 | |||||||||
SoCalGas: | |||||||||||||||||||
Total long-term debt(5) | $ | 3,009 | $ | — | $ | 3,131 | $ | — | $ | 3,131 |
(1) | Excluding accumulated interest outstanding of $19 million and $17 million at March 31, 2017 and December 31, 2016, respectively. |
(2) | Before reductions for unamortized discount (net of premium) and debt issuance costs of $105 million and $109 million at March 31, 2017 and December 31, 2016, respectively, and excluding build-to-suit and capital lease obligations of $382 million and $383 million at March 31, 2017 and December 31, 2016, respectively. We discuss our long-term debt in Note 6 above and in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report. |
(3) | Level 3 instruments include $302 million and $305 million at March 31, 2017 and December 31, 2016, respectively, related to Otay Mesa VIE. |
(4) | Before reductions for unamortized discount and debt issuance costs of $43 million and $45 million at March��31, 2017 and December 31, 2016, respectively, and excluding capital lease obligations of $239 million and $240 million at March 31, 2017 and December 31, 2016, respectively. |
(5) | Before reductions for unamortized discount and debt issuance costs of $26 million and $27 million at March 31, 2017 and December 31, 2016, respectively. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||
(Dollars in millions) | ||||||||||||
March 31, 2016 | ||||||||||||
Carrying | Fair value | |||||||||||
amount | Level 1 | Level 2 | Level 3 | Total | ||||||||
Sempra Energy Consolidated: | ||||||||||||
Noncurrent due from unconsolidated affiliates(1) | $ | 173 | $ | ― | $ | 92 | $ | 72 | $ | 164 | ||
Total long-term debt(2)(3) | 13,761 | ― | 14,363 | 652 | 15,015 | |||||||
Preferred stock of subsidiary | 20 | ― | 23 | ― | 23 | |||||||
SDG&E: | ||||||||||||
Total long-term debt(3)(4) | $ | 4,285 | $ | ― | $ | 4,517 | $ | 312 | $ | 4,829 | ||
SoCalGas: | ||||||||||||
Total long-term debt(5) | $ | 2,513 | $ | ― | $ | 2,731 | $ | ― | $ | 2,731 | ||
Preferred stock | 22 | ― | 25 | ― | 25 | |||||||
December 31, 2015 | ||||||||||||
Carrying | Fair value | |||||||||||
amount | Level 1 | Level 2 | Level 3 | Total | ||||||||
Sempra Energy Consolidated: | ||||||||||||
Noncurrent due from unconsolidated affiliates(1) | $ | 175 | $ | ― | $ | 97 | $ | 69 | $ | 166 | ||
Total long-term debt(2)(3) | 13,761 | ― | 13,985 | 648 | 14,633 | |||||||
Preferred stock of subsidiary | 20 | ― | 23 | ― | 23 | |||||||
SDG&E: | ||||||||||||
Total long-term debt(3)(4) | $ | 4,304 | $ | ― | $ | 4,355 | $ | 315 | $ | 4,670 | ||
SoCalGas: | ||||||||||||
Total long-term debt(5) | $ | 2,513 | $ | ― | $ | 2,621 | $ | ― | $ | 2,621 | ||
Preferred stock | 22 | ― | 25 | ― | 25 | |||||||
(1) | Excluding accumulated interest outstanding of $13 million and $11 million at March 31, 2016 and December 31, 2015, respectively. | |||||||||||
(2) | Before reductions for unamortized discount (net of premium) and debt issuance costs of $106 million and $107 million at March 31, 2016 and December 31, 2015, respectively, and excluding build-to-suit and capital lease obligations of $386 million and $387 million at March 31, 2016 and December 31, 2015, respectively. We discuss our long-term debt in Note 6 above and in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report. | |||||||||||
(3) | Level 3 instruments include $312 million and $315 million at March 31, 2016 and December 31, 2015, respectively, related to Otay Mesa VIE. | |||||||||||
(4) | Before reductions for unamortized discount and debt issuance costs of $43 million at March 31, 2016 and December 31, 2015, and excluding capital lease obligations of $243 million and $244 million at March 31, 2016 and December 31, 2015, respectively. | |||||||||||
(5) | Before reductions for unamortized discount and debt issuance costs of $24 million at March 31, 2016 and December 31, 2015, and excluding capital lease obligations of $1 million at March 31, 2016 and December 31, 2015. |
NON-RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED | |||||||||
(Dollars in millions) | |||||||||
Estimated | Fair | % of | Inputs used to | ||||||
fair | value | fair value | develop | Range of | |||||
value | Valuation technique | hierarchy | measurement | measurement | inputs | ||||
Investment in | |||||||||
Rockies Express | $ | 440 | (1) | Market approach | Level 2 | 100% | Equity sale price | 100% | |
(1) | At measurement date of March 29, 2016. At March 31, 2016, our investment in Rockies Express had a carrying value of $436 million, reflecting subsequent equity method activity to record a distribution. |
NUCLEAR DECOMMISSIONING TRUSTS | |||||||||||||||
(Dollars in millions) | |||||||||||||||
Cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||
At March 31, 2017: | |||||||||||||||
Debt securities: | |||||||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||||||
U.S. government corporations and agencies(1) | $ | 51 | $ | — | $ | — | $ | 51 | |||||||
Municipal bonds(1) | 216 | 6 | (1 | ) | 221 | ||||||||||
Other securities(2) | 166 | 2 | (1 | ) | 167 | ||||||||||
Total debt securities | 433 | 8 | (2 | ) | 439 | ||||||||||
Equity securities | 255 | 358 | (2 | ) | 611 | ||||||||||
Cash and cash equivalents | 12 | — | — | 12 | |||||||||||
Total | $ | 700 | $ | 366 | $ | (4 | ) | $ | 1,062 | ||||||
At December 31, 2016: | |||||||||||||||
Debt securities: | |||||||||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||||||||
U.S. government corporations and agencies | $ | 52 | $ | — | $ | — | $ | 52 | |||||||
Municipal bonds | 203 | 4 | (1 | ) | 206 | ||||||||||
Other securities | 141 | 2 | (2 | ) | 141 | ||||||||||
Total debt securities | 396 | 6 | (3 | ) | 399 | ||||||||||
Equity securities | 143 | 366 | (1 | ) | 508 | ||||||||||
Cash and cash equivalents | 119 | — | — | 119 | |||||||||||
Total | $ | 658 | $ | 372 | $ | (4 | ) | $ | 1,026 |
(1) | Maturity dates are 2017-2047. |
(2) | Maturity dates are 2017-2066. |
NUCLEAR DECOMMISSIONING TRUSTS | |||||||||
(Dollars in millions) | |||||||||
Gross | Gross | Estimated | |||||||
unrealized | unrealized | fair | |||||||
Cost | gains | losses | value | ||||||
At March 31, 2016: | |||||||||
Debt securities: | |||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||
U.S. government corporations and agencies(1) | $ | 101 | $ | 4 | $ | ― | $ | 105 | |
Municipal bonds(2) | 146 | 10 | ― | 156 | |||||
Other securities(2) | 192 | 6 | (8) | 190 | |||||
Total debt securities | 439 | 20 | (8) | 451 | |||||
Equity securities | 214 | 413 | (4) | 623 | |||||
Cash and cash equivalents | 9 | ― | (1) | 8 | |||||
Total | $ | 662 | $ | 433 | $ | (13) | $ | 1,082 | |
At December 31, 2015: | |||||||||
Debt securities: | |||||||||
Debt securities issued by the U.S. Treasury and other | |||||||||
U.S. government corporations and agencies | $ | 89 | $ | 2 | $ | ― | $ | 91 | |
Municipal bonds | 148 | 8 | ― | 156 | |||||
Other securities | 194 | 1 | (13) | 182 | |||||
Total debt securities | 431 | 11 | (13) | 429 | |||||
Equity securities | 214 | 412 | (7) | 619 | |||||
Cash and cash equivalents | 15 | ― | ― | 15 | |||||
Total | $ | 660 | $ | 423 | $ | (20) | $ | 1,063 | |
(1) | Maturity dates are 2016-2065. | ||||||||
(2) | Maturity dates are 2016-2115. |
SALES OF SECURITIES | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Proceeds from sales(1) | $ | 357 | $ | 93 | |||
Gross realized gains | 45 | 3 | |||||
Gross realized losses | (5 | ) | (8 | ) |
(1) | Excludes securities that are held to maturity. |
SALES OF SECURITIES | |||||
(Dollars in millions) | |||||
Three months ended March 31, | |||||
2016 | 2015 | ||||
Proceeds from sales(1) | $ | 93 | $ | 94 | |
Gross realized gains | 3 | 2 | |||
Gross realized losses | (8) | (4) | |||
(1) | Excludes securities that are held to maturity. |
FUTURE MINIMUM PAYMENTS – POWER PURCHASE AGREEMENT | |||
(Dollars in millions) | |||
2017 | $ | — | |
2018 | 88 | ||
2019 | 105 | ||
2020 | 105 | ||
2021 | 105 | ||
Thereafter | 1,706 | ||
Total minimum lease payments(1) | 2,109 | ||
Less: interest(2) | (1,559 | ) | |
Present value of net minimum lease payments | $ | 550 |
(1) | This amount will be recorded over the life of the lease as Cost of Electric Fuel and Purchased Power on Sempra Energy’s and SDG&E’s Condensed Consolidated Statements of Operations. This expense will receive ratemaking treatment consistent with purchased-power costs, which are recovered in rates. |
(2) | Amount necessary to reduce net minimum lease payments to estimated present value at the inception of the lease. |
▪ | SDG&E provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County. |
▪ | SoCalGas is a natural gas distribution utility, serving customers throughout most of Southern California and part of central California. |
▪ | Sempra South American Utilities develops, owns and operates, or holds interests in, electric transmission, distribution and generation infrastructure in Chile and Peru. |
▪ | Sempra Mexico develops, owns and operates, or holds interests in, natural gas transmission |
▪ | Sempra Renewables develops, owns and operates, or holds interests in, wind and solar energy |
▪ | Sempra |
SEGMENT INFORMATION | SEGMENT INFORMATION | |||||||||||||||
(Dollars in millions) | (Dollars in millions) | (Dollars in millions) | ||||||||||||||
Three months ended March 31, | Three months ended March 31, | |||||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
REVENUES | REVENUES | |||||||||||||||
SDG&E | SDG&E | $ | 991 | 38 | % | $ | 966 | 36 | % | $ | 1,057 | $ | 991 | |||
SoCalGas | SoCalGas | 1,033 | 40 | 1,048 | 39 | 1,241 | 1,033 | |||||||||
Sempra South American Utilities | Sempra South American Utilities | 400 | 15 | 389 | 15 | 412 | 400 | |||||||||
Sempra Mexico | Sempra Mexico | 138 | 5 | 163 | 6 | 264 | 138 | |||||||||
Sempra Renewables | Sempra Renewables | 7 | ― | 8 | ― | 22 | 7 | |||||||||
Sempra Natural Gas | 130 | 5 | 197 | 7 | ||||||||||||
Sempra LNG & Midstream | 132 | 130 | ||||||||||||||
Intersegment revenues(1) | Intersegment revenues(1) | (77) | (3) | (89) | (3) | (97 | ) | (77 | ) | |||||||
Total | Total | $ | 2,622 | 100 | % | $ | 2,682 | 100 | % | $ | 3,031 | $ | 2,622 | |||
INTEREST EXPENSE | INTEREST EXPENSE | |||||||||||||||
SDG&E | SDG&E | $ | 48 | $ | 52 | $ | 49 | $ | 48 | |||||||
SoCalGas | SoCalGas | 22 | 19 | 25 | 22 | |||||||||||
Sempra South American Utilities | Sempra South American Utilities | 9 | 5 | 9 | 9 | |||||||||||
Sempra Mexico | Sempra Mexico | 4 | 5 | 32 | 4 | |||||||||||
Sempra Renewables | Sempra Renewables | ― | 1 | 4 | — | |||||||||||
Sempra Natural Gas | 12 | 21 | ||||||||||||||
Sempra LNG & Midstream | 11 | 12 | ||||||||||||||
All other | All other | 72 | 63 | 68 | 72 | |||||||||||
Intercompany eliminations | Intercompany eliminations | (24) | (32) | (29 | ) | (24 | ) | |||||||||
Total | Total | $ | 143 | $ | 134 | $ | 169 | $ | 143 | |||||||
INTEREST INCOME | INTEREST INCOME | |||||||||||||||
Sempra South American Utilities | Sempra South American Utilities | $ | 5 | $ | 4 | $ | 5 | $ | 5 | |||||||
Sempra Mexico | Sempra Mexico | 2 | 2 | 2 | 2 | |||||||||||
Sempra Renewables | Sempra Renewables | 1 | ― | 1 | 1 | |||||||||||
Sempra Natural Gas | 16 | 19 | ||||||||||||||
Sempra LNG & Midstream | 17 | 16 | ||||||||||||||
Intercompany eliminations | Intercompany eliminations | (18) | (18) | (19 | ) | (18 | ) | |||||||||
Total | Total | $ | 6 | $ | 7 | $ | 6 | $ | 6 | |||||||
DEPRECIATION AND AMORTIZATION | DEPRECIATION AND AMORTIZATION | |||||||||||||||
SDG&E | SDG&E | $ | 159 | 49 | % | $ | 145 | 48 | % | $ | 163 | $ | 159 | |||
SoCalGas | SoCalGas | 122 | 37 | 113 | 37 | 126 | 122 | |||||||||
Sempra South American Utilities | Sempra South American Utilities | 13 | 4 | 13 | 4 | 13 | 13 | |||||||||
Sempra Mexico | Sempra Mexico | 17 | 5 | 17 | 6 | 36 | 17 | |||||||||
Sempra Renewables | Sempra Renewables | 1 | ― | 2 | 1 | 9 | 1 | |||||||||
Sempra Natural Gas | 13 | 4 | 12 | 4 | ||||||||||||
Sempra LNG & Midstream | 10 | 13 | ||||||||||||||
All other | All other | 3 | 1 | 1 | ― | 3 | 3 | |||||||||
Total | Total | $ | 328 | 100 | % | $ | 303 | 100 | % | $ | 360 | $ | 328 | |||
INCOME TAX EXPENSE (BENEFIT) | ||||||||||||||||
INCOME TAX EXPENSE (BENEFIT)(2) | ||||||||||||||||
SDG&E | SDG&E | $ | 72 | $ | 88 | $ | 90 | $ | 65 | |||||||
SoCalGas | SoCalGas | 87 | 95 | 98 | 83 | |||||||||||
Sempra South American Utilities | Sempra South American Utilities | 14 | 16 | 19 | 14 | |||||||||||
Sempra Mexico | Sempra Mexico | 41 | 8 | 142 | 40 | |||||||||||
Sempra Renewables | Sempra Renewables | (12) | (17) | (11 | ) | (13 | ) | |||||||||
Sempra Natural Gas | (25) | 2 | ||||||||||||||
Sempra LNG & Midstream | 1 | (29 | ) | |||||||||||||
All other | All other | (35) | (29) | (44 | ) | (52 | ) | |||||||||
Total | Total | $ | 142 | $ | 163 | $ | 295 | $ | 108 |
SEGMENT INFORMATION (CONTINUED) | SEGMENT INFORMATION (CONTINUED) | |||||||||||||||
(Dollars in millions) | (Dollars in millions) | |||||||||||||||
Three months ended March 31, | Three months ended March 31, | |||||||||||||||
2016 | 2015 | 2017 | 2016 | |||||||||||||
EQUITY EARNINGS (LOSSES) | EQUITY EARNINGS (LOSSES) | |||||||||||||||
Earnings (losses) recorded before tax: | Earnings (losses) recorded before tax: | |||||||||||||||
Sempra Renewables | Sempra Renewables | $ | 7 | $ | 2 | $ | 2 | $ | 7 | |||||||
Sempra Natural Gas | (29) | 17 | ||||||||||||||
Sempra LNG & Midstream | 1 | (29 | ) | |||||||||||||
Total | Total | $ | (22) | $ | 19 | $ | 3 | $ | (22 | ) | ||||||
Earnings (losses) recorded net of tax: | Earnings (losses) recorded net of tax: | |||||||||||||||
Sempra South American Utilities | Sempra South American Utilities | $ | 2 | $ | (1) | $ | 1 | $ | 2 | |||||||
Sempra Mexico | Sempra Mexico | 15 | 16 | (9 | ) | 15 | ||||||||||
Total | Total | $ | 17 | $ | 15 | $ | (8 | ) | $ | 17 | ||||||
EARNINGS (LOSSES) | ||||||||||||||||
EARNINGS (LOSSES)(2) | ||||||||||||||||
SDG&E | SDG&E | $ | 129 | 40 | % | $ | 147 | 34 | % | $ | 155 | $ | 136 | |||
SoCalGas(2) | 195 | 61 | 214 | 49 | ||||||||||||
SoCalGas(3) | 203 | 199 | ||||||||||||||
Sempra South American Utilities | Sempra South American Utilities | 38 | 12 | 41 | 9 | 47 | 38 | |||||||||
Sempra Mexico | Sempra Mexico | 17 | 5 | 47 | 11 | 48 | 18 | |||||||||
Sempra Renewables | Sempra Renewables | 13 | 4 | 13 | 3 | 11 | 14 | |||||||||
Sempra Natural Gas | (36) | (11) | 2 | ― | ||||||||||||
Sempra LNG & Midstream | 1 | (32 | ) | |||||||||||||
All other | All other | (37) | (11) | (27) | (6) | (24 | ) | (20 | ) | |||||||
Total | Total | $ | 319 | 100 | % | $ | 437 | 100 | % | $ | 441 | $ | 353 | |||
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT | EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT | EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT | ||||||||||||||
SDG&E | SDG&E | $ | 329 | 34 | % | $ | 355 | 46 | % | $ | 418 | $ | 329 | |||
SoCalGas | SoCalGas | 340 | 35 | 315 | 40 | 357 | 340 | |||||||||
Sempra South American Utilities | Sempra South American Utilities | 43 | 4 | 31 | 4 | 43 | 43 | |||||||||
Sempra Mexico | Sempra Mexico | 40 | 4 | 55 | 7 | 94 | 40 | |||||||||
Sempra Renewables | Sempra Renewables | 181 | 19 | 3 | 1 | 69 | 181 | |||||||||
Sempra Natural Gas | 35 | 4 | 10 | 1 | ||||||||||||
Sempra LNG & Midstream | 3 | 35 | ||||||||||||||
All other | All other | 3 | ― | 11 | 1 | 8 | 3 | |||||||||
Total | Total | $ | 971 | 100 | % | $ | 780 | 100 | % | $ | 992 | $ | 971 | |||
March 31, 2016 | December 31, 2015 | March 31, 2017 | December 31, 2016 | |||||||||||||
ASSETS | ASSETS | ASSETS | ||||||||||||||
SDG&E | SDG&E | $ | 16,625 | 40 | % | $ | 16,515 | 40 | % | $ | 17,900 | $ | 17,719 | |||
SoCalGas | SoCalGas | 12,427 | 30 | 12,104 | 29 | 13,602 | 13,424 | |||||||||
Sempra South American Utilities | Sempra South American Utilities | 3,434 | 8 | 3,235 | 8 | 3,729 | 3,591 | |||||||||
Sempra Mexico | Sempra Mexico | 3,843 | 9 | 3,783 | 9 | 7,702 | 7,542 | |||||||||
Sempra Renewables | Sempra Renewables | 1,454 | 3 | 1,441 | 4 | 2,282 | 3,644 | |||||||||
Sempra Natural Gas | 5,395 | 13 | 5,566 | 13 | ||||||||||||
Sempra LNG & Midstream | 5,092 | 5,564 | ||||||||||||||
All other | All other | 741 | 2 | 734 | 2 | 644 | 475 | |||||||||
Intersegment receivables | Intersegment receivables | (2,084) | (5) | (2,228) | (5) | (2,667 | ) | (4,173 | ) | |||||||
Total | Total | $ | 41,835 | 100 | % | $ | 41,150 | 100 | % | $ | 48,284 | $ | 47,786 | |||
EQUITY METHOD AND OTHER INVESTMENTS | EQUITY METHOD AND OTHER INVESTMENTS | EQUITY METHOD AND OTHER INVESTMENTS | ||||||||||||||
Sempra South American Utilities | Sempra South American Utilities | $ | (2) | $ | (4) | $ | 20 | $ | — | |||||||
Sempra Mexico | Sempra Mexico | 522 | 519 | 212 | 180 | |||||||||||
Sempra Renewables | Sempra Renewables | 823 | 855 | 812 | 844 | |||||||||||
Sempra Natural Gas | 1,308 | 1,460 | ||||||||||||||
Sempra LNG & Midstream | 999 | 997 | ||||||||||||||
All other | All other | 76 | 75 | 77 | 76 | |||||||||||
Total | Total | $ | 2,727 | $ | 2,905 | $ | 2,120 | $ | 2,097 | |||||||
(1) | Revenues for reportable segments include intersegment revenues of $3 million, $17 million, $27 million and $30 million for the three months ended March 31, 2016 and $2 million, $19 million, $25 million and $43 million for the three months ended March 31, 2015 for SDG&E, SoCalGas, Sempra Mexico and Sempra Natural Gas, respectively. | |||||||||||||||
(2) | After preferred dividends. |
(1) | Revenues for reportable segments include intersegment revenues of $1 million, $18 million, $25 million and $53 million for the three months ended March 31, 2017 and $3 million, $17 million, $27 million and $30 million for the three months ended March 31, 2016 for SDG&E, SoCalGas, Sempra Mexico and Sempra LNG & Midstream, respectively. |
(2) | Amounts for the three months ended March 31, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2. |
(3) | After preferred dividends. |
▪ | Sempra Energy and its consolidated entities |
▪ | San Diego Gas & Electric Company (SDG&E) and its consolidated variable interest entity (VIE) |
▪ | Southern California Gas Company (SoCalGas) |
▪ | the Condensed Consolidated Financial Statements and related Notes of Sempra Energy and its subsidiaries and VIEs; |
▪ | the Condensed Consolidated Financial Statements and related Notes of SDG&E and its VIE; and |
▪ | the Condensed Financial Statements and related Notes of SoCalGas. |
SEMPRA UTILITIES | ||
Business summary | Market | Service territory |
A regulated public utility; infrastructure supports electric generation, transmission and distribution, and natural gas distribution | ▪ Provides electricity to a population of 3.6 million (1.4 million meters)▪ | Serves the county of San Diego, California (electric and natural gas) and an adjacent portion of southern Orange County (electric only) covering 4,100 square miles |
A regulated public utility; infrastructure supports natural gas distribution, transmission and storage | ▪ | Southern California and portions of central California (excluding San Diego County, the city of Long Beach and the desert area of San Bernardino County) covering 20,000 square miles |
SEMPRA SOUTH AMERICAN UTILITIES Develops, owns and operates, or holds interests in electric transmission, distribution and generation infrastructure | ▪ Provides electricity to a population of approximately 2 million (approximately | ▪ Region of Valparaiso in central Chile▪ Southern zone of metropolitan Lima, Peru |
CAPITAL PROJECTS – SDG&E | |||||||||
Project description | Estimated cost (in millions) | Status | |||||||
South Orange County Reliability Enhancement | |||||||||
§ | December 2016 California Public Utilities Commission (CPUC) final decision granted a Certificate of Public Convenience and Necessity to replace/upgrade existing 230-kilovolt (kV) transmission lines to enhance the capacity and reliability of electric service to the south Orange County area. | $ | 381 | § | Construction expected to start in the second half of 2017. | ||||
§ | Rehearing requests filed by the City of San Juan Capistrano and local opposition group pending with CPUC. | ||||||||
Electric Vehicle Charging | |||||||||
§ | January 2017 application, pursuant to Senate Bill (SB) 350, to perform various activities and make investments in support of electric vehicle charging at an estimated cost of $349 million, including $51 million of operation and maintenance expense (O&M)(1). | $ | 298 | § | Application pending | ||||
Energy Storage | |||||||||
§ | August 2016 CPUC approval to own and operate two energy storage projects totaling 37.5 megawatts (MW) to enhance electric reliability in the San Diego service territory. | Not disclosed | § | Completed in first quarter of 2017. | |||||
§ | April 2017 application to procure up to 70 MW of utility-owned energy storage to provide local capacity. | Not disclosed | § | Application pending | |||||
Utility Billing and Customer Information Systems (CIS) Software | |||||||||
§ | April 2017 application to replace CIS software at an estimated cost of $287 million, including $67 million of O&M(1). | $ | 220 | § | Application pending |
(1) | O&M is related to implementation costs. |
CAPITAL PROJECTS – CALIFORNIA UTILITIES | |||||||||
Project description | Estimated cost (in millions) | Status | |||||||
Mobile Home Park Utility Upgrade Program | |||||||||
§ | May 2017 application filed with the CPUC to convert an additional 20 percent of eligible units to direct utility service, for a total of 30 percent of mobile homes. | $ | 471 | § | Application pending | ||||
to | |||||||||
$ | 508 | ||||||||
§ | Estimated cost of $204 million, including $2 million of O&M(1), at SDG&E. | ||||||||
§ | Estimated cost of $272 million to $310 million, including $3 million to $4 million of O&M(1), at SoCalGas. | ||||||||
Pipeline Safety Enhancement Plan (PSEP) | |||||||||
§ | March 2017 application filed with the CPUC to recover forecasted costs associated with twelve Phase 1B and Phase 2A pipeline safety projects for $255 million, including $57 million of O&M(1). | $ | 198 | § | Application pending |
(1) | O&M is related to implementation costs. |
SEMPRA INFRASTRUCTURE | |||
Business summary | Market | Geographic area | |
SEMPRA MEXICO Develops, owns and operates, or holds interests in: ▪ natural gas transmission pipelines▪ liquid petroleum gas (LPG) and ethane systems▪ ▪ ▪ ▪ a terminal for the storage of LPG▪ marketing operations for the purchase of LNG and the purchase and sale of natural gas | ▪ Natural gas▪ ▪ ▪ Liquid petroleum gas | ▪ Mexico |
SEMPRA RENEWABLES Develops, owns and operates, or holds interests in renewable energy generation projects | ▪ Wholesale electricity | ▪ Arizona▪ California▪ Colorado▪ Hawaii▪ Indiana▪ Kansas | ▪ Michigan▪ Minnesota▪ Nebraska▪ Nevada▪ Pennsylvania |
SEMPRA Develops, owns and operates, or holds interests ▪ ▪ ▪ | ▪ ▪ Natural gas | ▪ Alabama▪ Louisiana▪ Mississippi▪ Texas |
CAPITAL PROJECTS – SEMPRA MEXICO | |||||||||
Project description | Estimated cost (in millions) | Status | |||||||
San Isidro Pipeline | |||||||||
§ | July 2015 agreement with CFE for development, construction and operation of the approximately 14-mile pipeline. | $ | 110 | § | Pipeline completed in March 2017. | ||||
§ | Natural gas transportation services agreement for a 25-year term, denominated in U.S. dollars, for 100 percent of the transport capacity, equal to 1.1 billion cubic feet (Bcf) per day. | § | Estimated completion of compression station: second half of 2017 | ||||||
Pima Solar | |||||||||
§ | 110-MW photovoltaic project located in Sonora, Mexico. | $ | 115 | § | Construction expected to commence in the fourth quarter of 2017. | ||||
§ | In March 2017, entered into a 20-year, U.S. dollar denominated power purchase agreement to provide renewable energy, clean energy certificates and capacity. | § | Estimated completion: fourth quarter of 2018 | ||||||
§ | Wholly owned by Infraestructura Energética Nova, S.A.B. de C.V. (IEnova). |
▪ | Overall results of our operations |
▪ | Segment results |
▪ | Adjusted earnings and adjusted earnings per share |
▪ | Significant changes in revenues, costs and earnings between periods |
▪ | Impact of foreign currency and inflation rates on our results of operations |
SEMPRA ENERGY EARNINGS (LOSSES) BY SEGMENT | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016(1) | ||||||
Sempra Utilities: | |||||||
SDG&E | $ | 155 | $ | 136 | |||
SoCalGas(2) | 203 | 199 | |||||
Sempra South American Utilities | 47 | 38 | |||||
Sempra Infrastructure: | |||||||
Sempra Mexico | 48 | 18 | |||||
Sempra Renewables | 11 | 14 | |||||
Sempra LNG & Midstream | 1 | (32 | ) | ||||
Parent and other(3) | (24 | ) | (20 | ) | |||
Earnings | $ | 441 | $ | 353 |
(1) | Reflects the adoption of ASU 2016-09, as we discuss in Note 2 of the Notes to Condensed Consolidated |
(2) | After preferred dividends. |
(3) | Includes after-tax interest expense ($41 million and $43 million for the three months ended March 31, 2017 |
▪ | $ |
▪ | $6 million higher CPUC base operating margin authorized for 2017, net of |
▪ | $ |
SEMPRA ENERGY EARNINGS (LOSSES) BY SEGMENT | |||||||||
(Dollars in millions) | |||||||||
Three months ended March 31, | |||||||||
2016 | 2015 | ||||||||
California Utilities: | |||||||||
SDG&E | $ | 129 | 40 | % | $ | 147 | 34 | % | |
SoCalGas(1) | 195 | 61 | 214 | 49 | |||||
Sempra International: | |||||||||
Sempra South American Utilities | 38 | 12 | 41 | 9 | |||||
Sempra Mexico | 17 | 5 | 47 | 11 | |||||
Sempra U.S. Gas & Power: | |||||||||
Sempra Renewables | 13 | 4 | 13 | 3 | |||||
Sempra Natural Gas | (36) | (11) | 2 | ― | |||||
Parent and other(2) | (37) | (11) | (27) | (6) | |||||
Earnings | $ | 319 | 100 | % | $ | 437 | 100 | % | |
(1) | After preferred dividends. | ||||||||
(2) | Includes after-tax interest expense ($43 million and $38 million for the three months ended March 31, 2016 and 2015, respectively), intercompany eliminations recorded in consolidation and certain corporate costs. |
$ |
▪ | $ |
▪ | $12 million |
▪ | $ |
▪ | $ |
▪ | $28 million higher earnings from the recognition of AFUDC related to equity primarily associated with the Ojinaga and San Isidro pipeline projects; |
▪ | $22 million higher pipeline operational earnings, primarily attributable to the increase in our ownership interest in Gasoductos de Chihuahua S. de R.L. de C.V. (GdC) from 50 percent to 100 percent in September 2016; and |
▪ | $10 million operational earnings in 2017 from the Ventika, S.A.P.I. de C.V. and Ventika II, S.A.P.I. de C.V. (Ventika) wind power generation facilities, which we acquired in December 2016; offset by |
▪ | $97 million income tax expense ($65 million after noncontrolling interests) from foreign currency and inflation effects, offset by a $44 million benefit ($73 million pretax) from foreign currency derivatives, which are hedging Sempra Mexico’s foreign currency exposure from its controlling interest in IEnova, as we discuss below in “Other Income, Net;” and |
▪ | $8 million higher interest expense, including $4 million at Ventika and $2 million at GdC related to debt assumed in their acquisitions. |
▪ | $27 million impairment charge in 2016 related to the investment in Rockies Express Pipeline LLC (Rockies Express), which we discuss further in Note 3 of the Notes to Condensed Consolidated Financial Statements herein; |
▪ | $ |
▪ | $6 million higher results from LNG marketing activities primarily driven by changes in natural gas prices; offset by |
▪ | $10 million lower |
▪ | $ |
▪ | $8 million lower income tax benefits in 2017, including: |
◦ | $1 million income tax expense in 2017 compared to $17 million income tax benefit in 2016 associated with excess tax deficiencies/benefits related to share-based compensation, offset by |
◦ | $7 million income tax benefit in 2017 related to a deferred income tax liability on an outside basis difference in a subsidiary investment, and |
◦ | $5 million U.S. income tax expense in 2016 on planned repatriation of earnings from certain non-U.S. subsidiaries; and |
▪ | $5 million ($8 million pretax) of costs in 2017 associated with foreign currency derivatives, as we discuss below in “Other Income, Net;”offset by |
▪ | $5 million higher investment gains on dedicated assets in support of our executive retirement and deferred compensation plans, net of the increase in deferred compensation liability associated with the investments; and |
▪ | $4 million lower net interest expense. |
SEMPRA ENERGY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE | |||||||||||||||||||
(Dollars in millions, except per share amounts) | |||||||||||||||||||
Pretax amount | Income tax (benefit) expense(1) | Non-controlling interests | Earnings | Diluted EPS | |||||||||||||||
Three months ended March 31, 2017 | |||||||||||||||||||
Sempra Energy GAAP Earnings | $ | 441 | $ | 1.75 | |||||||||||||||
Excluded item: | |||||||||||||||||||
Deferred income tax benefit associated with TdM | $ | — | $ | (5 | ) | $ | 2 | (3 | ) | (0.01 | ) | ||||||||
Sempra Energy Adjusted Earnings | $ | 438 | $ | 1.74 | |||||||||||||||
Weighted-average number of shares outstanding, diluted (thousands) | 252,246 | ||||||||||||||||||
Three months ended March 31, 2016(2) | |||||||||||||||||||
Sempra Energy GAAP Earnings | $ | 353 | $ | 1.40 | |||||||||||||||
Excluded items: | |||||||||||||||||||
Impairment of investment in Rockies Express | $ | 44 | $ | (17 | ) | $ | — | 27 | 0.11 | ||||||||||
Deferred income tax expense associated with TdM | — | 29 | (5 | ) | 24 | 0.09 | |||||||||||||
Sempra Energy Adjusted Earnings | $ | 404 | $ | 1.60 | |||||||||||||||
Weighted-average number of shares outstanding, diluted (thousands) | 251,487 |
(1) | Income taxes were calculated based on applicable statutory tax rates, except for adjustments that are solely income tax. Income taxes associated with TdM were calculated based on the applicable statutory tax rate, including translation from historic to current exchange rates. |
(2) | Reflects the |
▪ | SDG&E |
Sempra South American Utilities’ Chilquinta Energía S.A. (Chilquinta Energía) and Luz del Sur |
▪ | SDG&E |
▪ | SoCalGas |
▪ | Sempra Mexico’s Ecogas México, S. de R.L. de C.V. (Ecogas) |
▪ | Sempra LNG & Midstream’s Mobile Gas Service Corporation (Mobile Gas) and Willmut Gas Company (Willmut Gas) (prior to the sale of EnergySouth Inc. on September 12, 2016) |
▪ | permits SDG&E to recover the actual cost incurred to generate or procure electricity based on annual estimates of the cost of electricity supplied to customers. The differences in cost between estimates and actual are recovered in subsequent periods through rates. |
UTILITIES REVENUES AND COST OF SALES | |||||
(Dollars in millions) | |||||
Three months ended March 31, | |||||
2016 | 2015 | ||||
Electric revenues: | |||||
SDG&E | $ | 843 | $ | 805 | |
Sempra South American Utilities | 378 | 363 | |||
Eliminations and adjustments | (2) | (2) | |||
Total | 1,219 | 1,166 | |||
Natural gas revenues: | |||||
SoCalGas | 1,033 | 1,048 | |||
SDG&E | 148 | 161 | |||
Sempra Mexico | 22 | 25 | |||
Sempra Natural Gas | 38 | 42 | |||
Eliminations and adjustments | (18) | (20) | |||
Total | 1,223 | 1,256 | |||
Total utilities revenues | $ | 2,442 | $ | 2,422 | |
Cost of electric fuel and purchased power: | |||||
SDG&E | $ | 248 | $ | 228 | |
Sempra South American Utilities | 267 | 253 | |||
Total | $ | 515 | $ | 481 | |
Cost of natural gas: | |||||
SoCalGas | $ | 253 | $ | 267 | |
SDG&E | 39 | 54 | |||
Sempra Mexico | 12 | 15 | |||
Sempra Natural Gas | 11 | 15 | |||
Eliminations and adjustments | (4) | (5) | |||
Total | $ | 311 | $ | 346 |
▪ | also permits the California |
UTILITIES REVENUES AND COST OF SALES | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Electric revenues: | |||||||
SDG&E | $ | 875 | $ | 843 | |||
Sempra South American Utilities | 390 | 378 | |||||
Eliminations and adjustments | (2 | ) | (2 | ) | |||
Total | 1,263 | 1,219 | |||||
Natural gas revenues: | |||||||
SoCalGas | 1,241 | 1,033 | |||||
SDG&E | 182 | 148 | |||||
Sempra Mexico | 30 | 22 | |||||
Sempra LNG & Midstream | — | 38 | |||||
Eliminations and adjustments | (18 | ) | (18 | ) | |||
Total | 1,435 | 1,223 | |||||
Total utilities revenues | $ | 2,698 | $ | 2,442 | |||
Cost of electric fuel and purchased power: | |||||||
SDG&E | $ | 261 | $ | 248 | |||
Sempra South American Utilities | 266 | 267 | |||||
Total | $ | 527 | $ | 515 | |||
Cost of natural gas: | |||||||
SoCalGas | $ | 408 | $ | 253 | |||
SDG&E | 65 | 39 | |||||
Sempra Mexico | 19 | 12 | |||||
Sempra LNG & Midstream | — | 11 | |||||
Eliminations and adjustments | (7 | ) | (4 | ) | |||
Total | $ | 485 | $ | 311 |
SDG&E | |||||||
ELECTRIC DISTRIBUTION AND TRANSMISSION | |||||||
(Volumes in millions of kilowatt-hours, dollars in millions) | |||||||
Three months ended March 31, 2016 | Three months ended March 31, 2015 | ||||||
Customer class | Volumes | Revenue | Volumes | Revenue | |||
Residential | 1,689 | $ | 339 | 1,712 | $ | 346 | |
Commercial | 1,579 | 285 | 1,600 | 302 | |||
Industrial | 488 | 73 | 497 | 79 | |||
Direct access | 834 | 49 | 867 | 52 | |||
Street and highway lighting | 17 | 3 | 23 | 4 | |||
4,607 | 749 | 4,699 | 783 | ||||
CAISO shared transmission revenue - net(1) | 68 | 43 | |||||
Other revenues | 52 | 52 | |||||
Balancing accounts | (26) | (73) | |||||
Total(2) | $ | 843 | $ | 805 | |||
(1) | California Independent System Operator (CAISO). | ||||||
(2) | Includes sales to affiliates of $2 million in each of 2016 and 2015. |
UTILITIES VOLUMES | |||||
(Electric volumes in millions of kilowatt-hours, natural gas volumes in billion cubic feet) | |||||
Three months ended March 31, | |||||
2017 | 2016 | ||||
Electric volumes: | |||||
SDG&E: | |||||
Residential | 1,671 | 1,689 | |||
Commercial | 1,569 | 1,579 | |||
Industrial | 500 | 488 | |||
Direct access | 787 | 834 | |||
Street and highway lighting | 24 | 17 | |||
Total(1) | 4,551 | 4,607 | |||
Sempra South American Utilities: | |||||
Luz del Sur | 1,894 | 1,949 | |||
Chilquinta Energía | 811 | 799 | |||
Total | 2,705 | 2,748 | |||
Natural gas volumes(2): | |||||
SoCalGas: | |||||
Natural gas sales | 111 | 99 | |||
Transportation | 148 | 140 | |||
Total(1) | 259 | 239 | |||
SDG&E: | |||||
Natural gas sales | 15 | 14 | |||
Transportation | 8 | 8 | |||
Total(1) | 23 | 22 | |||
Sempra Mexico – Ecogas | 8 | 8 |
(1) | Includes intercompany sales. |
(2) | In September 2016, Sempra LNG & Midstream completed the sale of EnergySouth Inc., the parent company of Mobile Gas and Willmut Gas. Volume information for Mobile Gas and Willmut Gas has been excluded for 2016 due to immateriality. |
▪ | $ |
◦ | $16 million increase in 2017 due to an increase in rates permitted under the attrition mechanism in the 2016 GRC FD, |
◦ | $14 million lower CPUC-authorized revenue in 2016 due to the delay in the issuance of the 2016 GRC FD, and |
◦ | $13 million higher cost of electric fuel and purchased power, |
◦ | $10 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in |
▪ | $12 million increase at Sempra South American Utilities, which included |
◦ | $22 million due to |
◦ | $10 million due to higher rates at Luz del Sur, offset by |
◦ | $17 million lower volumes at Luz del Sur primarily due to the migration of regulated and non-regulated customers to tolling customers, who pay only a |
◦ | $6 million lower rates at Chilquinta Energía. |
▪ | $13 million increase at SDG&E primarily due to an increase in the cost of purchased power and tolling costs due to |
▪ | $1 million decrease at Sempra South American Utilities driven primarily by |
◦ | $11 million lower volumes at Luz del Sur, and |
◦ | $6 million lower volumes at Chilquinta Energía, offset by |
◦ | $ |
CALIFORNIA UTILITIES AVERAGE COST OF NATURAL GAS | |||||||
(Dollars per thousand cubic feet) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
SoCalGas | $ | 3.70 | $ | 2.57 | |||
SDG&E | 4.24 | 2.67 |
▪ | $208 million increase at SoCalGas, which included |
◦ | $155 million increase in cost of natural gas sold, including $125 million from higher average gas prices and $30 million from higher volumes driven mainly by cooler weather in 2017, |
◦ | $21 million increase due to 2017 attrition, |
◦ | $14 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in |
◦ | $14 million lower CPUC-authorized revenue in 2016 due to the delay in the issuance of the 2016 GRC FD, |
◦ | $14 million higher revenues primarily associated with the PSEP, and |
SDG&E | ||||||||||
NATURAL GAS SALES AND TRANSPORTATION | ||||||||||
(Volumes in billion cubic feet, dollars in millions) | ||||||||||
Natural gas sales | Transportation | Total | ||||||||
Customer class | Volumes | Revenue | Volumes | Revenue | Volumes | Revenue | ||||
Three months ended March 31, 2016: | ||||||||||
Residential | 10 | $ | 125 | ― | $ | 1 | 10 | $ | 126 | |
Commercial and industrial | 4 | 30 | 3 | 5 | 7 | 35 | ||||
Electric generation plants | ― | ― | 5 | 1 | 5 | 1 | ||||
14 | $ | 155 | 8 | $ | 7 | 22 | 162 | |||
Other revenues | 11 | |||||||||
Balancing accounts | (25) | |||||||||
Total(1) | $ | 148 | ||||||||
Three months ended March 31, 2015: | ||||||||||
Residential | 9 | $ | 111 | ― | $ | 1 | 9 | $ | 112 | |
Commercial and industrial | 4 | 30 | 2 | 4 | 6 | 34 | ||||
Electric generation plants | ― | ― | 6 | ― | 6 | ― | ||||
13 | $ | 141 | 8 | $ | 5 | 21 | 146 | |||
Other revenues | 11 | |||||||||
Balancing accounts | 4 | |||||||||
Total(1) | $ | 161 | ||||||||
(1) | Includes sales to affiliates of $1 million in each of 2016 and 2015. |
SOCALGAS | ||||||||||
NATURAL GAS SALES AND TRANSPORTATION | ||||||||||
(Volumes in billion cubic feet, dollars in millions) | ||||||||||
Natural gas sales | Transportation | Total | ||||||||
Customer class | Volumes | Revenue | Volumes | Revenue | Volumes | Revenue | ||||
Three months ended March 31, 2016: | �� | |||||||||
Residential | 72 | $ | 696 | 1 | $ | 4 | 73 | $ | 700 | |
Commercial and industrial | 27 | 180 | 71 | 66 | 98 | 246 | ||||
Electric generation plants | ― | ― | 33 | 7 | 33 | 7 | ||||
Wholesale | ― | ― | 35 | 6 | 35 | 6 | ||||
99 | $ | 876 | 140 | $ | 83 | 239 | 959 | |||
Other revenues | 54 | |||||||||
Balancing accounts | 20 | |||||||||
Total(1) | $ | 1,033 | ||||||||
Three months ended March 31, 2015: | ||||||||||
Residential | 61 | $ | 605 | 1 | $ | 6 | 62 | $ | 611 | |
Commercial and industrial | 25 | 178 | 72 | 59 | 97 | 237 | ||||
Electric generation plants | ― | ― | 33 | 7 | 33 | 7 | ||||
Wholesale | ― | ― | 41 | 8 | 41 | 8 | ||||
86 | $ | 783 | 147 | $ | 80 | 233 | 863 | |||
Other revenues | 48 | |||||||||
Balancing accounts | 137 | |||||||||
Total(1) | $ | 1,048 | ||||||||
(1) | Includes sales to affiliates of $17 million in 2016 and $19 million in 2015. |
$ |
◦ | $12 million |
▪ | $34 million increase at SDG&E, which included |
◦ | $26 million increase in cost of natural gas sold primarily from higher average gas prices, and |
◦ | $3 million increase due to 2017 attrition. |
OTHER UTILITIES | |||||||
NATURAL GAS AND ELECTRIC REVENUES | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, 2016 | Three months ended March 31, 2015 | ||||||
Volumes | Revenue | Volumes | Revenue | ||||
Natural Gas Sales (billion cubic feet): | |||||||
Sempra Mexico – Ecogas | 8 | $ | 22 | 7 | $ | 25 | |
Sempra Natural Gas: | |||||||
Mobile Gas (including transportation) | 13 | 32 | 13 | 34 | |||
Willmut Gas | 1 | 6 | 1 | 8 | |||
Total | 22 | $ | 60 | 21 | $ | 67 | |
Electric Sales (million kilowatt hours): | |||||||
Sempra South American Utilities: | |||||||
Luz del Sur | 1,949 | $ | 232 | 1,923 | $ | 217 | |
Chilquinta Energía | 799 | 135 | 792 | 137 | |||
2,748 | 367 | 2,715 | 354 | ||||
Other service revenues | 11 | 9 | |||||
Total | $ | 378 | $ | 363 |
ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
REVENUES | |||||||
Sempra South American Utilities | $ | 22 | $ | 22 | |||
Sempra Mexico | 234 | 116 | |||||
Sempra Renewables | 22 | 7 | |||||
Sempra LNG & Midstream | 132 | 92 | |||||
Eliminations and adjustments(1) | (77 | ) | (57 | ) | |||
Total revenues | $ | 333 | $ | 180 | |||
COST OF SALES(2) | |||||||
Cost of natural gas, electric fuel and purchased power: | |||||||
Sempra South American Utilities | $ | 4 | $ | 4 | |||
Sempra Mexico | 51 | 35 | |||||
Sempra LNG & Midstream | 88 | 74 | |||||
Eliminations and adjustments(1) | (76 | ) | (57 | ) | |||
Total | $ | 67 | $ | 56 | |||
Other cost of sales: | |||||||
Sempra South American Utilities | $ | 15 | $ | 15 | |||
Sempra Mexico | 3 | 2 | |||||
Sempra LNG & Midstream | 7 | 20 | |||||
Eliminations and adjustments(1) | (3 | ) | (2 | ) | |||
Total | $ | 22 | $ | 35 |
(1) | Includes eliminations of intercompany activity. |
(2) | Excludes depreciation and amortization, which are shown separately on Sempra Energy’s Condensed Consolidated |
ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES | |||||
(Dollars in millions) | |||||
Three months ended March 31, | |||||
2016 | 2015 | ||||
REVENUES | |||||
Sempra South American Utilities | $ | 22 | $ | 26 | |
Sempra Mexico | 116 | 138 | |||
Sempra Renewables | 7 | 8 | |||
Sempra Natural Gas | 92 | 155 | |||
Intersegment revenues, eliminations and adjustments(1) | (57) | (67) | |||
Total revenues | $ | 180 | $ | 260 | |
COST OF SALES(2) | |||||
Cost of natural gas, electric fuel and purchased power: | |||||
Sempra South American Utilities | $ | 4 | $ | 9 | |
Sempra Mexico | 35 | 51 | |||
Sempra Natural Gas | 74 | 105 | |||
Eliminations and adjustments(1) | (57) | (67) | |||
Total | $ | 56 | $ | 98 | |
Other cost of sales: | |||||
Sempra South American Utilities | $ | 15 | $ | 11 | |
Sempra Mexico | 2 | 5 | |||
Sempra Natural Gas | 20 | 20 | |||
Eliminations and adjustments(1) | (2) | (1) | |||
Total | $ | 35 | $ | 35 | |
(1) | Includes eliminations of intercompany activity. | ||||
(2) | Excludes depreciation and amortization, which are shown separately on the Condensed Consolidated Statements of Operations. |
$ |
◦ | $75 million due to |
◦ | $26 million due to the acquisition of Ventika in |
▪ | $40 million |
◦ | $27 million primarily driven by improved results from midstream marketing activities and |
◦ | $13 million from higher natural gas |
▪ | $ |
$16 million |
▪ | $14 million increase at Sempra LNG & Midstream primarily due to higher natural gas prices; offset by |
▪ | $ |
▪ | $ |
◦ | $15 million higher non-refundable operating costs, including labor, contract services and administrative and support costs, and |
◦ | $14 million higher expenses associated with CPUC-authorized refundable programs for which all costs incurred are fully recovered in revenue (refundable program expenses); and |
$ |
▪ | $ |
◦ | $11 million reimbursement of litigation costs associated with the arbitration ruling over the SONGS replacement steam generators, as we discuss in Note 9 of the Notes to the Condensed Consolidated Financial Statements herein, and |
◦ | $10 million lower expenses associated with CPUC-authorized refundable programs, for which all costs incurred are fully recovered in revenue (refundable program expenses) |
◦ | $5 million higher non-refundable operating costs, including labor, contract services and administrative and support costs; and |
▪ | $15 million decrease at Sempra LNG & Midstream, including $9 million lower costs due to the sale of EnergySouth Inc. in September 2016. |
▪ | $45 million increase in equity-related AFUDC primarily at Sempra Mexico mainly from the Ojinaga and San Isidro pipeline projects; and |
▪ | $10 million foreign currency transactional gains in 2017 compared to $2 million foreign currency transactional losses in 2016. |
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES | |||||||||||||
(Dollars in millions) | |||||||||||||
Income tax expense | Effective income tax rate | Income tax expense | Effective income tax rate | ||||||||||
Three months ended March 31, | |||||||||||||
2017 | 2016(1) | ||||||||||||
Sempra Energy Consolidated | $ | 295 | 39 | % | $ | 108 | 24 | % | |||||
SDG&E | 90 | 36 | 65 | 32 | |||||||||
SoCalGas | 98 | 33 | 83 | 29 |
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES | |||||||||||
(Dollars in millions) | |||||||||||
Effective | Effective | ||||||||||
Income tax | income | Income tax | income | ||||||||
expense | tax rate | expense | tax rate | ||||||||
Three months ended March 31, | |||||||||||
2016 | 2015 | ||||||||||
Sempra Energy Consolidated | $ | 142 | 31 | % | $ | 163 | 27 | % | |||
SDG&E | 72 | 36 | 88 | 37 | |||||||
SoCalGas | 87 | 31 | 95 | 31 |
(1) | Reflects the adoption of ASU 2016-09, as we discuss in Note 2 of the Notes to Condensed Consolidated Financial Statements herein. |
▪ | $ |
▪ | $3 million income tax expense in 2017 compared to $34 million income tax benefit in 2016 associated with excess tax deficiencies/benefits related to share-based compensation; offset by |
▪ | $5 million Mexican deferred income tax benefit in 2017 compared to $29 million Mexican deferred income tax expense in 2016 on our outside basis difference in |
▪ | $5 million U.S. income tax expense in 2016 |
▪ | $15 million of equity earnings in 2016 from GdC, including $1 million from Ductos y Energéticos del Norte (DEN), prior to IEnova’s acquisition of the remaining 50-percent interest in GdC in September 2016, as we discuss in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report; and |
▪ | $10 million of equity losses in 2017 at DEN, a joint venture in which GdC holds a 50-percent interest, primarily from foreign currency and inflation effects. |
▪ | $16 million higher earnings attributable to noncontrolling interests as a result of the increase in earnings, excluding the effects of foreign currency and inflation, as we discuss above in “Segment Results – Sempra Mexico;” and |
▪ | $16 million higher earnings attributable to noncontrolling interests, excluding the effects of foreign currency and inflation, from the decrease in our controlling interest from 81.1 percent to 66.4 percent following IEnova’s equity offerings in October 2016, which we discuss in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report; offset by |
▪ | $32 million losses attributable to noncontrolling interests from foreign currency and inflation effects in 2017 without the corresponding benefit from foreign currency derivatives that are not subject to noncontrolling interests, as we discuss above in “Other Income, Net.” |
TRANSLATION IMPACT FROM CHANGE IN AVERAGE FOREIGN CURRENCY EXCHANGE RATES | |||
(Dollars in millions) | |||
First quarter 2017 compared to first quarter 2016 | |||
Higher earnings from foreign currency translation: | |||
Sempra South American Utilities | $ | 2 | |
Sempra Mexico – Ecogas | — | ||
Total | $ | 2 |
TRANSLATION IMPACT FROM CHANGE IN AVERAGE FOREIGN CURRENCY EXCHANGE RATES | ||||||
(Dollars in millions) | ||||||
First quarter 2016 compared to first quarter 2015 | ||||||
Lower earnings from foreign currency translation: | ||||||
Sempra South American Utilities | $ | 5 | ||||
Sempra Mexico | 1 | |||||
Total | $ | 6 |
TRANSACTIONAL GAINS (LOSSES) FROM FOREIGN CURRENCY AND INFLATION | |||||||||||||||
(Dollars in millions) | |||||||||||||||
Total reported amounts | Transactional gains (losses) included in reported amounts | ||||||||||||||
Three months ended March 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Other income, net | $ | 169 | $ | 49 | $ | 75 | $ | 1 | |||||||
Income tax expense | (295 | ) | (108 | ) | (97 | ) | 1 | ||||||||
Equity (losses) earnings, net of income tax | (8 | ) | 17 | (13 | ) | 1 | |||||||||
Net income | 452 | 364 | (61 | ) | 3 | ||||||||||
Earnings | 441 | 353 | (27 | ) | 3 |
TRANSACTIONAL GAINS (LOSSES) FROM FOREIGN CURRENCY AND INFLATION | ||||||||
(Dollars in millions) | ||||||||
Transactional | ||||||||
gains (losses) included | ||||||||
Total reported amount | in reported amounts | |||||||
Three months ended March 31, | ||||||||
2016 | 2015 | 2016 | 2015 | |||||
Other income, net | $ | 49 | $ | 39 | $ | 1 | $ | (1) |
Income tax expense | 142 | 163 | 1 | 6 | ||||
Equity earnings, net of income tax | 17 | 15 | 1 | 1 | ||||
Earnings | 319 | 437 | 3 | 5 |
AVAILABLE FUNDS AT MARCH 31, 2017 | |||||||||||
(Dollars in millions) | |||||||||||
Sempra Energy Consolidated | SDG&E | SoCalGas | |||||||||
Unrestricted cash and cash equivalents(1) | $ | 290 | $ | 18 | $ | 21 | |||||
Available unused credit(2) | 2,730 | 407 | 657 |
AVAILABLE FUNDS AT MARCH 31, 2016 | |||||||
(Dollars in millions) | |||||||
Sempra Energy | |||||||
Consolidated | SDG&E | SoCalGas | |||||
Unrestricted cash and cash equivalents(1) | $ | 376 | $ | 36 | $ | 14 | |
Available unused credit(2) | 3,160 | 584 | 745 | ||||
(1) | Amounts at Sempra Energy Consolidated include $311 million held in non-U.S. jurisdictions that are unavailable to fund U.S. operations unless repatriated, as we discuss below. | ||||||
(2) | Available credit is the total available on Sempra Energy’s, Sempra Global’s and the California Utilities’ credit facilities that we discuss in Note 6 of the Notes to Condensed Consolidated Financial Statements herein. At March 31, 2016, borrowings on the shared line of credit at SDG&E and SoCalGas were limited to $750 million for each utility and a combined total of $1 billion. SDG&E's and SoCalGas' available funds reflect commercial paper outstanding of $166 million and $5 million, respectively, supported by the line. |
(1) | Amounts at Sempra Energy Consolidated include $219 million held in non-U.S. jurisdictions that are unavailable to fund U.S. operations unless repatriated. We discuss repatriation in “Results of Operations – Changes in Revenues, Costs and Earnings – Income Taxes” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report. |
(2) | Available unused credit is the total available on Sempra Energy’s, Sempra Global’s and the California Utilities’ credit facilities that we discuss in Note 6 of the Notes to Condensed Consolidated Financial Statements herein. Borrowings on the shared line of credit at SDG&E and SoCalGas are limited to $750 million for each utility and a combined total of $1 billion. SDG&E’s available funds reflect commercial paper outstanding of $343 million, supported by the line. SoCalGas’ availability reflects the impact of SDG&E’s use as of March 31, 2017 of the combined credit available on the line. |
▪ | finance capital expenditures |
▪ | meet liquidity requirements |
▪ | fund shareholder dividends |
▪ | fund new business acquisitions or start-ups |
▪ | repay maturing long-term debt |
▪ | fund expenditures related to the natural gas leak at SoCalGas’ Aliso Canyon natural gas storage facility |
CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||
Three months ended March 31, 2017 | 2017 change | Three months ended March 31, 2016(1) | ||||||||||||||
Sempra Energy Consolidated | $ | 1,004 | $ | 378 | 60 | % | $ | 626 | ||||||||
SDG&E | 386 | 17 | 5 | 369 | ||||||||||||
SoCalGas | 463 | 222 | 92 | 241 |
CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||
(Dollars in millions) | ||||||||
Three months ended March 31, 2016 | 2016 change | Three months ended March 31, 2015 | ||||||
Sempra Energy Consolidated | $ | 592 | $ | (219) | (27) | % | $ | 811 |
SDG&E | 369 | 70 | 23 | 299 | ||||
SoCalGas | 241 | (134) | (36) | 375 |
▪ | $ |
◦ | $15 million net increase in receivable for expected insurance recovery in 2017 compared to $335 million net increase in 2016. The $15 million net increase includes $19 million of additional accruals, offset by $4 million in insurance proceeds, offset by |
◦ | $4 million net decrease in reserve for accrued expenditures in 2017 compared to a $28 million net increase in |
▪ | $142 million |
▪ | $53 million lower purchases of greenhouse gas allowances in 2017 ($25 million at SDG&E and $28 million at SoCalGas); |
▪ | $32 million payment of capital gains tax assessment in 2016 related to our 2011 acquisition of interest in Luz del Sur; |
▪ | $31 million increase due to timing of franchise fee payments at SDG&E; and |
▪ | $ |
▪ | $ |
▪ | $ |
▪ | $43 million higher net income, adjusted for noncash items included in earnings, in 2017 compared to 2016; |
▪ | $31 million increase due to timing of franchise fee payments; and |
▪ | $25 million lower purchases of greenhouse gas allowances in 2017; offset by |
▪ | $13 million increase in accounts receivable in 2017 compared to a $26 million decrease in 2016; and |
▪ | $ |
▪ | $ |
◦ | $15 million net increase in receivable for expected insurance recovery in 2017 compared to $335 million net increase in 2016. The $15 million net increase includes $19 million of additional accruals, offset by $4 million in insurance proceeds, offset by |
◦ | $4 million net decrease in reserve for accrued expenditures in 2017 compared to a $28 million net increase in |
▪ | $35 million |
$ |
▪ | $30 million increase in |
▪ | $28 million lower purchases of greenhouse gas allowances in 2017; offset by |
▪ | $ |
▪ | $93 million decrease in accounts payable in 2017 compared to a $29 million decrease in 2016. The 2017 decrease was primarily due to lower volumes and prices of natural gas purchased; and |
▪ | $15 million decrease in inventory in 2017 compared to a $46 million decrease in 2016. |
CONTRIBUTIONS TO PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | ||||
(Dollars in millions) | ||||
Three months ended March 31, 2016 | ||||
Other | ||||
Pension | postretirement | |||
benefits | benefits | |||
Sempra Energy Consolidated | $ | 15 | $ | 1 |
SDG&E | 2 | ― |
CASH USED IN INVESTING ACTIVITIES | ||||||||
(Dollars in millions) | ||||||||
Three months ended | Three months ended | |||||||
March 31, 2016 | 2016 change | March 31, 2015 | ||||||
Sempra Energy Consolidated | $ | (989) | $ | 219 | 28 | % | $ | (770) |
SDG&E | (330) | (91) | (22) | (421) | ||||
SoCalGas | (290) | (99) | (25) | (389) |
CASH USED IN INVESTING ACTIVITIES | ||||||||||||||||
(Dollars in millions) | ||||||||||||||||
Three months ended March 31, 2017 | 2017 change | Three months ended March 31, 2016 | ||||||||||||||
Sempra Energy Consolidated | $ | (1,026 | ) | $ | 37 | 4 | % | $ | (989 | ) | ||||||
SDG&E | (381 | ) | 51 | 15 | (330 | ) | ||||||||||
SoCalGas | (392 | ) | 102 | 35 | (290 | ) |
▪ | $ |
▪ | $21 million increase in capital expenditures; |
▪ | $ |
▪ | $89 million increase in capital expenditures; offset by |
▪ | $ |
▪ | $ |
▪ | $ |
EXPENDITURES FOR PROPERTY, PLANT AND EQUIPMENT | |||||||
(Dollars in millions) | |||||||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
SDG&E: | |||||||
Improvements to natural gas, including certain pipeline safety, and electric and generation | |||||||
distribution systems | $ | 308 | $ | 223 | |||
Pipeline Safety Enhancement Plan (PSEP) | 10 | 26 | |||||
Improvements to electric transmission systems | 92 | 80 | |||||
Electric generation plants and equipment | 8 | — | |||||
SoCalGas: | |||||||
Improvements to distribution, transmission and storage systems, and for certain pipeline safety | 307 | 224 | |||||
PSEP | 36 | 83 | |||||
Advanced metering infrastructure | 14 | 33 | |||||
Sempra South American Utilities: | |||||||
Improvements to electric transmission and distribution systems and generation | |||||||
projects in Peru | 29 | 32 | |||||
Improvements to electric transmission and distribution infrastructure in Chile | 14 | 11 | |||||
Sempra Mexico: | |||||||
Construction of the Sonora, Ojinaga and San Isidro pipeline projects | 85 | 34 | |||||
Construction of other natural gas pipeline and wind projects, and capital expenditures at Ecogas | 9 | 6 | |||||
Sempra Renewables: | |||||||
Construction costs for wind projects | 28 | 20 | |||||
Construction costs for solar projects/facilities | 41 | 161 | |||||
Sempra LNG & Midstream: | |||||||
Cameron Interstate Pipeline and other LNG liquefaction development costs | 3 | 29 | |||||
Other | — | 6 | |||||
Parent and other | 8 | 3 | |||||
Total | $ | 992 | $ | 971 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||
(Dollars in millions) | |||||||||||||
Three months ended March 31, 2017 | 2017 change | Three months ended March 31, 2016(1) | |||||||||||
Sempra Energy Consolidated | $ | (46 | ) | $ | (376 | ) | $ | 330 | |||||
SDG&E | 5 | 28 | (23 | ) | |||||||||
SoCalGas | (62 | ) | (67 | ) | 5 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
(Dollars in millions) | |||||||
Three months ended | Three months ended | ||||||
March 31, 2016 | 2016 change | March 31, 2015 | |||||
Sempra Energy Consolidated | $ | 364 | $ | 595 | $ | (231) | |
SDG&E | (23) | (160) | 137 | ||||
SoCalGas | 5 | 55 | (50) |
▪ | $ |
▪ | $ |
◦ | $167 million for long-term debt |
◦ | $92 million for commercial paper and other short-term debt with maturities greater than 90 days |
▪ | $ |
◦ | $437 million for commercial paper and other short-term debt with maturities greater than 90 days ($492 million in 2017 compared to $55 million in 2016), and |
◦ | $50 million for long-term debt in |
▪ | $343 million increase in short-term debt in 2017 compared to a $2 million decrease in 2016; offset by |
▪ | $ |
▪ | $140 million higher payments of long-term debt in |
▪ | a reopened CPUC proceeding that is considering whether a SONGS-related amended settlement agreement approved in 2014 is reasonable and in the public interest; |
▪ | matters concerning the ability to timely withdraw funds from trust accounts for the payment of decommissioning costs; and |
▪ | the arbitration decision finding Mitsubishi Heavy Industries, Ltd., Mitsubishi Nuclear Energy Systems, Inc., and Mitsubishi Heavy Industries America, Inc. (collectively MHI) liable for breach of contract in connection with the replacement steam generators at the SONGS nuclear power plant, subject to a contractual limitation of liability, and awarding MHI 95 percent of its arbitration costs. |
▪ | Electric Rate Reform – California Assembly Bill 327 |
▪ | Distributed Energy Storage – California Assembly Bill 2868 |
▪ | Renewable Energy Procurement |
▪ | Clean Energy and Pollution Reduction Act – California SB 350 |
▪ | In January 2016, the Governor of the State of California issued an Order proclaiming a state of emergency to exist in Los Angeles County due to the natural gas leak at the Aliso Canyon facility. The Governor’s Order imposes various orders with respect to: stopping the leak; protecting public health and safety; ensuring accountability; and strengthening oversight. We provide further detail regarding the Governor’s Order and CARB’s Aliso Canyon Methane Leak Climate Impacts Mitigation Program, issued pursuant to the Governor’s Order, in Note 11 of the Notes to Condensed Consolidated Financial Statements herein. |
▪ | In January 2016, SoCalGas entered into a Stipulated Order for Abatement with the SCAQMD and agreed to take various actions in connection with injecting and withdrawing natural gas at Aliso Canyon, sealing the well, monitoring, reporting, safety and funding a health impact study, among other things. In February 2017, SoCalGas entered into a settlement agreement with the SCAQMD, and in March 2017, the Hearing Board terminated the Abatement Order. We provide further detail regarding the SCAQMD stipulated Abatement Order in Note 11 of the Notes to Condensed Consolidated Financial Statements herein. |
▪ | In January 2016, DOGGR and the CPUC selected Blade Energy Partners (Blade) to conduct an independent analysis under the direction and supervision of DOGGR and the CPUC to be funded by SoCalGas to investigate the technical root cause of the Aliso Canyon natural gas leak. The timing of the root cause analysis is under the control of Blade, DOGGR and the CPUC. |
▪ | In February 2017, the CPUC opened a proceeding to determine the feasibility of minimizing or eliminating use of the Aliso Canyon natural gas storage facility, while still maintaining energy and electric reliability for the region, as we discuss below in “SB 380.” |
▪ | requires PHMSA to issue, within two years of passage, “minimum safety standards for underground natural gas storage facilities;” |
▪ | imposes a “user fee” on underground storage facilities as needed to implement the safety standards; |
▪ | grants PHMSA authority to issue emergency orders and impose emergency restrictions, prohibitions and safety measures on owners and operators of gas or hazardous liquid pipeline facilities without prior notice or an opportunity for hearing, if the Secretary of Energy determines that an unsafe condition or practice, or a combination of unsafe conditions and practices, constitutes or is causing an imminent hazard; and |
▪ | directs the Secretary of Energy to establish an Interagency Task Force comprised of representatives from various federal agencies and representatives of state and local governments. |
▪ | the continued prohibition against SoCalGas injecting any natural gas into the Aliso Canyon facility until a comprehensive review of the safety of the gas storage wells at the facility is completed in accordance with regulations adopted by DOGGR, the State Oil & Gas Supervisor has made a safety determination and other required findings, at least one public hearing has been held in the affected community, and the Executive Director of the CPUC has issued a concurring letter regarding the Supervisor’s determination of safety; |
▪ | that all gas storage wells returning to service at the Aliso Canyon storage field inject or produce gas only through the interior metal tubing and not through the annulus between the tubing and the well casing, which allows SoCalGas wells to operate with two complete barriers to mitigate the potential for an uncontrolled release of natural gas; and |
▪ | a CPUC proceeding (which was opened in February 2017) to determine the feasibility of minimizing or eliminating use of the Aliso Canyon natural gas storage facility, while still maintaining energy and electric reliability for the region, and to consult with various governmental agencies and other entities in making its determination. The scope of the proceeding does not include issues with respect to air quality, public health, causation, culpability, or cost responsibility regarding the Aliso Canyon natural gas leak. |
PIPELINE SAFETY ENHANCEMENT PLAN – REASONABLENESS REVIEW SUMMARY | |||||||||||||||
(Dollars in millions) | |||||||||||||||
2011 through March 31, 2017 | |||||||||||||||
Total invested(1) | CPUC review completed(2) | CPUC review pending(3) | 2018 recovery filing(4)(5) | ||||||||||||
Sempra Energy Consolidated: | �� | ||||||||||||||
Capital | $ | 1,282 | $ | 8 | $ | 142 | $ | 1,132 | |||||||
Operation and maintenance | 179 | 25 | 62 | 92 | |||||||||||
Total | $ | 1,461 | $ | 33 | $ | 204 | $ | 1,224 | |||||||
SoCalGas: | |||||||||||||||
Capital | $ | 977 | $ | 8 | $ | 128 | $ | 841 | |||||||
Operation and maintenance | 170 | 25 | 61 | 84 | |||||||||||
Total | $ | 1,147 | $ | 33 | $ | 189 | $ | 925 | |||||||
SDG&E: | |||||||||||||||
Capital | $ | 305 | $ | — | $ | 14 | $ | 291 | |||||||
Operation and maintenance | 9 | — | 1 | 8 | |||||||||||
Total | $ | 314 | $ | — | $ | 15 | $ | 299 |
▪ | DOE Free Trade Agreement (FTA) approval received in July 2015 |
▪ | Non-FTA approval received in July 2016 |
▪ | FERC permit received in May 2016 |
▪ | The proposed project is designed to include |
◦ | two natural gas liquefaction trains with production capability of approximately 13.5 Mtpa, or 698 Bcf per year; |
◦ | three LNG storage tanks; |
◦ | natural gas liquids and refrigerant storage; |
◦ | feed gas pre-treatment facilities; and |
◦ | two berths and associated marine and loading facilities. |
▪ | In June 2015, Sempra LNG & Midstream filed permit applications with the DOE for authorization to export the LNG produced from the proposed project to all current and future non-FTA countries. |
▪ | In August 2015, Sempra LNG & Midstream received authorization from the DOE to export the LNG produced from the proposed project to all current and future FTA countries. |
▪ | In February 2016, Sempra LNG & Midstream and Woodside Petroleum Ltd. |
NOMINAL AMOUNT OF LONG-TERM DEBT(1) | ||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||
March 31, 2017 | December 31, 2016 | |||||||||||||||||||||||
Sempra Energy Consolidated | SDG&E | SoCalGas | Sempra Energy Consolidated | SDG&E | SoCalGas | |||||||||||||||||||
Utility fixed-rate | $ | 7,200 | $ | 4,191 | $ | 3,009 | $ | 7,218 | $ | 4,209 | $ | 3,009 | ||||||||||||
Utility variable-rate | 302 | 302 | — | 445 | 445 | — | ||||||||||||||||||
Non-utility fixed-rate | 6,746 | — | — | 6,703 | — | — | ||||||||||||||||||
Non-utility variable-rate | 738 | — | — | 719 | — | — |
(1) | Before the effects of interest rate swaps, reductions/increases for unamortized discount/premium and reduction for debt issuance costs, and excluding capital lease obligations and build-to-suit lease. |
NOMINAL AMOUNT OF LONG-TERM DEBT(1) | |||||||||||||
(Dollars in millions) | |||||||||||||
March 31, 2016 | December 31, 2015 | ||||||||||||
Sempra Energy | Sempra Energy | ||||||||||||
Consolidated | SDG&E | SoCalGas | Consolidated | SDG&E | SoCalGas | ||||||||
Utility fixed-rate | $ | 6,344 | $ | 3,832 | $ | 2,512 | $ | 6,362 | $ | 3,849 | $ | 2,513 | |
Utility variable-rate | 452 | 452 | ― | 455 | 455 | ― | |||||||
Non-utility fixed-rate | 6,801 | ― | ― | 6,780 | ― | ― | |||||||
Non-utility variable-rate | 166 | ― | ― | 166 | ― | ― | |||||||
(1) | Excluding capital lease obligations, build-to-suit lease and interest rate swaps, and before reductions/increases for unamortized discount/premium and reductions for debt issuance costs. |
EXHIBIT 3 -- BYLAWS AND ARTICLES OF INCORPORATION | |||
Southern California Gas Company | |||
EXHIBIT 10 -- MATERIAL CONTRACTS | |||
Compensation | |||
Sempra Energy | |||
San Diego Gas & Electric Company | |||
Southern California Gas Company |
San Diego Gas & Electric Company / Southern California Gas Company |
EXHIBIT 12 -- STATEMENTS RE: COMPUTATION OF RATIOS |
Sempra Energy |
San Diego Gas & Electric Company |
Southern California Gas Company |
EXHIBIT 31 -- SECTION 302 CERTIFICATIONS |
Sempra Energy |
San Diego Gas & Electric Company |
Southern California Gas Company |
EXHIBIT 32 -- SECTION 906 CERTIFICATIONS | |||
Sempra Energy | |||
San Diego Gas & Electric Company | |||
Southern California Gas Company | |||
EXHIBIT 101 -- INTERACTIVE DATA FILE | |||
Sempra Energy / San Diego Gas & Electric Company / Southern California Gas Company | |||
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Sempra Energy: | |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. | |
SEMPRA ENERGY, (Registrant) | |
Date: May | By: /s/ Trevor I. Mihalik |
Trevor I. Mihalik Senior Vice President, Controller and Chief Accounting Officer |
San Diego Gas & Electric Company: | |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. | |
SAN DIEGO GAS & ELECTRIC COMPANY, (Registrant) | |
Date: May | 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: May | By: /s/ Bruce A. Folkmann |
Bruce A. Folkmann Vice President, Controller, Chief Financial Officer and Chief Accounting Officer |