Date of Report | |
(Date of earliest event reported): | May 9, 2017 |
SOUTHERN CALIFORNIA GAS COMPANY |
(Exact name of registrant as specified in its charter) |
CALIFORNIA | 1-01402 | 95-1240705 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
555 WEST FIFTH STREET, LOS ANGELES, CALIFORNIA | 90013 | |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code | (213) 244-1200 |
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company [ ] |
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. [ ] |
99.1 | May 9, 2017 Sempra Energy News Release (including tables). |
99.2 | Sempra Energy’s Statement of Operations Data by Segment for the three months ended March 31, 2017 and 2016. |
SOUTHERN CALIFORNIA GAS COMPANY, | |
(Registrant) | |
Date: May 9, 2017 | By: /s/ Bruce A. Folkmann |
Bruce A. Folkmann Vice President, Controller, Chief Financial Officer and Chief Accounting Officer |
SEMPRA ENERGY | ||||||||
Table A | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
Three months ended March 31, | ||||||||
(Dollars in millions, except per share amounts) | 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. |
▪ | $(27) million impairment charge related to Sempra LNG & Midstream’s investment in Rockies Express Pipeline LLC (Rockies Express) |
Pretax amount | Income tax benefit(1) | Non-controlling interests | Earnings | Pretax amount | Income tax (benefit)expense(1) | Non-controlling interests | Earnings | ||||||||||||||||||||
(Dollars in millions, except per share amounts) | Three months ended March 31, 2017 | Three months ended March 31, 2016(2) | |||||||||||||||||||||||||
Sempra Energy GAAP Earnings | $ | 441 | $ | 353 | |||||||||||||||||||||||
Exclude: | |||||||||||||||||||||||||||
Impairment of investment in Rockies Express | $ | — | $ | — | $ | — | — | $ | 44 | $ | (17 | ) | $ | — | 27 | ||||||||||||
Deferred income tax (benefit) expense associated with TdM | — | (5 | ) | 2 | (3 | ) | — | 29 | (5 | ) | 24 | ||||||||||||||||
Sempra Energy Adjusted Earnings | $ | 438 | $ | 404 | |||||||||||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||||||||||
Sempra Energy GAAP Earnings | $ | 1.75 | $ | 1.40 | |||||||||||||||||||||||
Sempra Energy Adjusted Earnings | $ | 1.74 | $ | 1.60 | |||||||||||||||||||||||
Weighted-average number of shares outstanding, diluted (thousands) | 252,246 | 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 adoption of ASU 2016-09 as of January 1, 2016. |
SEMPRA ENERGY | ||||||||||
Table B | ||||||||||
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, net | 1,468 | 1,554 | ||||||||
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, net | 33,492 | 32,931 | ||||||||
Total assets | $ | 48,284 | $ | 47,786 | ||||||
Liabilities and Equity | ||||||||||
Current liabilities: | ||||||||||
Short-term debt | $ | 2,054 | $ | 1,779 | ||||||
Accounts payable | 1,092 | 1,476 | ||||||||
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 | 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 | ||||||||
Equity: | ||||||||||
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 | ||||||||||
Table C | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
Three months ended March 31, | ||||||||||
(Dollars in millions) | 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 | ||||||||||
Table D | ||||||||||
SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES AND INVESTMENTS | ||||||||||
Three months ended March 31, | ||||||||||
(Dollars in millions) | 2017 | 2016(1) | ||||||||
(unaudited) | ||||||||||
Earnings (Losses) | ||||||||||
Sempra Utilities: | ||||||||||
San Diego Gas & Electric | $ | 155 | $ | 136 | ||||||
Southern California Gas | 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 | (24 | ) | (20 | ) | ||||||
Earnings | $ | 441 | $ | 353 | ||||||
Three months ended March 31, | ||||||||||
(Dollars in millions) | 2017 | 2016 | ||||||||
(unaudited) | ||||||||||
Capital Expenditures and Investments | ||||||||||
Sempra Utilities: | ||||||||||
San Diego Gas & Electric | $ | 418 | $ | 329 | ||||||
Southern California Gas | 357 | 340 | ||||||||
Sempra South American Utilities | 43 | 43 | ||||||||
Sempra Infrastructure: | ||||||||||
Sempra Mexico | 140 | 40 | ||||||||
Sempra Renewables | 69 | 199 | ||||||||
Sempra LNG & Midstream | 15 | 47 | ||||||||
Parent and other | 9 | 3 | ||||||||
Consolidated Capital Expenditures and Investments | $ | 1,051 | $ | 1,001 | ||||||
(1) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |
SEMPRA ENERGY | ||||||||
Table E | ||||||||
OTHER OPERATING STATISTICS (Unaudited) | ||||||||
Three months ended March 31, | ||||||||
UTILITIES | 2017 | 2016 | ||||||
SDG&E and SoCalGas | ||||||||
Gas Sales (Bcf)(1) | 126 | 113 | ||||||
Transportation (Bcf)(1) | 156 | 148 | ||||||
Total Deliveries (Bcf)(1) | 282 | 261 | ||||||
Total Gas Customers (Thousands) | 6,816 | 6,782 | ||||||
Electric Sales (Millions of kWhs)(1) | 3,764 | 3,773 | ||||||
Direct Access (Millions of kWhs) | 787 | 834 | ||||||
Total Deliveries (Millions of kWhs)(1) | 4,551 | 4,607 | ||||||
Total Electric Customers (Thousands) | 1,436 | 1,428 | ||||||
Other Utilities | ||||||||
Natural Gas Sales (Bcf) | ||||||||
Sempra Mexico | 8 | 8 | ||||||
Mobile Gas(2) (3) | — | 13 | ||||||
Willmut Gas(3) | — | 1 | ||||||
Natural Gas Customers (Thousands) | ||||||||
Sempra Mexico | 119 | 114 | ||||||
Mobile Gas(2) (3) | — | 84 | ||||||
Willmut Gas(3) | — | 19 | ||||||
Electric Sales (Millions of kWhs) | ||||||||
Peru | 1,894 | 1,949 | ||||||
Chile | 811 | 799 | ||||||
Electric Customers (Thousands) | ||||||||
Peru | 1,080 | 1,058 | ||||||
Chile | 689 | 675 | ||||||
ENERGY-RELATED BUSINESSES | ||||||||
Sempra Infrastructure | ||||||||
Power Sold (Millions of kWhs) | ||||||||
Sempra Mexico(4) | 1,055 | 580 | ||||||
Sempra Renewables(5) | 1,014 | 767 | ||||||
Sempra LNG & Midstream | 265 | 221 | ||||||
(1) | Includes intercompany sales. | |||||||
(2) | Includes transportation. | |||||||
(3) | On September 12, 2016, Sempra LNG & Midstream completed the sale of the parent company of Mobile Gas and Willmut Gas. | |||||||
(4) | Includes power sold at the Termoeléctrica de Mexicali natural gas-fired power plant and in 2017, at the Ventika wind power generation facilities acquired in December 2016. Also includes 50 percent of total power sold at the Energía Sierra Juárez wind power generation facility, in which Sempra Energy has a 50-percent ownership interest. Energía Sierra Juárez is not consolidated within Sempra Energy, and the related investment is accounted for under the equity method. | |||||||
(5) | Includes 50 percent of total power sold related to solar and wind projects in which Sempra Energy has a 50-percent ownership. These subsidiaries are not consolidated within Sempra Energy, and the related investments are accounted for under the equity method. |
SEMPRA ENERGY | |||||||||||||||||||||||||||||||||
Table F (Unaudited) | |||||||||||||||||||||||||||||||||
STATEMENT OF OPERATIONS DATA BY SEGMENT | |||||||||||||||||||||||||||||||||
Three months ended March 31, 2017 | |||||||||||||||||||||||||||||||||
(Dollars in millions) | SDG&E | SoCalGas | Sempra South American Utilities | Sempra Mexico | Sempra Renewables | Sempra LNG & Midstream | Consolidating Adjustments, Parent & Other | Total | |||||||||||||||||||||||||
Revenues | $ | 1,057 | $ | 1,241 | $ | 412 | $ | 264 | $ | 22 | $ | 132 | $ | (97 | ) | $ | 3,031 | ||||||||||||||||
Cost of sales and other expenses | (616 | ) | (800 | ) | (326 | ) | (121 | ) | (15 | ) | (128 | ) | 81 | (1,925 | ) | ||||||||||||||||||
Depreciation and amortization | (163 | ) | (126 | ) | (13 | ) | (36 | ) | (9 | ) | (10 | ) | (3 | ) | (360 | ) | |||||||||||||||||
Equity earnings, before income tax | — | — | — | — | 2 | 1 | — | 3 | |||||||||||||||||||||||||
Other income, net | 18 | 11 | 3 | 127 | — | 1 | 9 | 169 | |||||||||||||||||||||||||
Income (loss) before interest and tax (1) | 296 | 326 | 76 | 234 | — | (4 | ) | (10 | ) | 918 | |||||||||||||||||||||||
Net interest (expense) income (2) | (49 | ) | (25 | ) | (4 | ) | (30 | ) | (3 | ) | 6 | (58 | ) | (163 | ) | ||||||||||||||||||
Income tax (expense) benefit | (90 | ) | (98 | ) | (19 | ) | (142 | ) | 11 | (1 | ) | 44 | (295 | ) | |||||||||||||||||||
Equity earnings (losses), net of income tax | — | — | 1 | (9 | ) | — | — | — | (8 | ) | |||||||||||||||||||||||
(Earnings) losses attributable to noncontrolling interests | (2 | ) | — | (7 | ) | (5 | ) | 3 | — | — | (11 | ) | |||||||||||||||||||||
Earnings (losses) | $ | 155 | $ | 203 | $ | 47 | $ | 48 | $ | 11 | $ | 1 | $ | (24 | ) | $ | 441 | ||||||||||||||||
Three months ended March 31, 2016 | |||||||||||||||||||||||||||||||||
(Dollars in millions) | SDG&E | SoCalGas | Sempra South American Utilities | Sempra Mexico | Sempra Renewables | Sempra LNG & Midstream | Consolidating Adjustments, Parent & Other | Total | |||||||||||||||||||||||||
Revenues | $ | 991 | $ | 1,033 | $ | 400 | $ | 138 | $ | 7 | $ | 130 | $ | (77 | ) | $ | 2,622 | ||||||||||||||||
Cost of sales and other expenses | (596 | ) | (617 | ) | (329 | ) | (82 | ) | (13 | ) | (154 | ) | 62 | (1,729 | ) | ||||||||||||||||||
Depreciation and amortization | (159 | ) | (122 | ) | (13 | ) | (17 | ) | (1 | ) | (13 | ) | (3 | ) | (328 | ) | |||||||||||||||||
Equity earnings (losses), before income tax | — | — | — | — | 7 | (29 | ) | — | (22 | ) | |||||||||||||||||||||||
Other income, net | 14 | 10 | 2 | 11 | — | — | 12 | 49 | |||||||||||||||||||||||||
Income (loss) before interest and tax (1) | 250 | 304 | 60 | 50 | — | (66 | ) | (6 | ) | 592 | |||||||||||||||||||||||
Net interest (expense) income (2) | (48 | ) | (22 | ) | (4 | ) | (2 | ) | 1 | 4 | (66 | ) | (137 | ) | |||||||||||||||||||
Income tax (expense) benefit (3) | (65 | ) | (83 | ) | (14 | ) | (40 | ) | 13 | 29 | 52 | (108 | ) | ||||||||||||||||||||
Equity earnings, net of income tax | — | — | 2 | 15 | — | — | — | 17 | |||||||||||||||||||||||||
(Earnings) losses attributable to noncontrolling interests | (1 | ) | — | (6 | ) | (5 | ) | — | 1 | — | (11 | ) | |||||||||||||||||||||
Earnings (losses) (3) | $ | 136 | $ | 199 | $ | 38 | $ | 18 | $ | 14 | $ | (32 | ) | $ | (20 | ) | $ | 353 | |||||||||||||||
(1) | Management believes Income (Loss) Before Interest and Tax is a useful measurement of our segments’ performance because it can be used to evaluate the effectiveness of our operations exclusive of | ||||||||||||||||||||||||||||||||
interest and income tax, neither of which is directly relevant to the efficiency of those operations. | |||||||||||||||||||||||||||||||||
(2) | Includes interest income, interest expense and preferred dividends of subsidiary. | ||||||||||||||||||||||||||||||||
(3) | As adjusted for the adoption of ASU 2016-09 as of January 1, 2016. |