UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report | |
(Date of earliest event reported): | February 26, 2019 |
SEMPRA ENERGY |
(Exact name of registrant as specified in its charter) |
CALIFORNIA | 1-14201 | 33-0732627 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
488 8th AVENUE, SAN DIEGO, CALIFORNIA | 92101 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant's telephone number, including area code | (619) 696-2000 |
(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 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2). 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. [ ] |
FORM 8-K
Item 2.02 Results of Operations and Financial Condition.
The information furnished in this Item 2.02 and in Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, nor shall it be deemed to be incorporated by reference in any filing of Sempra Energy, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
On February 26, 2019, Sempra Energy issued a press release announcing consolidated earnings of $864 million, or $3.03 per diluted share of common stock, for the fourth quarter of 2018. The press release has been posted on Sempra Energy’s website (www.sempra.com) and a copy is attached as Exhibit 99.1.
Concurrently with the website posting of such press release and as noted therein, Sempra Energy also posted its Statements of Operations Data by Segment for the three months and years ended December 31, 2018 and 2017. A copy of such information is attached as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
Exhibits
SIGNATURE
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 hereunto duly authorized.
SEMPRA ENERGY, | ||
(Registrant) | ||
Date: February 26, 2019 | By: /s/ Peter R. Wall | |
Peter R. Wall Vice President, Controller and Chief Accounting Officer | ||
Exhibit 99.1
NEWS RELEASE
Media Contact: | Amber Albrecht | |||
Sempra Energy | ||||
(877) 340-8875 | ||||
www.sempra.com | ||||
Financial Contact: | Patrick Billings | |||
Sempra Energy | ||||
(877) 736-7727 | ||||
investor@sempra.com | ||||
SEMPRA ENERGY’S 2018 EARNINGS RISE ON STRONG OPERATING RESULTS
• | Company Advances Strategy to Align Asset Portfolio with North American Focus |
• | Common Dividend Raised for 9th Consecutive Year |
SAN DIEGO, Feb. 26, 2019 - Sempra Energy (NYSE: SRE) today reported its 2018 full-year earnings increased to $924 million, or $3.42 per diluted share, from $256 million, or $1.01 per diluted share, in 2017. On an adjusted basis, the company’s 2018 earnings were $1.5 billion, or $5.57 per diluted share, up from $1.37 billion, or $5.42 per diluted share, in 2017.
“Our strong 2018 operational and financial results confirm that we’re on track to fulfill our mission to become North America’s premier energy infrastructure company,” said Jeffrey W. Martin, chairman and CEO of Sempra Energy. “Over the past year, we made significant strides in all aspects of our business. We expanded our Texas regulated utility platform with the acquisition of our majority interest in Oncor. Also, we delivered outstanding safety, reliability and customer service at our California utilities, while advancing our role in North America’s liquefied natural gas (LNG) export market. Moreover, we executed our strategy to realign our portfolio to support our core mission. These results are a testament to our team’s ability to deliver value to our owners.”
In the fourth quarter 2018, Sempra Energy reported earnings of $864 million, or $3.03 per diluted share, compared with a loss of $501 million, or $1.99 per diluted share, in 2017. Sempra Energy's adjusted earnings in the fourth quarter 2018 increased to $431 million, or $1.56 per diluted share, from $389 million, or $1.54 per diluted share in 2017.
These financial results reflect certain significant items, as described on an after-tax basis in the following table of GAAP earnings reconciled to adjusted earnings for the fourth quarter and full year 2018 and 2017.
Three months ended | Years ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
(Dollars, except earnings per share, and shares, in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
(Unaudited) | |||||||||||||||
GAAP Earnings (Losses)(1) | $ | 864 | $ | (501 | ) | $ | 924 | $ | 256 | ||||||
Gain on Sale of Certain Sempra Renewables Assets | (367 | ) | — | (367 | ) | — | |||||||||
Impairment of Investment in RBS Sempra Commodities | — | — | 65 | — | |||||||||||
(Adjustment)/Impairment of Non-Utility U.S. Natural Gas Storage Assets | (126 | ) | — | 629 | — | ||||||||||
Impairment of U.S. Wind Equity Method Investments | — | — | 145 | — | |||||||||||
Impacts Associated with Aliso Canyon Litigation | — | 20 | 22 | 20 | |||||||||||
Impact from the Tax Cuts and Jobs Act of 2017 | 60 | 870 | 85 | 870 | |||||||||||
Write-Off of Wildfire Regulatory Asset | — | — | — | 208 | |||||||||||
Adjustments Related to Termoeléctrica de Mexicali (TdM) Held for Sale | — | — | — | 42 | |||||||||||
Recoveries Related to Permanent Releases of Pipeline Capacity | — | — | — | (28 | ) | ||||||||||
Adjusted Earnings(1) | $ | 431 | $ | 389 | $ | 1,503 | $ | 1,368 | |||||||
GAAP Diluted Weighted-Average Shares Outstanding | 296 | 252 | 270 | 252 | |||||||||||
GAAP Earnings (Losses) per Diluted Share(1) | $ | 3.03 | (2) | $ | (1.99 | ) | $ | 3.42 | $ | 1.01 | |||||
Adjusted Diluted Weighted-Average Shares Outstanding(1) | 276 | 253 | 270 | 252 | |||||||||||
Adjusted Earnings per Diluted Share(1) | $ | 1.56 | $ | 1.54 | $ | 5.57 | $ | 5.42 | |||||||
1) | Attributable to common shares. Sempra Energy adjusted earnings and adjusted earnings per share are non-GAAP financial measures. See Table A for information regarding non-GAAP financial measures and descriptions of adjustments above. |
2) | Due to the dilutive effect of the mandatory convertible preferred stock for GAAP earnings, the numerator used to calculate GAAP earnings per share includes an add-back of $36 million of mandatory preferred stock dividends declared in the quarter. |
Last week, Sempra Energy's board of directors approved an approximate 8-percent increase in the company's dividend to $3.87 per common share from $3.58 per common share, on an annualized basis. This marks the ninth consecutive year that the company has raised its common dividend.
OPERATING HIGHLIGHTS
In 2018, Sempra Energy achieved several significant milestones in advancing its mission to become North America’s premier energy infrastructure company.
Earlier this month, Sempra Energy announced an agreement to complete the divestiture of its U.S. renewables business by selling its remaining wind operating and development assets. When complete, the sales of the company’s U.S. solar, wind and non-utility natural gas storage assets are expected to generate approximately $2.5 billion in cash proceeds for Sempra Energy. The proceeds will be used to support Sempra Energy’s focus on North America and strengthen its balance sheet.
Additionally, in January, Sempra Energy announced that it would sell its equity interests in its South American businesses, including Luz del Sur S.A.A. in Peru and Chilquinta Energía S.A. in Chile. While Luz del Sur and Chilquinta Energía have made significant contributions to Sempra Energy over the past two decades and offer exciting future growth opportunities, the planned sale supports Sempra Energy’s refocusing of capital investments in North America. Sempra Energy will launch the formal sale process in March.
Sempra Energy also announced several LNG agreements with commercial parties in the fourth quarter 2018 with respect to the company's LNG facilities in development: Port Arthur LNG in Jefferson County, Texas; Cameron LNG Phase 2 in Hackberry, La.; and Energía Costa Azul LNG Phases 1 and 2 in Mexico. The agreements support Sempra Energy’s goal to become one of the largest U.S. exporters of LNG, targeting the export of 45 million tons per annum to global markets.
In November 2018, Cameron LNG initiated the commissioning process for the first of three liquefaction trains of Phase 1 of the project. Sempra Energy expects Cameron LNG to begin generating earnings in mid-2019.
Last month, Sempra Energy was added to the Dow Jones Utility Average, a 15-stock, price-weighted index measuring the performance of some of the largest U.S. companies within the utilities sector. Stocks are selected for the index based on reputation, demonstration of sustained financial growth and interest to a large number of investors.
Additionally, in 2018, the Wall Street Journal ranked Sempra Energy as the top company in the utility sector in the Journal’s first “Management Top 250” list.
2019 EARNINGS GUIDANCE
Sempra Energy today affirmed its 2019 adjusted earnings-per-share guidance range of $5.70 to $6.30.
NON-GAAP FINANCIAL MEASURES
Non-GAAP financial measures for Sempra Energy include fourth-quarter and full-year 2018 and 2017 adjusted earnings and adjusted earnings per share and 2019 adjusted earnings-per-share guidance. Additional information regarding these non-GAAP financial measures is in the appendix on Table A of the fourth-quarter 2018 financial tables.
INTERNET BROADCAST
Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. ET with senior management of the company. Access is available by logging onto the website at www.sempra.com. For those unable to log onto the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 2787825.
Sempra Energy’s mission is to become North America’s premier energy infrastructure company. With 2018 revenues of more than $11.5 billion, the San Diego-based company is the utility holding company with the largest U.S. customer base. The Sempra Energy companies’ more than 20,000 employees are focused on delivering energy with purpose to approximately 40 million consumers worldwide. Sempra Energy has been consistently recognized for its leadership in diversity and inclusion, social responsibility and investment value.
###
This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by words such as “believes,” “expects,” “anticipates,” “plans,” “estimates,” “projects,” “forecasts,” “contemplates,” “assumes,” “depends,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “target,” “pursue,” “outlook,” “maintain,” or similar expressions or when we discuss our guidance, strategy, plans, goals, vision, opportunities, projections, initiatives, objectives or intentions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements.
Factors, among others, that could cause our actual results and future actions to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: the greater degree and prevalence of wildfires in California in recent years and the risk that we may be found liable for damages regardless of fault, such as where inverse condemnation applies, and risk that we may not be able to recover any such costs in rates from customers in California; actions and the timing of actions, including decisions, new regulations and issuances of authorizations by the California Public Utilities Commission, U.S. Department of Energy, California Department of Conservation’s Division of Oil, Gas, and Geothermal Resources, Federal Energy Regulatory Commission, U.S. Environmental Protection Agency, Pipeline and Hazardous Materials Safety Administration, Los Angeles County Department of Public Health, Public Utility Commission of Texas, states, cities and counties, and other regulatory and governmental bodies in the U.S. and other countries in which we operate; actions by credit rating agencies to downgrade our credit ratings or those of our subsidiaries or to place those ratings on negative outlook and our ability to borrow at favorable interest rates; the success of business development efforts, construction projects, major acquisitions, divestitures and internal structural changes, including risks in (i) obtaining or maintaining authorizations; (ii) completing construction projects on schedule and budget; (iii) obtaining the consent of partners; (iv) counterparties’ ability to fulfill contractual commitments; (v) winning competitively bid infrastructure projects; (vi) disruption caused by the announcement of contemplated acquisitions and/or divestitures or internal structural changes; (vii) the ability to complete contemplated acquisitions and/or divestitures; and (viii) the ability to realize anticipated benefits from any of these efforts once completed; the resolution of civil and criminal litigation and regulatory investigations and proceedings; deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and ratepayers; denial of approvals of proposed settlements; delays in, or denial of, regulatory agency authorizations to recover costs in rates from customers or regulatory agency approval for projects required to enhance safety and reliability; and moves to reduce or eliminate reliance on natural gas; the availability of electric power and natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid, limitations on the withdrawal or injection of natural gas from or into storage facilities, and equipment failures; risks posed by actions of third parties who control the operations of our investments; weather conditions, natural disasters, accidents, equipment failures, computer system outages, explosions, terrorist attacks and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires and subject us to third-party liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits), may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance; cybersecurity threats to the energy grid, storage and pipeline infrastructure, the information and systems used to operate our businesses and the confidentiality of our proprietary information and the personal information of our customers and employees; actions of activist shareholders, which could impact the market price of our securities and disrupt our operations as a result of, among other things, requiring significant time by management and our board of directors; changes in capital markets, energy markets and economic conditions, including the availability of credit; and volatility in currency exchange, interest and inflation rates and commodity prices and our ability to effectively hedge the risk of such volatility; the impact of recent federal tax reform and our ability to mitigate adverse impacts; changes in foreign and domestic trade policies and laws, including border tariffs and revisions to or replacement of international trade agreements, such as the North American Free Trade Agreement, that may increase our costs or impair our ability to resolve trade disputes; expropriation of assets by foreign governments and title and other property disputes; the impact at San Diego Gas & Electric (SDG&E) on competitive customer rates and reliability of electric transmission and distribution systems due to the growth in distributed and local power generation and from possible departing retail load resulting from customers transferring to Direct Access and Community Choice Aggregation or other forms of distributed and local power generation and the potential risk of nonrecovery for stranded assets and contractual obligations; Oncor Electric Delivery Company LLC’s (Oncor) ability to eliminate or reduce its quarterly dividends due to regulatory capital requirements and other regulatory and governance commitments, including the determination by a majority of Oncor’s independent directors or a minority member director to retain such amounts to meet future requirements; and other uncertainties, some of which may be difficult to predict and are beyond our control.
These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov. Investors should not rely unduly on any forward-looking statements. These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.
Sempra South American Utilities, Sempra North American Infrastructure, Sempra LNG & Midstream, Sempra Renewables, Sempra Mexico, Sempra Texas Utility, Oncor Electric Delivery Company LLC (Oncor) and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) are not the same companies as the California utilities, San Diego Gas & Electric Company (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra South American Utilities, Sempra North American Infrastructure, Sempra LNG & Midstream, Sempra Renewables, Sempra Mexico, Sempra Texas Utility, Oncor and IEnova are not regulated by the California Public Utilities Commission.
SEMPRA ENERGY | |||||||||||||||||
Table A | |||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
Three months ended December 31, | Years ended December 31, | ||||||||||||||||
(Dollars in millions, except per share amounts; shares in thousands) | 2018 | 2017(1) | 2018 | 2017(1) | |||||||||||||
(unaudited) | |||||||||||||||||
REVENUES | |||||||||||||||||
Utilities | $ | 2,798 | $ | 2,604 | $ | 10,046 | $ | 9,776 | |||||||||
Energy-related businesses | 423 | 360 | 1,641 | 1,431 | |||||||||||||
Total revenues | 3,221 | 2,964 | 11,687 | 11,207 | |||||||||||||
EXPENSES AND OTHER INCOME | |||||||||||||||||
Utilities: | |||||||||||||||||
Cost of electric fuel and purchased power | (545 | ) | (551 | ) | (2,323 | ) | (2,281 | ) | |||||||||
Cost of natural gas | (426 | ) | (287 | ) | (1,208 | ) | (1,190 | ) | |||||||||
Energy-related businesses: | |||||||||||||||||
Cost of natural gas, electric fuel and purchased power | (98 | ) | (113 | ) | (355 | ) | (339 | ) | |||||||||
Other cost of sales | (24 | ) | (19 | ) | (78 | ) | (24 | ) | |||||||||
Operation and maintenance | (916 | ) | (868 | ) | (3,309 | ) | (3,096 | ) | |||||||||
Depreciation and amortization | (391 | ) | (384 | ) | (1,549 | ) | (1,490 | ) | |||||||||
Franchise fees and other taxes | (120 | ) | (111 | ) | (472 | ) | (436 | ) | |||||||||
Write-off of wildfire regulatory asset | — | — | — | (351 | ) | ||||||||||||
Impairment losses | 182 | — | (1,122 | ) | (72 | ) | |||||||||||
Gain on sale of assets | 514 | 1 | 524 | 3 | |||||||||||||
Other (expense) income, net | (124 | ) | (89 | ) | 72 | 233 | |||||||||||
Interest income | 28 | 20 | 104 | 46 | |||||||||||||
Interest expense | (240 | ) | (166 | ) | (925 | ) | (659 | ) | |||||||||
Income before income taxes and equity earnings of unconsolidated entities | 1,061 | 397 | 1,046 | 1,551 | |||||||||||||
Income tax expense | (223 | ) | (898 | ) | (96 | ) | (1,276 | ) | |||||||||
Equity earnings | 126 | 50 | 176 | 76 | |||||||||||||
Net income (loss) | 964 | (451 | ) | 1,126 | 351 | ||||||||||||
Earnings attributable to noncontrolling interests | (64 | ) | (50 | ) | (76 | ) | (94 | ) | |||||||||
Mandatory convertible preferred stock dividends | (36 | ) | — | (125 | ) | — | |||||||||||
Preferred dividends of subsidiary | — | — | (1 | ) | (1 | ) | |||||||||||
Earnings (losses) attributable to common shares | $ | 864 | $ | (501 | ) | $ | 924 | $ | 256 | ||||||||
BASIC EARNINGS PER COMMON SHARE | |||||||||||||||||
Numerator: | |||||||||||||||||
Earnings (losses) attributable to common shares | $ | 864 | $ | (501 | ) | $ | 924 | $ | 256 | ||||||||
Denominator: | |||||||||||||||||
Weighted-average shares outstanding, basic | 274,331 | 251,902 | 268,072 | 251,545 | |||||||||||||
Basic earnings (losses) per common share | $ | 3.15 | $ | (1.99 | ) | $ | 3.45 | $ | 1.02 | ||||||||
DILUTED EARNINGS PER COMMON SHARE | |||||||||||||||||
Numerator: | |||||||||||||||||
Earnings (losses) attributable to common shares | $ | 864 | $ | (501 | ) | $ | 924 | $ | 256 | ||||||||
Add back dividends for dilutive mandatory convertible preferred stock | 36 | N/A | N/A | N/A | |||||||||||||
Total | $ | 900 | $ | (501 | ) | $ | 924 | $ | 256 | ||||||||
Denominator: | |||||||||||||||||
Weighted-average shares outstanding, basic | 274,331 | 251,902 | 268,072 | 251,545 | |||||||||||||
Dilutive effect of stock options, RSAs and RSUs | 905 | — | 919 | 755 | |||||||||||||
Dilutive effect of common shares sold forward | 994 | — | 861 | — | |||||||||||||
Dilutive effect of mandatory convertible preferred stock | 20,199 | — | — | — | |||||||||||||
Weighted-average shares outstanding, diluted(2) | 296,429 | 251,902 | 269,852 | 252,300 | |||||||||||||
Diluted earnings (losses) per common share(2) | $ | 3.03 | $ | (1.99 | ) | $ | 3.42 | $ | 1.01 | ||||||||
(1) | As adjusted for the retrospective adoption of Accounting Standards Update (ASU) 2017-07 and a reclassification to conform to current year presentation. |
(2) | For the three months ended December 31, 2017, the total weighted-average potentially dilutive securities was 823 shares. However, these securities were not included in the computation of GAAP EPS since to do so would have decreased the loss per share. |
SEMPRA ENERGY
Table A (Continued)
RECONCILIATION OF SEMPRA ENERGY ADJUSTED EARNINGS TO SEMPRA ENERGY GAAP EARNINGS (LOSSES) (Unaudited)
Sempra Energy Adjusted Earnings and Adjusted Earnings Per Common Share (Adjusted EPS) exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2018 and 2017 as follows:
Three months ended December 31, 2018:
▪ | $367 million gain on the sale of certain Sempra Renewables assets |
▪ | $126 million reduction in the impairment of certain non-utility natural gas storage assets in the southeast U.S. at Sempra LNG & Midstream |
▪ | $(60) million income tax expense in 2018 to adjust the Tax Cuts and Jobs Act of 2017 (TCJA) provisional amounts recorded in 2017 |
Three months ended December 31, 2017:
▪ | $(870) million income tax expense from the impact of the TCJA |
▪ | $(20) million associated with Aliso Canyon litigation reserves at Southern California Gas Company (SoCalGas) |
Year ended December 31, 2018:
▪ | $367 million gain on the sale of certain Sempra Renewables assets |
▪ | $(65) million impairment of RBS Sempra Commodities LLP (RBS Sempra Commodities) equity method investment at Parent and Other |
▪ | $(629) million impairment of certain non-utility natural gas storage assets at Sempra LNG & Midstream |
▪ | $(145) million other-than-temporary impairment of certain U.S. wind equity method investments at Sempra Renewables |
▪ | $(22) million impacts associated with Aliso Canyon natural gas storage facility litigation at SoCalGas |
▪ | $(85) million income tax expense in 2018 to adjust the TCJA provisional amounts recorded in 2017 |
Year ended December 31, 2017:
▪ | $(870) million income tax expense from the impact of the TCJA |
▪ | $(208) million write-off of wildfire regulatory asset at San Diego Gas & Electric Company (SDG&E) |
▪ | $(47) million impairment of Termoeléctrica de Mexicali (TdM) assets that were held for sale until June 2018 at Sempra Mexico |
▪ | $(20) million associated with Aliso Canyon litigation reserves at SoCalGas |
▪ | $5 million deferred income tax benefit on the TdM assets that were held for sale |
▪ | $28 million of recoveries related to 2016 permanent releases of pipeline capacity at Sempra LNG & Midstream |
Sempra Energy Adjusted Earnings, Weighted-Average Shares Outstanding – Adjusted and Adjusted EPS are non-GAAP financial measures (GAAP represents accounting principles generally accepted in the United States of America). Because of the significance and/or nature of the excluded items, management believes that these non-GAAP financial measures provide a meaningful comparison of the performance of Sempra Energy’s business operations from 2018 to 2017 and to future periods. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. The table below reconciles for historical periods these non-GAAP financial measures to Sempra Energy GAAP Earnings (Losses), Weighted-Average Shares Outstanding – GAAP and GAAP Diluted Earnings (Losses) Per Common Share (GAAP EPS), which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.
SEMPRA ENERGY
Table A (Continued)
Pretax amount | Income tax expense (benefit)(1) | Non-controlling interests | Earnings | Pretax amount | Income tax expense (benefit)(1) | Non-controlling interests | (Losses) earnings | ||||||||||||||||||||
(Dollars in millions, except per share amounts; shares in thousands) | Three months ended December 31, 2018 | Three months ended December 31, 2017 | |||||||||||||||||||||||||
Sempra Energy GAAP Earnings (Losses) | $ | 864 | $ | (501 | ) | ||||||||||||||||||||||
Excluded items: | |||||||||||||||||||||||||||
Gain on sale of certain Sempra Renewables assets | $ | (513 | ) | $ | 146 | $ | — | (367 | ) | $ | — | $ | — | $ | — | — | |||||||||||
Reduction of impairment of non-utility natural gas storage assets | (183 | ) | 47 | 10 | (126 | ) | — | — | — | — | |||||||||||||||||
Impact from the TCJA | — | 60 | — | 60 | — | 870 | — | 870 | |||||||||||||||||||
Aliso Canyon litigation reserves | — | — | — | — | 20 | — | — | 20 | |||||||||||||||||||
Sempra Energy Adjusted Earnings | $ | 431 | $ | 389 | |||||||||||||||||||||||
Diluted earnings (losses) per common share(2): | |||||||||||||||||||||||||||
Sempra Energy GAAP Earnings (Losses) | $ | 900 | (3) | $ | (501 | ) | |||||||||||||||||||||
Weighted-average shares outstanding, diluted – GAAP | 296,429 | 251,902 | |||||||||||||||||||||||||
Sempra Energy GAAP EPS | $ | 3.03 | (3) | $ | (1.99 | ) | |||||||||||||||||||||
Sempra Energy Adjusted Earnings | $ | 431 | $ | 389 | |||||||||||||||||||||||
Weighted-average shares outstanding, diluted – Adjusted | 276,230 | (4) | 252,725 | (5) | |||||||||||||||||||||||
Sempra Energy Adjusted EPS | $ | 1.56 | (4) | $ | 1.54 | (5) | |||||||||||||||||||||
Year ended December 31, 2018 | Year ended December 31, 2017 | ||||||||||||||||||||||||||
Sempra Energy GAAP Earnings | $ | 924 | $ | 256 | |||||||||||||||||||||||
Excluded items: | |||||||||||||||||||||||||||
Gain on sale of certain Sempra Renewables assets | $ | (513 | ) | $ | 146 | $ | — | (367 | ) | $ | — | $ | — | $ | — | — | |||||||||||
Impairment of investment in RBS Sempra Commodities | 65 | — | — | 65 | — | — | — | — | |||||||||||||||||||
Impairment of non-utility natural gas storage assets | 1,117 | (452 | ) | (36 | ) | 629 | — | — | — | — | |||||||||||||||||
Impairment of U.S. wind equity method investments | 200 | (55 | ) | — | 145 | — | — | — | — | ||||||||||||||||||
Impacts associated with Aliso Canyon litigation | 1 | 21 | — | 22 | — | — | — | — | |||||||||||||||||||
Impact from the TCJA | — | 85 | — | 85 | — | 870 | — | 870 | |||||||||||||||||||
Write-off of wildfire regulatory asset | — | — | — | — | 351 | (143 | ) | — | 208 | ||||||||||||||||||
Impairment of TdM assets held for sale | — | — | — | — | 71 | — | (24 | ) | 47 | ||||||||||||||||||
Aliso Canyon litigation reserves | — | — | — | — | 20 | — | — | 20 | |||||||||||||||||||
Deferred income tax benefit associated with TdM | — | — | — | — | — | (8 | ) | 3 | (5 | ) | |||||||||||||||||
Recoveries related to 2016 permanent release of pipeline capacity | — | — | — | — | (47 | ) | 19 | — | (28 | ) | |||||||||||||||||
Sempra Energy Adjusted Earnings | $ | 1,503 | $ | 1,368 | |||||||||||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||||||||||
Sempra Energy GAAP EPS | $ | 3.42 | $ | 1.01 | |||||||||||||||||||||||
Sempra Energy Adjusted EPS | $ | 5.57 | $ | 5.42 | |||||||||||||||||||||||
Weighted-average shares outstanding, diluted | 269,852 | 252,300 | |||||||||||||||||||||||||
(1) | Except for adjustments that are solely income tax and tax related to outside basis differences, income taxes were primarily calculated based on applicable statutory tax rates. Income taxes associated with TdM were calculated based on the applicable statutory tax rate, including translation from historic to current exchange rates. An income tax benefit of $12 million associated with the 2017 TdM impairment has been fully reserved. | ||||||||||||||||||||||||||
(2) | For the three months ended December 31, 2018, the assumed conversion of the mandatory convertible preferred stock is dilutive for GAAP earnings, but antidilutive for the lower adjusted earnings. | ||||||||||||||||||||||||||
(3) | Due to the dilutive effect of the mandatory convertible preferred stock, the numerator used to calculate GAAP EPS includes an add-back of $36 million of mandatory convertible preferred stock dividends declared in that quarter. | ||||||||||||||||||||||||||
(4) | Due to the antidilutive effect of the mandatory convertible preferred stock, the denominator used to calculate Adjusted EPS excludes 20,199 shares of mandatory convertible preferred stock. | ||||||||||||||||||||||||||
(5) | The denominator used to calculate Adjusted EPS includes 823 shares of potentially dilutive securities, which were excluded from GAAP EPS because to include them would have decreased the loss per share. | ||||||||||||||||||||||||||
SEMPRA ENERGY
Table A (Continued)
SEMPRA ENERGY 2019 ADJUSTED EPS GUIDANCE RANGE (Unaudited)
Sempra Energy 2019 Adjusted EPS Guidance Range of $5.70 to $6.30 excludes:
▪ | an approximate $35 million after-tax(1) (approximately $50 million pretax) gain, plus working capital and other customary adjustments, related to our agreement to sell the remaining U.S. renewables assets and investments to American Electric Power |
▪ | any potential gain from the planned sale, as well as income tax expense related to an expected change in our indefinite reinvestment assertions, resulting from our decision in January 2019 to hold our South American businesses for sale |
Sempra Energy 2019 Adjusted EPS Guidance is a non-GAAP financial measure. Because of the significance and nature of the excluded items, management believes that this non-GAAP measure provides better clarity into the ongoing results of the business and the comparability of such results to prior and future periods. Sempra Energy 2019 Adjusted EPS Guidance should not be considered an alternative to GAAP EPS Guidance. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Because the sale process for the planned divestiture of our South American businesses was only recently initiated in January 2019, the terms and structure of any potential sale transaction or transactions are unknown, including terms that would impact income tax expense resulting from an expected change in our assertion regarding indefinite reinvestment of foreign undistributed earnings, including the timing and amounts of repatriation of such earnings.
(1) | Income taxes were estimated based on statutory tax rates. |
SEMPRA ENERGY | ||||||||||
Table B | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
(Dollars in millions) | December 31, 2018 | December 31, 2017 | ||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 190 | $ | 288 | ||||||
Restricted cash | 35 | 62 | ||||||||
Accounts receivable, net | 1,850 | 1,584 | ||||||||
Due from unconsolidated affiliates | 39 | 37 | ||||||||
Income taxes receivable | 68 | 110 | ||||||||
Inventories | 296 | 307 | ||||||||
Regulatory assets | 138 | 325 | ||||||||
Greenhouse gas allowances | 59 | 299 | ||||||||
Assets held for sale | 713 | 127 | ||||||||
Other | 257 | 202 | ||||||||
Total current assets | 3,645 | 3,341 | ||||||||
Other assets: | ||||||||||
Restricted cash | 21 | 14 | ||||||||
Due from unconsolidated affiliates | 688 | 598 | ||||||||
Regulatory assets | 1,589 | 1,517 | ||||||||
Nuclear decommissioning trusts | 974 | 1,033 | ||||||||
Investment in Oncor Holdings | 9,652 | — | ||||||||
Other investments | 2,337 | 2,527 | ||||||||
Goodwill | 2,373 | 2,397 | ||||||||
Other intangible assets | 272 | 596 | ||||||||
Dedicated assets in support of certain benefit plans | 416 | 455 | ||||||||
Insurance receivable for Aliso Canyon costs | 461 | 418 | ||||||||
Deferred income taxes | 151 | 170 | ||||||||
Greenhouse gas allowances | 289 | 93 | ||||||||
Sundry | 974 | 792 | ||||||||
Total other assets | 20,197 | 10,610 | ||||||||
Property, plant and equipment, net | 36,796 | 36,503 | ||||||||
Total assets | $ | 60,638 | $ | 50,454 | ||||||
SEMPRA ENERGY | ||||||||||
Table B (Continued) | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
(Dollars in millions) | December 31, 2018 | December 31, 2017 | ||||||||
Liabilities and Equity | ||||||||||
Current liabilities: | ||||||||||
Short-term debt | $ | 2,079 | $ | 1,540 | ||||||
Accounts payable | 1,474 | 1,523 | ||||||||
Due to unconsolidated affiliates | 10 | 7 | ||||||||
Dividends and interest payable | 499 | 342 | ||||||||
Accrued compensation and benefits | 469 | 439 | ||||||||
Regulatory liabilities | 105 | 109 | ||||||||
Current portion of long-term debt | 1,673 | 1,427 | ||||||||
Reserve for Aliso Canyon costs | 160 | 84 | ||||||||
Greenhouse gas obligations | 59 | 299 | ||||||||
Liabilities held for sale | 25 | 49 | ||||||||
Other | 970 | 816 | ||||||||
Total current liabilities | 7,523 | 6,635 | ||||||||
Long-term debt | 21,611 | 16,445 | ||||||||
Deferred credits and other liabilities: | ||||||||||
Due to unconsolidated affiliates | 37 | 35 | ||||||||
Pension and other postretirement benefit plan obligations, net of plan assets | 1,161 | 1,148 | ||||||||
Deferred income taxes | 2,571 | 2,767 | ||||||||
Deferred investment tax credits | 24 | 28 | ||||||||
Regulatory liabilities | 4,016 | 3,922 | ||||||||
Asset retirement obligations | 2,787 | 2,732 | ||||||||
Greenhouse gas obligations | 131 | — | ||||||||
Deferred credits and other | 1,529 | 1,602 | ||||||||
Total deferred credits and other liabilities | 12,256 | 12,234 | ||||||||
Equity: | ||||||||||
Sempra Energy shareholders’ equity | 17,138 | 12,670 | ||||||||
Preferred stock of subsidiary | 20 | 20 | ||||||||
Other noncontrolling interests | 2,090 | 2,450 | ||||||||
Total equity | 19,248 | 15,140 | ||||||||
Total liabilities and equity | $ | 60,638 | $ | 50,454 | ||||||
SEMPRA ENERGY | |||||||||
Table C | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
Years ended December 31, | |||||||||
(Dollars in millions) | 2018 | 2017 | |||||||
Cash Flows from Operating Activities | |||||||||
Net income | $ | 1,126 | $ | 351 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 1,549 | 1,490 | |||||||
Deferred income taxes and investment tax credits | (182 | ) | 1,160 | ||||||
Write-off of wildfire regulatory asset | — | 351 | |||||||
Impairment losses | 1,122 | 72 | |||||||
Gain on sale of assets | (524 | ) | (3 | ) | |||||
Equity earnings, net | (176 | ) | (76 | ) | |||||
Share-based compensation expense | 83 | 82 | |||||||
Fixed-price contracts and other derivatives | (10 | ) | 7 | ||||||
Other | 315 | 67 | |||||||
Net change in other working capital components | 173 | 57 | |||||||
Insurance receivable for Aliso Canyon costs | (43 | ) | 188 | ||||||
Changes in other noncurrent assets and liabilities, net | 14 | (121 | ) | ||||||
Net cash provided by operating activities | 3,447 | 3,625 | |||||||
Cash Flows from Investing Activities | |||||||||
Expenditures for property, plant and equipment | (3,784 | ) | (3,949 | ) | |||||
Expenditures for investments and acquisitions, net of cash and cash equivalents acquired | (10,376 | ) | (270 | ) | |||||
Proceeds from sale of assets, net of cash and restricted cash sold | 1,593 | 17 | |||||||
Distributions from investments | 10 | 26 | |||||||
Purchases of nuclear decommissioning trust assets | (890 | ) | (1,314 | ) | |||||
Proceeds from sales by nuclear decommissioning trust assets | 890 | 1,314 | |||||||
Advances to unconsolidated affiliates | (102 | ) | (531 | ) | |||||
Repayments of advances to unconsolidated affiliates | 71 | 9 | |||||||
Other | 31 | (2 | ) | ||||||
Net cash used in investing activities | (12,557 | ) | (4,700 | ) | |||||
Cash Flows from Financing Activities | |||||||||
Common dividends paid | (877 | ) | (755 | ) | |||||
Preferred dividends paid | (89 | ) | — | ||||||
Preferred dividends paid by subsidiary | (1 | ) | (1 | ) | |||||
Issuances of mandatory convertible preferred stock, net of $42 in offering costs in 2018 | 2,258 | — | |||||||
Issuances of common stock, net of $41 in offering costs in 2018 | 2,272 | 47 | |||||||
Repurchases of common stock | (21 | ) | (15 | ) | |||||
Issuances of debt (maturities greater than 90 days) | 9,174 | 4,509 | |||||||
Payments on debt (maturities greater than 90 days) | (3,510 | ) | (2,800 | ) | |||||
Decrease in short-term debt, net | (124 | ) | (36 | ) | |||||
Advances from unconsolidated affiliates | — | 35 | |||||||
Proceeds from sale of noncontrolling interests, net of $1 and $3 in offering costs, respectively | 90 | 196 | |||||||
Net distributions to noncontrolling interests | (43 | ) | (130 | ) | |||||
Settlement of cross-currency swaps | (33 | ) | — | ||||||
Other | (90 | ) | (43 | ) | |||||
Net cash provided by financing activities | 9,006 | 1,007 | |||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (14 | ) | 7 | ||||||
Decrease in cash, cash equivalents and restricted cash | (118 | ) | (61 | ) | |||||
Cash, cash equivalents and restricted cash, January 1 | 364 | 425 | |||||||
Cash, cash equivalents and restricted cash, December 31 | $ | 246 | $ | 364 | |||||
SEMPRA ENERGY | |||||||||||||||||
Table D | |||||||||||||||||
SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES, INVESTMENTS AND ACQUISITIONS | |||||||||||||||||
Three months ended December 31, | Years ended December 31, | ||||||||||||||||
(Dollars in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
(unaudited) | |||||||||||||||||
Earnings (Losses) | |||||||||||||||||
San Diego Gas & Electric | $ | 148 | $ | 131 | $ | 669 | $ | 407 | |||||||||
Southern California Gas | 156 | 128 | 400 | 396 | |||||||||||||
Sempra Texas Utility | 88 | — | 371 | — | |||||||||||||
Sempra South American Utilities | 59 | 52 | 199 | 186 | |||||||||||||
Sempra Mexico | 76 | 64 | 237 | 169 | |||||||||||||
Sempra Renewables | 382 | 203 | 328 | 252 | |||||||||||||
Sempra LNG & Midstream | 147 | 126 | (617 | ) | 150 | ||||||||||||
Parent and other | (192 | ) | (1,205 | ) | (663 | ) | (1,304 | ) | |||||||||
Total | $ | 864 | $ | (501 | ) | $ | 924 | $ | 256 | ||||||||
Three months ended December 31, | Years ended December 31, | ||||||||||||||||
(Dollars in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
(unaudited) | |||||||||||||||||
Capital Expenditures, Investments and Acquisitions | |||||||||||||||||
San Diego Gas & Electric | $ | 348 | $ | 433 | $ | 1,542 | $ | 1,555 | |||||||||
Southern California Gas | 411 | 334 | 1,538 | 1,367 | |||||||||||||
Sempra Texas Utility | 179 | — | 9,457 | — | |||||||||||||
Sempra South American Utilities | 287 | 106 | 448 | 245 | |||||||||||||
Sempra Mexico | 148 | 202 | 468 | 467 | |||||||||||||
Sempra Renewables | 10 | 136 | 56 | 497 | |||||||||||||
Sempra LNG & Midstream | 104 | 15 | 306 | 68 | |||||||||||||
Parent and other | (63 | ) | 3 | 345 | 20 | ||||||||||||
Capital Expenditures, Investments and Acquisitions | $ | 1,424 | $ | 1,229 | $ | 14,160 | $ | 4,219 | |||||||||
SEMPRA ENERGY | ||||||||||||||
Table E | ||||||||||||||
OTHER OPERATING STATISTICS (Unaudited) | ||||||||||||||
Three months ended December 31, | Years ended or at December 31, | |||||||||||||
UTILITIES | 2018 | 2017 | 2018 | 2017 | ||||||||||
SDG&E and SoCalGas | ||||||||||||||
Gas sales (Bcf)(1) | 93 | 88 | 337 | 341 | ||||||||||
Transportation (Bcf)(1) | 134 | 150 | 581 | 638 | ||||||||||
Total deliveries (Bcf)(1) | 227 | 238 | 918 | 979 | ||||||||||
Total gas customer meters (thousands) | 6,885 | 6,846 | ||||||||||||
SDG&E | ||||||||||||||
Electric sales (millions of kWhs)(1) | 3,643 | 3,845 | 15,125 | 15,617 | ||||||||||
Direct Access and Community Choice Aggregation (millions of kWhs) | 947 | 864 | 3,628 | 3,394 | ||||||||||
Total deliveries (millions of kWhs)(1) | 4,590 | 4,709 | 18,753 | 19,011 | ||||||||||
Total electric customer meters (thousands) | 1,459 | 1,446 | ||||||||||||
Oncor(2) | ||||||||||||||
Total deliveries (millions of kWhs) | 29,800 | — | 107,276 | — | ||||||||||
Total electric customer meters (thousands) | 3,621 | — | ||||||||||||
Ecogas | ||||||||||||||
Natural gas sales (Bcf) | — | 7 | 7 | 29 | ||||||||||
Natural gas customer meters (thousands) | 123 | 120 | ||||||||||||
Chilquinta Energía | ||||||||||||||
Electric Sales (Millions of kWhs) | 739 | 735 | 2,948 | 2,936 | ||||||||||
Tolling (Millions of kWhs) | 85 | 27 | 303 | 98 | ||||||||||
Total Deliveries (Millions of kWhs) | 824 | 762 | 3,251 | 3,034 | ||||||||||
Electric customer meters (thousands) | 722 | 704 | ||||||||||||
Luz del Sur | ||||||||||||||
Electric Sales (Millions of kWhs) | 1,661 | 1,678 | 6,760 | 6,999 | ||||||||||
Tolling (Millions of kWhs) | 649 | 539 | 2,385 | 1,922 | ||||||||||
Total Deliveries (Millions of kWhs) | 2,310 | 2,217 | 9,145 | 8,921 | ||||||||||
Electric customer meters (thousands) | 1,134 | 1,102 | ||||||||||||
ENERGY-RELATED BUSINESSES | ||||||||||||||
Power generated and sold (millions of kWhs) | ||||||||||||||
Sempra Mexico(3) | 1,404 | 1,305 | 5,250 | 4,337 | ||||||||||
Sempra Renewables(4) | 1,036 | 1,075 | 4,799 | 4,175 | ||||||||||
(1) | Includes intercompany sales. |
(2) | Includes 100 percent of the electric deliveries and customer meters of Oncor Electric Delivery Company LLC (Oncor), in which we hold an 80.25-percent interest through our March 2018 acquisition of our equity method investment in Oncor Electric Delivery Holdings Company LLC (Oncor Holdings). Total deliveries for the year ended December 31, 2018 only include volumes from the March 9, 2018 acquisition date. |
(3) | Includes power generated and sold at the TdM natural gas-fired power plant and the Ventika wind power generation facilities. Also includes 50 percent of total power generated and 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. |
(4) | We include 50 percent of total power generated and sold related to U.S. 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. On June 25, 2018, our board of directors approved a plan to sell all U.S. wind and solar assets and investments. For assets and investments sold in December 2018, we include their power generated and sold up to the date of the sale. |
Exhibit 99.2
SEMPRA ENERGY | |||||||||||||||||||||||||||||||||||||
Table F (Unaudited) | |||||||||||||||||||||||||||||||||||||
STATEMENT OF OPERATIONS DATA BY SEGMENT | |||||||||||||||||||||||||||||||||||||
Three months ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||
(Dollars in millions) | SDG&E | SoCalGas | Sempra Texas Utility | Sempra South American Utilities | Sempra Mexico | Sempra Renewables | Sempra LNG & Midstream | Consolidating Adjustments, Parent & Other | Total | ||||||||||||||||||||||||||||
Revenues | $ | 1,163 | $ | 1,262 | $ | — | $ | 395 | $ | 348 | $ | 21 | $ | 142 | $ | (110 | ) | $ | 3,221 | ||||||||||||||||||
Cost of sales and other expenses | (737 | ) | (882 | ) | — | (293 | ) | (175 | ) | (26 | ) | (122 | ) | 106 | (2,129 | ) | |||||||||||||||||||||
Depreciation and amortization | (179 | ) | (142 | ) | — | (15 | ) | (44 | ) | — | (2 | ) | (9 | ) | (391 | ) | |||||||||||||||||||||
Write-off and reduction in impairment losses | — | — | — | — | — | — | 183 | (1 | ) | 182 | |||||||||||||||||||||||||||
Gain (loss) on sale of assets | — | 1 | — | 1 | (1 | ) | 513 | — | — | 514 | |||||||||||||||||||||||||||
Other (expense) income, net | (21 | ) | (34 | ) | — | 10 | (63 | ) | 1 | — | (17 | ) | (124 | ) | |||||||||||||||||||||||
Income (loss) before interest and tax(1) | 226 | 205 | — | 98 | 65 | 509 | 201 | (31 | ) | 1,273 | |||||||||||||||||||||||||||
Net interest (expense) income | (59 | ) | (32 | ) | — | 2 | (13 | ) | 2 | 10 | (122 | ) | (212 | ) | |||||||||||||||||||||||
Income tax (expense) benefit | (22 | ) | (17 | ) | — | (31 | ) | 41 | (138 | ) | (53 | ) | (3 | ) | (223 | ) | |||||||||||||||||||||
Equity earnings (losses), net | — | — | 88 | — | 38 | 1 | (1 | ) | — | 126 | |||||||||||||||||||||||||||
Losses (earnings) attributable to noncontrolling interests | 3 | — | — | (10 | ) | (55 | ) | 8 | (10 | ) | — | (64 | ) | ||||||||||||||||||||||||
Preferred dividends | — | — | — | — | — | — | — | (36 | ) | (36 | ) | ||||||||||||||||||||||||||
Earnings (losses) | $ | 148 | $ | 156 | $ | 88 | $ | 59 | $ | 76 | $ | 382 | $ | 147 | $ | (192 | ) | $ | 864 | ||||||||||||||||||
Three months ended December 31, 2017 | |||||||||||||||||||||||||||||||||||||
(Dollars in millions) | SDG&E | SoCalGas | Sempra Texas Utility | Sempra South American Utilities | Sempra Mexico | Sempra Renewables | Sempra LNG & Midstream | Consolidating Adjustments, Parent & Other | Total | ||||||||||||||||||||||||||||
Revenues | $ | 1,125 | $ | 1,090 | $ | — | $ | 398 | $ | 323 | $ | 20 | $ | 134 | $ | (126 | ) | $ | 2,964 | ||||||||||||||||||
Cost of sales and other expenses(2) | (698 | ) | (729 | ) | — | (312 | ) | (165 | ) | (19 | ) | (136 | ) | 111 | (1,948 | ) | |||||||||||||||||||||
Depreciation and amortization | (171 | ) | (131 | ) | — | (14 | ) | (42 | ) | (10 | ) | (11 | ) | (5 | ) | (384 | ) | ||||||||||||||||||||
Other income (expense), net(2) | 9 | (20 | ) | — | 6 | (85 | ) | 1 | 1 | (1 | ) | (89 | ) | ||||||||||||||||||||||||
Income (loss) before interest and tax(1)(3) | 265 | 210 | — | 78 | 31 | (8 | ) | (12 | ) | (21 | ) | 543 | |||||||||||||||||||||||||
Net interest (expense) income | (52 | ) | (25 | ) | — | 3 | (13 | ) | (1 | ) | 3 | (61 | ) | (146 | ) | ||||||||||||||||||||||
Income tax (expense) benefit | (83 | ) | (57 | ) | — | (23 | ) | 51 | 201 | 136 | (1,123 | ) | (898 | ) | |||||||||||||||||||||||
Equity earnings (losses), net(3) | — | — | — | 2 | 45 | 4 | (1 | ) | — | 50 | |||||||||||||||||||||||||||
Losses (earnings) attributable to noncontrolling interests | 1 | — | — | (8 | ) | (50 | ) | 7 | — | — | (50 | ) | |||||||||||||||||||||||||
Earnings (losses) | $ | 131 | $ | 128 | $ | — | $ | 52 | $ | 64 | $ | 203 | $ | 126 | $ | (1,205 | ) | $ | (501 | ) | |||||||||||||||||
(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) | As adjusted for the retrospective adoption of ASU 2017-07. |
(3) | As adjusted for a reclassification to conform to current year presentation. |
SEMPRA ENERGY | |||||||||||||||||||||||||||||||||||||
Table F (Unaudited) | |||||||||||||||||||||||||||||||||||||
STATEMENT OF OPERATIONS DATA BY SEGMENT | |||||||||||||||||||||||||||||||||||||
Year ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||
(Dollars in millions) | SDG&E | SoCalGas | Sempra Texas Utility | Sempra South American Utilities | Sempra Mexico | Sempra Renewables | Sempra LNG & Midstream | Consolidating Adjustments, Parent & Other | Total | ||||||||||||||||||||||||||||
Revenues | $ | 4,568 | $ | 3,962 | $ | — | $ | 1,585 | $ | 1,376 | $ | 124 | $ | 472 | $ | (400 | ) | $ | 11,687 | ||||||||||||||||||
Cost of sales and other expenses | (2,870 | ) | (2,816 | ) | — | (1,218 | ) | (628 | ) | (94 | ) | (446 | ) | 327 | (7,745 | ) | |||||||||||||||||||||
Depreciation and amortization | (688 | ) | (556 | ) | — | (58 | ) | (175 | ) | (27 | ) | (26 | ) | (19 | ) | (1,549 | ) | ||||||||||||||||||||
Write-off and impairment losses | — | — | — | — | (4 | ) | — | (1,117 | ) | (1 | ) | (1,122 | ) | ||||||||||||||||||||||||
Gain (loss) on sale of assets | — | 1 | — | 11 | (1 | ) | 513 | — | — | 524 | |||||||||||||||||||||||||||
Other income (expense), net | 56 | 15 | — | 14 | 1 | 1 | — | (15 | ) | 72 | |||||||||||||||||||||||||||
Income (loss) before interest and tax(1) | 1,066 | 606 | — | 334 | 569 | 517 | (1,117 | ) | (108 | ) | 1,867 | ||||||||||||||||||||||||||
Net interest (expense) income | (217 | ) | (113 | ) | — | (9 | ) | (55 | ) | (7 | ) | 28 | (448 | ) | (821 | ) | |||||||||||||||||||||
Income tax (expense) benefit | (173 | ) | (92 | ) | — | (95 | ) | (185 | ) | (71 | ) | 435 | 85 | (96 | ) | ||||||||||||||||||||||
Equity earnings (losses), net | — | — | 371 | 1 | 40 | (169 | ) | — | (67 | ) | 176 | ||||||||||||||||||||||||||
(Earnings) losses attributable to noncontrolling interests | (7 | ) | — | — | (32 | ) | (132 | ) | 58 | 37 | — | (76 | ) | ||||||||||||||||||||||||
Preferred dividends | — | (1 | ) | — | — | — | — | — | (125 | ) | (126 | ) | |||||||||||||||||||||||||
Earnings (losses) | $ | 669 | $ | 400 | $ | 371 | $ | 199 | $ | 237 | $ | 328 | $ | (617 | ) | $ | (663 | ) | $ | 924 | |||||||||||||||||
Year ended December 31, 2017 | |||||||||||||||||||||||||||||||||||||
(Dollars in millions) | SDG&E | SoCalGas | Sempra Texas Utility | Sempra South American Utilities | Sempra Mexico | Sempra Renewables | Sempra LNG & Midstream | Consolidating Adjustments, Parent & Other | Total | ||||||||||||||||||||||||||||
Revenues | $ | 4,476 | $ | 3,785 | $ | — | $ | 1,567 | $ | 1,196 | $ | 94 | $ | 540 | $ | (451 | ) | $ | 11,207 | ||||||||||||||||||
Cost of sales and other expenses(2) | (2,746 | ) | (2,643 | ) | — | (1,227 | ) | (568 | ) | (76 | ) | (489 | ) | 386 | (7,363 | ) | |||||||||||||||||||||
Depreciation and amortization | (670 | ) | (515 | ) | — | (54 | ) | (156 | ) | (38 | ) | (42 | ) | (15 | ) | (1,490 | ) | ||||||||||||||||||||
Write-off and impairment losses | (351 | ) | — | — | — | (72 | ) | — | — | — | (423 | ) | |||||||||||||||||||||||||
Other income (expense), net(2) | 70 | 31 | — | 13 | 105 | 2 | 3 | 9 | 233 | ||||||||||||||||||||||||||||
Income (loss) before interest and tax(1)(3) | 779 | 658 | — | 299 | 505 | (18 | ) | 12 | (71 | ) | 2,164 | ||||||||||||||||||||||||||
Net interest (expense) income | (203 | ) | (101 | ) | — | (10 | ) | (74 | ) | (8 | ) | 17 | (234 | ) | (613 | ) | |||||||||||||||||||||
Income tax (expense) benefit | (155 | ) | (160 | ) | — | (80 | ) | (227 | ) | 226 | 119 | (999 | ) | (1,276 | ) | ||||||||||||||||||||||
Equity earnings (losses), net(3) | — | — | — | 4 | 38 | 29 | 5 | — | 76 | ||||||||||||||||||||||||||||
(Earnings) losses attributable to noncontrolling interests | (14 | ) | — | — | (27 | ) | (73 | ) | 23 | (3 | ) | — | (94 | ) | |||||||||||||||||||||||
Preferred dividends | — | (1 | ) | — | — | — | — | — | — | (1 | ) | ||||||||||||||||||||||||||
Earnings (losses) | $ | 407 | $ | 396 | $ | — | $ | 186 | $ | 169 | $ | 252 | $ | 150 | $ | (1,304 | ) | $ | 256 | ||||||||||||||||||
(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) | As adjusted for the retrospective adoption of ASU 2017-07. |
(3) | As adjusted for a reclassification to conform to current year presentation. |