Document


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 27, 2018

 
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 (§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. [ ]







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 27, 2018, Sempra Energy issued a press release announcing consolidated losses of $501 million, or $1.99 per diluted share of common stock, for the fourth quarter of 2017. 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 Statement of Operations Data by Segment for the three months and years ended December 31, 2017 and 2016. A copy of such information is attached as Exhibit 99.2.


Item 9.01 Financial Statements and Exhibits.
  
Exhibits

99.1 February 27, 2018 Sempra Energy News Release (including tables).

99.2 Sempra Energy’s Statement of Operations Data by Segment for the three months and years ended December 31, 2017 and 2016.













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 27, 2018
By: /s/ Trevor I. Mihalik
 
Trevor I. Mihalik
Senior Vice President, Controller and Chief Accounting Officer
 






Exhibit


Exhibit 99.1

https://cdn.kscope.io/dc29a1ba59132c1276ccaaeff9aa130b-sempragraphic2.gif
NEWS RELEASE


 
 
 
 
 
Media Contact:
Doug Kline
 
 
 
 
Sempra Energy
 
 
 
 
(877) 340-8875
 
 
 
 
www.sempra.com
 
 
 
 
 
 
 
 
Financial Contact:
Patrick Billings
 
 
 
 
Sempra Energy
 
 
 
 
(877) 736-7727
 
 
 
 
investor@sempra.com
 
 
 

SEMPRA ENERGY REPORTS
STRONG 2017 OPERATING RESULTS

Company Affirms Earnings-Per-Share Guidance Range of $5.30 to $5.80 for 2018

Dividend Increased Approximately 9 Percent to $3.58 per Common Share on Annualized Basis

Federal Tax Reform Drives $1.6 Billion, Five-Year Repatriation Plan and Fourth-Quarter Tax Expense

SAN DIEGO, Feb. 27, 2018 - Sempra Energy (NYSE: SRE) today reported earnings of $256 million, or $1.01 per diluted share, in 2017, compared with earnings of $1.37 billion, or $5.46 per diluted share, in 2016.
On an adjusted basis, Sempra Energy’s 2017 earnings increased to $1.37 billion, or $5.42 per diluted share, from $1.27 billion, or $5.05 per diluted share, in 2016. Among the items excluded from 2017 adjusted earnings was a fourth-quarter $870 million income-tax expense related to the impact of the Tax Cuts and Jobs Act of 2017. A portion of this income-tax expense relates to Sempra Energy’s plans to repatriate approximately $1.6 billion of undistributed foreign earnings over the next five years. Also excluded from Sempra Energy’s 2017 adjusted earnings was the previously disclosed third-quarter $208 million after-tax write-off related to the California Public Utilities Commission (CPUC) denial of recovery by San Diego Gas & Electric (SDG&E) of costs related to the 2007 San Diego wildfires.
“In 2017, we produced outstanding financial and operating results, while making significant investments to fuel our future growth,” said Debra L. Reed, chairman, president and CEO of Sempra Energy. “Our proposal to acquire a majority stake in Oncor continues to gain positive momentum and we expect state regulators to complete their review within the next month. Our California utilities are executing on their robust capital programs to reinforce their systems and filed their General Rate Case applications for 2019. Additionally, both SDG&E and Sempra LNG & Midstream recently resolved key business issues, resulting in better visibility going forward.”
For the fourth quarter, Sempra Energy recorded a loss of $501 million, or $1.99 per diluted share, in 2017, compared with earnings of $379 million, or $1.51 per diluted share, in 2016. Excluding items in the table below, Sempra Energy’s adjusted earnings in the fourth quarter 2017 increased to $389 million, or $1.54 per diluted share, from $383 million, or $1.52 per diluted share, in the fourth quarter 2016.
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 of 2017 and 2016.
 
 
 
 
 
 
 
 
 
 Three months ended
 
 Years ended
 
December 31,
 
December 31,
(Dollars, except EPS, and shares, in millions)
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
GAAP (Losses) Earnings
$
(501
)
 
$
379

 
$
256

 
$
1,370

 
 
 
 
 
 
 
 
Impact from the Tax Cuts and Jobs Act of 2017
870

 

 
870

 

 
 
 
 
 
 
 
 
Aliso Canyon Litigation Reserves
20

 

 
20

 

 
 
 
 
 
 
 
 
Write-Off of Wildfire Regulatory Asset

 

 
208

 

 
 
 
 
 
 
 
 
Gain on Gasoductos de Chihuahua (GdC) Acquisition

 

 

 
(350
)
 
 
 
 
 
 
 
 
Gain on Sale of EnergySouth

 

 

 
(78
)
 
 
 
 
 
 
 
 
Adjustments Related to Termoeléctrica de Mexicali (TdM) Held For Sale

 
4

 
42

 
95

 
 
 
 
 
 
 
 
(Recoveries) Losses Related to Permanent Release of Pipeline Capacity

 

 
(28
)
 
123

 
 
 
 
 
 
 
 
Tax Repairs Adjustments Related to 2016 General Rate Case

 

 

 
80

 
 
 
 
 
 
 
 
Impairment of Investment in Rockies Express Pipeline

 

 

 
27

 
 
 
 
 
 
 
 
Adjusted Earnings(1)
$
389


$
383


$
1,368


$
1,267

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted Weighted-Average Common Shares Outstanding
253

(2) 
252

 
252

 
251

 
 
 
 
 
 
 
 
GAAP (Losses) Earnings Per Diluted Share
$
(1.99
)
(2) 
$
1.51

 
$
1.01

 
$
5.46

 
 
 
 
 
 
 
 
Adjusted Earnings Per Diluted Share(1)
$
1.54

 
$
1.52

 
$
5.42

 
$
5.05

1)
Sempra Energy adjusted earnings and adjusted earnings per share are non-GAAP financial measures. See Table A in the appendix for information regarding non-GAAP financial measures and descriptions of adjustments above.
2)
For the three months ended Dec. 31, 2017, the total weighted average number of potentially dilutive securities was 0.8 million. However, these securities were not included in the computation of GAAP losses per common share since to do so would have decreased the loss per share.

Sempra Energy’s board of directors last week approved an approximate 9-percent increase in the company’s annualized dividend to $3.58 per common share from $3.29 per common share.
Yesterday, the U.S. Bankruptcy Court for the District of Delaware ruled that it will confirm the plan of reorganization and approve the merger for Sempra Energy to acquire Energy Future Holdings Corp. (EFH), including EFH’s indirect, approximate 80-percent ownership interest in Oncor Electric Delivery Company LLC (Oncor). On Feb. 15, the Public Utility Commission of Texas (PUCT) waived scheduled hearings and directed PUCT staff to draft a proposed order approving the merger, for a potential final vote as early as March 8. Additionally, last month, Sempra Energy conducted successful equity and debt offerings to raise funds for the transaction.

SEMPRA UTILITIES
San Diego Gas & Electric
SDG&E’s fourth-quarter earnings were $131 million in 2017, compared with $151 million in 2016. The decrease was primarily due to a $28 million income-tax expense related to the Tax Cuts and Jobs Act of 2017, partially offset by higher earnings from projects under construction.
SDG&E’s full-year earnings were $407 million in 2017, down from $570 million in 2016, primarily due to the third-quarter 2017 after-tax write-off of $208 million in regulatory assets related to the denial of recovery of costs associated with the 2007 San Diego wildfires.
On Jan. 30, 2018, SDG&E entered into a settlement agreement with Southern California Edison and multiple parties to resolve the cost-allocation dispute related to the retirement of the San Onofre Nuclear Generating Station (SONGS). If approved by the CPUC, the settlement would conclude the CPUC’s investigation into the original SONGS settlement. SDG&E has a 20-percent ownership stake in SONGS.

Southern California Gas Co.
In the fourth quarter 2017, SoCalGas’ earnings were $128 million, down from $151 million in the fourth quarter 2016, due primarily to litigation reserves recorded in 2017 related to the Aliso Canyon natural gas leak.
For the full year, SoCalGas’ earnings increased to $396 million in 2017 from $349 million in 2016, primarily due to higher earnings from the Pipeline Safety Enhancement Plan and Advanced Meter technology programs. Additionally, in 2016, SoCalGas had tax repairs adjustments related to the 2016 General Rate Case and an impairment charge related to CPUC denial of a proposed pipeline project.

Sempra South American Utilities
In the fourth quarter 2017, Sempra South American Utilities earnings increased to $52 million from $29 million in the fourth quarter 2016, primarily due to a $17 million charge in 2016 related to Peruvian tax reform, as well as higher operational earnings in 2017 in Peru.
In 2017, full-year earnings for Sempra South American Utilities were $186 million, up from $156 million in 2016.

SEMPRA INFRASTRUCTURE
Sempra Mexico
Sempra Mexico’s fourth-quarter 2017 earnings rose to $64 million, from $56 million in the fourth quarter 2016, due primarily to favorable currency exchange rate and inflation effects.
Sempra Mexico’s full-year earnings were $169 million in 2017, compared with $463 million in 2016, primarily due to the $350 million remeasurement gain in connection with IEnova’s Gasoductos de Chihuahua acquisition in 2016.

Sempra Renewables
Fourth-quarter earnings for Sempra Renewables were $203 million in 2017, compared with $12 million in 2016, primarily due to a $192 million non-cash income-tax benefit related to the Tax Cuts and Jobs Act of 2017.
In 2017, full-year earnings for Sempra Renewables were $252 million, up from $55 million in 2016.

Sempra LNG & Midstream
Sempra LNG & Midstream had earnings of $126 million in the fourth quarter 2017, compared with a net loss of $3 million in the fourth quarter 2016, due primarily to a $133 million non-cash income-tax benefit related to the Tax Cuts and Jobs Act of 2017.
For the full year, Sempra LNG & Midstream had earnings of $150 million in 2017, compared with a net loss of $107 million in 2016.
In December 2017, Sempra LNG & Midstream announced that the Cameron LNG joint-venture partners had reached a settlement agreement with their contractor, CCJV, related to construction of the Cameron LNG liquefaction project in Hackberry, La. The settlement resolves all of CCJV’s project-related claims as of the date of the agreement and better aligns the interests of all parties in achieving the joint goal of having all three of Cameron LNG’s liquefaction trains producing liquefied natural gas in 2019.

2018 EARNINGS GUIDANCE
Sempra Energy today affirmed its 2018 earnings-per-share guidance range of $5.30 to $5.80, reflecting both accretion from the expected closing of the Oncor transaction and the impact of federal tax reform.
  
NON-GAAP FINANCIAL MEASURES
Non-GAAP financial measures for Sempra Energy include fourth-quarter and full-year 2017 and 2016 adjusted earnings and adjusted earnings per share. Additional information regarding these non-GAAP financial measures is in the appendix on Table A of the fourth-quarter 2017 financial tables.

INTERNET BROADCAST
Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. EST 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 7936770.
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2017 revenues of more than $11 billion. The Sempra Energy companies’ 16,000 employees serve approximately 32 million consumers worldwide.
###

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 discussions of guidance, strategies, plans, goals, 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: actions and the timing of actions, including decisions, new regulations, and issuances of permits and other authorizations by the California Public Utilities Commission (CPUC), U.S. Department of Energy, California 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, states, cities and counties, and other regulatory and governmental bodies in the United States and other countries in which we operate; the timing and success of business development efforts and construction projects, including risks in obtaining or maintaining permits and other authorizations on a timely basis, risks in completing construction projects on schedule and on budget, and risks in obtaining the consent and participation of partners; the resolution of civil and criminal litigation and regulatory investigations; deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and ratepayers; approvals of proposed settlements or modifications of settlements; delays in, or disallowance or denial of, regulatory agency authorizations to recover costs in rates from customers (including with respect to amounts associated with the San Onofre Nuclear Generating Station facility and 2007 wildfires) or regulatory agency approval for projects required to enhance safety and reliability; the greater degree and prevalence of wildfires in California in recent years and risk that we may be found liable for damages regardless of fault, such as in cases where the doctrine of inverse condemnation applies, and risk that we may not be able to recover any such costs in rates from customers in California; the risk that rulings by the CPUC such as denying recovery for wildfire damages may raise our cost of capital and materially impair our ability to finance our operations; the availability of electric power, natural gas and liquefied natural gas, and natural gas pipeline and storage capacity, including disruptions caused by failures in the transmission grid, moratoriums or limitations on the withdrawal or injection of natural gas from or into storage facilities, and equipment failures; changes in energy markets; volatility in commodity prices; moves to reduce or eliminate reliance on natural gas; the impact on the value of our investments in natural gas storage and related assets from low natural gas prices, low volatility of natural gas prices and the inability to procure favorable long-term contracts for storage services; risks posed by actions of third parties who control the operations of our investments, and risks that our partners or counterparties will be unable or unwilling to fulfill their contractual commitments; weather conditions, natural disasters, accidents, equipment failures, computer system outages, explosions, terrorist attacks and other events that disrupt our operations, damage our facilities and systems, cause the release of greenhouse gases, radioactive materials and harmful emissions, cause wildfires and subject us to third-party liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits), may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of insurance, to the extent that such insurance is available or not prohibitively expensive; cybersecurity threats to the energy grid, storage and pipeline infrastructure, the information and systems used to operate our businesses and the confidentiality of our proprietary information and the personal information of our customers and employees; capital markets and economic conditions, including the availability of credit and the liquidity of our investments; fluctuations in inflation, interest and currency exchange rates and our ability to effectively hedge the risk of such fluctuations; the impact of recent federal tax reform and uncertainty as to how it may be applied, and our ability to mitigate any adverse impacts; actions by credit rating agencies to downgrade our credit ratings or those of our subsidiaries or to place those ratings on negative outlook; changes in foreign and domestic trade policies and laws, including border tariffs, and revisions to international trade agreements, such as the North American Free Trade Agreement, that make us less competitive or impair our ability to resolve trade disputes; the ability to win competitively bid infrastructure projects against a number of strong and aggressive competitors; expropriation of assets by foreign governments and title and other property disputes; the impact on reliability of 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 due to the growth in distributed and local power generation and the corresponding decrease in demand for power delivered through SDG&E's electric transmission and distribution system and from possible departing retail load resulting from customers transferring to Direct Access and Community Choice Aggregation or other forms of distributed and local power generation, and the potential risk of nonrecovery for stranded assets and contractual obligations; and other uncertainties, some of which may be difficult to predict and are beyond our control.
Forward-looking statements also include, statements about the anticipated benefits of the proposed merger involving Sempra Energy, EFH, and EFH’s 80.03 percent indirect interest in Oncor, including future financial or operating results of Sempra Energy or Oncor, Sempra Energy’s, EFH’s or Oncor’s plans, objectives, expectations or intentions, the anticipated impact of the merger, if consummated, on the credit ratings of Sempra Energy or Oncor, the expected timing of completion of the merger, plans regarding future capital investments by Sempra Energy or Oncor, future return on equity or capital structure of Sempra Energy or Oncor, and other statements that are not historical facts. Additional 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 risk that Sempra Energy, EFH or Oncor may be unable to satisfy all closing conditions including obtaining governmental and regulatory approvals required for the merger, or that required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the merger or be onerous to Sempra Energy; the risk that the merger may not be completed for other reasons, or may not be completed on the terms or timing currently contemplated; the risk that the anticipated benefits from the merger may not be fully realized or may take longer to realize than expected and that liabilities that survive the bankruptcy will be greater than we anticipate; the risk that Sempra Energy may be unable to obtain, additional permanent equity financing for the merger on favorable terms; the risk that indebtedness Sempra Energy incurs in connection with the merger may make it more difficult for Sempra Energy to repay or refinance its debt or take other actions, which may decrease business flexibility and increase borrowing costs; the diversion of management time and attention to merger-related issues; merger-related costs, whether or not the merger is completed, as well as disruptions to our business; and the risk that Oncor will eliminate or reduce its quarterly dividends due to its requirement to meet and maintain its new regulatory capital structure, or because any of the three major credit rating agencies rates Oncor’s senior secured debt securities below BBB (or the equivalent) or Oncor’s independent directors or a minority member director determine it is in the best interest of Oncor to retain such amounts to meet future capital expenditures.
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 Infrastructure, Sempra LNG & Midstream, Sempra Renewables, Sempra Mexico and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) are not the same as the California Utilities, San Diego Gas & Electric Company (SDG&E) or Southern California Gas Company (SoCalGas), and 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)
 
2017
 
2016
 
2017
 
2016
 
 
(unaudited)
 
 
 
 
REVENUES
 
 
 
 
 
 
 
 
Utilities
 
$
2,604

 
$
2,561

 
$
9,776

 
$
9,261

Energy-related businesses
 
360

 
309

 
1,431

 
922

Total revenues
 
2,964

 
2,870

 
11,207

 
10,183

 
 
 
 
 
 
 
 
 
EXPENSES AND OTHER INCOME
 
 
 
 
 
 
 
 
Utilities:
 
 
 
 
 
 
 
 
Cost of electric fuel and purchased power
 
(551
)
 
(508
)
 
(2,281
)
 
(2,188
)
Cost of natural gas
 
(287
)
 
(365
)
 
(1,190
)
 
(1,067
)
Energy-related businesses:
 
 
 
 
 
 
 
 
Cost of natural gas, electric fuel and purchased power
 
(113
)
 
(64
)
 
(339
)
 
(277
)
Other cost of sales
 
(19
)
 
(29
)
 
(24
)
 
(322
)
Operation and maintenance
 
(910
)
 
(861
)
 
(3,117
)
 
(2,970
)
Depreciation and amortization
 
(384
)
 
(342
)
 
(1,490
)
 
(1,312
)
Franchise fees and other taxes
 
(111
)
 
(111
)
 
(436
)
 
(426
)
Write-off of wildfire regulatory asset
 

 

 
(351
)
 

Impairment adjustment (losses)
 

 
1

 
(72
)
 
(153
)
Gain on sale of assets
 
1

 
3

 
3

 
134

Equity earnings, before income tax
 
3

 
2

 
34

 
6

Remeasurement of equity method investment
 

 

 

 
617

Other (expense) income, net
 
(47
)
 
34

 
254

 
132

Interest income
 
20

 
7

 
46

 
26

Interest expense
 
(166
)
 
(132
)
 
(659
)
 
(553
)
Income before income taxes and equity earnings of certain unconsolidated subsidiaries
 
400

 
505

 
1,585

 
1,830

Income tax expense
 
(898
)
 
(105
)
 
(1,276
)
 
(389
)
Equity earnings, net of income tax
 
47

 
9

 
42

 
78

Net (loss) income
 
(451
)
 
409

 
351

 
1,519

Earnings attributable to noncontrolling interests
 
(50
)
 
(30
)
 
(94
)
 
(148
)
Preferred dividends of subsidiary
 

 

 
(1
)
 
(1
)
(Losses) earnings
 
$
(501
)
 
$
379

 
$
256

 
$
1,370

 
 
 
 
 
 
 
 
 
Basic (losses) earnings per common share
 
$
(1.99
)
 
$
1.51

 
$
1.02

 
$
5.48

Weighted-average number of shares outstanding, basic (thousands)
 
251,902

 
250,645

 
251,545

 
250,217

 
 
 
 
 
 
 
 
 
Diluted (losses) earnings per common share(1)
 
$
(1.99
)
 
$
1.51

 
$
1.01

 
$
5.46

Weighted-average number of shares outstanding, diluted (thousands)(1)
 
251,902

 
251,611

 
252,300

 
251,155

 
 
 
 
 
 
 
 
 
Dividends declared per share of common stock
 
$
0.82

 
$
0.75

 
$
3.29

 
$
3.02

 
 
 
 
 
 
 
 
 
(1) 
For the three months ended December 31, 2017, the total weighted-average number of potentially dilutive securities was 0.8 million. However, these securities were not included in the computation of GAAP losses per common share 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 (LOSSES) EARNINGS (Unaudited)
Sempra Energy Adjusted Earnings and Adjusted Earnings Per Share exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2017 and 2016 as follows:
Three months ended December 31, 2017:
$(870) million income tax expense from the impact of the Tax Cuts and Jobs Act of 2017 (TCJA)
$(20) million associated with Aliso Canyon litigation reserves at SoCalGas

Three months ended December 31, 2016:
$(4) million deferred income tax expense on Termoeléctrica de Mexicali (TdM) assets held for sale at Sempra Mexico

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 SDG&E
$(47) million impairment of TdM assets held for sale
$(20) million associated with Aliso Canyon litigation reserves at SoCalGas
$5 million deferred income tax benefit on the TdM assets held for sale
$28 million of recoveries related to 2016 permanent releases of pipeline capacity at Sempra LNG & Midstream

Year ended December 31, 2016:
$350 million noncash gain from the remeasurement of our equity method investment in IEnova Pipelines (formerly Gasoductos de Chihuahua or GdC), a 50-50 joint venture between our Mexican subsidiary, IEnova, and Petróleos Mexicanos (PEMEX), in connection with IEnova’s September 2016 acquisition of PEMEX’s 50-percent interest in GdC
$78 million gain at Sempra LNG & Midstream on the September 2016 sale of EnergySouth Inc., the parent company of Mobile Gas and Willmut Gas
$(123) million losses from the permanent releases of pipeline capacity at Sempra LNG & Midstream
$(80) million adjustments related to tax repairs deductions reallocated to ratepayers as a result of the 2016 General Rate Case Final Decision (2016 GRC FD) at the California Utilities
$(27) million impairment charge related to Sempra LNG & Midstream’s investment in Rockies Express Pipeline LLC (Rockies Express)
$(90) million impairment of TdM assets held for sale
$(5) million deferred income tax expense related to our decision to hold TdM for sale

Sempra Energy Adjusted Earnings and Adjusted Earnings Per Share 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 2017 to 2016 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 (Losses) Earnings and GAAP Diluted (Losses) Earnings Per Common Share, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.    
 
 
Pretax amount
Income tax expense (benefit)(1)
Non-controlling interests
(Losses) earnings
 
Pretax amount
Income tax expense (benefit)(1)
Non-controlling interests
Earnings
 
(Dollars in millions, except per share amounts)
Three months ended December 31, 2017
 
Three months ended December 31, 2016
 
Sempra Energy GAAP (Losses) Earnings
 
 
 
$
(501
)
 
 
 
 
$
379

 
Excluded items:
 
 
 
 
 
 
 
 
 
 
   Impact from the TCJA
$

$
870

$

870

 
$

$

$


 
   Aliso Canyon litigation reserves
20



20

 




 
   Deferred income tax expense associated with TdM




 

7

(3
)
4

 
Sempra Energy Adjusted Earnings
 
 
 
$
389

 
 
 
 
$
383

 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted (losses) earnings per common share:
 
 
 
 
 
 
 
 
 
 
   Sempra Energy GAAP (Losses) Earnings
 
 
 
$
(1.99
)
(2) 
 
 
 
$
1.51

 
   Sempra Energy Adjusted Earnings
 
 
 
$
1.54

 
 
 
 
$
1.52

 
Weighted-average number of shares outstanding, diluted (thousands)
 
 
 
252,725

(2) 

 
 
 
251,611

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2017
 
Year ended December 31, 2016
 
Sempra Energy GAAP Earnings
 
 
 
$
256

 
 
 
 
$
1,370

 
Excluded items:
 
 
 
 
 
 
 
 
 
 
   Impact from the TCJA
$

$
870

$

870

 
$

$

$


 
   Write-off of wildfire regulatory asset
351

(143
)

208

 




 
   Impairment of TdM assets held for sale
71


(24
)
47

 
131

(20
)
(21
)
90

 
   Aliso Canyon litigation reserves
20



20

 




 
   Deferred income tax (benefit) expense associated with TdM

(8
)
3

(5
)
 

8

(3
)
5

 
   Recoveries related to 2016 permanent releases of pipeline capacity
(47
)
19


(28
)
 




 
   Remeasurement gain in connection with GdC acquisition




 
(617
)
185

82

(350
)
 
   Gain on sale of EnergySouth




 
(130
)
52


(78
)
 
   Permanent releases of pipeline capacity




 
206

(83
)

123

 
   SDG&E tax repairs adjustments related to 2016 GRC FD




 
52

(21
)

31

 
   SoCalGas tax repairs adjustments related to 2016 GRC FD




 
83

(34
)

49

 
   Impairment of investment in Rockies Express




 
44

(17
)

27

 
Sempra Energy Adjusted Earnings
 
 
 
$
1,368

 
 
 
 
$
1,267

 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per common share:
 
 
 
 
 
 
 
 
 
 
   Sempra Energy GAAP Earnings
 
 
 
$
1.01

 
 
 
 
$
5.46

 
   Sempra Energy Adjusted Earnings
 
 
 
$
5.42

 
 
 
 
$
5.05

 
Weighted-average number of shares outstanding, diluted (thousands)
 
 
 
252,300

 
 
 
 
251,155

 
(1) 
Income taxes were calculated based on applicable statutory tax rates, except for adjustments that are solely income tax. Income taxes on the impairment of 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) 
The total weighted-average number of potentially dilutive securities was 0.8 million. However, these securities were not included in the computation of GAAP losses per common share since to do so would have decreased the loss per share.
 





SEMPRA ENERGY
Table B
 
 
 
 
 
 
 
CONSOLIDATED BALANCE SHEETS
 
 
 
 
(Dollars in millions)
December 31, 2017
 
December 31, 2016
 
 
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
288

 
$
349

Restricted cash
62

 
66

Accounts receivable, net
1,584

 
1,554

Due from unconsolidated affiliates
37

 
26

Income taxes receivable
110

 
43

Inventories
307

 
258

Regulatory assets
325

 
348

Fixed-price contracts and other derivatives
66

 
83

Greenhouse gas allowances
299

 
40

Assets held for sale
127

 
201

Other
136

 
142

Total current assets
3,341

 
3,110

 
 
 
 
Other assets:
 
 
 
Restricted cash
14

 
10

Due from unconsolidated affiliates
598

 
201

Regulatory assets
1,517

 
3,414

Nuclear decommissioning trusts
1,033

 
1,026

Investments
2,527

 
2,097

Goodwill
2,397

 
2,364

Other intangible assets
596

 
548

Dedicated assets in support of certain benefit plans
455

 
430

Insurance receivable for Aliso Canyon costs
418

 
606

Deferred income taxes
170

 
234

Greenhouse gas allowances
93

 
295

Sundry
792

 
520

Total other assets
10,610

 
11,745

Property, plant and equipment, net
36,503

 
32,931

Total assets
$
50,454

 
$
47,786

 
 
 
 
Liabilities and Equity
 
 
 
Current liabilities:
 
 
 
Short-term debt
$
1,540

 
$
1,779

Accounts payable
1,523

 
1,476

Due to unconsolidated affiliates
7

 
11

Dividends and interest payable
342

 
319

Accrued compensation and benefits
439

 
409

Regulatory liabilities
109

 
122

Current portion of long-term debt
1,427

 
913

Fixed-price contracts and other derivatives
109

 
83

Customer deposits
162

 
158

Reserve for Aliso Canyon costs
84

 
53

Greenhouse gas obligations
299

 
40

Liabilities held for sale
49

 
47

Other
545

 
517

Total current liabilities
6,635

 
5,927

Long-term debt
16,445

 
14,429

 
 
 
 
Deferred credits and other liabilities:
 
 
 
Customer advances for construction
150

 
152

Due to unconsolidated affiliates
35

 

Pension and other postretirement benefit plan obligations, net of plan assets
1,148

 
1,208

Deferred income taxes
2,767

 
3,745

Deferred investment tax credits
28

 
28

Regulatory liabilities
3,922

 
2,876

Asset retirement obligations
2,732

 
2,431

Fixed-price contracts and other derivatives
316

 
405

Greenhouse gas obligations

 
171

Deferred credits and other
1,136

 
1,173

Total deferred credits and other liabilities
12,234

 
12,189

Equity:
 
 
 
Sempra Energy shareholders’ equity
12,670

 
12,951

Preferred stock of subsidiary
20

 
20

Other noncontrolling interests
2,450

 
2,270

Total equity
15,140

 
15,241

Total liabilities and equity
$
50,454

 
$
47,786






SEMPRA ENERGY
Table C
 
 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
 
 
 
 
 
 
 
Years ended December 31,
(Dollars in millions)
 
2017
 
2016(1)
 
 
 
Cash Flows from Operating Activities
 
 
 
 
Net income
 
$
351

 
$
1,519

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
1,490

 
1,312

Deferred income taxes and investment tax credits
 
1,160

 
217

Write-off of wildfire regulatory asset
 
351

 

Impairment losses
 
72

 
153

Gain on sale of assets
 
(3
)
 
(134
)
Equity earnings, net
 
(76
)
 
(84
)
Remeasurement of equity method investment
 

 
(617
)
Fixed-price contracts and other derivatives
 
7

 
21

Other
 
149

 
62

Net change in other working capital components
 
57

 
(59
)
Insurance receivable for Aliso Canyon costs
 
188

 
(281
)
Changes in other assets
 
(214
)
 
49

Changes in other liabilities
 
93

 
153

Net cash provided by operating activities
 
3,625

 
2,311

 
 
 
 
 
Cash Flows from Investing Activities
 
 
 
 
Expenditures for property, plant and equipment
 
(3,949
)
 
(4,214
)
Expenditures for investments and acquisitions, net of cash,
cash equivalents and restricted cash acquired
 
(270
)
 
(1,504
)
Proceeds from sale of assets, net of cash sold
 
17

 
763

Distributions from investments
 
26

 
25

Purchases of nuclear decommissioning and other trust assets
 
(1,314
)
 
(1,034
)
Proceeds from sales by nuclear decommissioning and other trusts
 
1,314

 
1,134

Advances to unconsolidated affiliates
 
(531
)
 
(25
)
Repayments of advances to unconsolidated affiliates
 
9

 
11

Other
 
(2
)
 
9

Net cash used in investing activities
 
(4,700
)
 
(4,835
)
 
 
 
 
 
Cash Flows from Financing Activities
 
 
 
 
Common dividends paid
 
(755
)
 
(686
)
Preferred dividends paid by subsidiary
 
(1
)
 
(1
)
Issuances of common stock
 
47

 
51

Repurchases of common stock
 
(15
)
 
(56
)
Issuances of debt (maturities greater than 90 days)
 
4,509

 
2,951

Payments on debt (maturities greater than 90 days)
 
(2,800
)
 
(2,057
)
(Decrease) increase in short-term debt, net
 
(36
)
 
692

Advances from unconsolidated affiliates
 
35

 

Proceeds from sale of noncontrolling interests, net of $3 and $40 in offering costs, respectively
 
196

 
1,692

Net distributions to noncontrolling interests
 
(130
)
 
(63
)
Other
 
(43
)
 
(21
)
Net cash provided by financing activities
 
1,007

 
2,502

 
 
 
 
 
Effect of exchange rate changes on cash, cash equivalents and restricted cash
 
7

 
(3
)
 
 
 
 
 
Decrease in cash, cash equivalents and restricted cash
 
(61
)
 
(25
)
Cash, cash equivalents and restricted cash, January 1
 
425

 
450

Cash, cash equivalents and restricted cash, December 31
 
$
364

 
$
425

(1) 
As adjusted for the retrospective adoption of ASU 2016-15 and ASU 2016-18.






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)
2017
 
2016
 
2017
 
2016
 
    (unaudited)
 
 
 
 
Earnings (Losses)
 
 
 
 
 
 
 
Sempra Utilities:
 
 
 
 
 
 
 
San Diego Gas & Electric
$
131

 
$
151

 
$
407

 
$
570

Southern California Gas
128

 
151

 
396

 
349

Sempra South American Utilities
52

 
29

 
186

 
156

Sempra Infrastructure:
 
 
 
 
 
 
 
Sempra Mexico
64

 
56

 
169

 
463

Sempra Renewables
203

 
12

 
252

 
55

Sempra LNG & Midstream
126

 
(3
)
 
150

 
(107
)
Parent and other
(1,205
)
 
(17
)
 
(1,304
)
 
(116
)
(Losses) Earnings
$
(501
)
 
$
379

 
$
256

 
$
1,370

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
December 31,
 
Years ended
December 31,
(Dollars in millions)
2017
 
2016(1)
 
2017
 
2016(1)
 
    (unaudited)
 
 
 
 
Capital Expenditures, Investments and Acquisitions
 
 
 
 
 
 
 
Sempra Utilities:
 
 
 
 
 
 
 
San Diego Gas & Electric
$
433

 
$
440

 
$
1,555

 
$
1,399

Southern California Gas
334

 
370

 
1,367

 
1,319

Sempra South American Utilities
106

 
61

 
245

 
194

Sempra Infrastructure:
 
 
 
 
 
 
 
Sempra Mexico
202

 
384

 
467

 
1,750

Sempra Renewables
136

 
132

 
497

 
871

Sempra LNG & Midstream
15

 
28

 
68

 
164

Parent and other
3

 
4

 
20

 
21

Capital Expenditures, Investments and Acquisitions
$
1,229

 
$
1,419

 
$
4,219

 
$
5,718

(1) 
As adjusted for the retrospective adoption of ASU 2016-15 and ASU 2016-18.






SEMPRA ENERGY
Table E
 
OTHER OPERATING STATISTICS (Unaudited)
 
 
Three months ended
December 31,
 
Years ended or at
December 31,
UTILITIES
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
SDG&E and SoCalGas
 
 
 
 
 
 
 
Gas Sales (Bcf)(1)
88

 
92

 
341

 
334

Transportation (Bcf)(1)
150

 
164

 
638

 
641

Total Deliveries (Bcf)(1)
238

 
256

 
979

 
975

 
 
 
 
 
 
 
 
Total Gas Customers (Thousands)
 
 
 
 
6,846

 
6,808

 
 
 
 
 
 
 
 
Electric Sales (Millions of kWhs)(1)
3,845

 
3,987

 
15,617

 
15,649

Direct Access (Millions of kWhs)
864

 
942

 
3,394

 
3,515

Total Deliveries (Millions of kWhs)(1)
4,709

 
4,929

 
19,011

 
19,164

 
 
 
 
 
 
 
 
Total Electric Customers (Thousands)
 
 
 
 
1,446

 
1,434

 
 
 
 
 
 
 
 
Other Utilities
 
 
 
 
 
 
 
Natural Gas Sales (Bcf)
 
 
 
 
 
 
 
Sempra Mexico  Ecogas
7

 
7

 
29

 
29

Mobile Gas(2)

 

 

 
33

Willmut Gas(2)

 

 

 
2

 
 
 
 
 
 
 
 
Natural Gas Customers (Thousands)
 
 
 
 
 
 
 
Sempra Mexico – Ecogas
 
 
 
 
120

 
119

 
 
 
 
 
 
 
 
Chile:
 
 
 
 
 
 
 
Electric Sales (Millions of kWhs)
735

 
739

 
2,936

 
2,900

Tolling (Millions of kWhs)
27

 
23

 
98

 
90

Total Deliveries (Millions of kWhs)
762

 
762

 
3,034

 
2,990

 
 
 
 
 
 
 
 
Peru:
 
 
 
 
 
 
 
Electric Sales (Millions of kWhs)
1,678

 
1,780

 
6,999

 
7,387

Tolling (Millions of kWhs)
539

 
396

 
1,922

 
1,365

Total Deliveries (Millions of kWhs)
2,217

 
2,176

 
8,921

 
8,752

 
 
 
 
 
 
 
 
Electric Customers (Thousands)
 
 
 
 
 
 
 
Chile
 
 
 
 
704

 
688

Peru
 
 
 
 
1,102

 
1,078

 
 
 
 
 
 
 
 
ENERGY-RELATED BUSINESSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sempra Infrastructure
 
 
 
 
 
 
 
Power Generated and Sold (Millions of kWhs)
 
 
 
 
 
 
 
Sempra Mexico(3)
1,305

 
826

 
4,337

 
3,173

Sempra Renewables(4)
1,075

 
815

 
4,175

 
2,956

(1)  
Includes intercompany sales.
(2) 
On September 12, 2016, Sempra LNG & Midstream completed the sale of the parent company of Mobile Gas and Willmut Gas.
(3) 
Includes power generated and sold at the Termoeléctrica de Mexicali natural gas-fired power plant, which is currently held for sale, and the Ventika wind power generation facilities acquired in December 2016. 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) 
Includes 50 percent of total power generated and sold related to solar and wind projects in which Sempra Energy has a 50-percent ownership interest. These subsidiaries are not consolidated within Sempra Energy, and the related investments are accounted for under the equity method.



Exhibit


Exhibit 99.2
 
         SEMPRA ENERGY
           Table F (Unaudited)
STATEMENT OF OPERATIONS DATA BY SEGMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended December 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
$
1,125

 
$
1,090

 
$
398

 
$
323

 
$
20

 
$
134

 
$
(126
)
 
 
$
2,964

Cost of sales and other expenses
(706
)
 
(757
)
 
(312
)
 
(164
)
 
(19
)
 
(136
)
 
104

 
 
(1,990
)
Depreciation and amortization
(171
)
 
(131
)
 
(14
)
 
(42
)
 
(10
)
 
(11
)
 
(5
)
 
 
(384
)
Equity earnings (losses), before income tax

 

 

 

 
4

 
(1
)
 

 
 
3

Other income (expense), net
17

 
8

 
6

 
(86
)
 
1

 
1

 
6

 
 
(47
)
Income (loss) before interest and tax(1)
265

 
210

 
78

 
31

 
(4
)
 
(13
)
 
(21
)
 
 
546

Net interest (expense) income(2)
(52
)
 
(25
)
 
3

 
(13
)
 
(1
)
 
3

 
(61
)
 
 
(146
)
Income tax (expense) benefit(3)
(83
)
 
(57
)
 
(23
)
 
51

 
201

 
136

 
(1,123
)
 
 
(898
)
Equity earnings, net of income tax

 

 
2

 
45

 

 

 

 
 
47

Losses (earnings) attributable to noncontrolling interests
1

 

 
(8
)
 
(50
)
 
7

 

 

 
 
(50
)
Earnings (losses)
$
131

 
$
128

 
$
52

 
$
64

 
$
203

 
$
126

 
$
(1,205
)
 

$
(501
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended December 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
$
1,061

 
$
1,135

 
$
386

 
$
244

 
$
9

 
$
124

 
$
(89
)
 
 
$
2,870

Cost of sales and other expenses
(632
)
 
(779
)
 
(318
)
 
(124
)
 
(16
)
 
(127
)
 
58

 
 
(1,938
)
Depreciation and amortization
(168
)
 
(121
)
 
(8
)
 
(30
)
 
(2
)
 
(10
)
 
(3
)
 
 
(342
)
Adjustment to impairment losses

 
1

 

 

 

 

 

 
 
1

(Loss) gain on sale of assets

 

 
(1
)
 

 
4

 

 

 
 
3

Equity earnings (losses), before income tax

 

 

 

 
4

 
(2
)
 

 
 
2

Other income (expense), net
12

 
8

 
11

 
6

 
1

 
1

 
(5
)
 
 
34

Income (loss) before interest and tax(1)
273

 
244

 
70

 
96

 

 
(14
)
 
(39
)
 
 
630

Net interest (expense) income(2)
(50
)
 
(25
)
 
(3
)
 
1

 
(1
)
 
9

 
(56
)
 
 
(125
)
Income tax (expense) benefit
(76
)
 
(68
)
 
(34
)
 
(18
)
 
9

 
3

 
79

 
 
(105
)
Equity earnings, net of income tax

 

 

 
9

 

 

 

 
 
9

Losses (earnings) attributable to noncontrolling interests
4

 

 
(4
)
 
(32
)
 
4

 
(1
)
 
(1
)
 
 
(30
)
Earnings (losses)
$
151

 
$
151

 
$
29

 
$
56

 
$
12

 
$
(3
)
 
$
(17
)
 
 
$
379

(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) 
Includes $(870) from (unfavorable) favorable impacts from the Tax Cuts and Jobs Act of 2017, as follows, in millions: SDG&E $(28), SoCalGas $(2), Sempra Renewables $192, Sempra LNG & Midstream $133 and Parent and Other $(1,165).





         SEMPRA ENERGY
           Table F (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF OPERATIONS DATA BY SEGMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 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
$
4,476

 
$
3,785

 
$
1,567

 
$
1,196

 
$
94

 
$
540

 
$
(451
)
 
 
$
11,207

Cost of sales and other expenses
(2,742
)
 
(2,648
)
 
(1,228
)
 
(568
)
 
(76
)
 
(489
)
 
367

 
 
(7,384
)
Depreciation and amortization
(670
)
 
(515
)
 
(54
)
 
(156
)
 
(38
)
 
(42
)
 
(15
)
 
 
(1,490
)
Write-off and impairment losses
(351
)
 

 

 
(72
)
 

 

 

 
 
(423
)
Equity earnings, before income tax

 

 

 

 
29

 
5

 

 
 
34

Other income, net
66

 
36

 
14

 
105

 
2

 
3

 
28

 
 
254

Income (loss) before interest and tax(1)
779

 
658

 
299

 
505

 
11

 
17

 
(71
)
 
 
2,198

Net interest (expense) income(2)
(203
)
 
(102
)
 
(10
)
 
(74
)
 
(8
)
 
17

 
(234
)
 
 
(614
)
Income tax (expense) benefit(3)
(155
)
 
(160
)
 
(80
)
 
(227
)
 
226

 
119

 
(999
)
 
 
(1,276
)
Equity earnings, net of income tax

 

 
4

 
38

 

 

 

 
 
42

(Earnings) losses attributable to noncontrolling interests
(14
)
 

 
(27
)
 
(73
)
 
23

 
(3
)
 

 
 
(94
)
Earnings (losses)
$
407

 
$
396

 
$
186

 
$
169

 
$
252

 
$
150

 
$
(1,304
)
 
 
$
256

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 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
$
4,253

 
$
3,471

 
$
1,556

 
$
725

 
$
34

 
$
508

 
$
(364
)
 
 
$
10,183

Cost of sales and other expenses
(2,617
)
 
(2,416
)
 
(1,255
)
 
(413
)
 
(56
)
 
(780
)
 
287

 
 
(7,250
)
Depreciation and amortization
(646
)
 
(476
)
 
(49
)
 
(77
)
 
(6
)
 
(47
)
 
(11
)
 
 
(1,312
)
Impairments

 
(22
)
 

 
(131
)
 

 

 

 
 
(153
)
Gain on sale of assets

 

 

 

 
4

 
130

 

 
 
134

Equity earnings (losses), before income tax

 

 

 

 
34

 
(28
)
 

 
 
6

Remeasurement of equity method investment

 

 

 
617

 

 

 

 
 
617

Other income (expense), net
50

 
32

 
21

 
(5
)
 
2

 
3

 
29

 
 
132

Income (loss) before interest and tax(1)
1,040

 
589

 
273

 
716

 
12

 
(214
)
 
(59
)
 
 
2,357

Net interest (expense) income(2)
(195
)
 
(97
)
 
(17
)
 
(7
)
 
1

 
28

 
(241
)
 
 
(528
)
Income tax (expense) benefit
(280
)
 
(143
)
 
(80
)
 
(188
)
 
38

 
80

 
184

 
 
(389
)
Equity earnings, net of income tax

 

 
3

 
75

 

 

 

 
 
78

Losses (earnings) attributable to noncontrolling interests
5

 

 
(23
)
 
(133
)
 
4

 
(1
)
 

 
 
(148
)
Earnings (losses)
$
570

 
$
349

 
$
156

 
$
463

 
$
55

 
$
(107
)
 
$
(116
)
 
 
$
1,370

(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) 
Includes $(870) from (unfavorable) favorable impacts from the Tax Cuts and Jobs Act of 2017, as follows, in millions: SDG&E $(28), SoCalGas $(2), Sempra Renewables $192, Sempra LNG & Midstream $133 and Parent and Other $(1,165).