Document
0000092108false00000921082019-11-012019-11-01

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):November 1, 2019


SOUTHERN CALIFORNIA GAS COMPANY
(Exact name of registrant as specified in its charter)


California1-0140295-1240705
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)

555 West Fifth Street, Los Angeles, California
90013
(Address of principal executive offices)(Zip Code)


Registrant's telephone number, including area code
(213) 244-1200


(Former name or former address, if changed since last report.)




Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
None

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 Southern California Gas Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

On November 1, 2019, Sempra Energy, of which Southern California Gas Company is a consolidated subsidiary, issued a press release announcing consolidated earnings of $813 million, or $2.84 per diluted share of common stock, for the third quarter of 2019. 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 nine months ended September 30, 2019 and 2018. A copy of such information is attached as Exhibit 99.2.

The Sempra Energy financial information contained in the press release includes, on a consolidated basis, information regarding Southern California Gas Company’s results of operations and financial condition.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit NumberExhibit Description
99.1
99.2
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)




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.


SOUTHERN CALIFORNIA GAS COMPANY,
(Registrant)
Date: November 1, 2019By: /s/ Mia L. DeMontigny
Mia L. DeMontigny
Vice President, Controller, Chief Financial Officer and
Chief Accounting Officer

Document

Exhibit 99.1

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13175443&doc=9
NEWS RELEASE

Media Contact:Amber Albrecht
Sempra Energy
(877) 340-8875
media@sempra.com
Financial Contact:Lindsay Gartner
Sempra Energy
(877) 736-7727
investor@sempra.com


SEMPRA ENERGY REPORTS STRONG
THIRD-QUARTER 2019 EARNINGS

Raises 2019 EPS Guidance; Issues 2020 GAAP and Affirms 2020 Adjusted EPS Guidance
Receives Approval of California Utilities’ Safety and Reliability-Based General Rate Case
Continues to Advance LNG Development Opportunities with Multiple MOU Agreements

SAN DIEGO, Nov. 1, 2019 – Sempra Energy (NYSE: SRE) today reported third-quarter 2019 earnings of $813 million, or $2.84 per diluted share, up from $274 million, or $0.99 per diluted share, in the third quarter 2018. On an adjusted basis, the company’s third-quarter 2019 earnings were $425 million, or $1.50 per diluted share, compared to $339 million, or $1.23 per diluted share, in the third quarter 2018.
“At Sempra Energy, we laid out a plan last year to increasingly focus on core markets where we can produce the best results for our stakeholders,” said Jeffrey W. Martin, chairman and CEO of Sempra Energy. “With our recently announced agreements to sell our South American businesses, it reflects our ongoing commitment to simplify our strategy. Our year-to-date financial results are a product of that more focused strategy, and the hard work and dedication of all of our employees.”
Sempra Energy's earnings for the first nine months of 2019 were $1.61 billion, or $5.74 per diluted share, compared with earnings of $60 million, or $0.23 per diluted share, in the first nine months of 2018. Adjusted earnings for



the first nine months of 2019 were $1.46 billion, or $5.23 per diluted share, compared with $1.07 billion, or $4.00 per diluted share, in the first nine months of 2018.
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 third quarter and first nine months of 2019 and 2018.
Three months ended September 30Nine months ended September 30
(Unaudited; Dollars, except EPS, and shares, in millions)201920182019
2018(1)
GAAP Earnings 813  274  $1,608   60  
Retroactive Impact of 2019 GRC FD for First Half of 2019(196) —  —  —  
Gain on Sale of U.S. Wind Assets—  —  (45) —  
Tax Impacts from Expected Sale of South American Businesses
(192) —  (99) 
(2)
—  
Impacts Associated with Aliso Canyon Litigation—  —  —  22  
Impairment of U.S. Wind Equity Method Investments—  —  —  145  
Impairment of Non-utility U.S. Natural Gas Storage Assets—  —  —  755  
Impairment of Investment in RBS Sempra Commodities—  65  —  65  
Impacts from the Tax Cuts and Jobs Act of 2017—  —  —  25  
Adjusted Earnings(3)
 425   339   1,464   1,072  
Adjusted Diluted Weighted-Average Common Shares Outstanding(3)
283  
(4)
276  280  268  
(5)
Adjusted Earnings Per Diluted Common Share(3)
$1.50  $1.23  $5.23   4.00  
Diluted Weighted-Average Common Shares Outstanding296  276  280  266  
GAAP Earnings Per Diluted Common Share
$2.84  
(4)
$0.99  $5.74   0.23  
1) Amounts have been retrospectively adjusted for discontinued operations.

2) Includes $89 million income tax benefit due to change in indefinite reinvestment assertion of basis differences and structure of sale of discontinued operations, and $10 million to reduce a tax valuation allowance against certain net operating loss (NOL) carryforwards at Parent and Other.

3) Sempra Energy adjusted earnings, adjusted EPS and adjusted diluted weighted-average common shares outstanding are non-GAAP financial measures. See Table A for information regarding non-GAAP financial measures and descriptions of the adjustments above.

4) In the three months ended September 30, 2019, because the assumed conversion of the series A preferred stock is dilutive for GAAP Earnings, the numerator used to calculate GAAP EPS includes an add-back of $26 million of series A preferred stock dividends declared in that quarter. However, because the assumed conversion is antidilutive for the lower adjusted earnings, 13,238 series A preferred stock shares are not included in the denominator used to calculate adjusted EPS.

5) In the nine months ended September 30, 2018, the total weighted-average potentially dilutive stock options and restricted stock units of 736 and common shares sold forward of 945 were not included in the denominator used to calculate GAAP EPS due to the losses from continuing operations attributable to common shares, but have been added to the denominator used to calculate Adjusted EPS.

OPERATING HIGHLIGHTS

Sempra LNG
Sempra Energy is continuing to advance its liquefied natural gas (LNG) development projects.
Sempra Energy announced in October that it has entered into a memorandum of understanding (MOU) with Mitsui & Co., Ltd. (Mitsui) reflecting the parties’ preliminary agreement for Mitsui’s participation in the Cameron LNG Phase 2 project, and a future expansion of the Energía Costa Azul (ECA) LNG project in Baja California, Mexico. The MOU is non-binding and contemplates the continued mutual support for the development of Cameron LNG Phase 2, including Mitsui’s potential purchase of up to one-third of the available capacity of the project, as well as the potential offtake of approximately 1 million tonnes per annum of LNG and equity participation in a future expansion of ECA LNG.
In September, Sempra LNG also entered into a MOU with China Three Gorges Corporation regarding potential cooperation in supplying LNG to support demand growth in China, including the growth of natural gas power generation.



In August, the Cameron LNG liquefaction-export project in Hackberry, La., began commercial operations at Train 1 of the facility. The project, including Trains 2 and 3, is over 96% complete. Commissioning of Train 2 is underway, and the previously disclosed project timeline remains unchanged.

California Utilities
In September, San Diego Gas & Electric and Southern California Gas Co. received a final decision in the utilities’ 2019 General Rate Case. The increased revenue requirements will enable the utilities to invest in critical energy infrastructure with a focus on enhancing safety and reliability for the communities they serve.

Texas Utilities
Oncor Electric Delivery Company LLC (Oncor) has increased its five-year capital plan. The increase is related to growth seen in and around Oncor’s service territory. The infrastructure investments will help to facilitate renewables integration in Texas, support growth in West Texas and the Dallas-Fort Worth area, and strengthen and expand the grid in Oncor’s service territory for the benefit of Oncor’s customers and the communities it serves. Oncor now plans to spend approximately $11.9 billion between 2020 and 2024.

Sempra Mexico
Infraestructura Energética Nova, S.A.B. de C.V. (IEnova), Sempra Energy’s Mexican subsidiary, continues to develop infrastructure that provides Mexico access to cleaner, more affordable and more reliable energy.
In August, IEnova reached constructive resolutions with the Federal Electricity Commission and the Mexican government on the Sur de Texas-Tuxpan pipeline and Guaymas-El Oro pipeline. Shortly thereafter, the Sur de Texas-Tuxpan pipeline, a joint venture with TC Energy Corporation, commenced commercial operations in September.

Announced Sale of South American Businesses
Sempra Energy recently announced two agreements that would conclude the company’s planned sale of its South American businesses for combined proceeds of approximately $5.82 billion in cash, subject to adjustments and satisfaction of closing conditions. Both transactions, one to sell Sempra Energy’s equity interests in its Peruvian businesses and the other to sell its equity interests in its Chilean businesses, are expected to be completed in the first quarter of 2020.

EARNINGS GUIDANCE
On a GAAP basis, the company’s earnings-per-common-share (EPS) guidance range for full-year 2019 is $6.50 to $7.00. Sempra Energy today raised its 2019 adjusted EPS guidance from a range of $5.70 to $6.30 to a range of $6.00 to $6.50. The company also issued its full-year 2020 GAAP EPS guidance range of $12.78 to $14.26 and affirmed its full-year 2020 adjusted EPS guidance range of $6.70 to $7.50.




NON-GAAP FINANCIAL MEASURES

Non-GAAP financial measures include Sempra Energy’s adjusted earnings and adjusted EPS for both the third quarter and first nine months of 2019 and 2018, adjusted diluted weighted-average common shares outstanding for the third quarter of 2019 and the first nine months of 2018, and 2020 and 2019 adjusted EPS guidance. See Table A for additional information regarding these non-GAAP financial measures.

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 6278133.
Sempra Energy's mission is to be North America's premier energy infrastructure company. With more than $60 billion in total assets reported in 2018, 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 deliver energy with purpose to approximately 40 million consumers worldwide. The company is focused on the most attractive markets in North America, including California, Texas, Mexico and the LNG export market. Sempra Energy has been consistently recognized for its leadership in diversity and inclusion, and sustainability, and is a member of the S&P 500 Utilities Index and the Dow Jones Utility Index.
###

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, mission, 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 the risk that we may not be able to recover any such costs from insurance, the California wildfire fund or in rates from customers in California or otherwise; actions and the timing of actions, including decisions, investigations, new regulations and issuances of permits and other authorizations and renewal of franchises by the Comisión Federal de Electricidad (CFE), California Public Utilities Commission, U.S. Department of Energy, California Department of Conservation's Division of Oil, Gas, and Geothermal Resources, Los Angeles County Department of Public Health, U.S. Environmental Protection Agency, Federal Energy Regulatory Commission, Pipeline and Hazardous Materials Safety Administration, 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; the success of business development efforts, construction projects, and major acquisitions, divestitures and internal structural changes, including risks in (i) obtaining or maintaining authorizations; (ii) completing construction projects on schedule and budget; (iii) obtaining the consent of partners; (iv) counterparties’ financial ability or otherwise to fulfill contractual commitments; (v) winning competitively bid infrastructure projects; (vi) the ability to complete contemplated acquisitions and/or divestitures and the disruptions caused by such efforts; and (vii) the ability to realize anticipated benefits from any of these efforts once completed; the resolution of civil and criminal litigation, regulatory investigations and proceedings, and arbitrations; 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; 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; 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; 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; 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; expropriation of assets, the failure to honor the terms of contracts by foreign governments and state-owned entities such as the CFE, and other property disputes; the impact at San Diego Gas & Electric Company 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; changes in capital markets, energy markets and economic conditions, including the availability of credit; and volatility in foreign currency exchange, interest and inflation rates and commodity prices and our ability to effectively hedge the risk of such volatility; 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; actions of activist shareholders, which could disrupt our operations by, among other things, requiring significant time by management and our board of directors; the impact of federal or state tax reform and our ability to mitigate adverse impacts; 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, and on the company’s website, www.sempra.com. 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, Sempra Mexico, Sempra Texas Utilities, 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, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova are not regulated by the California Public Utilities Commission.






SEMPRA ENERGY
Table A
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended September 30,Nine months ended September 30,
(Dollars in millions, except per share amounts; shares in thousands) 2019
2018(1)
2019
2018(1)
(unaudited) 
REVENUES
Utilities$2,398  $2,102  $6,808  $6,112  
Energy-related businesses360  463  1,078  1,164  
Total revenues2,758  2,565  7,886  7,276  
EXPENSES AND OTHER INCOME
Utilities:
Cost of natural gas(122) (255) (789) (782) 
Cost of electric fuel and purchased power(410) (446) (929) (1,037) 
Energy-related businesses cost of sales(94) (119) (265) (258) 
Operation and maintenance(845) (792) (2,515) (2,275) 
Depreciation and amortization(402) (366) (1,174) (1,115) 
Franchise fees and other taxes(127) (131) (369) (352) 
Impairment losses(43) (4) (43) (1,304) 
(Loss) gain on sale of assets(3) —  63  —  
Other (expense) income, net(7) 96  103  192  
Interest income22  19  64  66  
Interest expense(279) (222) (797) (656) 
Income (loss) from continuing operations before income taxes
and equity earnings
448  345  1,235  (245) 
Income tax (expense) benefit(61) (139) (150) 221  
Equity earnings266  74  485  49  
Income from continuing operations, net of income tax653  280  1,570  25  
Income from discontinued operations, net of income tax256  54  292  137  
Net income909  334  1,862  162  
Earnings attributable to noncontrolling interests(60) (24) (146) (12) 
Mandatory convertible preferred stock dividends(36) (36) (107) (89) 
Preferred dividends of subsidiary—  —  (1) (1) 
Earnings attributable to common shares$813  $274  $1,608  $60  
Basic earnings per common share:
Earnings attributable to common shares$2.93  $1.00  $5.83  $0.23  
Weighted-average common shares outstanding277,360  273,944  275,684  265,963  
Diluted earnings per common share:
Earnings attributable to common shares$2.84  $0.99  $5.74  $0.23  
Weighted-average common shares outstanding295,789  275,907  279,809  265,963  
(1) Amounts have been retrospectively adjusted for discontinued operations.




SEMPRA ENERGY
Table A (Continued)
RECONCILIATION OF SEMPRA ENERGY ADJUSTED EARNINGS TO SEMPRA ENERGY GAAP EARNINGS (Unaudited)
Sempra Energy Adjusted Earnings and Adjusted Diluted Earnings Per Common Share (Adjusted EPS) exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2019 and 2018 as follows:
Three months ended September 30, 2019:
$196 million incremental revenue increases for the first six months of 2019 from the retroactive application of the final decision in the 2019 General Rate Case (GRC FD) at the California Utilities
Associated with holding the South American businesses for sale:
$192 million income tax benefit associated with outside basis differences in our South American businesses primarily related to a change in the anticipated structure of the sale of those businesses
Three months ended September 30, 2018:
$(65) million impairment of RBS Sempra Commodities LLP (RBS Sempra Commodities) equity method investment at Parent and other
Nine months ended September 30, 2019:
$45 million gain on the sale of certain Sempra Renewables assets
Associated with holding the South American businesses for sale:
$89 million income tax benefit from outside basis differences in our South American businesses primarily related to the change in our indefinite reinvestment assertion from our decision in January 2019 to hold those businesses for sale and a change in the anticipated structure of the sale
$10 million income tax benefit to reduce a valuation allowance against certain net operating loss (NOL) carryforwards as a result of our decision to sell our South American businesses
Nine months ended September 30, 2018:
$(22) million impacts associated with Aliso Canyon natural gas storage facility litigation at Southern California Gas Company (SoCalGas)
$(145) million other-than-temporary impairment of certain U.S. wind equity method investments at Sempra Renewables
$(755) million impairment of certain non-utility natural gas storage assets at Sempra LNG
$(65) million impairment of RBS Sempra Commodities equity method investment
$(25) million income tax expense to adjust the Tax Cuts and Jobs Act of 2017 (TCJA) provisional amounts
Sempra Energy Adjusted Earnings, Weighted-Average Common 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 to prior and 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, Weighted-Average Common Shares Outstanding – GAAP and GAAP Diluted Earnings 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)
EarningsPretax amount
Income tax expense (benefit)(1)
Non-controlling interestsEarnings
(Dollars in millions, except per share amounts; shares in thousands)Three months ended September 30, 2019Three months ended September 30, 2018
Sempra Energy GAAP Earnings$813  $274  
Excluded items:
SDG&E retroactive impact of 2019 GRC FD for first half of 2019
$(92) $26  (66) $—  $—  $—  —  
SoCalGas retroactive impact of 2019 GRC FD for first half of 2019
(181) 51  (130) —  —  —  —  
Associated with holding the South American businesses for sale:
Change in indefinite reinvestment assertion of basis differences and structure of sale of discontinued operations—  (192) (192) —  —  —  —  
Impairment of investment in RBS Sempra Commodities
—  —  —  65  —  —  65  
Sempra Energy Adjusted Earnings$425  $339  
Diluted earnings per common share:
     Sempra Energy GAAP Earnings(2)
$839  $274  
     Weighted-average common shares outstanding, diluted – GAAP295,789  275,907  
     Sempra Energy GAAP EPS$2.84  $0.99  
Sempra Energy Adjusted Earnings for Adjusted EPS
$425  $339  
Weighted-average common shares outstanding, diluted – Adjusted(2)
282,551  275,907  
Sempra Energy Adjusted EPS
$1.50  $1.23  
Nine months ended September 30, 2019Nine months ended September 30, 2018
Sempra Energy GAAP Earnings$1,608  $60  
Excluded items:
Gain on sale of certain Sempra Renewables assets
$(61) $16  (45) $—  $—  $—  —  
Associated with holding the South American businesses for sale:
Change in indefinite reinvestment assertion of basis differences and structure of sale of discontinued operations—  (89) (89) —  —  —  —  
Reduction in tax valuation allowance against certain NOL carryforwards—  (10) (10) —  —  —  —  
Impacts associated with Aliso Canyon litigation
—  —  —   21  —  22  
Impairment of U.S. wind equity method investments
—  —  —  200  (55) —  145  
Impairment of non-utility natural gas storage assets
—  —  —  1,300  (499) (46) 755  
Impairment of investment in RBS Sempra Commodities
—  —  —  65  —  —  65  
Impact from the TCJA
—  —  —  —  25  —  25  
Sempra Energy Adjusted Earnings$1,464  $1,072  
Diluted earnings per common share:
     Sempra Energy GAAP Earnings$1,608  $60  
     Weighted-average common shares outstanding, diluted – GAAP 279,809  265,963  
     Sempra Energy GAAP EPS$5.74  $0.23  
Sempra Energy Adjusted Earnings for Adjusted EPS
$1,464  $1,072  
Weighted-average common shares outstanding, diluted – Adjusted(3)
279,809  267,644  
Sempra Energy Adjusted EPS
$5.23  $4.00  
(1) Except for adjustments that are solely income tax and tax related to outside basis differences, income taxes on pretax amounts were primarily calculated based on applicable statutory tax rates.
(2) In the three months ended September 30, 2019, because the assumed conversion of the series A preferred stock is dilutive for GAAP Earnings, the numerator used to calculate GAAP EPS includes an add-back of $26 million of series A preferred stock dividends declared in that quarter. However, because the assumed conversion is antidilutive for the lower Adjusted Earnings, 13,238 series A preferred stock shares are not included in the denominator used to calculate Adjusted EPS.
(3) In the nine months ended September 30, 2018, the total weighted-average potentially dilutive stock options and restricted stock units of 736 and common shares sold forward of 945 were not included in the denominator used to calculate GAAP EPS due to the losses from continuing operations attributable to common shares, but have been added to the denominator used to calculate Adjusted EPS.




SEMPRA ENERGY
Table A (Continued)
RECONCILIATION OF SEMPRA ENERGY 2019 ADJUSTED EPS GUIDANCE RANGE TO SEMPRA ENERGY 2019 GAAP EPS GUIDANCE RANGE (Unaudited)
Sempra Energy 2019 Adjusted EPS Guidance Range of $6.00 to $6.50 excludes items as follows:
$45 million gain on the sale of certain Sempra Renewables assets
Associated with holding the South American businesses for sale:
$89 million income tax benefit from outside basis differences in our South American businesses primarily related to the change in our indefinite reinvestment assertion from our decision in January 2019 to hold those businesses for sale and a change in the anticipated structure of the sale
$10 million income tax benefit to reduce a valuation allowance against certain NOL carryforwards as a result of our decision to sell our South American businesses
Sempra Energy 2019 Adjusted EPS Guidance is a non-GAAP financial measure. Because of the significance and/or nature of the excluded items, management believes that this non-GAAP financial measure provides a meaningful comparison of the performance of Sempra Energy's business operations to prior and future periods. Sempra Energy 2019 Adjusted EPS Guidance should not be considered an alternative to Sempra Energy 2019 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. The table below reconciles Sempra Energy 2019 Adjusted EPS Guidance Range to Sempra Energy 2019 GAAP EPS Guidance Range, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP.
Full-Year 2019
Sempra Energy GAAP EPS Guidance Range$6.50  to$7.00  
Excluded items:
Gain on sale of certain Sempra Renewables assets(0.16) (0.16) 
Associated with holding the South American businesses for sale:
Change in indefinite reinvestment assertion of basis differences and structure of sale of discontinued operations(0.31) (0.31) 
Reduction in tax valuation allowance against certain NOL carryforwards(0.03) (0.03) 
Sempra Energy Adjusted EPS Guidance Range$6.00  to$6.50  
Weighted-average common shares outstanding, diluted (millions)283




SEMPRA ENERGY
Table A (Continued)
RECONCILIATION OF SEMPRA ENERGY 2020 ADJUSTED EPS GUIDANCE RANGE TO SEMPRA ENERGY 2020 GAAP EPS GUIDANCE RANGE (Unaudited)
Sempra Energy 2020 Adjusted EPS Guidance Range of $6.70 to $7.50 excludes approximately $1.8 billion to $2.0 billion estimated after-tax gain on the sale of our South American businesses, net of approximately $1.2 billion of income tax expense, which was calculated primarily based on applicable statutory tax rates.

Sempra Energy 2020 Adjusted EPS Guidance is a non-GAAP financial measure. Because of the significance and/or nature of the excluded item, management believes that this non-GAAP financial measure provides a meaningful comparison of the performance of Sempra Energy's business operations to prior and future periods. Sempra Energy 2020 Adjusted EPS Guidance should not be considered an alternative to Sempra Energy 2020 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. The table below reconciles Sempra Energy 2020 Adjusted EPS Guidance Range to Sempra Energy 2020 GAAP EPS Guidance Range, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP.
Full-Year 2020
Sempra Energy GAAP EPS Guidance Range$12.78  to$14.26  
Excluded item:
Estimated gain on sale of South American businesses(6.08) (6.76) 
Sempra Energy Adjusted EPS Guidance Range$6.70  to$7.50  
Weighted-average common shares outstanding, diluted (millions)296

.




SEMPRA ENERGY
Table B
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)September 30,
2019
December 31,
2018(1)
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$106  $102  
Restricted cash28  35  
Accounts receivable, net1,431  1,535  
Dividends receivable from discontinued operations422  —  
Due from unconsolidated affiliates40  37  
Income taxes receivable98  60  
Inventories270  258  
Regulatory assets183  138  
Greenhouse gas allowances59  59  
Assets held for sale—  713  
Assets held for sale in discontinued operations720  459  
Other309  249  
Total current assets3,666  3,645  
Other assets:
Restricted cash 21  
Due from unconsolidated affiliates712  644  
Regulatory assets1,942  1,589  
Nuclear decommissioning trusts1,049  974  
Investment in Oncor Holdings11,145  9,652  
Other investments2,076  2,320  
Goodwill1,602  1,602  
Other intangible assets216  224  
Dedicated assets in support of certain benefit plans439  416  
Insurance receivable for Aliso Canyon costs354  461  
Deferred income taxes157  141  
Greenhouse gas allowances483  289  
Right-of-use assets – operating leases595  —  
Wildfire fund381  —  
Assets held for sale in discontinued operations3,395  3,259  
Sundry850  962  
Total other assets25,399  22,554  
Property, plant and equipment, net35,520  34,439  
Total assets$64,585  $60,638  
(1) Derived from audited financial statements, which have been retrospectively adjusted for discontinued operations.




SEMPRA ENERGY
Table B (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)September 30,
2019
December 31,
2018(1)
(unaudited)
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt$3,588  $2,024  
Accounts payable, net1,129  1,298  
Due to unconsolidated affiliates12  10  
Dividends and interest payable517  480  
Accrued compensation and benefits362  440  
Regulatory liabilities 445  105  
Current portion of long-term debt and finance leases1,623  1,644  
Reserve for Aliso Canyon costs45  160  
Greenhouse gas obligations59  59  
Liabilities held for sale in discontinued operations804  368  
Other914  935  
Total current liabilities9,498  7,523  
Long-term debt and finance leases20,995  20,903  
Deferred credits and other liabilities:
Due to unconsolidated affiliates 39  37  
Pension and other postretirement benefit plan obligations, net of plan assets1,120  1,143  
Deferred income taxes2,360  2,321  
Deferred investment tax credits22  24  
Regulatory liabilities 3,823  4,016  
Asset retirement obligations2,824  2,786  
Greenhouse gas obligations281  131  
Liabilities held for sale in discontinued operations1,023  1,013  
Deferred credits and other2,049  1,493  
Total deferred credits and other liabilities13,541  12,964  
Equity:
Sempra Energy shareholders’ equity18,620  17,138  
Preferred stock of subsidiary20  20  
Other noncontrolling interests1,911  2,090  
Total equity20,551  19,248  
Total liabilities and equity$64,585  $60,638  
(1) Derived from audited financial statements, which have been retrospectively adjusted for discontinued operations.

SEMPRA ENERGY
Table C
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30,
(Dollars in millions)2019
2018(1)
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,862  $162  
Less: Income from discontinued operations, net of income tax(292) (137) 
Income from continuing operations, net of income tax1,570  25  
Adjustments to reconcile net income to net cash provided by operating activities741  2,084  
Intercompany activities with discontinued operations, net184  72  
Net change in other working capital components(200) 491  
Insurance receivable for Aliso Canyon costs107  (56) 
Wildfire fund, current and noncurrent(323) —  
Changes in other noncurrent assets and liabilities, net(250) (177) 
Net cash provided by continuing operations1,829  2,439  
Net cash provided by discontinued operations289  220  
Net cash provided by operating activities2,118  2,659  
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment(2,590) (2,654) 
Expenditures for investments and acquisition(1,449) (9,921) 
Proceeds from sale of assets899   
Decrease in cash from deconsolidation of Otay Mesa VIE(8) —  
Purchases of nuclear decommissioning trust assets(728) (703) 
Proceeds from sales of nuclear decommissioning trust assets728  703  
Advances to unconsolidated affiliates(16) (81) 
Repayments of advances to unconsolidated affiliates12   
Intercompany activities with discontinued operations, net(257) (18) 
Other33  38  
Net cash used in continuing operations(3,376) (12,631) 
Net cash used in discontinued operations(63) (161) 
Net cash used in investing activities(3,439) (12,792) 
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid(734) (645) 
Preferred dividends paid(107) (53) 
Issuances of mandatory convertible preferred stock, net —  2,259  
Issuances of common stock, net 757  2,261  
Repurchases of common stock(23) (20) 
Issuances of debt (maturities greater than 90 days)3,269  8,458  
Payments on debt (maturities greater than 90 days) and finance leases (2,500) (2,836) 
Increase in short-term debt, net888  715  
Proceeds from sale of noncontrolling interests, net  90  
Purchases of noncontrolling interests(30) —  
Contributions from (distributions to) noncontrolling interests, net171  (88) 
Intercompany activities with discontinued operations, net(128) 70  
Other(42) (112) 
Net cash provided by continuing operations1,526  10,099  
Net cash provided by (used in) discontinued operations49  (34) 
Net cash provided by financing activities1,575  10,065  
Effect of exchange rate changes in continuing operations—  —  
Effect of exchange rate changes in discontinued operations(3) (8) 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(3) (8) 
Increase (decrease) in cash, cash equivalents and restricted cash, including discontinued operations251  (76) 
Cash, cash equivalents and restricted cash, including discontinued operations, January 1246  364  
Cash, cash equivalents and restricted cash, including discontinued operations, September 30$497  $288  
(1) Amounts have been retrospectively adjusted for discontinued operations.  




SEMPRA ENERGY  
Table D  
SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES, INVESTMENTS AND ACQUISITIONS 
Three months ended September 30,Nine months ended September 30,
(Dollars in millions) 2019
2018(1)
2019
2018(1)
(unaudited) 
Earnings (Losses) Attributable to Common Shares 
SDG&E  $263  $205  $582  $521  
SoCalGas  143  (14) 437  244  
Sempra Texas Utilities  212  154  419  283  
Sempra Mexico  84  44  214  161  
Sempra Renewables  —  34  59  (54) 
Sempra LNG   16  13  (764) 
Parent and other  (139) (211) (383) (446) 
Discontinued operations  248  46  267  115  
Total  $813  $274  $1,608  $60  
Three months ended September 30,Nine months ended September 30,
(Dollars in millions) 2019
2018(1)
2019
2018(1)
(unaudited) 
Capital Expenditures, Investments and Acquisitions  
SDG&E  $363  $343  $1,071  $1,194  
SoCalGas  360  344  1,019  1,127  
Sempra Texas Utilities  56  —  1,338  9,278  
Sempra Mexico  178  152  420  320  
Sempra Renewables  —    46  
Sempra LNG  37  65  183  202  
Parent and other     408  
Total  $997  $918  $4,039  $12,575  
(1) Amounts have been retrospectively adjusted for discontinued operations.






SEMPRA ENERGY
Table E
OTHER OPERATING STATISTICS (Unaudited)
Three months ended September 30,Nine months ended September 30,
UTILITIES2019201820192018
SDG&E and SoCalGas
Gas sales (Bcf)(1)
57  55  271  244  
Transportation (Bcf)(1)
156  163  424  447  
Total deliveries (Bcf)(1)
213  218  695  691  
Total gas customer meters (thousands)6,912  6,874  
SDG&E
Electric sales (millions of kWhs)(1)
3,970  4,493  10,796  11,493  
Direct Access and Community Choice Aggregation (millions of kWhs)952  1,009  2,640  2,680  
Total deliveries (millions of kWhs)(1)
4,922  5,502  13,436  14,173  
Total electric customer meters (thousands)1,468  1,456  
Oncor(2)
Total deliveries (millions of kWhs)40,834  38,163  102,462  77,476  
Total electric customer meters (thousands)3,673  3,607  
Ecogas
Natural gas sales (Bcf)—     
Natural gas customer meters (thousands)129  121  
ENERGY-RELATED BUSINESSES
Power generated and sold
Sempra Mexico
Termoeléctrica de Mexicali (TdM) (millions of kWhs)1,032  1,145  2,862  2,922  
Wind and solar (millions of kWhs)(3)
419  305  1,109  924  
(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 nine months ended September 30, 2018 only include volumes from the March 9, 2018 acquisition date.
(3) Includes 50 percent of the 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.


Document
Exhibit 99.2


         SEMPRA ENERGY
           Table F (Unaudited)
STATEMENTS OF OPERATIONS DATA BY SEGMENT
Three months ended September 30, 2019
(Dollars in millions)SDG&ESoCalGasSempra Texas UtilitiesSempra MexicoSempra RenewablesSempra LNGConsolidating Adjustments, Parent & OtherTotal
Revenues$1,427  $975  $—  $357  $—  $100  $(101) $2,758  
Cost of sales and other expenses(802) (571) —  (174) —  (120) 69  (1,598) 
Depreciation and amortization(196) (154) —  (46) —  (2) (4) (402) 
Impairment losses(6) (37) —  —  —  —  —  (43) 
Loss on sale of assets—  —  —  —  —  —  (3) (3) 
Other income (expense), net19   —  (30) —  —   (7) 
Income (loss) before interest and tax(1)
442  214  —  107  —  (22) (36) 705  
Net interest (expense) income(105) (36) —  (10) —   (110) (257) 
Income tax (expense) benefit(71) (35) —  —  —   43  (61) 
Equity earnings, net—  —  212  37  —  17  —  266  
(Earnings) losses attributable to noncontrolling interests(3) —  —  (50) —   —  (52) 
Preferred dividends—  —  —  —  —  —  (36) (36) 
Earnings (losses) from continuing operations$263  $143  $212  $84  $—  $ $(139) 565  
Earnings from discontinued operations248  
Earnings attributable to common shares$813  
Three months ended September 30, 2018(2)
(Dollars in millions)SDG&ESoCalGasSempra Texas UtilitiesSempra MexicoSempra RenewablesSempra LNGConsolidating Adjustments, Parent & OtherTotal
Revenues$1,299  $802  $—  $410  $38  $147  $(131) $2,565  
Cost of sales and other expenses(825)