Sempra Energy 8-K

 

 

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):

May 4, 2016

 

 

 

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))

 

 


 

 

 

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 May 4, 2016, Sempra Energy issued a press release announcing consolidated earnings of $319 million, or $1.27 per diluted share of common stock, for the first quarter of 2016. 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 ended March 31, 2016 and 2015. A copy of such information is attached as Exhibit 99.2.

 

 

 

Item 9.01  Financial Statements and Exhibits.

 

         Exhibits 

 

          99.1       May 4, 2016 Sempra Energy News Release (including tables).

 

          99.2       Sempra Energy’s Statement of Operations Data by Segment for the three months ended March 31, 2016 and 2015.

 

 

 

 

 

 


 

 

 

 

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: May 4, 2016

By: /s/ Trevor I. Mihalik

 

Trevor I. Mihalik
Senior Vice President, Controller and Chief Accounting Officer

 

 

 

 

Exhibit 99.1


Exhibit 99.1




NEWS RELEASE



Media Contact:

Doug Kline

Sempra Energy

(877) 340-8875

dkline@sempra.com

www.sempra.com


Financial Contact:

Kendall Helm

Sempra Energy

(877) 736-7727

investor@sempra.com



SEMPRA ENERGY ANNOUNCES

FIRST-QUARTER 2016 FINANCIAL RESULTS


·

2016 Adjusted Earnings-Per-Share Guidance Range Revised to $4.60 to $5.00 With Pending Sale of Rockies Express Stake


·

Company Sets 2020 Earnings-Per-Share Guidance Range at $7.20 to $7.80


SAN DIEGO, May 4, 2016 – Sempra Energy (NYSE: SRE) today reported first-quarter 2016 earnings of $319 million, or $1.27 per diluted share, compared with $437 million, or $1.74 per diluted share, in the first quarter 2015.

Sempra Energy’s first-quarter 2016 results included a $27 million after-tax loss related to the previously announced agreement to sell Sempra U.S. Gas & Power’s stake in the Rockies Express Pipeline (REX) and $24 million of deferred tax expense related to the planned sale of the Termoeléctrica de Mexicali power plant. Sempra Energy’s first-quarter 2015 results reflected a $13 million after-tax benefit due to the reduction in the loss related to the San Onofre Nuclear Generating Station (SONGS) closure, offset by $4 million after-tax in liquefied natural gas (LNG) development expenses. Excluding these items, Sempra Energy’s adjusted earnings were $370 million, or $1.47 per diluted share, in the first quarter 2016, compared with $428 million, or $1.71 per diluted share, in the first quarter 2015.

Both GAAP and adjusted earnings in the first quarter 2016 were impacted by the delay of a final 2016-18 General Rate Case decision from the California Public Utilities Commission (CPUC) for Southern California Gas Co. (SoCalGas) and San Diego Gas & Electric (SDG&E). Revenues for SoCalGas and SDG&E currently are being recorded based on 2015 authorized amounts and, when the CPUC issues a final decision, the impact of the 2016 authorized margin will be recorded retroactive to Jan. 1, 2016.

“While we have not yet received a proposed decision from the CPUC in the General Rate Case for our California utilities, we expect that, when issued, the decision will be consistent with the settlement agreements SDG&E and SoCalGas filed last fall,” said Debra L. Reed, chairman and CEO of Sempra Energy. “Based on this expectation, we believe we are on track to meet our new, revised adjusted earnings guidance for 2016, which reflects the loss of future earnings from the pending sales of our interest in the Rockies Express Pipeline and our Southeastern utilities. Going forward, we expect our five-year performance plan to generate 12-percent compound annual adjusted earnings growth from 2016 through 2020 – about twice the growth rate of the utility average.”


CALIFORNIA UTILITIES

Southern California Gas Co.

Earnings for SoCalGas were $195 million in the first quarter 2016, compared with $214 million in the first quarter 2015, due primarily to higher non-refundable operating costs, including depreciation and litigation.  Additionally, in last year’s first quarter, the CPUC awarded SoCalGas $8 million in gas cost incentives related to the 2014 program year.

While there was no material impact on first-quarter 2016 earnings, SoCalGas today said its updated estimate of the costs related to the Aliso Canyon leak is $665 million. Concurrently, the company has recorded an insurance receivable of $660 million.

 

San Diego Gas & Electric

First-quarter earnings for SDG&E were $129 million in 2016, compared with $147 million in the first quarter 2015. Last year’s first-quarter results included the $13 million after-tax reduction in the loss related to the SONGS closure.


SEMPRA INTERNATIONAL

Sempra Mexico

Sempra Mexico had first-quarter earnings of $17 million in 2016, compared with $47 million in 2015, primarily due to foreign currency effects and the $24 million in deferred tax expense in 2016 related to the planned sale of the Termoeléctrica de Mexicali power plant in Baja California, Mexico.  Sempra Energy’s Mexican subsidiary, IEnova, announced the planned sale of the plant in February.


Sempra South American Utilities

Earnings for Sempra South American Utilities were $38 million in the first quarter 2016, compared with $41 million in the first quarter 2015, primarily due to foreign-currency translation effects.     


SEMPRA U.S. GAS & POWER

Sempra Renewables

Sempra Renewables had first-quarter earnings of $13 million in 2016, unchanged from last year’s first quarter.


Sempra Natural Gas

Sempra Natural Gas recorded a loss of $36 million in the first quarter 2016, compared with earnings of $2 million in the first quarter 2015.

Last week, Sempra U.S. Gas & Power announced that it signed a definitive agreement to sell its natural gas utility operations in the Southeastern U.S. Cash proceeds to Sempra U.S. Gas & Power are expected to be $323 million, subject to normal closing adjustments, and the buyer will assume existing debt of $67 million. Sempra U.S. Gas & Power expects to record an after-tax gain of approximately $70 million on the sale upon closing.

On March 29, Sempra U.S. Gas & Power announced an agreement to sell its 25-percent stake in REX for $440 million in cash. The company recorded an after-tax loss of $27 million in the first quarter 2016 related to the pending sale. Sempra U.S. Gas & Power expects the transaction to close in the second quarter 2016 and intends to permanently release uncontracted pipeline capacity that it holds. The permanent capacity release is expected to result in a charge to earnings of between $100 million and $120 million in the second quarter 2016, representing an acceleration of expected losses that otherwise would be realized over the contract term.


EARNINGS GUIDANCE

Sempra Energy today revised its 2016 adjusted earnings-per-share guidance range to $4.60 to $5. The new guidance for 2016 reflects the anticipated reduction in 2016 earnings of approximately $60 million, or $0.24 per diluted share, related to the pending sale of the company’s interest in REX.

Sempra Energy also today set its 2020 earnings-per-share guidance range at $7.20 to $7.80, reflecting an expected compound annual growth rate in adjusted earnings of 12 percent from 2016 through 2020.


NON-GAAP FINANCIAL MEASURES

First-quarter adjusted earnings and adjusted earnings per share for both 2016 and 2015, as well as adjusted earnings guidance for 2016 and the compound annual growth rate for 2016 through 2020, are non-GAAP financial measures.  Additional information regarding these non-GAAP financial measures is in the appendix on Table A of the first-quarter financial tables.


INTERNET BROADCAST

Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 1 p.m. EDT 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 5467296.

Sempra Energy (NYSE: SRE), based in San Diego, is a Fortune 500 energy services holding company with 2015 revenues of more than $10 billion. The Sempra Energy companies' 17,000 employees serve more than 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 like "believes," "expects," "anticipates," "plans," "estimates,"  "projects," "forecasts," "contemplates," "intends," "assumes," "depends," "should," "could," "would," "will," "confident," "may," "potential," "possible,"  "proposed,"  "target," "pursue," "goals," "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. 


Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others:  local, regional, national and international economic, competitive, political, legislative, legal and regulatory conditions, decisions and developments; actions and the timing of actions, including general rate case decisions, new regulations, issuances of permits to construct, operate and maintain facilities and equipment and to use land, franchise agreements and licenses for operation, by the California Public Utilities Commission, California State Legislature, U.S. Department of Energy, California Division of Oil, Gas, and Geothermal Resources, Federal Energy Regulatory Commission, Nuclear Regulatory Commission, California Energy Commission, U.S. Environmental Protection Agency, Pipeline and Hazardous Materials Safety Administration, California Air Resources Board, South Coast Air Quality Management District, Mexican Competition Commission, cities and counties, and other regulatory, governmental and environmental bodies in the United States and other countries in which we operate; the timing and success of business development efforts and construction, maintenance and capital projects, including risks in obtaining, maintaining or extending permits, licenses, certificates and other authorizations on a timely basis and risks in obtaining adequate and competitive financing for such projects; 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, and delays in regulatory agency authorization to recover costs in rates from customers; 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 North American transmission grid, moratoriums on the ability to withdraw natural gas from or inject natural gas into storage facilities, pipeline explosions and equipment failures; energy markets; the timing and extent of changes and volatility in commodity prices; and the impact on the value of our natural gas storage and related assets and our investments from low natural gas prices, low volatility of natural gas prices and the inability to procure favorable long-term contracts for natural gas storage services; risks posed by decisions and actions of third parties who control the operations of investments in which we do not have a controlling interest, and risks that our partners or counterparties will be unable (due to liquidity issues, bankruptcy or otherwise) or unwilling to fulfill their contractual commitments; capital markets conditions, including the availability of credit and the liquidity of our investments, and inflation, interest and currency exchange rates; cybersecurity threats to the energy grid, natural gas 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; terrorist attacks that threaten system operations and critical infrastructure; and wars; the ability to win competitively bid infrastructure projects against a number of strong competitors willing to aggressively bid for these projects; weather conditions, natural disasters, catastrophic accidents, equipment failures and other events that may disrupt our operations, damage our facilities and systems, cause the release of greenhouse gasses, radioactive materials and harmful emissions, 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 or may be disputed by insurers; disallowance of regulatory assets associated with, or decommissioning costs of, the San Onofre Nuclear Generating Station facility due to increased regulatory oversight, including motions to modify settlements; 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 and increased reliance on natural gas and natural gas transmission systems; the impact on competitive customer rates of 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; the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements due to insufficient market interest, unattractive pricing or other factors; and other uncertainties, all of which are difficult to predict and many of which are beyond our control.


These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the Securities and Exchange Commission. 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 at 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 International, LLC, Sempra U.S. Gas & Power, LLC, and Sempra Partners, LP, are not the same companies as the California utilities, San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra International, LLC, Sempra U.S. Gas & Power, LLC, and Sempra Partners, LP, are not regulated by the California Public Utilities Commission. Sempra International's underlying entities include Sempra Mexico and Sempra South American Utilities. Sempra U.S. Gas & Power's underlying entities include Sempra Renewables and Sempra Natural Gas.









SEMPRA ENERGY
           
               
Table A
           
               
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
         
        Three months ended March 31,  
(Dollars in millions, except per share amounts)
 
  2016  
 
  2015  
     
(unaudited)
 
REVENUES
           
Utilities
 $
      2,442
 
 $
      2,422
 
Energy-related businesses
 
         180
   
         260
 
    Total revenues
 
      2,622
   
      2,682
 
EXPENSES AND OTHER INCOME
           
Utilities:
           
    Cost of natural gas
 
        (311)
   
        (346)
 
    Cost of electric fuel and purchased power
 
        (515)
   
        (481)
 
Energy-related businesses:
           
    Cost of natural gas, electric fuel and purchased power
 
          (56)
   
          (98)
 
    Other cost of sales
 
          (35)
   
          (35)
 
Operation and maintenance
 
        (701)
   
        (658)
 
Depreciation and amortization
 
        (328)
   
        (303)
 
Franchise fees and other taxes
 
        (111)
   
        (107)
 
Plant closure adjustment
 
           ―
   
           21
 
Equity (losses) earnings, before income tax
 
          (22)
   
           19
 
Other income, net
 
           49
   
           39
 
Interest income
 
             6
   
             7
 
Interest expense
 
        (143)
   
        (134)
 
Income before income taxes and equity earnings
           
    of certain unconsolidated subsidiaries
 
         455
   
         606
 
Income tax expense
 
        (142)
   
        (163)
 
Equity earnings, net of income tax
 
           17
   
           15
 
Net income
 
         330
   
         458
 
Earnings attributable to noncontrolling interests
 
          (11)
   
          (21)
 
Earnings
 $
         319
 
 $
         437
 
               
Basic earnings per common share
 $
        1.28
 
 $
        1.76
 
Weighted-average number of shares outstanding, basic (thousands)
 
   249,734
   
   247,722
 
               
Diluted earnings per common share
 $
        1.27
 
 $
        1.74
 
Weighted-average number of shares outstanding, diluted (thousands)
 
   251,412
   
   251,206
 
               
Dividends declared per share of common stock
 $
        0.76
 
 $
        0.70
 
               





SEMPRA ENERGY
           
Table A (Continued)
           
               
Sempra Energy Consolidated
           
               
RECONCILIATION OF SEMPRA ENERGY GAAP EARNINGS TO SEMPRA ENERGY ADJUSTED EARNINGS (Unaudited)
       
               
Sempra Energy Adjusted Earnings and Adjusted Earnings Per Common Share exclude items in 2016 and 2015 as follows:
       
               
2016:
           
   •
$27 million after-tax impairment charge related to Sempra Natural Gas' investment in Rockies Express Pipeline LLC (Rockies Express)
   
   •
$24 million deferred income tax expense related to our decision to hold Sempra Mexico's Termoeléctrica de Mexicali (TdM) natural gas-fired power plant for sale
 
               
2015:
           
   •
$13 million reduction in the plant closure loss related to the San Onofre Nuclear Generating Station (SONGS) due to California Public Utilities Commission (CPUC)
 
 
approval of a compliance filing related to San Diego Gas & Electric Company's (SDG&E) authorized recovery of its investment in SONGS
   
   •
$4 million of liquefied natural gas (LNG) liquefaction development expenses
           
               
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 nature of these items, management believes that these non-GAAP financial measures provide a more meaningful comparison of the performance of Sempra Energy's business operations from 2016 to 2015 and to future periods, and also as a base for projection of future earnings-per-share compounded annual growth rate (EPS CAGR) from 2016 to 2020. 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 Earnings and Diluted Earnings Per Common Share, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.
               
     
Three months ended March 31,
   
(Dollars in millions, except per share amounts)
 
2016
 
2015
   
Sempra Energy GAAP Earnings
 
 $                   319
 
 $                   437
   
Exclude:
           
   Loss related to Rockies Express
 
                        27
 
                                  ―
   
   Deferred income tax expense associated with TdM
 
                        24
 
                                  ―
   
   SONGS plant closure adjustment
 
                                  ―
 
                       (13)
   
   LNG liquefaction development expenses (1)
 
                                  ―
 
                          4
   
Sempra Energy Adjusted Earnings
 
 $                   370
 
 $                   428
   
               
Diluted earnings per common share:
           
Sempra Energy GAAP Earnings
 
 $                  1.27
 
 $                  1.74
   
Sempra Energy Adjusted Earnings
 
 $                  1.47
 
 $                  1.71
   
Weighted-average number of shares outstanding, diluted (thousands)
 
               251,412
 
               251,206
   
               
(1)
 
LNG liquefaction development expenses for 2016 are included in 2016 Adjusted Earnings-Per-Share Guidance and therefore are not an adjusted earnings item in 2016.
 
               
SEMPRA ENERGY 2016 ADJUSTED EARNINGS-PER-SHARE GUIDANCE RANGE (Unaudited)
         
               
Sempra Energy 2016 Adjusted Earnings-Per-Share Guidance Range of $4.60 to $5.00 excludes:
         
   •
any potential gain from the remeasurement of our equity method investment in Gasoductos de Chihuahua (GdC), a 50-50 joint venture between our Mexican subsidiary,
 
 
IEnova, and Petróleos Mexicanos (PEMEX), in connection with the potential acquisition by IEnova of PEMEX’s 50-percent interest in GdC;
   
   •
any earnings impact from any transaction to sell the TdM natural gas-fired power plant in Mexico, including the $24 million deferred income tax expense recorded in the first
 
 
quarter of 2016;
           
   •
the $27 million after-tax Rockies Express impairment charge;
           
   •
approximately $100 million to $120 million charge expected in the second quarter of 2016 from Sempra Natural Gas' planned permanent release of uncontracted capacity;
 
   •
approximately $70 million gain from the pending sale of the parent company of Mobile Gas and Willmut Gas in 2016; and
       
   •
any impact from the adoption of new accounting standards in 2016.
           
               
Sempra Energy 2016 Adjusted Earnings-Per-Share Guidance is a non-GAAP financial measure. Because of the significance and nature of the excluded items, management believes this non-GAAP measure provides better clarity into the ongoing results of the business and the comparability of such results to prior and future periods and also as a base for comparison of the projected EPS CAGR from 2016 to 2020. Sempra Energy 2016 Adjusted Earnings-Per-Share Guidance should not be considered an alternative to diluted earnings per share determined in accordance with GAAP. As the parties are in the process of restructuring the GdC transaction and an agreement for the sale of the TdM plant has yet to be obtained, any potential earnings impact, other than the TdM deferred income tax expense recorded in the first quarter of 2016, from these transactions cannot be reasonably estimated at this time. We are also not able to estimate the impact from the adoption of new accounting standards in 2016. Accordingly, we are not able to provide a corresponding GAAP equivalent to our 2016 Adjusted Earnings-Per-Share Guidance or our projected EPS CAGR from 2016 to 2020.
               
               
San Diego Gas & Electric Company (SDG&E)
           
               
RECONCILIATION OF SDG&E GAAP EARNINGS TO SDG&E ADJUSTED EARNINGS (Unaudited)
         
               
SDG&E Adjusted Earnings exclude, in 2015, a $13 million reduction in the plant closure loss related to SONGS due to CPUC approval of a compliance filing related to SDG&E's authorized recovery of its investment in SONGS.
 
SDG&E Adjusted Earnings is a non-GAAP financial measure. Because of the significance and nature of this item, management believes that this non-GAAP financial measure provides a more meaningful comparison of the performance of SDG&E's business operations from 2016 to 2015 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 this non-GAAP financial measure to SDG&E Earnings, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP.
               
               
               
               
               
               
               
     
Three months ended March 31,
   
(Dollars in millions)
 
2016
 
2015
   
SDG&E GAAP Earnings
 
 $                   129
 
 $                   147
   
Exclude:
           
   SONGS plant closure adjustment
 
                                  ―
 
                       (13)
   
SDG&E Adjusted Earnings
 
 $                   129
 
 $                   134
   
               





SEMPRA ENERGY
 
Table B
 
                 
CONDENSED CONSOLIDATED BALANCE SHEETS
         
                 
         
March 31,
 
December 31,
 
(Dollars in millions)
 
2016
 
2015(1)
 
         
(unaudited)
     
Assets
           
Current assets:
         
 
Cash and cash equivalents
 
 $               376
 
 $               403
 
 
Restricted cash
 
                    23
 
                    27
 
 
Accounts receivable, net
 
               1,277
 
               1,473
 
 
Due from unconsolidated affiliates
 
                     7
 
                     6
 
 
Income taxes receivable
 
                    49
 
                    30
 
 
Inventories
 
                  231
 
                  298
 
 
Regulatory balancing accounts – undercollected
 
                  256
 
                  307
 
 
Fixed-price contracts and other derivatives
 
                    88
 
                    80
 
 
Assets held for sale, power plant
 
                  303
 
                    ―
 
 
Other
   
                  273
 
                  267
 
     
Total current assets
 
               2,883
 
               2,891
 
                 
Other assets:
         
 
Restricted cash
 
                    20
 
                    20
 
 
Due from unconsolidated affiliates
 
                  186
 
                  186
 
 
Regulatory assets
 
               3,336
 
               3,273
 
 
Nuclear decommissioning trusts
 
               1,082
 
               1,063
 
 
Investments
 
               2,727
 
               2,905
 
 
Goodwill
 
                  849
 
                  819
 
 
Other intangible assets
 
                  402
 
                  404
 
 
Dedicated assets in support of certain benefit plans
 
                  432
 
                  464
 
 
Insurance receivable for Aliso Canyon costs
 
                  660
 
                  325
 
 
Sundry
 
                  825
 
                  761
 
     
Total other assets
 
             10,519
 
             10,220
 
Property, plant and equipment, net
 
             28,433
 
             28,039
 
Total assets
 
 $           41,835
 
 $           41,150
 
                 
Liabilities and Equity
         
Current liabilities:
         
 
Short-term debt
 
 $            1,177
 
 $               622
 
 
Accounts payable
 
               1,157
 
               1,275
 
 
Due to unconsolidated affiliates
 
                    13
 
                    14
 
 
Dividends and interest payable
 
                  360
 
                  303
 
 
Accrued compensation and benefits
 
                  259
 
                  423
 
 
Regulatory balancing accounts – overcollected
 
                    45
 
                    34
 
 
Current portion of long-term debt
 
               1,066
 
                  907
 
 
Fixed-price contracts and other derivatives
 
                    57
 
                    56
 
 
Customer deposits
 
                  147
 
                  153
 
 
Reserve for Aliso Canyon costs
 
                  302
 
                  274
 
 
Other
   
                  549
 
                  551
 
     
Total current liabilities
 
               5,132
 
               4,612
 
Long-term debt
 
             12,975
 
             13,134
 
                 
Deferred credits and other liabilities:
         
 
Customer advances for construction
 
                  148
 
                  149
 
 
Pension and other postretirement benefit plan obligations, net of plan assets
 
               1,165
 
               1,152
 
 
Deferred income taxes
 
               3,222
 
               3,157
 
 
Deferred investment tax credits
 
                    32
 
                    32
 
 
Regulatory liabilities arising from removal obligations
 
               2,850
 
               2,793
 
 
Asset retirement obligations
 
               2,151
 
               2,126
 
 
Fixed-price contracts and other derivatives
 
                  248
 
                  240
 
 
Deferred credits and other
 
               1,188
 
               1,176
 
     
Total deferred credits and other liabilities
 
             11,004
 
             10,825
 
Equity:
           
 
Total Sempra Energy shareholders’ equity
 
             11,946
 
             11,809
 
 
Preferred stock of subsidiary
 
                    20
 
                    20
 
 
Other noncontrolling interests
 
                  758
 
                  750
 
     
Total equity
 
             12,724
 
             12,579
 
Total liabilities and equity
 
 $           41,835
 
 $           41,150
 
                 
(1)
Derived from audited financial statements.
         





SEMPRA ENERGY
         
Table C
         
             
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
         
             
     
Three months ended March 31,
 
(Dollars in millions)
 
2016
 
2015
 
     
(unaudited)
 
Cash Flows from Operating Activities
         
Net income
 
 $             330
 
 $             458
 
Adjustments to reconcile net income to net cash provided by operating activities:
         
 
Depreciation and amortization
 
                328
 
                303
 
 
Deferred income taxes and investment tax credits
 
                112
 
                131
 
 
Plant closure adjustment
 
                  ―
 
                 (21)
 
 
Equity losses (earnings)
 
                    5
 
                 (34)
 
 
Fixed-price contracts and other derivatives
 
                    4
 
                  11
 
 
Other
 
                    2
 
                 (27)
 
Net change in other working capital components
 
                165
 
                  19
 
Insurance receivable for Aliso Canyon costs
 
               (335)
 
                  ―
 
Changes in other assets
 
                 (29)
 
                 (42)
 
Changes in other liabilities
 
                  10
 
                  13
 
 
Net cash provided by operating activities
 
                592
 
                811
 
             
Cash Flows from Investing Activities
         
Expenditures for property, plant and equipment
 
               (971)
 
               (780)
 
Expenditures for investments and acquisition of business
 
                 (30)
 
                 (34)
 
Distributions from investments
 
                    9
 
                    1
 
Purchases of nuclear decommissioning and other trust assets
 
                 (94)
 
                 (95)
 
Proceeds from sales by nuclear decommissioning and other trusts
 
                  93
 
                  94
 
Increases in restricted cash
 
                 (16)
 
                 (18)
 
Decreases in restricted cash
 
                  20
 
                  25
 
Advances to unconsolidated affiliates
 
                   (6)
 
                   (5)
 
Repayments of advances to unconsolidated affiliates
 
                    9
 
                  33
 
Other
 
                   (3)
 
                    9
 
 
Net cash used in investing activities
 
               (989)
 
               (770)
 
             
Cash Flows from Financing Activities
         
Common dividends paid
 
               (161)
 
               (149)
 
Issuances of common stock
 
                  15
 
                  17
 
Repurchases of common stock
 
                 (54)
 
                 (65)
 
Issuances of debt (maturities greater than 90 days)
 
                  55
 
                938
 
Payments on debt (maturities greater than 90 days)
 
                 (54)
 
               (654)
 
Increase (decrease) in short-term debt, net
 
                531
 
               (363)
 
Tax benefit related to share-based compensation
 
                  34
 
                  52
 
Other
 
                   (2)
 
                   (7)
 
 
Net cash provided by (used in) financing activities
 
                364
 
               (231)
 
             
Effect of exchange rate changes on cash and cash equivalents
 
 
                    6
 
                   (3)
 
             
Decrease in cash and cash equivalents
 
                 (27)
 
               (193)
 
Cash and cash equivalents, January 1
 
                403
 
                570
 
Cash and cash equivalents, March 31
 
 $             376
 
 $             377
 
             





SEMPRA ENERGY
       
Table D
       
             
             
SEGMENT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS
   
             
             
     
Three months ended March 31,
 
(Dollars in millions)
2016
 
2015
 
     
    (unaudited)
 
Earnings (Losses)
       
California Utilities:
       
San Diego Gas & Electric
 $              129
 
 $               147
 
Southern California Gas
                 195
 
                  214
 
Sempra International:
       
Sempra South American Utilities
                  38
 
                   41
 
Sempra Mexico
                  17
 
                   47
 
Sempra U.S. Gas & Power:
       
Sempra Renewables
                  13
 
                   13
 
Sempra Natural Gas
                 (36)
 
                     2
 
Parent and other
                 (37)
 
                  (27)
 
Earnings
 $              319
 
 $               437
 
             
             
     
Three months ended March 31,
 
(Dollars in millions)
2016
 
2015
 
     
    (unaudited)
 
Capital Expenditures and Investments
       
California Utilities:
       
San Diego Gas & Electric
 $              329
 
 $               355
 
Southern California Gas
                 340
 
                  315
 
Sempra International:
       
Sempra South American Utilities
                  43
 
                   31
 
Sempra Mexico
                  40
 
                   55
 
Sempra U.S. Gas & Power:
       
Sempra Renewables
                 199
 
                   22
 
Sempra Natural Gas
                  47
 
                   25
 
Parent and other
                    3
 
                   11
 
Consolidated Capital Expenditures and Investments
 $           1,001
 
 $               814
 
             





SEMPRA ENERGY
 
Table E
 
               
               
OTHER OPERATING STATISTICS (Unaudited)
         
               
               
       
Three months ended March 31,
 
UTILITIES
 
2016
 
2015
 
               
California Utilities - SDG&E and SoCalGas
         
Gas Sales (Bcf)(1)
 
              113
 
                99
 
Transportation (Bcf)(1)
 
              148
 
              155
 
Total Deliveries (Bcf)(1)
 
              261
 
              254
 
Total Gas Customers (Thousands)
 
            6,782
 
            6,746
 
               
Electric Sales (Millions of kWhs)(1)
 
            3,773
 
            3,832
 
Direct Access (Millions of kWhs)
 
              834
 
              867
 
Total Deliveries (Millions of kWhs)(1)
 
            4,607
 
            4,699
 
Total Electric Customers (Thousands)
 
            1,428
 
            1,419
 
               
Other Utilities
         
Natural Gas Sales (Bcf)
         
 
Mexico
 
                  8
 
                  7
 
 
Mobile Gas(2)
 
                13
 
                13
 
 
Willmut Gas
 
                  1
 
                  1
 
Natural Gas Customers (Thousands)
         
 
Mexico
 
              114
 
              108
 
 
Mobile Gas(2)
 
                84
 
                87
 
 
Willmut Gas
 
                19
 
                19
 
Electric Sales (Millions of kWhs)
         
 
Peru
   
            1,949
 
            1,923
 
 
Chile
   
              799
 
              792
 
Electric Customers (Thousands)
         
 
Peru
   
            1,058
 
            1,036
 
 
Chile
   
              675
 
              661
 
               
ENERGY-RELATED BUSINESSES
         
               
Sempra International
         
Power Sold (Millions of kWhs)
         
 
Sempra Mexico
 
              528
 
              910
 
               
Sempra U.S. Gas & Power
         
Power Sold (Millions of kWhs)
         
 
Sempra Renewables(3)
 
              767
 
              727
 
 
Sempra Natural Gas(4)
 
              221
 
            1,373
 
               
(1)
Includes intercompany sales.
         
(2)
Includes transportation.
         
(3)
Includes 50 percent of total power sold related to solar and wind projects in which Sempra Energy has 50-percent ownership. These
 
subsidiaries are not consolidated within Sempra Energy, and the related investments are accounted for under the equity method.
(4)
Sempra Natural Gas sold the remaining 625-megawatt block of its Mesquite Power natural gas-fired power plant in April 2015.
Exhibit 99.2

Exhibit 99.2


           SEMPRA ENERGY
             Table F (Unaudited)
                                     
Statement of Operations Data by Segment
                             
                                     
Three Months Ended March 31, 2016
                               
                                 
 
(Dollars in millions)
   
SDG&E
   
SoCalGas
   
Sempra South
 American
 Utilities
   
Sempra
 Mexico
   
Sempra
 Renewables
   
Sempra
 Natural Gas
   
Consolidating
 Adjustments,
 Parent & Other
     
Total
                                     
Revenues
 
 $          991
 
 $    1,033
 
 $            400
 
 $           138
 
 $              7
 
 $         130
 
 $                 (77)
   
 $     2,622
                                     
Cost of sales and other expenses
 
            (596)
 
         (617)
 
              (329)
 
              (82)
 
              (13)
 
          (154)
 
                     62
   
       (1,729)
                                     
Depreciation and amortization
 
            (159)
 
         (122)
 
                (13)
 
              (17)
 
                (1)
 
            (13)
 
                     (3)
   
         (328)
                                     
Equity earnings (losses), before income tax
                 -
 
              -
 
                   -
 
                  -
 
                 7
 
            (29)
 
                       -
   
           (22)
                                     
Other income, net
 
               14
 
            10
 
                  2
 
               11
 
                 -
 
                -
 
                     12
   
            49
                                     
Income (loss) before interest and tax (1)
 
             250
 
          304
 
                 60
 
               50
 
                 -
 
            (66)
 
                     (6)
   
          592
                                     
Net interest (expense) income (2)
 
              (48)
 
           (22)
 
                 (4)
 
                (2)
 
                 1
 
               4
 
                    (66)
   
         (137)
                                     
Income tax (expense) benefit
 
              (72)
 
           (87)
 
                (14)
 
              (41)
 
               12
 
             25
 
                     35
   
         (142)
                                     
Equity earnings, net of income tax
 
                 -
 
              -
 
                  2
 
               15
 
                 -
 
                -
 
                       -
   
            17
                                     
(Earnings) losses attributable to noncontrolling interests
               (1)
 
              -
 
                 (6)
 
                (5)
 
                 -
 
               1
 
                       -
   
           (11)
                                     
Earnings (losses)
 
 $          129
 
 $       195
 
 $              38
 
 $            17
 
 $            13
 
 $         (36)
 
 $                 (37)
   
 $        319
                                     
                                     
                                     
                                     
Three Months Ended March 31, 2015
                                 
                                   
 
(Dollars in millions)
   
SDG&E
   
SoCalGas
   
Sempra South
 American
 Utilities
   
Sempra
 Mexico
   
Sempra
 Renewables
   
Sempra
 Natural Gas
   
Consolidating
 Adjustments,
 Parent & Other
     
Total
                                     
Revenues
 
 $          966
 
 $    1,048
 
 $            389
 
 $           163
 
 $              8
 
 $         197
 
 $                 (89)
   
 $     2,682
                                     
Cost of sales and other expenses
 
            (560)
 
         (615)
 
              (314)
 
            (102)
 
              (11)
 
          (196)
 
                     73
   
       (1,725)
                                     
Depreciation and amortization
 
            (145)
 
         (113)
 
                (13)
 
              (17)
 
                (2)
 
            (12)
 
                     (1)
   
         (303)
                                     
Plant closure adjustment
 
               21
 
              -
 
                   -
 
                  -
 
                 -
 
                -
 
                       -
   
            21
                                     
Equity earnings, before income tax
 
                 -
 
              -
 
                   -
 
                  -
 
                 2
 
             17
 
                       -
   
            19
                                     
Other income, net
 
                9
 
             8
 
                  3
 
                 9
 
                 -
 
                -
 
                     10
   
            39
                                     
Income (loss) before interest and tax (1)
 
             291
 
          328
 
                 65
 
               53
 
                (3)
 
               6
 
                     (7)
   
          733
                                     
Net interest expense (2)
 
              (52)
 
           (19)
 
                 (1)
 
                (3)
 
                (1)
 
              (2)
 
                    (49)
   
         (127)
                                     
Income tax (expense) benefit
 
              (88)
 
           (95)
 
                (16)
 
                (8)
 
               17
 
              (2)
 
                     29
   
         (163)
                                     
Equity (losses) earnings, net of income tax
 
                 -
 
              -
 
                 (1)
 
               16
 
                 -
 
                -
 
                       -
   
            15
                                     
Earnings attributable to noncontrolling interests
               (4)
 
              -
 
                 (6)
 
              (11)
 
                 -
 
                -
 
                       -
   
           (21)
                                     
Earnings (losses)
 
 $          147
 
 $       214
 
 $              41
 
 $            47
 
 $            13
 
 $            2
 
 $                 (27)
   
 $        437
                                     
(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.