Sempra Energy Reports Strong 2019 Financial And Operating Results

- Exceeds Full-Year 2019 EPS Guidance Range

- Increases Common Stock Dividend by 8%

- Achieves Substantial Completion of Cameron LNG Train 2, Commercial Operations Expected in Coming Days

SAN DIEGO, Feb. 27, 2020 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported full-year 2019 earnings of $2.1 billion, or $7.29 per diluted share, up from $924 million, or $3.42 per diluted share, in 2018. On an adjusted basis, the company's full-year 2019 earnings were $1.9 billion, or $6.78 per diluted share, compared to $1.5 billion, or $5.57 per diluted share, in 2018.

"This year has been one of the strongest in our company's history," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "Our earnings results are a direct reflection of our sharper strategic focus and ongoing execution of our mission to be North America's premier energy infrastructure company. Supported by our high-performance culture, our dedicated employees will carry this momentum into 2020 as we continue to focus on our vision of delivering energy with purpose by connecting millions of consumers to safe, resilient and affordable energy."

In the fourth quarter 2019, Sempra Energy reported earnings of $447 million, or $1.55 per diluted share, compared with earnings of $864 million, or $3.03 per diluted share, in the fourth quarter 2018. On an adjusted basis, fourth quarter 2018 earnings were $431 million, or $1.56 per diluted share.

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 2019 and 2018.

                     
     

 Three months ended 

 

 Years ended 

 
     

 December 31, 

 

 December 31, 

 
 

(Dollars, except EPS, and shares, in millions)

 

2019

 

2018 (1)

 

2019

 

2018(1)

 
     

(Unaudited)

         
 

GAAP Earnings

 

$  447

 

$  864

 

$ 2,055

 

$     924

 
                     
 

Tax Impacts from Expected Sale of South American Businesses

 

-

 

-

 

(99)

 

-

 
                     
 

Gain on Sale of Certain Sempra Renewables Assets

-

 

(367)

 

(45)

 

(367)

 
                     
 

(Adjustment)/Impairment of U.S. Non-utility Natural Gas Storage Assets

-

 

(126)

 

-

 

629

 
                     
 

Impairment of U.S. Wind Equity Method Investments

 

-

 

-

 

-

 

145

 
                     
 

Impact from the Tax Cuts and Jobs Act of 2017

 

-

 

60

 

-

 

85

 
                     
 

Impairment of Investment in RBS Sempra Commodities

 

-

 

-

 

-

 

65

 
                     
 

Impacts Associated with Aliso Canyon Litigation

 

-

 

-

 

-

 

22

 
                     
 

Adjusted Earnings(2)

 

$  447

 

$  431

 

$ 1,911

 

$ 1,503

 
                     
                     
 

Diluted Weighted-Average Common Shares Outstanding

 

289

 

296

 

282

 

270

 
 

GAAP Earnings Per Diluted Common Share

 

$ 1.55

 

$ 3.03(3)

 

$    7.29

 

$    3.42

 
                     
 

Adjusted Diluted Weighted-Average Common Shares Outstanding(2)

 

289

 

276(3)

 

282

 

270

 
 

Adjusted Earnings Per Diluted Common Share(2)

 

$ 1.55

 

$ 1.56

 

$    6.78

 

$    5.57

 
                     
   

1)

Amounts have been retrospectively adjusted for discontinued operations.

2)

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.

3)

Due to the dilutive effect of the mandatory convertible preferred stock for GAAP earnings, the numerator used to calculate GAAP EPS includes an add-back of $36 million of mandatory preferred stock dividends declared in the quarter. However, because the assumed conversion is antidilutive for the lower Adjusted Earnings, ~20 million preferred stock shares are not included in the denominator used to calculate Adjusted EPS for the quarter.

Earlier this week, Sempra Energy's board of directors approved an 8% increase to the company's dividend, to $4.18 per common share from $3.87 per common share, on an annualized basis. On average, Sempra Energy has increased its dividend by more than 10% annually for the last decade.

OPERATING HIGHLIGHTS

The company made progress on its strategy to focus on transmission and distribution infrastructure in the most attractive markets in North America.

In January, the California Public Utilities Commission issued a final decision approving an extension of the General Rate Case (GRC) cycle to four years on a go-forward basis. This change applies to San Diego Gas & Electric's (SDG&E) and Southern California Gas Co.'s recently approved GRC. As a transitional step, both utilities' GRC cycle will be extended to five years, covering the years 2019 through 2023. Extending the GRC cycle is a constructive development that is expected to benefit all stakeholders by delivering future visibility to the utilities' robust capital programs to enhance safety and resilience.

Earlier this month, SDG&E filed its comprehensive 2020 Wildfire Mitigation Plan, a strategic three-year program. This program is a continuation of SDG&E's efforts over the last decade to help mitigate infrastructure-related wildfires and to help increase the safety of its customers, workforce and the communities it serves. The 2020 Wildfire Mitigation Plan includes initiatives announced in October under SDG&E's Fire Safe 3.0 program, an innovative portfolio of continuous improvement initiatives to increase wildfire safety. The Fire Safe 3.0 program involves partnering with academic, government and public safety professionals to implement artificial intelligence, satellite wildfire alerts and a new Vegetation Risk index, among other strategies.

To meet the growing needs of its customers in Texas, Oncor Electric Delivery Co. LLC (Oncor) recently announced a new five-year capital plan of approximately $11.9 billion. The increase will help to support population growth in West Texas and the Dallas-Fort Worth area, as well as to strengthen and expand the grid in Oncor's service territory. Additionally, Sempra Energy took a positive step in growing its presence in Texas through the announcement of a new "Center of Excellence" in Houston. The office, which is expected to open later this year, will serve as a regional headquarters as Sempra Energy advances its high-growth business strategy in Texas.

Sempra Energy continues to be focused on its goal of developing liquefied natural gas (LNG) infrastructure that can deliver up to 45 million tonnes per annum (Mtpa) of LNG to the largest world markets, which would make Sempra Energy one of North America's largest developers of LNG-export infrastructure projects.

Train 2 of the Cameron LNG liquefaction-export infrastructure project recently achieved substantial completion and is expected to commence commercial operations under Cameron LNG's tolling agreements in the coming days. The facility began producing LNG from Train 2 in December 2019. Train 1 began commercial operations in August 2019 and Train 3 remains on schedule and is expected to start commercial operations in the third quarter of 2020. Sempra Energy's share of full-year run-rate earnings from the first three trains at Cameron LNG are projected to be between $400 million and $450 million annually after all three trains achieve commercial operations under Cameron LNG's tolling agreements.

The potential Port Arthur LNG liquefaction-export infrastructure project under development in Jefferson County, Texas, continues to advance with a final investment decision targeted for third quarter 2020. In January, Sempra LNG signed an Interim Project Participation Agreement (IPPA) with Aramco Services Company, a subsidiary of Saudi Aramco, for the proposed Port Arthur LNG project. The IPPA represents another milestone for both companies after having signed a heads of agreement in May 2019 for the potential purchase of 5 Mtpa of LNG and a 25% equity investment in the project. In December 2018, Port Arthur LNG entered into an agreement with Polish Oil & Gas Company for the sale and purchase of 2 Mtpa of LNG per year.

A final investment decision for the Energía Costa Azul (ECA) LNG liquefaction-export infrastructure project, under development in Baja California, Mexico, is expected later this quarter. TechnipFMC has been selected as the engineering, procurement and construction (EPC) contractor for the proposed project. ECA LNG expects to sign a lump-sum, turn-key EPC contract for Phase 1 of the project in the coming days.

In 2019, Sempra Energy announced two agreements that would conclude the company's planned sale of its South American businesses for combined expected after-tax proceeds of approximately $4.55 to $4.85 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, continue to advance and are expected to be completed in the next four to eight weeks.

EARNINGS GUIDANCE

Sempra Energy's full-year 2020 GAAP EPS guidance range is $12.78 to $14.26 and includes the estimated gain on the sale of the company's South American businesses. Today, the company affirmed its full-year 2020 adjusted EPS guidance range of $6.70 to $7.50. Sempra Energy also issued its full-year 2021 EPS guidance range of $7.50 to $8.10.  

NON-GAAP FINANCIAL MEASURES

Non-GAAP financial measures include Sempra Energy's adjusted earnings and adjusted EPS for the fourth quarter of 2018 and full-year 2019 and 2018, adjusted diluted weighted-average common shares outstanding for the fourth quarter of 2018, and 2020 adjusted EPS guidance range. 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 1455338.

ABOUT SEMPRA ENERGY

Sempra Energy's mission is to be North America's premier energy infrastructure company. With more than $65 billion in total assets reported in 2019, 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 over 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. The company was also named one of the "World's Most Admired Companies" for 2020 by Fortune Magazine.

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," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "target," "pursue," "outlook," "maintain," or similar expressions, or when we discuss our guidance, strategy, goals, vision, mission, opportunities, projections or intentions. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees of performance. 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: California wildfires and the risk that we may be found liable for damages regardless of fault and the risk that we may not be able to recover any such costs from insurance, the wildfire fund established by California Assembly Bill 1054 or in rates from customers; decisions, investigations, regulations, issuances of permits and other authorizations, renewal of franchises, and other actions by the Comisión Federal de Electricidad, California Public Utilities Commission, U.S. Department of Energy, Public Utility Commission of Texas, regulatory and governmental bodies and jurisdictions in the U.S. and other countries in which we operate; the success of business development efforts, construction projects and major acquisitions and divestitures, including risks in (i) the ability to make a final investment decision and completing construction projects on schedule and budget; (ii) obtaining the consent of partners; (iii)  counterparties' financial or other ability to fulfill contractual commitments; (iv) the ability to complete contemplated acquisitions and/or divestitures; and (v) 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 to place those ratings on negative outlook and our ability to borrow at favorable interest rates; moves to reduce or eliminate reliance on natural gas; weather, natural disasters, accidents, equipment failures, computer system outages and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires and subject us to 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; 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 of foreign governments and state-owned entities to honor the terms of contracts, and property disputes; the impact at San Diego Gas & Electric Company on competitive customer rates and reliability due to the growth in distributed power generation and from departing retail load resulting from customers transferring to Direct Access, Community Choice Aggregation or other forms of distributed power generation and the 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 and governance requirements and commitments, including by actions of Oncor's independent directors or a minority member director; 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 trade policies, laws and regulations, including 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; the impact of changes to federal and state tax laws 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 any of these forward-looking statements as a result of new information, future events or other factors.

Sempra South American Utilities, Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, 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, 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

                   

CONSOLIDATED STATEMENTS OF OPERATIONS

     
               
     

Three months ended
December 31,

 

 

Years ended
December 31,

(Dollars in millions, except per share amounts; shares in thousands)

     

2019

 

2018(1)

 

2019

 

2018(1)

     

(unaudited)

         

REVENUES

                 

Utilities

   

$

2,640

   

$

2,427

   

$

9,448

   

$

8,539

 

Energy-related businesses

   

303

   

399

   

1,381

   

1,563

 

Total revenues

   

2,943

   

2,826

   

10,829

   

10,102

 
                   

EXPENSES AND OTHER INCOME

                 

Utilities:

                 

Cost of natural gas

   

(350)

   

(426)

   

(1,139)

   

(1,208)

 

Cost of electric fuel and purchased power

   

(259)

   

(321)

   

(1,188)

   

(1,358)

 

Energy-related businesses cost of sales

   

(79)

   

(99)

   

(344)

   

(357)

 

Operation and maintenance

   

(951)

   

(875)

   

(3,466)

   

(3,150)

 

Depreciation and amortization

   

(395)

   

(376)

   

(1,569)

   

(1,491)

 

Franchise fees and other taxes

   

(127)

   

(120)

   

(496)

   

(472)

 

Impairment losses

   

   

182

   

(43)

   

(1,122)

 

Gain on sale of assets

   

   

513

   

63

   

513

 

Other (expense) income, net

   

(26)

   

(134)

   

77

   

58

 

Interest income

   

23

   

19

   

87

   

85

 

Interest expense

   

(280)

   

(230)

   

(1,077)

   

(886)

 

Income from continuing operations before income taxes and equity earnings

   

499

   

959

   

1,734

   

714

 

Income tax (expense) benefit

   

(165)

   

(172)

   

(315)

   

49

 

Equity earnings

   

95

   

126

   

580

   

175

 

Income from continuing operations, net of income tax

   

429

   

913

   

1,999

   

938

 

Income from discontinued operations, net of income tax

   

71

   

51

   

363

   

188

 

Net income

   

500

   

964

   

2,362

   

1,126

 

Earnings attributable to noncontrolling interests

   

(18)

   

(64)

   

(164)

   

(76)

 

Mandatory convertible preferred stock dividends

   

(35)

   

(36)

   

(142)

   

(125)

 

Preferred dividends of subsidiary

   

   

   

(1)

   

(1)

 

Earnings attributable to common shares

   

$

447

   

$

864

   

$

2,055

   

$

924

 
                   

Basic earnings per common share (EPS):

                 
                         
                         

Earnings

   

$

1.57

   

$

3.15

   

$

7.40

   

$

3.45

 

Weighted-average common shares outstanding

   

284,649

   

274,331

   

277,904

   

268,072

 
                     

Diluted EPS:

                   
                         
                         

Earnings

   

$

1.55

   

$

3.03

   

$

7.29

   

$

3.42

 

Weighted-average common shares outstanding

   

288,787

   

296,429

   

282,033

   

269,852

 
 

(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 EPS exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2019 and 2018 as follows:

Three months ended December 31, 2018:

  • $367 million gain on the sale of certain Sempra Renewables assets
  • $126 million reduction in the impairment of certain non-utility natural gas storage assets in the southeast U.S. at Sempra LNG
  • $(60) million income tax expense in 2018 to adjust the Tax Cuts and Jobs Act of 2017 (TCJA) provisional amounts recorded in 2017

Year ended December 31, 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

Year ended December 31, 2018:

  • $367 million gain on the sale of certain Sempra Renewables assets
  • $(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
  • $(629) million impairment of certain non-utility natural gas storage assets at Sempra LNG
  • $(65) million impairment of RBS Sempra Commodities LLP (RBS Sempra Commodities) equity method investment at Parent and Other
  • $(85) million income tax expense in 2018 to adjust the TCJA provisional amounts recorded in 2017

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)

   

Earnings

   

Pretax amount

Income tax expense   (benefit)(1)

Non-controlling interests

 

Earnings

 

(Dollars in millions, except per share amounts; shares in thousands)

 

Three months ended December 31, 2019

 

Three months ended December 31, 2018

Sempra Energy GAAP Earnings

       

$

447

         

$

864

 

Excluded items:

                   
                     

   Gain on sale of certain Sempra Renewables assets

 

$

 

$

   

   

$

(513)

 

$

146

 

$

 

(367)

 

   Reduction of impairment of non-utility natural gas storage assets

 

 

   

   

(183)

 

47

 

10

 

(126)

 

   Impact from the TCJA

 

 

   

   

 

60

 

 

60

 

Sempra Energy Adjusted Earnings

       

$

447

         

$

431

 
                     

Diluted EPS:

                   

   Sempra Energy GAAP Earnings(2)

       

$

447

         

$

900

 

   Weighted-average common shares outstanding, diluted – GAAP

       

288,787

         

296,429

 

   Sempra Energy GAAP EPS

       

$

1.55

         

$

3.03

 
                     

   Sempra Energy Adjusted Earnings for Adjusted EPS

                   

$

431

 

   Weighted-average common shares outstanding, diluted – Adjusted(2)

                   

276,230

 

   Sempra Energy Adjusted EPS

                   

$

1.56

 
                     
   

Year ended December 31, 2019

       

Year ended December 31, 2018

Sempra Energy GAAP Earnings

       

$

2,055

         

$

924

 

Excluded items:

                   

   Gain on sale of certain Sempra Renewables assets

 

$

(61)

 

$

16

   

(45)

   

$

(513)

 

$

146

 

$

 

(367)

 

   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

 

 

   

   

1

 

21

 

 

22

 

   Impairment of U.S. wind equity method investments

 

 

   

   

200

 

(55)

 

 

145

 

   Impairment of non-utility natural gas storage assets

 

 

   

   

1,117

 

(452)

 

(36)

 

629

 

   Impairment of investment in RBS Sempra Commodities

 

 

   

   

65

 

 

 

65

 

   Impact from the TCJA

 

 

   

   

 

85

 

 

85

 

Sempra Energy Adjusted Earnings

       

$

1,911

         

$

1,503

 
                     

Diluted EPS:

                   

   Weighted-average common shares outstanding, diluted – GAAP

       

282,033

         

269,852

 

   Sempra Energy GAAP EPS

       

$

7.29

         

$

3.42

 

   Sempra Energy Adjusted EPS

       

$

6.78

         

$

5.57

 
                         
                     

 

 

(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 December 31, 2018, because the assumed conversion of the mandatory convertible preferred stock is dilutive for GAAP Earnings, the numerator used to calculate GAAP EPS includes an add-back of $36 million of mandatory convertible preferred stock dividends declared in that quarter. However, because the assumed conversion is antidilutive for the lower Adjusted Earnings, 20,199 mandatory convertible preferred stock shares are not included in the denominator used to calculate Adjusted EPS.

 

 

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)

       

295

 

 

 

 

SEMPRA ENERGY

Table B

       

CONSOLIDATED BALANCE SHEETS

     
       
 

December 31,

 

December 31,

(Dollars in millions)

2019

 

2018(1)

ASSETS

     

Current assets:

     

Cash and cash equivalents

$

108

   

$

102

 

Restricted cash

31

   

35

 

Accounts receivable – trade, net

1,261

   

1,215

 

Accounts receivable – other, net

455

   

320

 

Due from unconsolidated affiliates

32

   

37

 

Income taxes receivable

112

   

60

 

Inventories

277

   

258

 

Regulatory assets

222

   

138

 

Greenhouse gas allowances

72

   

59

 

Assets held for sale

   

713

 

Assets held for sale in discontinued operations

445

   

459

 

Other current assets

324

   

249

 

Total current assets

3,339

   

3,645

 
       

Other assets:

     

Restricted cash

3

   

21

 

Due from unconsolidated affiliates

742

   

644

 

Regulatory assets

1,930

   

1,589

 

Nuclear decommissioning trusts

1,082

   

974

 

Investment in Oncor Holdings

11,519

   

9,652

 

Other investments

2,103

   

2,320

 

Goodwill

1,602

   

1,602

 

Other intangible assets

213

   

224

 

Dedicated assets in support of certain benefit plans

488

   

416

 

Insurance receivable for Aliso Canyon costs

339

   

461

 

Deferred income taxes

155

   

141

 

Greenhouse gas allowances

470

   

289

 

Right-of-use assets – operating leases

591

   

 

Wildfire fund

392

   

 

Assets held for sale in discontinued operations

3,513

   

3,259

 

Other long-term assets

732

   

962

 

Total other assets

25,874

   

22,554

 

Property, plant and equipment, net

36,452

   

34,439

 

Total assets

$

65,665

   

$

60,638

 

 

(1) Amounts have been retrospectively adjusted for discontinued operations.

 

 

 

SEMPRA ENERGY

Table B (Continued)

       

CONSOLIDATED BALANCE SHEETS

     
       
 

December 31,

 

December 31,

(Dollars in millions)

2019

 

2018(1)

LIABILITIES AND EQUITY

     

Current liabilities:

     

Short-term debt

$

3,505

   

$

2,024

 

Accounts payable – trade

1,234

   

1,160

 

Accounts payable – other

179

   

138

 

Due to unconsolidated affiliates

5

   

10

 

Dividends and interest payable

515

   

480

 

Accrued compensation and benefits

476

   

440

 

Regulatory liabilities

319

   

105

 

Current portion of long-term debt and finance leases

1,526

   

1,644

 

Reserve for Aliso Canyon costs

9

   

160

 

Greenhouse gas obligations

72

   

59

 

Liabilities held for sale in discontinued operations

444

   

368

 

Other current liabilities

866

   

935

 

Total current liabilities

9,150

   

7,523

 
       

Long-term debt and finance leases

20,785

   

20,903

 
       

Deferred credits and other liabilities:

     

Due to unconsolidated affiliates

195

   

37

 

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

1,067

   

1,143

 

Deferred income taxes

2,577

   

2,321

 

Deferred investment tax credits

21

   

24

 

Regulatory liabilities

3,741

   

4,016

 

Asset retirement obligations

2,923

   

2,786

 

Greenhouse gas obligations

301

   

131

 

Liabilities held for sale in discontinued operations

1,052

   

1,013

 

Deferred credits and other

2,048

   

1,493

 

Total deferred credits and other liabilities

13,925

   

12,964

 

Equity:

     

Sempra Energy shareholders' equity

19,929

   

17,138

 

Preferred stock of subsidiary

20

   

20

 

Other noncontrolling interests

1,856

   

2,090

 

Total equity

21,805

   

19,248

 

Total liabilities and equity

$

65,665

   

$

60,638

 
 

(1) Amounts have been retrospectively adjusted for discontinued operations.

 

SEMPRA ENERGY

Table C

       

CONSOLIDATED STATEMENTS OF CASH FLOWS

     
       
 

Years ended December 31,

(Dollars in millions)

2019

 

2018(1)

CASH FLOWS FROM OPERATING ACTIVITIES

     

Net income

$

2,362

   

$

1,126

 

Less: Income from discontinued operations, net of income tax

(363)

   

(188)

 

Income from continuing operations, net of income tax

1,999

   

938

 

Adjustments to reconcile net income to net cash provided by operating activities

1,259

   

1,878

 

Net change in other working capital components

(207)

   

433

 

Insurance receivable for Aliso Canyon costs

122

   

(43)

 

Wildfire fund, current and noncurrent

(323)

   

 

Changes in other noncurrent assets and liabilities, net

(152)

   

14

 

Net cash provided by continuing operations

2,698

   

3,220

 

Net cash provided by discontinued operations

390

   

296

 

Net cash provided by operating activities

3,088

   

3,516

 
           

CASH FLOWS FROM INVESTING ACTIVITIES

         

Expenditures for property, plant and equipment

(3,708)

   

(3,544)

 

Expenditures for investments and acquisitions, net of cash and cash equivalents acquired

(1,797)

   

(10,168)

 

Proceeds from sale of assets

899

   

1,580

 

Purchases of nuclear decommissioning trust assets

(914)

   

(890)

 

Proceeds from sales of nuclear decommissioning trust assets

914

   

890

 

Advances to unconsolidated affiliates

(16)

   

(95)

 

Repayments of advances to unconsolidated affiliates

3

   

3

 

Intercompany activities with discontinued operations, net

8

   

(22)

 

Other

30

   

41

 

Net cash used in continuing operations

(4,581)

   

(12,205)

 

Net cash used in discontinued operations

(12)

   

(265)

 

Net cash used in investing activities

(4,593)

   

(12,470)

 
       

CASH FLOWS FROM FINANCING ACTIVITIES

     

Common dividends paid

(993)

   

(877)

 

Preferred dividends paid

(142)

   

(89)

 

Issuances of mandatory convertible preferred stock, net

   

2,258

 

Issuances of common stock, net

1,830

   

2,272

 

Repurchases of common stock

(26)

   

(21)

 

Issuances of debt (maturities greater than 90 days)

4,296

   

8,927

 

Payments on debt (maturities greater than 90 days) and finance leases

(3,667)

   

(3,342)

 

Increase (decrease) in short-term debt, net

656

   

(84)

 

Advances from unconsolidated affiliates

155

   

 

Proceeds from sale of noncontrolling interests, net

5

   

90

 

Purchases of noncontrolling interests

(30)

   

(7)

 

Contributions from (distributions to) noncontrolling interests, net

98

   

(26)

 

Intercompany activities with discontinued operations, net

(266)

   

(109)

 

Other

(49)

   

(117)

 

Net cash provided by continuing operations

1,867

   

8,875

 

Net cash used in discontinued operations

(392)

   

(25)

 

Net cash provided by financing activities

1,475

   

8,850

 
       

Effect of exchange rate changes in continuing operations

   

(2)

 

Effect of exchange rate changes in discontinued operations

1

   

(12)

 

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

1

   

(14)

 
       

Decrease in cash, cash equivalents and restricted cash, including discontinued operations

(29)

   

(118)

 

Cash, cash equivalents and restricted cash, including discontinued operations, January 1

246

   

364

 

Cash, cash equivalents and restricted cash, including discontinued operations, December 31

$

217

   

$

246

 
 

(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
December 31,

 

Years ended
December 31,

(Dollars in millions)

     

2019

 

2018(1)

 

2019

 

2018(1)

     

    (unaudited)

         

Earnings (Losses) Attributable to Common Shares

                   

San Diego Gas & Electric 

     

$

185

   

$

148

   

$

767

   

$

669

 

Southern California Gas 

     

204

   

156

   

641

   

400

 

Sempra Texas Utilities 

     

109

   

88

   

528

   

371

 

Sempra Mexico 

     

39

   

76

   

253

   

237

 

Sempra Renewables 

     

   

382

   

59

   

328

 

Sempra LNG 

     

(19)

   

147

   

(6)

   

(617)

 

Parent and other 

     

(132)

   

(174)

   

(515)

   

(620)

 

Discontinued operations 

     

61

   

41

   

328

   

156

 

Total 

     

$

447

   

$

864

   

$

2,055

   

$

924

 
                   
                   
     

Three months ended
December 31,

 

Years ended
December 31,

(Dollars in millions)

     

2019

 

2018(1)

 

2019

 

2018(1)

     

    (unaudited)

         

Capital Expenditures, Investments and Acquisitions 

                   

San Diego Gas & Electric 

     

$

451

   

$

348

   

$

1,522

   

$

1,542

 

Southern California Gas 

     

420

   

411

   

1,439

   

1,538

 

Sempra Texas Utilities 

     

347

   

179

   

1,685

   

9,457

 

Sempra Mexico 

     

204

   

148

   

624

   

468

 

Sempra Renewables 

     

   

10

   

2

   

56

 

Sempra LNG 

     

39

   

104

   

222

   

306

 

Parent and other 

     

5

   

(63)

   

11

   

345

 

Capital Expenditures, Investments and Acquisitions 

     

$

1,466

   

$

1,137

   

$

5,505

   

$

13,712

 

 

 

(1) Amounts have been retrospectively adjusted for discontinued operations.

 

 

 

 

 

SEMPRA ENERGY

Table E

 

OTHER OPERATING STATISTICS (Unaudited)

 
   

Three months ended
December 31,

 

Years ended or at
December 31,

   

2019

 

2018

 

2019

 

2018

UTILITIES

               

SDG&E and SoCalGas

               

   Gas sales (Bcf)(1)

 

103

 

93

 

374

 

337

   Transportation (Bcf)(1)

 

149

 

134

 

573

 

581

   Total deliveries (Bcf)(1)

 

252

 

227

 

947

 

918

                 

Total gas customer meters (thousands)

         

6,924

 

6,885

                 

SDG&E

               

   Electric sales (millions of kWhs)(1)

 

3,601

 

3,643

 

14,397

 

15,125

   Direct Access and Community Choice Aggregation (millions of kWhs)

 

909

 

947

 

3,549

 

3,628

   Total deliveries (millions of kWhs)(1)

 

4,510

 

4,590

 

17,946

 

18,753

                 

   Total electric customer meters (thousands)

         

1,471

 

1,459

                 

Oncor(2)

               

   Total deliveries (millions of kWhs)

 

30,916

 

29,800

 

133,378

 

107,276

   Total electric customer meters (thousands)

         

3,685

 

3,621

                 

Ecogas

               

   Natural gas sales (Bcf)

 

1

 

 

3

 

7

   Natural gas customer meters (thousands)

         

132

 

123

                 
                 

ENERGY-RELATED BUSINESSES

               

Power generated and sold

               

  Sempra Mexico

               

  Termoeléctrica de Mexicali (TdM) (millions of kWhs)

 

1,011

 

1,152

 

3,873

 

4,074

     Wind and solar (millions of kWhs)(3)

 

333

 

252

 

1,442

 

1,176

                 

 

 

(1)

Includes intercompany sales.

(2)

Includes 100% of the electric deliveries and customer meters of Oncor Electric Delivery Company LLC (Oncor), in which we hold an 80.25% interest through our March 2018 acquisition of our equity method investment in Oncor Electric Delivery Holdings Company LLC (Oncor Holdings). Total deliveries for the year ended December 31, 2018 only include volumes from the March 9, 2018 acquisition date.

(3)

Includes 50% of the total power generated and sold at the Energía Sierra Juárez wind power generation facility, in which Sempra Energy has a 50% ownership interest. Energía Sierra Juárez is not consolidated within Sempra Energy, and the related investment is accounted for under the equity method.

 

 

 

 

 

         SEMPRA ENERGY

           Table F (Unaudited)

 

STATEMENT OF OPERATIONS DATA BY SEGMENT

 

Three months ended December 31, 2019

 

(Dollars in millions)

 

SDG&E

 

SoCalGas

 

Sempra Texas Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra LNG

 

Consolidating Adjustments, Parent & Other

   

Total

Revenues

 

$

1,259

   

$

1,383

   

$

   

$

317

   

$

   

$

83

   

$

(99)

     

$

2,943

 

Cost of sales and other expenses

 

(705)

   

(847)

   

   

(153)

   

   

(112)

   

51

     

(1,766)

 

Depreciation and amortization

 

(189)

   

(153)

   

   

(47)

   

   

(3)

   

(3)

     

(395)

 

Other (expense) income, net

 

(21)

   

(73)

   

   

70

   

   

   

(2)

     

(26)

 

Income (loss) before interest and tax(1)

 

344

   

310

   

   

187

   

   

(32)

   

(53)

     

756

 

Net interest (expense) income

 

(99)

   

(36)

   

   

(10)

   

   

(1)

   

(111)

     

(257)

 

Income tax (expense) benefit

 

(60)

   

(70)

   

   

(111)

   

   

9

   

67

     

(165)

 

Equity earnings (losses), net

 

   

   

109

   

(19)

   

   

5

   

     

95

 

Earnings attributable to noncontrolling interests

 

   

   

   

(8)

   

   

   

     

(8)

 

Preferred dividends

 

   

   

   

   

   

   

(35)

     

(35)

 

Earnings (losses) from continuing operations

 

$

185

   

$

204

   

$

109

   

$

39

   

$

   

$

(19)

   

$

(132)

     

386

 

Earnings from discontinued operations

                               

61

 

Earnings attributable to common shares

                               

$

447

 
                                   

Three months ended December 31, 2018(2)

                         

(Dollars in millions)

 

SDG&E

 

SoCalGas

 

Sempra Texas Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra LNG

 

Consolidating Adjustments, Parent & Other

   

Total

Revenues

 

$

1,163

   

$

1,262

   

$

   

$

348

   

$

21

   

$

142

   

$

(110)

     

$

2,826

 

Cost of sales and other expenses

 

(737)

   

(882)

   

   

(175)

   

(26)

   

(122)

   

100

     

(1,842)

 

Depreciation and amortization

 

(179)

   

(142)

   

   

(44)

   

   

(2)

   

(9)

     

(376)

 

Write-off and reduction in impairment losses

 

   

   

   

   

   

183

   

(1)

     

182

 

Gain (loss) on sale of assets

 

   

1

   

   

(1)

   

513

   

   

     

513

 

Other (expense) income, net

 

(21)

   

(34)

   

   

(63)

   

1

   

   

(17)

     

(134)

 

Income (loss) before interest and tax(1)

 

226

   

205

   

   

65

   

509

   

201

   

(37)

     

1,169

 

Net interest (expense) income

 

(59)

   

(32)

   

   

(13)

   

2

   

10

   

(119)

     

(211)

 

Income tax (expense) benefit

 

(22)

   

(17)

   

   

41

   

(138)

   

(53)

   

17

     

(172)

 

Equity earnings (losses), net

 

   

   

88

   

38

   

1

   

(1)

   

     

126

 

Losses (earnings) attributable to noncontrolling interests

 

3

   

   

   

(55)

   

8

   

(10)

   

1

     

(53)

 

Preferred dividends

 

   

   

   

   

   

   

(36)

     

(36)

 

Earnings (losses) from continuing operations

 

$

148

   

$

156

   

$

88

   

$

76

   

$

382

   

$

147

   

$

(174)

     

823

 

Earnings from discontinued operations

                               

41

 

Earnings attributable to common shares

                               

$

864

 
                                   

 

 

(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)

Amounts have been retrospectively adjusted for discontinued operations.

 


 

 

         SEMPRA ENERGY

           Table F (Unaudited)

 

STATEMENT OF OPERATIONS DATA BY SEGMENT

 

Year ended December 31, 2019

 

(Dollars in millions)

 

SDG&E

 

SoCalGas

 

Sempra Texas Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra LNG

 

Consolidating Adjustments, Parent & Other

   

Total

Revenues

 

$

4,925

   

$

4,525

   

$

   

$

1,375

   

$

10

   

$

410

   

$

(416)

     

$

10,829

 

Cost of sales and other expenses

 

(2,846)

   

(2,930)

   

   

(649)

   

(20)

   

(462)

   

274

     

(6,633)

 

Depreciation and amortization

 

(760)

   

(602)

   

   

(183)

   

   

(10)

   

(14)

     

(1,569)

 

Impairment losses

 

(6)

   

(37)

   

   

   

   

   

     

(43)

 

Gain on sale of assets

 

   

   

   

   

61

   

   

2

     

63

 

Other income (expense), net

 

39

   

(55)

   

   

76

   

   

   

17

     

77

 

Income (loss) before interest and tax(1)

 

1,352

   

901

   

   

619

   

51

   

(62)

   

(137)

     

2,724

 

Net interest (expense) income

 

(407)

   

(139)

   

   

(41)

   

8

   

26

   

(437)

     

(990)

 

Income tax (expense) benefit

 

(171)

   

(120)

   

   

(227)

   

(4)

   

5

   

202

     

(315)

 

Equity earnings (losses), net

 

   

   

528

   

24

   

5

   

24

   

(1)

     

580

 

(Earnings) losses attributable to noncontrolling interests

 

(7)

   

   

   

(122)

   

(1)

   

1

   

     

(129)

 

Preferred dividends

 

   

(1)

   

   

   

   

   

(142)

     

(143)

 

Earnings (losses) from continuing operations

 

$

767

   

$

641

   

$

528

   

$

253

   

$

59

   

$

(6)

   

$

(515)

     

1,727

 

Earnings from discontinued operations

                                             

328

 

Earnings attributable to common shares

                                             

$

2,055

 
                                   

Year ended December 31, 2018(2)

                         

(Dollars in millions)

 

SDG&E

 

SoCalGas

 

Sempra Texas Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra LNG

 

Consolidating Adjustments, Parent & Other

   

Total

Revenues

 

$

4,568

   

$

3,962

   

$

   

$

1,376

   

$

124

   

$

472

   

$

(400)

     

$

10,102

 

Cost of sales and other expenses

 

(2,870)

   

(2,816)

   

   

(628)

   

(94)

   

(446)

   

309

     

(6,545)

 

Depreciation and amortization

 

(688)

   

(556)

   

   

(175)

   

(27)

   

(26)

   

(19)

     

(1,491)

 

Write-off and impairment losses

 

   

   

   

(4)

   

   

(1,117)

   

(1)

     

(1,122)

 

Gain (loss) on sale of assets

 

   

1

   

   

(1)

   

513

   

   

     

513

 

Other income (expense), net

 

56

   

15

   

   

1

   

1

   

   

(15)

     

58

 

Income (loss) before interest and tax(1)

 

1,066

   

606

   

   

569

   

517

   

(1,117)

   

(126)

     

1,515

 

Net interest (expense) income

 

(217)

   

(113)

   

   

(55)

   

(7)

   

28

   

(437)

     

(801)

 

Income tax (expense) benefit

 

(173)

   

(92)

   

   

(185)

   

(71)

   

435

   

135

     

49

 

Equity earnings (losses), net

 

   

   

371

   

40

   

(169)

   

   

(67)

     

175

 

(Earnings) losses attributable to noncontrolling interests

 

(7)

   

   

   

(132)

   

58

   

37

   

     

(44)

 

Preferred dividends

 

   

(1)

   

   

   

   

   

(125)

     

(126)

 

Earnings (losses) from continuing operations

 

$

669

   

$

400

   

$

371

   

$

237

   

$

328

   

$

(617)

   

$

(620)

     

768

 

Earnings from discontinued operations

                                             

156

 

Earnings attributable to common shares

                                             

$

924

 
                                   

 

 

(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)

Amounts have been retrospectively adjusted for discontinued operations.

 

 

 

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SOURCE Sempra Energy

Media Contact: Linda Pazin, Sempra Energy (877) 340-8875, media@sempra.com; or Financial Contact: Adam Pierce, Sempra Energy (877) 736-7727, investor@sempra.com

Category

Sempra , Financial News , Sempra LNG