Sempra Energy Reports Third-Quarter 2020 Earnings Results

- GAAP and Adjusted EPS Guidance Expected at High End of 2020 Range

- Cameron LNG Phase 1 Achieves Full Commercial Operations

- Oncor Announces Higher Five-Year Capital Plan of $12.2 Billion

- Sempra Recognized Nationally for High-Performance Culture

SAN DIEGO, Nov. 5, 2020 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported third-quarter 2020 earnings of $351 million, or $1.21 per diluted share, compared to third-quarter 2019 earnings of $813 million, or $2.84 per diluted share. On an adjusted basis, the company's third-quarter 2020 earnings were $380 million, or $1.31 per diluted share, compared to $425 million, or $1.50 per diluted share, in the third quarter of 2019. Sempra Energy's earnings for the first nine months of 2020 were $3.35 billion, or $11.43 per diluted share, compared with earnings of $1.61 billion, or $5.74 per diluted share, in the first nine months of 2019. Adjusted earnings for the first nine months of 2020 were $1.8 billion, or $6.10 per diluted share, compared to $1.46 billion, or $5.23 per diluted share, in the first nine months of 2019.

"We are excited to advance our leadership position in the most attractive markets in North AmericaCalifornia, Texas, Mexico and the LNG export market – with an unrelenting commitment to safety and operational excellence. Our investments in critical new energy infrastructure support economic prosperity, community wellbeing and the energy transition," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "Our strategy of investing in a high-growth infrastructure platform supports long-term, stable cash flows, attractive economic returns and improved earnings visibility."

The reported financial results reflect certain significant items as described on an after-tax basis in the following table of GAAP earnings, reconciled to adjusted earnings, for the third quarter and first nine months of 2020 and 2019.

                     
     

 Three months ended 

 

 Nine months ended 

 
     

 September 30, 

 

 September 30, 

 
 

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

 

2020

 

2019

 

2020

 

2019

 
     

(Unaudited)

 
 

GAAP Earnings

 

$            351

 

$            813

 

$        3,350

 

$        1,608

 
                     
 

Loss (Gain) on Sale of South American Businesses

 

7

 

-

 

(1,747)

 

-

 
                     
 

Losses from Investment in RBS Sempra Commodities LLP

 

-

 

-

 

100

 

-

 
                     
 

Impacts Associated with Aliso Canyon Litigation and Regulatory Matters

 

22

 

-

 

94

 

-

 
                     
 

Tax Impacts from Holding the South American Businesses for Sale 

 

-

 

(192)

 

-

 

(99)

 
                     
 

Gain on Sale of U.S. Wind Assets

 

-

 

-

 

-

 

(45)

 
                     
 

SDG&E Retroactive Impact of 2019 GRC FD for first half of 2019

 

-

 

(66)

 

-

 

-

 
                     
 

SoCalGas Retroactive Impact of 2019 GRC FD for first half of 2019

 

-

 

(130)

 

-

 

-

 
                     
 

Adjusted Earnings(1)

 

$            380

 

$            425

 

$        1,797

 

$        1,464

 
                     
                     
 

GAAP Diluted Weighted-Average Common Shares Outstanding

 

291

 

296

 

293

 

280

 
 

GAAP Earnings Per Diluted Common Share(2)

 

$          1.21

 

$          2.84

 

$        11.43

 

$          5.74

 
                     
 

Adjusted Diluted Weighted-Average Common Shares Outstanding(1)

 

291

 

283

 

307

 

280

 
 

Adjusted Earnings Per Diluted Common Share(1),(3)

 

$          1.31

 

$          1.50

 

$          6.10

 

$          5.23

 
                     
   

1)

Represents a non-GAAP financial measure. See Table A for information regarding non-GAAP financial measures.

2)

To calculate Q3-2019 GAAP EPS, preferred dividends of $26 million are added back to GAAP Earnings because of the dilutive effect of Series A mandatory convertible preferred stock.         

3)

To calculate YTD-2020 Adjusted EPS, preferred dividends of $78 million are added back to Adjusted Earnings because of the dilutive effect of Series A mandatory convertible preferred stock.

Advancing Critical Energy Infrastructure in North America

In August, Phase 1 of the Cameron LNG export facility in Hackberry, Louisiana, reached full commercial operations under Cameron LNG's tolling agreements. This marked the start of full run-rate earnings and cash flows. Sempra Energy's share of full run-rate earnings from the Phase 1 project is expected to be between $400 million and $450 million annually, with no commodity or volumetric exposure. Due to the structure of the tolling agreements at Cameron LNG, Sempra Energy does not expect any earnings impact as a result of the recent outages due to Hurricanes Laura and Delta on the U.S. Gulf Coast.

Sempra Energy continues to work closely with local authorities as well as the highest levels of the Mexican government to advance the export permit process for Energía Costa Azul (ECA) LNG Phase 1. The company expects to reach a final investment decision in the fourth quarter of 2020.

Phase 1 of ECA LNG's project is planned to be built and operated by Sempra LNG and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova), Sempra Energy's subsidiary in Mexico, as a single-train liquefaction facility. Last year, ECA LNG received authorization from the U.S. Department of Energy to export U.S.-produced natural gas to Mexico and to re-export liquefied natural gas (LNG) to countries that do not have a free-trade agreement with the U.S.

ECA LNG has successfully secured definitive 20-year sale-and-purchase agreements with Mitsui & Co., Ltd. and an affiliate of Total SE for the purchase of approximately 2.5 Mtpa of LNG from Phase 1 of the project.

In another development, the U.S. Department of Energy extended the terms of the export authorizations for Phase 1 of the proposed Port Arthur LNG export project through Dec. 31, 2050.

Additionally, IEnova is advancing construction of its Gulf of Mexico network of fuel terminals. All three terminals are backed by take-or-pay contracts with Valero Energy Corp. and, once completed, should contribute nearly 3.4 million barrels of combined refined products storage capacity, while improving Mexico's energy security. Notably, the Veracruz terminal is situated in the largest Mexican port on the Gulf Coast and is expected to be one of the largest terminals in Mexico.

Executing Capital Plans and Driving Sustainability at U.S. Utilities

Oncor Electric Delivery Company LLC (Oncor) today announced its 2021-2025 capital plan of $12.2 billion. This is a $300 million increase over Oncor's previous 2020-2024 capital plan and is a result of new growth capital required across the system, increased maintenance on the transmission system, including investments to enhance the safety and reliability of service, and continued investment in technology and innovation. Additionally, Oncor recently issued its inaugural sustainable bond with proceeds expected to finance or refinance expenditures with minority- and women-owned business suppliers.

San Diego Gas & Electric Co. (SDG&E) and Southern California Gas Co. (SoCalGas) continue to execute on their record five-year capital investment plans. These plans are centered on enhancing safety, improving system reliability, and reducing energy-related emissions. Further, SDG&E has announced a new sustainability strategy that includes a commitment to place two green hydrogen projects into service by 2022, aiming to offer long-duration energy storage, increased system resiliency and reduced carbon intensity. In addition, SoCalGas has announced its participation in three research and development projects that are designed to advance fuel cell technology for trucking and transit and near-zero emissions natural gas technology for rail locomotives.

Investing in a High-Performing Culture

Sempra Energy is committed to creating long-term value by managing environmental, social and governance risks and opportunities. The company has a long-standing history of prioritizing diversity and inclusion to advance its high-performance culture and is continuing to build upon those efforts.

Last month, Sempra Energy received three awards recognizing its leadership position in diversity, inclusion and sustainability. Forbes and JUST Capital named Sempra Energy to the Forbes JUST 100 list, which is intended to recognize companies that are doing right by all their stakeholders, including employees, customers, communities, the environment and shareholders.

Additionally, Sempra Energy received the National Association of Corporate Directors' NXT Award, recognizing boards for their excellence in utilizing diversity and inclusion as a strategy for building long-term value for their companies. The National Organization on Disability also recently recognized Sempra Energy as a 2020 Leading Disability Employer for adopting exemplary employment practices for people with disabilities.

Earnings Guidance

As a result of the company's strong execution and financial results, Sempra Energy is reaffirming and guiding to the high end of both its full-year 2020 GAAP earnings-per-common-share (EPS) guidance range of $12.50 to $13.10 and adjusted EPS guidance range of $7.20 to $7.80. Additionally, Sempra Energy is reaffirming 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 third quarters and first nine months of 2020 and 2019, adjusted diluted weighted-average common shares outstanding for the first nine months of 2020 and third quarter of 2019, and full-year 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 on to the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 8857186.

About Sempra Energy

Sempra Energy's mission is to be North America's premier energy infrastructure company. With more than $60 billion in total assets at the end of 2019, the San Diego-based company is the utility holding company with the largest U.S. customer base. The Sempra Energy companies' more than 18,000 employees deliver energy with purpose to over 35 million consumers. 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 sustainability, and diversity and inclusion, 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 constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed in the forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.

In this press release, forward-looking 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.

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, including 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, renewals of franchises, and other actions by (i) the Comisión Federal de Electricidad, California Public Utilities Commission (CPUC), U.S. Department of Energy, Public Utility Commission of Texas, and other regulatory and governmental bodies and (ii) states, counties, cities and other jurisdictions in the U.S., Mexico and other countries in which we operate or do business; 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, (ii) completing construction projects on schedule and budget, (iii) the ability to realize anticipated benefits from any of these efforts once completed, and (iv) obtaining the consent of partners; the impact of the COVID-19 pandemic on our (i) ability to commence and complete capital and other projects and obtain regulatory approvals, (ii) supply chain and current and prospective counterparties, contractors, customers, employees and partners, (iii) liquidity, resulting from bill payment challenges experienced by our customers, including in connection with a CPUC-ordered suspension of service disconnections, decreased stability and accessibility of the capital markets and other factors, and (iv) ability to sustain operations and satisfy compliance requirements due to social distancing measures or if employee absenteeism were to increase significantly; the resolution of civil and criminal litigation, regulatory inquiries, 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 and the impact of the extreme volatility of oil prices on our businesses and development projects; 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 of natural gas from 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 (SDG&E) on competitive customer rates and reliability due to the growth in distributed and local power generation, including from departing retail load resulting from customers transferring to Direct Access, Community Choice Aggregation or other forms of distributed or local 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 tax and trade policies, laws and regulations, including tariffs and revisions to or replacement of international trade agreements, such as the United States-Mexico-Canada Agreement, that may increase our costs or impair our ability to resolve trade disputes; 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.

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, SDG&E or Southern California Gas Company, and Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.

 

SEMPRA ENERGY

Table A

               

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

         
 

Three months ended
September 30,

 

Nine months ended
September 30,

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

2020

 

2019

 

2020

 

2019

 

(unaudited)

REVENUES

             

Utilities

$

2,301

   

$

2,398

   

$

7,199

   

$

6,808

 

Energy-related businesses

343

   

360

   

1,000

   

1,078

 

Total revenues

2,644

   

2,758

   

8,199

   

7,886

 
               

EXPENSES AND OTHER INCOME

             

Utilities:

             

Cost of natural gas

(114)

   

(122)

   

(582)

   

(789)

 

Cost of electric fuel and purchased power

(429)

   

(410)

   

(918)

   

(929)

 

Energy-related businesses cost of sales

(90)

   

(94)

   

(200)

   

(265)

 

Operation and maintenance

(1,044)

   

(845)

   

(2,893)

   

(2,515)

 

Depreciation and amortization

(418)

   

(402)

   

(1,242)

   

(1,174)

 

Franchise fees and other taxes

(139)

   

(127)

   

(397)

   

(369)

 

Impairment losses

(1)

   

(43)

   

(1)

   

(43)

 

(Loss) gain on sale of assets

   

(3)

   

   

63

 

Other income (expense), net

29

   

(7)

   

(163)

   

103

 

Interest income

27

   

22

   

76

   

64

 

Interest expense

(264)

   

(279)

   

(818)

   

(797)

 

Income from continuing operations before income taxes and equity earnings

201

   

448

   

1,061

   

1,235

 

Income tax expense

(99)

   

(61)

   

(60)

   

(150)

 

Equity earnings

326

   

266

   

822

   

485

 

Income from continuing operations, net of income tax

428

   

653

   

1,823

   

1,570

 

(Loss) income from discontinued operations, net of income tax

(7)

   

256

   

1,850

   

292

 

Net income

421

   

909

   

3,673

   

1,862

 

Earnings attributable to noncontrolling interests

(22)

   

(60)

   

(201)

   

(146)

 

Preferred dividends

(48)

   

(36)

   

(121)

   

(107)

 

Preferred dividends of subsidiary

   

   

(1)

   

(1)

 

Earnings attributable to common shares

$

351

   

$

813

   

$

3,350

   

$

1,608

 
               

Basic earnings per common share (EPS):

             

Earnings

$

1.21

   

$

2.93

   

$

11.48

   

$

5.83

 

Weighted-average common shares outstanding

289,490

   

277,360

   

291,771

   

275,684

 
               

Diluted EPS:

             

Earnings

$

1.21

   

$

2.84

   

$

11.43

   

$

5.74

 

Weighted-average common shares outstanding

290,582

   

295,789

   

292,935

   

279,809

 
               

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 2020 and 2019 as follows:

Three months ended September 30, 2020:

  • $(22) million from impacts associated with Aliso Canyon natural gas storage facility litigation and regulatory matters at Southern California Gas Company (SoCalGas)
  • $(7) million reduction to the gain on sale of our Chilean businesses as a result of post-closing adjustments

Three months ended September 30, 2019:

  • $196 million incremental revenue increases for the first six months of 2019 from the retroactive application of the final decision in the 2019 General Rate Case (GRC FD) at the California Utilities

Associated with holding the South American businesses for sale:

  • $192 million income tax benefit associated with outside basis differences in our South American businesses primarily related to a change in the anticipated structure of the sale of those businesses

Nine months ended September 30, 2020:

  • $(94) million from impacts associated with Aliso Canyon natural gas storage facility litigation and regulatory matters at SoCalGas
  • $(100) million equity losses at RBS Sempra Commodities LLP, which represent an estimate of our obligations to settle pending tax matters and related legal costs at our equity method investment at Parent and Other
  • $1,747 million gain on the sale of our South American businesses

Nine months ended September 30, 2019:

  • $45 million gain on the sale of certain Sempra Renewables assets

Associated with holding the South American businesses for sale:

  • $89 million income tax benefit from outside basis differences in our South American businesses primarily related to the change in our indefinite reinvestment assertion from our decision in January 2019 to hold those businesses for sale and a change in the anticipated structure of the sale
  • $10 million income tax benefit to reduce a valuation allowance against certain net operating loss (NOL) carryforwards as a result of our decision to sell our South American businesses

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 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 (benefit) expense(1)

 

Earnings

 

Pretax amount

Income tax expense

(benefit)(1)

 

Earnings

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

Three months ended September 30, 2020

 

Three months ended September 30, 2019

Sempra Energy GAAP Earnings

     

$

351

         

$

813

 

Excluded items:

                 
 

Impacts associated with Aliso Canyon litigation and regulatory matters

$

27

 

$

(5)

   

22

   

$

 

$

   

 
 

Reduction to gain on sale of Chilean businesses

16

 

(9)

   

7

   

 

   

 
 

SDG&E retroactive impact of 2019 GRC FD for first half of 2019

 

   

   

(92)

 

26

   

(66)

 
 

SoCalGas retroactive impact of 2019 GRC FD for first half of 2019

 

   

   

(181)

 

51

   

(130)

 
 

Associated with holding the South American businesses for sale:

                 
 

   Change in indefinite reinvestment assertion of basis differences and structure of sale of discontinued operations

 

   

   

 

(192)

   

(192)

 
 

Sempra Energy Adjusted Earnings

     

$

380

         

$

425

 
                     

Diluted EPS:

                 
 

Sempra Energy GAAP Earnings

     

$

351

         

$

813

 
 

Add back dividends for dilutive series A preferred stock

     

         

26

 
 

Sempra Energy GAAP Earnings for GAAP EPS

     

$

351

         

$

839

 
 

Weighted-average common shares outstanding, diluted – GAAP

     

290,582

         

295,789

 
 

Sempra Energy GAAP EPS

     

$

1.21

         

$

2.84

 
                       
 

Sempra Energy Adjusted Earnings for Adjusted EPS

     

$

380

         

$

425

 
 

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

     

290,582

         

282,551

 
 

Sempra Energy Adjusted EPS

     

$

1.31

         

$

1.50

 
                       
   

Nine months ended September 30, 2020

   

 

Nine months ended September 30, 2019

Sempra Energy GAAP Earnings

     

$

3,350

         

$

1,608

 

Excluded items:

                 
 

Impacts associated with Aliso Canyon litigation and regulatory matters

$

127

 

$

(33)

   

94

   

$

 

$

   

 
 

Losses from investment in RBS Sempra Commodities LLP

100

 

   

100

   

 

   

 
 

Gain on sale of South American businesses

(2,899)

 

1,152

   

(1,747)

   

 

   

 
 

Gain on sale of certain Sempra Renewables assets

 

   

   

(61)

 

16

   

(45)

 
 

Associated with holding the South American businesses for sale:

                 
 

   Change in indefinite reinvestment assertion of basis differences and structure of sale of discontinued operations

 

   

   

 

(89)

   

(89)

 
 

    Reduction in tax valuation allowance against certain NOL

 carryforwards

 

   

   

 

(10)

   

(10)

 

Sempra Energy Adjusted Earnings

     

$

1,797

         

$

1,464

 
                     

Diluted EPS:

                 
 

Sempra Energy GAAP Earnings

     

$

3,350

         

$

1,608

 
 

Weighted-average common shares outstanding, diluted – GAAP

     

292,935

         

279,809

 
 

Sempra Energy GAAP EPS

     

$

11.43

         

$

5.74

 
                       
 

Sempra Energy Adjusted Earnings

     

$

1,797

         

$

1,464

 
 

Add back dividends for dilutive series A preferred stock

     

78

         

 
 

Sempra Energy Adjusted Earnings for Adjusted EPS

     

$

1,875

         

$

1,464

 
 

Weighted-average common shares outstanding, diluted – Adjusted(3)

     

307,405

         

279,809

 
 

Sempra Energy Adjusted EPS

     

$

6.10

         

$

5.23

 
                       

(1)

Except for adjustments that are solely income tax and tax related to outside basis differences, income taxes were primarily calculated based on applicable statutory tax rates. We did not record an income tax benefit for the equity losses from our investment in RBS Sempra Commodities LLP because, even though a portion of the liabilities may be deductible under United Kingdom tax law, it is not probable that the deduction will reduce United Kingdom taxes.

(2)

In the three months ended September 30, 2019, because the assumed conversion of the series A preferred stock is antidilutive for Adjusted Earnings, 13,238 series A preferred stock shares are excluded from the denominator used to calculate Adjusted EPS.

(3)

In the nine months ended September 30, 2020, because the assumed conversion of the series A preferred stock is dilutive for Adjusted Earnings, 14,470 series A preferred stock shares are added back to 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 $7.20 to $7.80 excludes items (after the effects of income taxes and, if applicable, noncontrolling interests) as follows:

  • $(94) million from impacts associated with Aliso Canyon natural gas storage facility litigation and regulatory matters at SoCalGas
  • $(100) million equity losses at RBS Sempra Commodities LLP, which represent an estimate of our obligations to settle pending tax matters and related legal costs at our equity method investment at Parent and Other
  • $1,747 million gain on the sale of our South American businesses

Sempra Energy 2020 Adjusted EPS Guidance is a non-GAAP financial measure. Because of the significance and/or nature of the excluded items, management believes that this non-GAAP financial measure provides a meaningful comparison of the performance of Sempra Energy's business operations to prior and future periods. Sempra Energy 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(1)

             

$

12.50

 

to

$

13.10

 

Excluded items:

                     

 

    Impacts associated with Aliso Canyon litigation and regulatory matters

         

0.32

   

0.32

 

 

    Losses from investment in RBS Sempra Commodities LLP

         

0.34

   

0.34

 

 

    Gain on sale of South American businesses

         

(5.96)

   

(5.96)

 

Sempra Energy Adjusted EPS Guidance Range

             

$

7.20

 

to

$

7.80

 

Weighted-average common shares outstanding, diluted (millions)(2)

                 

293

 
   

(1)

Sempra Energy's prior GAAP EPS guidance range for full-year 2020 has been updated to reflect additional impacts associated with the Aliso Canyon natural gas storage facility litigation and regulatory matters, and post-closing adjustments with respect to the sale of our Chilean businesses.

(2)

Weighted-average common shares outstanding does not include the dilutive effect of mandatory convertible preferred stock, as they are assumed to be antidilutive for full-year 2020. If such mandatory convertible preferred stock were dilutive for the full year, the 2020 GAAP EPS Guidance Range would differ from the range presented above.

 

       

SEMPRA ENERGY

     

Table B

     
             

CONDENSED CONSOLIDATED BALANCE SHEETS

     
             

(Dollars in millions)

     

September 30,
2020

 

December 31,

2019(1)

       

(unaudited)

   

ASSETS

           

Current assets:

           

Cash and cash equivalents

     

$

3,515

   

$

108

 

Restricted cash

     

28

   

31

 

Accounts receivable – trade, net

     

1,067

   

1,261

 

Accounts receivable – other, net

     

418

   

455

 

Due from unconsolidated affiliates

     

46

   

32

 

Income taxes receivable

     

152

   

112

 

Inventories

     

309

   

277

 

Regulatory assets

     

386

   

222

 

Greenhouse gas allowances

     

66

   

72

 

Assets held for sale in discontinued operations

     

   

445

 

Other current assets

     

407

   

324

 

Total current assets

     

6,394

   

3,339

 
             

Other assets:

           

Restricted cash

     

3

   

3

 

Due from unconsolidated affiliates

     

617

   

742

 

Regulatory assets

     

1,740

   

1,930

 

Nuclear decommissioning trusts

     

1,057

   

1,082

 

Investment in Oncor Holdings

     

11,962

   

11,519

 

Other investments

     

1,455

   

2,103

 

Goodwill

     

1,602

   

1,602

 

Other intangible assets

     

205

   

213

 

Dedicated assets in support of certain benefit plans

     

469

   

488

 

Insurance receivable for Aliso Canyon costs

     

504

   

339

 

Deferred income taxes

     

199

   

155

 

Greenhouse gas allowances

     

598

   

470

 

Right-of-use assets – operating leases

     

563

   

591

 

Wildfire fund

     

371

   

392

 

Assets held for sale in discontinued operations

     

   

3,513

 

Other long-term assets

     

699

   

732

 

Total other assets

     

22,044

   

25,874

 

Property, plant and equipment, net

     

38,784

   

36,452

 

Total assets

     

$

67,222

   

$

65,665

 
   

(1)

Derived from audited financial statements.

 

 

SEMPRA ENERGY

Table B (Continued)

       

CONDENSED CONSOLIDATED BALANCE SHEETS

       

(Dollars in millions)

September 30,
2020

 

December 31,

2019(1)

 

(unaudited)

   

LIABILITIES AND EQUITY

     

Current liabilities:

     

Short-term debt

$

772

   

$

3,505

 

Accounts payable – trade

1,129

   

1,234

 

Accounts payable – other

163

   

179

 

Due to unconsolidated affiliates

6

   

5

 

Dividends and interest payable

563

   

515

 

Accrued compensation and benefits

412

   

476

 

Regulatory liabilities

373

   

319

 

Current portion of long-term debt and finance leases

2,890

   

1,526

 

Reserve for Aliso Canyon costs

268

   

9

 

Greenhouse gas obligations

66

   

72

 

Liabilities held for sale in discontinued operations

   

444

 

Other current liabilities

993

   

866

 

Total current liabilities

7,635

   

9,150

 
       

Long-term debt and finance leases

21,770

   

20,785

 
       

Deferred credits and other liabilities:

     

Due to unconsolidated affiliates

271

   

195

 

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

999

   

1,067

 

Deferred income taxes

2,696

   

2,577

 

Deferred investment tax credits

22

   

21

 

Regulatory liabilities

3,410

   

3,741

 

Asset retirement obligations

2,961

   

2,923

 

Greenhouse gas obligations

456

   

301

 

Liabilities held for sale in discontinued operations

   

1,052

 

Deferred credits and other

2,146

   

2,048

 

Total deferred credits and other liabilities

12,961

   

13,925

 

Equity:

     

Sempra Energy shareholders' equity

23,228

   

19,929

 

Preferred stock of subsidiary

20

   

20

 

Other noncontrolling interests

1,608

   

1,856

 

Total equity

24,856

   

21,805

 

Total liabilities and equity

$

67,222

   

$

65,665

 
   

(1)

Derived from audited financial statements.

 

 

SEMPRA ENERGY

Table C

       

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

       
 

Nine months ended September 30,

(Dollars in millions)

2020

 

2019

 

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

     

Net income

$

3,673

   

$

1,862

 

Less: Income from discontinued operations, net of income tax

(1,850)

   

(292)

 

Income from continuing operations, net of income tax

1,823

   

1,570

 

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

692

   

741

 

Intercompany activities with discontinued operations, net

   

184

 

Net change in other working capital components

(137)

   

(200)

 

Distributions from investments

429

   

163

 

Insurance receivable for Aliso Canyon costs

(165)

   

107

 

Wildfire fund, current and noncurrent

   

(323)

 

Changes in other noncurrent assets and liabilities, net

38

   

(413)

 

Net cash provided by continuing operations

2,680

   

1,829

 

Net cash (used in) provided by discontinued operations

(1,051)

   

289

 

Net cash provided by operating activities

1,629

   

2,118

 
       

CASH FLOWS FROM INVESTING ACTIVITIES

     

Expenditures for property, plant and equipment

(3,313)

   

(2,590)

 

Expenditures for investments and acquisitions

(229)

   

(1,449)

 

Proceeds from sale of assets

22

   

899

 

Distributions from investments

761

   

9

 

Purchases of nuclear decommissioning trust assets

(1,091)

   

(728)

 

Proceeds from sales of nuclear decommissioning trust assets

1,091

   

728

 

Advances to unconsolidated affiliates

(32)

   

(16)

 

Repayments of advances to unconsolidated affiliates

7

   

12

 

Intercompany activities with discontinued operations, net

   

(257)

 

Other

13

   

16

 

Net cash used in continuing operations

(2,771)

   

(3,376)

 

Net cash provided by (used in) discontinued operations

5,186

   

(63)

 

Net cash provided by (used in) investing activities

2,415

   

(3,439)

 
       

CASH FLOWS FROM FINANCING ACTIVITIES

     

Common dividends paid

(872)

   

(734)

 

Preferred dividends paid

(107)

   

(107)

 

Issuances of preferred stock

890

   

 

Issuances of common stock

10

   

757

 

Repurchases of common stock

(565)

   

(23)

 

Issuances of debt (maturities greater than 90 days)

5,934

   

3,269

 

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

(4,387)

   

(2,500)

 

(Decrease) increase in short-term debt, net

(1,871)

   

888

 

Advances from unconsolidated affiliates

64

   

 

Purchases of noncontrolling interests

(178)

   

(30)

 

Contributions from noncontrolling interests, net of distributions

   

171

 

Intercompany activities with discontinued operations, net

   

(128)

 

Other

(29)

   

(37)

 

Net cash (used in) provided by continuing operations

(1,111)

   

1,526

 

Net cash provided by discontinued operations

401

   

49

 

Net cash (used in) provided by financing activities

(710)

   

1,575

 
       

Effect of exchange rate changes in continuing operations

(2)

   

 

Effect of exchange rate changes in discontinued operations

(3)

   

(3)

 

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

(5)

   

(3)

 
       

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

3,329

   

251

 

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

217

   

246

 

Cash, cash equivalents and restricted cash, including discontinued operations, September 30

$

3,546

   

$

497

 

 

 

SEMPRA ENERGY

Table D

           

SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES, INVESTMENTS AND ACQUISITIONS

           
   

Three months ended September 30,

 

Nine months ended September 30,

(Dollars in millions)

 

2020

 

2019

 

2020

 

2019

 

(unaudited)

Earnings (Losses) Attributable to Common Shares

         

SDG&E

 

$

178

   

$

263

   

$

633

   

$

582

 

SoCalGas

 

(24)

   

143

   

425

   

437

 

Sempra Texas Utilities

 

209

   

212

   

458

   

419

 

Sempra Mexico

 

50

   

84

   

302

   

214

 

Sempra Renewables

 

   

   

   

59

 

Sempra LNG

 

71

   

2

   

207

   

13

 

Parent and other

 

(126)

   

(139)

   

(515)

   

(383)

 

Discontinued operations

 

(7)

   

248

   

1,840

   

267

 

Total

 

$

351

   

$

813

   

$

3,350

   

$

1,608

 
                 
                 
   

Three months ended September 30,

 

Nine months ended September 30,

(Dollars in millions)

 

2020

 

2019

 

2020

 

2019

 

(unaudited)

Capital Expenditures, Investments and Acquisitions

         

SDG&E

 

$

473

   

$

363

   

$

1,323

   

$

1,071

 

SoCalGas

 

460

   

360

   

1,345

   

1,019

 

Sempra Texas Utilities

 

86

   

56

   

225

   

1,338

 

Sempra Mexico

 

122

   

178

   

443

   

420

 

Sempra Renewables

 

   

   

   

2

 

Sempra LNG

 

63

   

37

   

200

   

183

 

Parent and other

 

   

3

   

6

   

6

 

Total

 

$

1,204

   

$

997

   

$

3,542

   

$

4,039

 

 

 

SEMPRA ENERGY

Table E

         

OTHER OPERATING STATISTICS (Unaudited)

       
         
 

Three months ended September 30,

 

Nine months ended September 30,

 

2020

 

2019

 

2020

 

2019

UTILITIES

             

SDG&E and SoCalGas

             

Gas sales (Bcf)(1)

57

 

57

 

257

 

271

Transportation (Bcf)(1)

174

 

156

 

451

 

424

Total deliveries (Bcf)(1)

231

 

213

 

708

 

695

               

Total gas customer meters (thousands)

       

6,953

 

6,912

                 

SDG&E

             

Electric sales (millions of kWhs)(1)

4,063

 

3,970

 

10,647

 

10,796

Direct Access and Community Choice Aggregation (millions of kWhs)

914

 

952

 

2,530

 

2,640

Total deliveries (millions of kWhs)(1)

4,977

 

4,922

 

13,177

 

13,436

               

Total electric customer meters (thousands)

       

1,480

 

1,468

               

Oncor(2)

             

Total deliveries (millions of kWhs)

39,084

 

40,834

 

100,542

 

102,462

Total electric customer meters (thousands)

       

3,744

 

3,673

               

Ecogas

             

Natural gas sales (Bcf)

 

 

2

 

2

Natural gas customer meters (thousands)

       

137

 

129

               
               

ENERGY-RELATED BUSINESSES

             

Power generated and sold

             

Sempra Mexico

             

Termoeléctrica de Mexicali (TdM) (millions of kWhs)

893

 

1,032

 

2,176

 

2,862

Wind and solar (millions of kWhs)(3)

432

 

419

 

1,304

 

1,109

   

(1)

Include intercompany sales.

(2)

Includes 100% of the electric deliveries and customer meters of Oncor Electric Delivery Company LLC (Oncor), in which we hold an indirect 80.25% interest through our investment in Oncor Electric Delivery Holdings Company LLC.

(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.

 

 

SEMPRA ENERGY

Table F (Unaudited)

STATEMENTS OF OPERATIONS DATA BY SEGMENT

                   
                             

Three months ended September 30, 2020

               

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra Texas Utilities

 

Sempra Mexico

 

Sempra LNG

 

Consolidating Adjustments, Parent & Other

   

Total

                               

Revenues

$

1,472

   

$

842

   

$

   

$

351

   

$

63

   

$

(84)

     

$

2,644

 

Cost of sales and other expenses

(957)

   

(661)

   

   

(160)

   

(105)

   

66

     

(1,817)

 

Depreciation and amortization

(200)

   

(165)

   

   

(47)

   

(2)

   

(4)

     

(418)

 

Other (expense) income, net

(2)

   

(7)

   

   

36

   

   

2

     

29

 

Income (loss) before interest and tax(1)

313

   

9

   

   

180

   

(44)

   

(20)

     

438

 

Net interest (expense) income

(102)

   

(39)

   

   

(17)

   

17

   

(96)

     

(237)

 

Income tax (expense) benefit

(33)

   

6

   

   

(92)

   

(18)

   

38

     

(99)

 

Equity earnings, net

   

   

209

   

1

   

116

   

     

326

 

Earnings attributable to noncontrolling interests

   

   

   

(22)

   

   

     

(22)

 

Preferred dividends

   

   

   

   

   

(48)

     

(48)

 

Earnings (losses) from continuing operations

$

178

   

$

(24)

   

$

209

   

$

50

   

$

71

   

$

(126)

     

358

 

Losses from discontinued operations(2)

                         

(7)

 

Earnings attributable to common shares

                         

$

351

 
                               

Three months ended September 30, 2019

             

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra Texas Utilities

 

Sempra Mexico

 

Sempra LNG

 

Consolidating Adjustments, Parent & Other

   

Total

                               

Revenues

$

1,427

   

$

975

   

$

   

$

357

   

$

100

   

$

(101)

     

$

2,758

 

Cost of sales and other expenses

(802)

   

(571)

   

   

(174)

   

(120)

   

69

     

(1,598)

 

Depreciation and amortization

(196)

   

(154)

   

   

(46)

   

(2)

   

(4)

     

(402)

 

Impairment losses

(6)

   

(37)

   

   

   

   

     

(43)

 

Loss on sale of assets

   

   

   

   

   

(3)

     

(3)

 

Other income (expense), net

19

   

1

   

   

(30)

   

   

3

     

(7)

 

Income (loss) before interest and tax(1)

442

   

214

   

   

107

   

(22)

   

(36)

     

705

 

Net interest (expense) income

(105)

   

(36)

   

   

(10)

   

4

   

(110)

     

(257)

 

Income tax (expense) benefit

(71)

   

(35)

   

   

   

2

   

43

     

(61)

 

Equity earnings, net

   

   

212

   

37

   

17

   

     

266

 

(Earnings) losses attributable to noncontrolling interests

(3)

   

   

   

(50)

   

1

   

     

(52)

 

Preferred dividends

   

   

   

   

   

(36)

     

(36)

 

Earnings (losses) from continuing operations

$

263

   

$

143

   

$

212

   

$

84

   

$

2

   

$

(139)

     

565

 

Earnings from discontinued operations

                         

248

 

Earnings attributable to common shares

                         

$

813

 
                               

(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)

Represents post-closing adjustments related to the sale of our equity interests in our Chilean businesses.

 

 

SEMPRA ENERGY

Table F (Unaudited)

STATEMENTS OF OPERATIONS DATA BY SEGMENT

               
                                   

Nine months ended September 30, 2020

               

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra Texas Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra LNG

 

Consolidating Adjustments, Parent & Other

   

Total

                                   

Revenues

$

3,976

   

$

3,247

   

$

   

$

935

   

$

   

$

255

   

$

(214)

     

$

8,199

 

Cost of sales and other expenses

(2,326)

   

(2,144)

   

   

(408)

   

   

(266)

   

153

     

(4,991)

 

Depreciation and amortization

(598)

   

(486)

   

   

(141)

   

   

(7)

   

(10)

     

(1,242)

 

Other income (expense), net

47

   

21

   

   

(211)

   

   

   

(20)

     

(163)

 

Income (loss) before interest and tax(1)

1,099

   

638

   

   

175

   

   

(18)

   

(91)

     

1,803

 

Net interest (expense) income

(305)

   

(117)

   

   

(48)

   

   

26

   

(298)

     

(742)

 

Income tax (expense) benefit

(161)

   

(95)

   

   

161

   

   

(59)

   

94

     

(60)

 

Equity earnings (losses), net

   

   

458

   

207

   

   

257

   

(100)

     

822

 

(Earnings) losses attributable to noncontrolling interests

   

   

   

(193)

   

   

1

   

1

     

(191)

 

Preferred dividends

   

(1)

   

   

   

   

   

(121)

     

(122)

 

Earnings (losses) from continuing operations

$

633

   

$

425

   

$

458

   

$

302

   

$

   

$

207

   

$

(515)

     

1,510

 

Earnings from discontinued operations(2)

                             

1,840

 

Earnings attributable to common shares

                             

$

3,350

 
                                   

Nine months ended September 30, 2019

                 

(Dollars in millions)

SDG&E

 

SoCalGas

 

Sempra Texas Utilities

 

Sempra Mexico

 

Sempra Renewables

 

Sempra LNG

 

Consolidating Adjustments, Parent & Other

   

Total

                                   

Revenues

$

3,666

   

$

3,142

   

$

   

$

1,058

   

$

10

   

$

327

   

$

(317)

     

$

7,886

 

Cost of sales and other expenses

(2,141)

   

(2,083)

   

   

(496)

   

(20)

   

(350)

   

223

     

(4,867)

 

Depreciation and amortization

(571)

   

(449)

   

   

(136)

   

   

(7)

   

(11)

     

(1,174)

 

Impairment losses

(6)

   

(37)

       

   

   

   

     

(43)

 

Gain on sale of assets

   

   

   

   

61

   

   

2

     

63

 

Other income, net

60

   

18

   

   

6

   

   

   

19

     

103

 

Income (loss) before interest and tax(1)

1,008

   

591

   

   

432

   

51

   

(30)

   

(84)

     

1,968

 

Net interest (expense) income

(308)

   

(103)

   

   

(31)

   

8

   

27

   

(326)

     

(733)

 

Income tax (expense) benefit

(111)

   

(50)

   

   

(116)

   

(4)

   

(4)

   

135

     

(150)

 

Equity earnings (losses), net

   

   

419

   

43

   

5

   

19

   

(1)

     

485

 

(Earnings) losses attributable to noncontrolling interests

(7)

   

   

   

(114)

   

(1)

   

1

   

     

(121)

 

Preferred dividends

   

(1)

   

   

   

   

   

(107)

     

(108)

 

Earnings (losses) from continuing operations

$

582

   

$

437

   

$

419

   

$

214

   

$

59

   

$

13

   

$

(383)

     

1,341

 

Earnings from discontinued operations

                             

267

 

Earnings attributable to common shares

                             

$

1,608

 
   

(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 $1,747 million gain on the sale of our South American businesses in the second quarter of 2020.

 

 

 

SOURCE Sempra Energy

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

Category

Sempra Energy , Financial News , Sempra LNG