Sempra Reports Third-Quarter 2021 Earnings Results

- Marking completion of integrated transactions forming Sempra Infrastructure

- Announcing higher projected 2022-2026 capital plan at Oncor of $15 billion

SAN DIEGO, Nov. 5, 2021 /PRNewswire/ -- Sempra (NYSE: SRE) (BMV: SRE) today announced third-quarter 2021 losses of $648 million, or $2.03 per diluted share, compared to third-quarter 2020 earnings of $351 million, or $1.21 per diluted share. Sempra's third-quarter 2021 results included a $1.1 billion after-tax charge associated with civil litigation related to the 2015 Aliso Canyon natural gas storage facility leak. On an adjusted basis, the company's third-quarter 2021 earnings were $545 million, or $1.70 per diluted share, compared to $432 million, or $1.49 per diluted share, in the third quarter of 2020.

Sempra Q3 2021 Earnings Infographic

"At this point in the year, we are excited to see strong growth across all three of our business platforms," said Trevor Mihalik, executive vice president and chief financial officer of Sempra. "This is a product of our strategic focus on investing in some of the most attractive energy markets in North America, and it sets us up well for strong financial and operating performance through the end of the year and into 2022."

Sempra's earnings for the first nine months of 2021 were $650 million, or $2.09 per diluted share, compared with earnings of $3.35 billion, or $11.43 per diluted share, in the first nine months of 2020. Adjusted earnings for the first nine months of 2021 were $1.949 billion, or $6.27 per diluted share, compared to $1.674 billion, or $5.70 per diluted share, in the first nine months of 2020.

The reported financial results reflect certain significant items as described on an after-tax basis in the following table of GAAP (generally accepted accounting principles in the United States of America) earnings, reconciled to adjusted earnings, for the third quarter and first nine months of 2021 and 2020.

   

 Three months ended 

 

 Nine months ended 

   

 September 30, 

 

 September 30, 

(Dollars, except EPS, and shares in millions)

 

2021

 

2020

 

2021

 

2020

   

(Unaudited)

GAAP (Losses) Earnings

 

$   (648)

 

$  351

 

$    650

 

$  3,350

                 

Impacts Associated with Aliso Canyon Litigation and Regulatory Matters

 

1,132

 

22

 

1,132

 

94

                 

Impact from Foreign Currency and Inflation and Associated Undesignated Derivatives1

(28)

 

18

 

41

 

(111)

                 

Net Unrealized Losses (Gains) on Commodity Derivatives1

 

89

 

34

 

176

 

(12)

                 

Loss (Gain) on Sale of South American Businesses

 

-

 

7

 

-

 

(1,747)

                 

(Earnings) Losses from Investment in RBS Sempra Commodities LLP

 

-

 

-

 

(50)

 

100

                 

Adjusted Earnings2

 

$   545

 

$ 432

 

$1,949

 

$1,674

                 
                 

Diluted Weighted-Average Common Shares Outstanding

 

319

 

291

 

311

 

293

GAAP EPS

 

$  (2.03)

 

$  1.21

 

$   2.09

 

$ 11.43

                 

Diluted Weighted-Average Common Shares Outstanding

 

320

 

291

 

311

 

307

Adjusted EPS2,3

 

$   1.70

 

$  1.49

 

$   6.27

 

$   5.70

   

1)

Q3-2020 and YTD-2020 Adjusted Earnings and Adjusted Earnings per Common Share (EPS) have been updated to exclude this item to conform to current year presentation.

2)

Represents a non-GAAP financial measure. See Table A for information regarding non-GAAP financial measures and descriptions of adjustments.

3)

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

Advancing Key Strategic Priorities at Sempra California

Southern California Gas Co. (SoCalGas) recently announced agreements expected to resolve substantially all material civil litigation against SoCalGas and Sempra related to the 2015 Aliso Canyon natural gas storage facility leak. The net, after-tax cash outflows for SoCalGas are expected to ultimately be up to approximately $895 million, after taking into consideration the remaining insurance receivable and other adjustments.

SoCalGas also recently issued a new economy-wide technical analysis, which underscores the essential role that clean fuels like hydrogen and renewable natural gas (RNG) are expected to play in reaching carbon neutrality. The analysis highlights that a clean fuels network made, in part, by leveraging existing gas infrastructure to deliver clean fuels and to manage carbon could allow California to achieve its net-zero goals more affordably and more effectively than other alternatives.

Continuing Strong Growth at Sempra Texas

In Texas, Oncor Electric Delivery Company LLC (Oncor) has announced its updated, five-year projected capital plan for 2022-2026 of $15 billion, a record high for the company. Additionally, Oncor now projects its rate base to grow to nearly $28 billion by 2026, which reflects a compound annual growth rate of about 8% over the five-year period. Oncor's robust projected capital plan and rate base figures are expected to support the economic development seen throughout its service territory, forecasted generation additions, strong premise growth, and critical investments in grid resiliency, safety and reliability.

Investing in the Energy Transition at Sempra Infrastructure

Last month, Sempra completed the sale of a non-controlling, 20% interest in Sempra Infrastructure to KKR for a purchase price of $3.37 billion, subject to post-closing adjustments. Proceeds from the sale are expected to be used to, among other things, help fund growth across Sempra's capital program, which is centered on its U.S. utilities, and further strengthen its balance sheet.

Also, Sempra completed its follow-on cash tender offer to acquire the remaining publicly owned shares of Infraestructura Energética Nova S.A.B. de C.V. (IEnova) that were not obtained in the previously completed exchange offer, and IEnova's shares have been delisted from the Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A.B. de C.V.).

With the consolidation of Sempra's liquefied natural gas (LNG) business and its ownership of IEnova under Sempra Infrastructure, the newly formed business platform is expected to generate increased shareholder value over the long-term by investing in the energy systems of the future.

Earnings Guidance

Sempra is updating its full-year 2021 GAAP EPS guidance range, including items expected to be reflected in our fourth quarter results, to $3.01 to $3.61, and the company is continuing to guide to the upper end of the range for its full-year 2021 adjusted EPS guidance of $7.75 to $8.35. Sempra is also reaffirming its full-year 2022 EPS guidance range of $8.10 to $8.70.

Non-GAAP Financial Measures

Non-GAAP financial measures include Sempra's adjusted earnings, adjusted EPS and adjusted EPS guidance range. See Table A for additional information regarding these non-GAAP financial measures.

Internet Broadcast

Sempra 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 9127369.

About Sempra

Sempra's mission is to be North America's premier energy infrastructure company. The Sempra family of companies has more than 19,000 talented employees who deliver energy with purpose to over 36 million consumers. With more than $66 billion in total assets at the end of 2020, the San Diego-based company is the owner of one of the largest energy networks in North America serving some of the world's leading economies. The company is helping to advance the global energy transition by enabling the delivery of lower-carbon energy solutions in the markets it serves, including California, Texas, Mexico and the LNG export market. Sempra is consistently recognized as a leader in sustainable business practices and for its long-standing commitment to building a high-performing culture with a focus on safety, workforce development and training, and diversity and inclusion. Sempra is the only North American utility sector company included on the Dow Jones Sustainability World Index and was also named one of the "World's Most Admired Companies" for 2021 by Fortune Magazine. For additional information about Sempra, please visit Sempra's website at www.sempra.com and on Twitter @Sempra.

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 any 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," "in process," "under construction," "in development," "target," "outlook," "maintain," "continue," "goal," "aim," "commit," or similar expressions, or when we discuss our guidance, priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations.

Factors, among others, that could cause actual results and events to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: California wildfires, including the risks that we may be found liable for damages regardless of fault and that we may not be able to recover costs from insurance, the wildfire fund established by California Assembly Bill 1054 or in rates from customers; decisions, investigations, regulations, issuances or revocations of permits and other authorizations, renewals of franchises, and other actions by (i) the California Public Utilities Commission (CPUC), Comisión Reguladora de Energía, U.S. Department of Energy, U.S. Federal Energy Regulatory Commission, 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 do business; the success of business development efforts, construction projects and acquisitions and divestitures, including risks in (i) the ability to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) the ability to realize anticipated benefits from any of these efforts if completed, and (iv) obtaining the consent or approval of partners or other third parties, including governmental entities; the resolution of civil and criminal litigation, regulatory inquiries, investigations and proceedings, and arbitrations, including those related to the natural gas leak at Southern California Gas Company's (SoCalGas) Aliso Canyon natural gas storage facility; changes to laws, including proposed changes to the Mexican constitution that could materially limit access to the electric generation market and changes to Mexico's trade rules that could materially limit our ability to import and export hydrocarbons; failure of foreign governments and state-owned entities to honor their contracts and commitments and property disputes; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow on favorable terms and meet our substantial debt service obligations; the impact of energy and climate goals, policies, legislation and rulemaking, including actions to reduce or eliminate reliance on natural gas generally and any deterioration of or increased uncertainty in the political or regulatory environment for California natural gas distribution companies; the pace of the development and adoption of new technologies in the energy sector, including those designed to support governmental and private party energy and climate goals, and our ability to timely and economically incorporate them into our business; weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, information system outages or other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires or subject us to liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance, 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 or limitations on the withdrawal of natural gas from storage facilities; the impact of the COVID-19 pandemic, including potential vaccination mandates, on capital projects, regulatory approvals and the execution of our operations; cybersecurity threats to the energy grid, storage and pipeline infrastructure, information and systems used to operate our businesses, and confidentiality of our proprietary information and personal information of our customers and employees, including ransomware attacks on our systems and the systems of third-party vendors and other parties with which we conduct business; 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 and Community Choice Aggregation, 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, inflation and interest rates and commodity prices and our ability to effectively hedge these risks and with respect to interest rates, the impact on SDG&E's and SoCalGas' cost of capital; changes in tax and trade policies, laws and regulations, including tariffs and revisions to international trade agreements that may increase our costs, reduce our competitiveness, 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 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 Sempra's website, www.sempra.com. Investors should not rely unduly on any forward-looking statements.

Sempra Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova) are not the same companies as the California utilities, SDG&E or SoCalGas, and Sempra Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.

None of the website references in this press release are active hyperlinks, and the information contained on, or that can be accessed through, any such website is not, and shall not be deemed to be, part of this document.

                                               

SEMPRA ENERGY

Table A

               

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

             
 

Three months ended

September 30,

 

Nine months ended

September 30,

 

2021

 

2020

 

2021

 

2020

 

(unaudited)

REVENUES

             

Utilities

$

2,560

   

$

2,301

   

$

7,839

   

$

7,199

 

Energy-related businesses

453

   

343

   

1,174

   

1,000

 

Total revenues

3,013

   

2,644

   

9,013

   

8,199

 
               

EXPENSES AND OTHER INCOME

             

Utilities:

             

Cost of natural gas

(282)

   

(114)

   

(892)

   

(582)

 

Cost of electric fuel and purchased power

(312)

   

(429)

   

(828)

   

(918)

 

Energy-related businesses cost of sales

(220)

   

(90)

   

(448)

   

(200)

 

Operation and maintenance

(1,073)

   

(1,018)

   

(3,098)

   

(2,767)

 

Aliso Canyon litigation and regulatory matters

(1,571)

   

(27)

   

(1,571)

   

(127)

 

Depreciation and amortization

(471)

   

(418)

   

(1,376)

   

(1,242)

 

Franchise fees and other taxes

(151)

   

(139)

   

(442)

   

(397)

 

Other (expense) income, net

(55)

   

29

   

52

   

(163)

 

Interest income

16

   

27

   

50

   

76

 

Interest expense

(259)

   

(264)

   

(776)

   

(818)

 

   (Loss) income from continuing operations before income taxes and equity

earnings

(1,365)

   

201

   

(316)

   

1,061

 

Income tax benefit (expense)

342

   

(99)

   

45

   

(60)

 

Equity earnings

391

   

326

   

1,022

   

822

 

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

(632)

   

428

   

751

   

1,823

 

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

   

(7)

   

   

1,850

 

Net (loss) income

(632)

   

421

   

751

   

3,673

 

Earnings attributable to noncontrolling interests

(5)

   

(22)

   

(48)

   

(201)

 

Preferred dividends

(11)

   

(48)

   

(52)

   

(121)

 

Preferred dividends of subsidiary

   

   

(1)

   

(1)

 

 (Losses) earnings attributable to common shares

$

(648)

   

$

351

   

$

650

   

$

3,350

 
               

Basic (losses) earnings per common share (EPS):

             

(Losses) earnings

$

(2.03)

   

$

1.21

   

$

2.10

   

$

11.48

 

Weighted-average common shares outstanding

319,144

   

289,490

   

309,350

   

291,771

 
               

Diluted EPS:

             

(Losses) earnings

$

(2.03)

   

$

1.21

   

$

2.09

   

$

11.43

 

Weighted-average common shares outstanding

319,144

   

290,582

   

310,854

   

292,935

 

SEMPRA ENERGY
Table A (Continued)

RECONCILIATION OF SEMPRA ADJUSTED EARNINGS TO SEMPRA GAAP (LOSSES) EARNINGS (Unaudited)

Sempra Adjusted Earnings and Adjusted EPS exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2021 and 2020 as follows:

Three months ended September 30, 2021:

  • $(1,132) million from impacts associated with Aliso Canyon natural gas storage facility litigation at Southern California Gas Company (SoCalGas)
  • $28 million impact from foreign currency and inflation and associated undesignated derivatives
  • $(89) million net unrealized losses on commodity derivatives

Three months ended September 30, 2020:

  • $(22) million from impacts associated with Aliso Canyon natural gas storage facility litigation and regulatory matters at SoCalGas
  • $(18) million impact from foreign currency and inflation and associated undesignated derivatives
  • $(34) million net unrealized losses on commodity derivatives
  • $(7) million reduction to the gain on sale of our Chilean businesses as a result of post-closing adjustments

Nine months ended September 30, 2021:

  • $(1,132) million from impacts associated with Aliso Canyon natural gas storage facility litigation at SoCalGas
  • $(41) million impact from foreign currency and inflation and associated undesignated derivatives
  • $(176) million net unrealized losses on commodity derivatives
  • $50 million equity earnings from investment in RBS Sempra Commodities LLP, which represents a reduction to an estimate of our obligations to settle pending value added tax (VAT) matters and related legal costs at our equity method investment at Parent and other

Nine months ended September 30, 2020:

  • $(94) million from impacts associated with Aliso Canyon natural gas storage facility litigation and regulatory matters at SoCalGas
  • $111 million impact from foreign currency and inflation and associated undesignated derivatives
  • $12 million net unrealized gains on commodity derivatives
  • $(100) million equity losses from investment in RBS Sempra Commodities LLP, which represents an estimate of our obligations to settle pending VAT 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 Adjusted Earnings and Adjusted EPS are non-GAAP financial measures (GAAP represents generally accepted accounting principles in the United States of America). These non-GAAP financial measures exclude significant items that are generally not related to our ongoing business activities and/or are infrequent in nature. These non-GAAP financial measures also exclude the impact from foreign currency and inflation effects and associated undesignated derivatives and unrealized gains and losses on commodity derivatives, which we expect to occur in future periods, and which can vary significantly from one period to the next. Exclusion of these items is useful to management and investors because it provides a meaningful comparison of the performance of Sempra'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 GAAP (Losses) Earnings and GAAP EPS, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.

                                                                       

SEMPRA ENERGY

Table A (Continued)

                       

RECONCILIATION OF ADJUSTED EARNINGS TO GAAP (LOSSES) EARNINGS

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

     

Pretax
amount

Income
tax (benefit)
expense(1)

Non-
controlling
interests

Earnings

 

Pretax
amount

Income tax
(benefit)
expense(1)

Non-
controlling
interests

Earnings

 

Three months ended September 30, 2021

 

Three months ended September 30, 2020

Sempra GAAP (Losses) Earnings

     

$

(648)

         

$

351

 

Excluded items:

                 
 

Impacts associated with Aliso Canyon litigation and regulatory matters

$

1,571

 

$

(439)

 

$

 

1,132

   

$

27

 

$

(5)

 

$

 

22

 
 

Impact from foreign currency and inflation and associated
undesignated derivatives

4

 

(33)

 

1

 

(28)

   

(11)

 

44

 

(15)

 

18

 
 

Net unrealized losses on commodity derivatives

120

 

(32)

 

1

 

89

   

48

 

(13)

 

(1)

 

34

 
 

Reduction to gain on sale of Chilean businesses

 

 

 

   

16

 

(9)

 

 

7

 

Sempra Adjusted Earnings(2)

     

$

545

         

$

432

 
                     

Diluted EPS:

                 
 

Sempra GAAP (Losses) Earnings

     

$

(648)

         

$

351

 
 

Weighted-average common shares outstanding, diluted – GAAP

     

319,144

         

290,582

 
 

Sempra GAAP EPS

     

$

(2.03)

         

$

1.21

 
                       
 

Sempra Adjusted Earnings(2)

     

$

545

         

$

432

 
 

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

     

320,483

         

290,582

 
 

Sempra Adjusted EPS(2)

     

$

1.70

         

$

1.49

 
                       
 

Nine months ended September 30, 2021

 

Nine months ended September 30, 2020

Sempra GAAP Earnings

     

$

650

         

$

3,350

 

Excluded items:

                 
 

Impacts associated with Aliso Canyon litigation and regulatory matters

$

1,571

 

$

(439)

 

$

 

1,132

   

$

127

 

$

(33)

 

$

 

94

 
 

Impact from foreign currency and inflation and associated
undesignated derivatives

36

 

8

 

(3)

 

41

   

83

 

(278)

 

84

 

(111)

 
 

Net unrealized losses (gains) on commodity derivatives

245

 

(67)

 

(2)

 

176

   

(15)

 

4

 

(1)

 

(12)

 
 

(Earnings) losses from investment in RBS Sempra Commodities LLP

(50)

 

 

 

(50)

   

100

 

 

 

100

 
 

Gain on sale of South American businesses

 

 

 

   

(2,899)

 

1,152

 

 

(1,747)

 

Sempra Adjusted Earnings(2)

     

$

1,949

         

$

1,674

 
                     

Diluted EPS:

                 
 

Sempra GAAP Earnings

     

$

650

         

$

3,350

 
 

Weighted-average common shares outstanding, diluted – GAAP

     

310,854

         

292,935

 
 

Sempra GAAP EPS

     

$

2.09

         

$

11.43

 
                       
 

Sempra Adjusted Earnings(2)

     

$

1,949

         

$

1,674

 
 

Add back dividends for dilutive series A preferred stock

     

         

78

 
                           
 

Sempra Adjusted Earnings for Adjusted EPS(2)

     

$

1,949

         

$

1,752

 
 

Weighted-average common shares outstanding, diluted – Adjusted(4)

     

310,854

         

307,405

 
 

Sempra Adjusted EPS(2)

     

$

6.27

         

$

5.70

 
   

(1)

Income taxes were primarily calculated based on applicable statutory tax rates. We did not record an income tax expense for the equity earnings or 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)

Adjusted Earnings, Adjusted Earnings for Adjusted EPS, and Adjusted EPS have been updated to reflect impact from foreign currency and inflation and associated undesignated derivatives and net unrealized losses (gains) on commodity derivatives for the three months and nine months ended September 30, 2020.

(3)

In the three months ended September 30, 2021, the total weighted-average number of potentially dilutive securities of 699 were not included in the computation of GAAP EPS because to do so would have decreased losses per share, additionally because the conversion of the series B preferred stock is dilutive for Adjusted Earnings, 640 series B preferred stock shares are added back to the denominator used to calculate Adjusted EPS.

(4)

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 2021 ADJUSTED EPS GUIDANCE RANGE TO SEMPRA 2021 GAAP EPS GUIDANCE RANGE (Unaudited)

Sempra 2021 Adjusted EPS Guidance Range of $7.75 to $8.35 excludes items (after the effects of income taxes and, if applicable, noncontrolling interests) as follows:

  • $(1,132) million from impacts associated with Aliso Canyon natural gas storage facility litigation at SoCalGas
  • $(41) million impact from foreign currency and inflation and associated undesignated derivatives for the nine months ended September 30, 2021(1)
  • $(176) million net unrealized losses on commodity derivatives for the nine months ended September 30, 2021
  • $(72) million net income tax expense to derecognize a deferred income tax asset upon completing the sale of a 20% equity interest in Sempra Infrastructure Partners in October 2021
  • $(30) million in charges associated with hedge termination costs and write-off of unamortized debt issuance costs from early redemption of debt at Sempra Mexico in October 2021
  • $(93) million in charges associated with make-whole premiums and write-off of unamortized discount and debt issuance costs from early redemptions of debt at Parent and other in December 2021
  • $50 million equity earnings from investment in RBS Sempra Commodities LLP, which represents a reduction to an estimate of our obligations to settle pending VAT matters and related legal costs at our equity method investment at Parent and other

Sempra 2021 Adjusted EPS Guidance is a non-GAAP financial measure. This non-GAAP financial measure excludes the impact from foreign currency and inflation and associated undesignated derivatives and unrealized gains and losses on commodity derivatives, which we expect to occur in future periods, and which can vary significantly from one period to the next. Exclusion of these items is useful to management and investors because it provides a meaningful comparison of the performance of Sempra's business operations to prior and future periods. Sempra 2021 Adjusted EPS Guidance Range should not be considered an alternative to Sempra 2021 GAAP EPS Guidance Range. 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 2021 Adjusted EPS Guidance Range to Sempra 2021 GAAP EPS Guidance Range, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP.

                       

RECONCILIATION OF ADJUSTED EPS GUIDANCE RANGE TO GAAP EPS GUIDANCE RANGE

 
 

Full-Year 2021

Sempra GAAP EPS Guidance Range(2)

$

3.01

 

to

$

3.61

 

Excluded items:

     

Impacts associated with Aliso Canyon litigation

3.59

   

3.59

 

Impact from foreign currency and inflation and associated undesignated derivatives(1)

0.13

   

0.13

 

Net unrealized losses on commodity derivatives

0.56

   

0.56

 

Net income tax expense to derecognize a deferred income tax asset

0.23

   

0.23

 

Costs associated with early redemption of debt

0.39

   

0.39

 

Earnings from investment in RBS Sempra Commodities LLP

(0.16)

   

(0.16)

 

Sempra Adjusted EPS Guidance Range

$

7.75

 

to

$

8.35

 

Weighted-average common shares outstanding, diluted (millions)(3)(4)

   

315

 
   

(1)

Amounts include impacts recorded in equity earnings from our unconsolidated equity method investments.

(2)

Sempra's prior GAAP EPS Guidance Range for full-year 2021 has been updated to reflect the impacts associated with Aliso Canyon litigation, impact from foreign currency and inflation and associated undesignated derivatives and net unrealized losses on commodity derivatives for the nine months ended September 30, 2021, and net income tax expense to derecognize a deferred income tax asset and costs associated with early redemption of debt in the fourth quarter of 2021.

(3)

Weighted-average common shares outstanding reflects the conversion of the series A preferred stock that converted on January 15, 2021 and series B preferred stock that converted on July 15, 2021.

(4)

Includes the impact of the Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) exchange offer.

 

                       

SEMPRA ENERGY

Table B

       

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

     
 

September 30,

2021

 

December 31,

2020(1)

 

(unaudited)

   

ASSETS

     

Current assets:

     

Cash and cash equivalents

$

873

   

$

960

 

Restricted cash

31

   

22

 

Accounts receivable – trade, net

1,416

   

1,578

 

Accounts receivable – other, net

470

   

403

 

Due from unconsolidated affiliates

30

   

20

 

Income taxes receivable

93

   

113

 

Inventories

371

   

308

 

Regulatory assets

290

   

190

 

Greenhouse gas allowances

546

   

553

 

Other current assets

473

   

364

 

Total current assets

4,593

   

4,511

 
       

Other assets:

     

Restricted cash

3

   

3

 

Due from unconsolidated affiliates

684

   

780

 

Regulatory assets

2,280

   

1,822

 

Nuclear decommissioning trusts

1,003

   

1,019

 

Investment in Oncor Holdings

12,475

   

12,440

 

Other investments

1,483

   

1,388

 

Goodwill

1,602

   

1,602

 

Other intangible assets

376

   

202

 

Dedicated assets in support of certain benefit plans

539

   

512

 

Insurance receivable for Aliso Canyon costs

414

   

445

 

Deferred income taxes

151

   

136

 

Greenhouse gas allowances

356

   

101

 

Right-of-use assets – operating leases

499

   

543

 

Wildfire fund

342

   

363

 

Other long-term assets

914

   

753

 

Total other assets

23,121

   

22,109

 

Property, plant and equipment, net

42,758

   

40,003

 

Total assets

$

70,472

   

$

66,623

 
   

(1)

Derived from audited financial statements.

 

                       

SEMPRA ENERGY

Table B (Continued)

       

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

     
 

September 30,

2021

 

December 31,

2020(1)

 

(unaudited)

   

LIABILITIES AND EQUITY

     

Current liabilities:

     

Short-term debt

$

3,068

   

$

885

 

Accounts payable – trade

1,400

   

1,359

 

Accounts payable – other

179

   

154

 

Due to unconsolidated affiliates

42

   

45

 

Dividends and interest payable

592

   

551

 

Accrued compensation and benefits

454

   

446

 

Regulatory liabilities

515

   

140

 

Current portion of long-term debt and finance leases

2,994

   

1,540

 

Reserve for Aliso Canyon costs

1,962

   

150

 

Greenhouse gas obligations

546

   

553

 

Other current liabilities

1,192

   

1,016

 

Total current liabilities

12,944

   

6,839

 
       

Long-term debt and finance leases

20,042

   

21,781

 
       

Deferred credits and other liabilities:

     

Due to unconsolidated affiliates

286

   

234

 

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

964

   

1,059

 

Deferred income taxes

2,882

   

2,871

 

Regulatory liabilities

3,378

   

3,372

 

Reserve for Aliso Canyon costs

14

   

301

 

Greenhouse gas obligations

190

   

 

Asset retirement obligations

3,187

   

3,113

 

Deferred credits and other

1,981

   

2,119

 

Total deferred credits and other liabilities

12,882

   

13,069

 

Equity:

     

Sempra Energy shareholders' equity

24,554

   

23,373

 

Preferred stock of subsidiary

20

   

20

 

Other noncontrolling interests

30

   

1,541

 

Total equity

24,604

   

24,934

 

Total liabilities and equity

$

70,472

   

$

66,623

 
   

(1)

Derived from audited financial statements.

 

                       

SEMPRA ENERGY

Table C

       

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

     
 

Nine months ended September 30,

 

2021

 

2020

 

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

     

Net income

$

751

   

$

3,673

 

Less: Income from discontinued operations, net of income tax

   

(1,850)

 

Income from continuing operations, net of income tax

751

   

1,823

 

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

661

   

692

 

Reserve for Aliso Canyon costs

1,525

   

259

 

Net change in other working capital components

(186)

   

(396)

 

Distributions from investments

727

   

429

 

Insurance receivable for Aliso Canyon costs

31

   

(165)

 

Changes in other noncurrent assets and liabilities, net

(528)

   

38

 

Net cash provided by continuing operations

2,981

   

2,680

 

Net cash used in discontinued operations

   

(1,051)

 

Net cash provided by operating activities

2,981

   

1,629

 
       

CASH FLOWS FROM INVESTING ACTIVITIES

     

Expenditures for property, plant and equipment

(3,606)

   

(3,313)

 

Expenditures for investments and acquisitions

(216)

   

(229)

 

Proceeds from sale of assets

   

22

 

Distributions from investments

365

   

761

 

Purchases of nuclear decommissioning trust assets

(729)

   

(1,091)

 

Proceeds from sales of nuclear decommissioning trust assets

729

   

1,091

 

Advances to unconsolidated affiliates

(8)

   

(32)

 

Repayments of advances to unconsolidated affiliates

   

7

 

Other

9

   

13

 

Net cash used in continuing operations

(3,456)

   

(2,771)

 

Net cash provided by discontinued operations

   

5,186

 

Net cash (used in) provided by investing activities

(3,456)

   

2,415

 
       

CASH FLOWS FROM FINANCING ACTIVITIES

     

Common dividends paid

(981)

   

(872)

 

Preferred dividends paid

(77)

   

(107)

 

Issuances of preferred stock

   

890

 

Issuances of common stock

5

   

10

 

Repurchases of common stock

(39)

   

(565)

 

Issuances of debt (maturities greater than 90 days)

1,992

   

5,934

 

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

(2,315)

   

(4,387)

 

Increase (decrease) in short-term debt, net

1,999

   

(1,871)

 

Advances from unconsolidated affiliates

40

   

64

 

Proceeds from sales of noncontrolling interests

7

   

 

Purchases of noncontrolling interests

(221)

   

(178)

 

Other

(13)

   

(29)

 

Net cash provided by (used in) continuing operations

397

   

(1,111)

 

Net cash provided by discontinued operations

   

401

 

Net cash provided by (used in) financing activities

397

   

(710)

 
       

Effect of exchange rate changes in continuing operations

   

(2)

 

Effect of exchange rate changes in discontinued operations

   

(3)

 

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

   

(5)

 
       

(Decrease) increase in cash, cash equivalents and restricted cash, including discontinued operations

(78)

   

3,329

 

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

985

   

217

 

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

$

907

   

$

3,546

 

 

                                               

SEMPRA ENERGY

Table D

         

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

(Dollars in millions)

       
 

Three months ended September 30,

 

Nine months ended September 30,

 

2021

 

2020

 

2021

 

2020

 

(unaudited)

Earnings (Losses) Attributable to Common Shares

       

SDG&E

$

205

   

$

178

   

$

603

   

$

633

 

SoCalGas

(1,126)

   

(24)

   

(625)

   

425

 

Sempra Texas Utilities

206

   

209

   

479

   

458

 

Sempra Mexico

164

   

50

   

225

   

302

 

Sempra LNG

1

   

71

   

194

   

207

 

Parent and other

(98)

   

(126)

   

(226)

   

(515)

 

Discontinued operations

   

(7)

   

   

1,840

 

Total

$

(648)

   

$

351

   

$

650

   

$

3,350

 
               
 

Three months ended September 30,

 

Nine months ended September 30,

 

2021

 

2020

 

2021

 

2020

 

(unaudited)

Capital Expenditures, Investments and Acquisitions

       

SDG&E

$

488

   

$

473

   

$

1,560

   

$

1,323

 

SoCalGas

481

   

460

   

1,417

   

1,345

 

Sempra Texas Utilities

51

   

86

   

151

   

225

 

Sempra Mexico

94

   

122

   

325

   

443

 

Sempra LNG

113

   

63

   

362

   

200

 

Parent and other

6

   

   

7

   

6

 

Total

$

1,233

   

$

1,204

   

$

3,822

   

$

3,542

 

 

                                                     

SEMPRA ENERGY

Table E

         

OTHER OPERATING STATISTICS

       
         
 

Three months ended September 30,

 

Nine months ended or at September 30,

 

2021

 

2020

 

2021

 

2020

   

(unaudited)

UTILITIES

             

SDG&E and SoCalGas

             

   Gas sales (Bcf)(1)

56

   

57

   

255

   

257

 

   Transportation (Bcf)(1)

170

   

174

   

452

   

451

 

   Total deliveries (Bcf)(1)

226

   

231

   

707

   

708

 
               

Total gas customer meters (thousands)

       

6,994

   

6,953

 
                 

SDG&E

             

   Electric sales (millions of kWhs)(1)

2,789

   

4,063

   

8,912

   

10,647

 

Direct Access and Community Choice Aggregation
(millions of kWhs)

2,025

   

914

   

3,812

   

2,530

 

   Total deliveries (millions of kWhs)(1)

4,814

   

4,977

   

12,724

   

13,177

 
               

Total electric customer meters (thousands)

       

1,493

   

1,480

 
               

Oncor(2)

             

Total deliveries (millions of kWhs)

40,244

   

39,084

   

103,810

   

100,542

 

Total electric customer meters (thousands)

       

3,817

   

3,744

 
               

Ecogas

             

Natural gas sales (Bcf)

   

   

2

   

2

 

Natural gas customer meters (thousands)

       

141

   

137

 
               
               

ENERGY-RELATED BUSINESSES

             

Power generated and sold

             

Sempra Mexico

             

Termoeléctrica de Mexicali (TdM) (millions of kWhs)

912

   

893

   

2,583

   

2,176

 

   Wind and solar (millions of kWhs)(3)

612

   

432

   

1,924

   

1,304

 
                                                 

(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 (ESJ) wind power generation facility through March 19, 2021. As of March 19, 2021, ESJ became a wholly owned, consolidated subsidiary of IEnova.

 

                                                                                         
             

         SEMPRA ENERGY

           

           Table F (Unaudited)

           
                             

STATEMENTS OF OPERATIONS DATA BY SEGMENT

           

(Dollars in millions)

           

Three months ended September 30, 2021

SDG&E

 

SoCalGas

 

Sempra
Texas
Utilities

 

Sempra
Mexico

 

Sempra
LNG

 

Consolidating
Adjustments,
Parent &

Other

   

Total

                             

Revenues

$

1,464

   

$

1,106

   

$

   

$

597

   

$

119

   

$

(273)

     

$

3,013

 

Cost of sales and other expenses

(843)

   

(840)

   

(1)

   

(343)

   

(265)

   

254

     

(2,038)

 

Aliso Canyon litigation and regulatory matters

   

(1,571)

   

   

   

   

     

(1,571)

 

Depreciation and amortization

(226)

   

(180)

   

   

(60)

   

(3)

   

(2)

     

(471)

 

Other income (expense), net

4

   

(39)

   

   

(16)

   

(1)

   

(3)

     

(55)

 

Income (loss) before interest and tax(1)

399

   

(1,524)

   

(1)

   

178

   

(150)

   

(24)

     

(1,122)

 

Net interest (expense) income

(104)

   

(39)

   

   

(31)

   

2

   

(71)

     

(243)

 

Income tax (expense) benefit

(90)

   

437

   

   

(24)

   

11

   

8

     

342

 

Equity earnings, net

   

   

207

   

47

   

137

   

     

391

 

(Earnings) losses attributable to noncontrolling interests

   

   

   

(6)

   

1

   

     

(5)

 

Preferred dividends

   

   

   

   

   

(11)

     

(11)

 

Earnings (losses) attributable to common shares

$

205

   

$

(1,126)

   

$

206

   

$

164

   

$

1

   

$

(98)

     

$

(648)

 
                             
                             
                             

Three months ended September 30, 2020

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)

   

(634)

   

   

(160)

   

(105)

   

66

     

(1,790)

 

Aliso Canyon litigation and regulatory matters

   

(27)

   

   

   

   

     

(27)

 

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

 
   

(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

           

(Dollars in millions)

           

Nine months ended September 30, 2021

SDG&E

 

SoCalGas

 

Sempra
Texas
Utilities

 

Sempra
Mexico

 

Sempra
LNG

 

Consolidating
Adjustments,
Parent &
Other

   

Total

                             

Revenues

$

4,119

   

$

3,738

   

$

   

$

1,368

   

$

367

   

$

(579)

     

$

9,013

 

Cost of sales and other expenses

(2,444)

   

(2,473)

   

(4)

   

(753)

   

(563)

   

529

     

(5,708)

 

Aliso Canyon litigation and regulatory matters

   

(1,571)

   

   

   

   

     

(1,571)

 

Depreciation and amortization

(659)

   

(533)

   

   

(168)

   

(8)

   

(8)

     

(1,376)

 

Other income (expense), net

61

   

(2)

   

   

(26)

   

(1)

   

20

     

52

 

Income (loss) before interest and tax(1)

1,077

   

(841)

   

(4)

   

421

   

(205)

   

(38)

     

410

 

Net interest (expense) income

(306)

   

(118)

   

   

(86)

   

13

   

(229)

     

(726)

 

Income tax (expense) benefit

(168)

   

335

   

   

(145)

   

(19)

   

42

     

45

 

Equity earnings, net

   

   

483

   

85

   

404

   

50

     

1,022

 

(Earnings) losses attributable to noncontrolling interests

   

   

   

(50)

   

1

   

1

     

(48)

 

Preferred dividends

   

(1)

   

   

   

   

(52)

     

(53)

 

Earnings (losses) attributable to common shares

$

603

   

$

(625)

   

$

479

   

$

225

   

$

194

   

$

(226)

     

$

650

 
                             
                             
                             

Nine months ended September 30, 2020

SDG&E

 

SoCalGas

 

Sempra
Texas
Utilities

 

Sempra
Mexico

 

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)

   

(2,017)

   

   

(408)

   

(266)

   

153

     

(4,864)

 

Aliso Canyon litigation and regulatory matters

   

(127)

   

   

   

   

     

(127)

 

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

 
   

(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

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

Category

Sempra , Financial News