Sempra Energy Earnings Rise In 2015

- Results Exceed 2015 Adjusted Earnings Guidance

- Annualized Dividend Raised 8 Percent to $3.02 Per Share

- Company Sets 2016 Adjusted Earnings-Per-Share Guidance Range at $4.80 to $5.20

26 Feb, 2016, 09:00 ET from Sempra Energy

SAN DIEGO, Feb. 26, 2016 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today reported 2015 earnings of $1.35 billion, or $5.37 per diluted share, up from $1.16 billion, or $4.63 per diluted share, in 2014.

Sempra Energy's 2015 results included: a $36 million after-tax gain on the sale of the second block of Sempra U.S. Gas & Power's Mesquite power facility; a benefit of $15 million after tax for San Diego Gas & Electric (SDG&E), due to a reduction in the loss related to the San Onofre Nuclear Generating Station (SONGS); and $10 million after tax in liquefied natural gas (LNG) liquefaction development expenses.  Sempra Energy's 2014 results reflected $21 million after tax in charges related to SONGS.  Excluding these items in both years, Sempra Energy's adjusted earnings in 2015 were $1.31 billion, or $5.21 per diluted share, up from $1.18 billion, or $4.71 per diluted share, in 2014.

On Feb. 18, California state regulators confirmed that Southern California Gas Co. (SoCalGas) had permanently sealed the leaking well at its Aliso Canyon natural gas storage facility outside Los Angeles.

"We are pleased SoCalGas was able to permanently stop the Aliso Canyon natural gas leak last week," said Debra L. Reed, chairman and CEO of Sempra Energy. "We recognize the disruption the leak has caused to SoCalGas customers living in the neighborhoods adjacent to the Aliso Canyon facility. SoCalGas is committed to helping local residents return to their normal lives as quickly as possible and also will support forward-looking regulations to ensure the safety of natural gas storage operations going forward.  

"Despite this operational challenge at SoCalGas, we produced strong financial results in 2015.  We successfully grew operating earnings and outperformed our adjusted earnings guidance for the year. Looking forward, our key capital projects and initiatives are progressing well, and we are executing our five-year financial plan, which we expect will generate earnings growth at about twice the utility industry average."

Sempra Energy's fourth-quarter earnings increased to $369 million, or $1.47 per diluted share, in 2015 from $297 million, or $1.18 per diluted share, in 2014. Excluding SONGS-related items and LNG liquefaction development expenses, Sempra Energy's adjusted earnings in the fourth quarter 2015 were $370 million, or $1.47 per diluted share, compared with $309 million, or $1.23 per diluted share, in the fourth quarter 2014.

Beginning in the first quarter 2015, SoCalGas adopted an order by the California Public Utilities Commission (CPUC) to recognize revenues from the utility's core activities on a seasonally adjusted basis (seasonality). The application of seasonality to revenues results in substantially all of SoCalGas' annual earnings being reported in the first and fourth quarters of the year, but did not affect full-year earnings or cash flow.  Due to seasonality, Sempra Energy's fourth-quarter 2015 earnings reflected $48 million higher earnings at SoCalGas, compared with the fourth quarter 2014, offsetting the net seasonality impact on earnings through the first three quarters of 2015.

Last week, Sempra Energy's board of directors approved an 8-percent increase in the company's annualized dividend to $3.02 per share from $2.80 per share.

CALIFORNIA UTILITIES

San Diego Gas & Electric

SDG&E's fourth-quarter earnings increased to $144 million in 2015 from $128 million in 2014. Excluding SONGS-related items in both years, SDG&E's adjusted earnings were $142 million in the fourth quarter 2015, compared with $140 million in the fourth quarter 2014.

SDG&E's full-year earnings were $587 million in 2015, up from $507 million in 2014, due primarily to increased earnings from electric transmission operations; higher CPUC base margin, net of operating expenses; and the favorable resolution of prior-years' tax matters. Excluding SONGS-related items in both years, SDG&E's adjusted earnings were $572 million in 2015, compared with $528 million in 2014.

Southern California Gas Co.

In the fourth quarter 2015, SoCalGas' earnings were $143 million, up from $76 million in the fourth quarter 2014, due primarily to the impact of seasonality on revenues, which added $48 million of earnings during the most recent quarter, as well as higher CPUC base margin, net of operating expenses.

SoCalGas' full-year earnings were $419 million in 2015, up from $332 million in 2014, due primarily to a lower effective tax rate, including favorable resolution of prior years' income-tax matters.  Additionally, in 2015, SoCalGas' increased earnings were due to higher CPUC base margin, net of operating expenses; a retroactive rate base benefit approved by the CPUC in 2015; and higher regulatory earnings on projects under construction.   

SEMPRA INTERNATIONAL

Sempra South American Utilities

In the fourth quarter 2015, Sempra South American Utilities' earnings were $46 million, down from $63 million in the prior year's fourth quarter, due primarily to lower income-tax expense in 2014 as a result of Peruvian tax reform.  

In 2015, full-year earnings for Sempra South American Utilities were $175 million, compared with $172 million in 2014. 

Sempra Mexico

Sempra Mexico's fourth-quarter earnings were $53 million in 2015, unchanged from 2014.

In 2015, Sempra Mexico's earnings were $213 million, up from $192 million in 2014, primarily due to a full year of earnings from pipelines that were placed into service in the fourth quarter 2014. 

SEMPRA U.S. GAS & POWER

Sempra Natural Gas

In the fourth quarter 2015, Sempra Natural Gas earned $1 million, down from $11 million in the fourth quarter 2014, primarily as a result of lower natural gas prices.

Sempra Natural Gas earned $44 million in 2015, down from $50 million in 2014. 

Sempra Renewables

Fourth-quarter earnings for Sempra Renewables were $16 million in 2015, down from $18 million in 2014. 

In 2015, earnings for Sempra Renewables were $63 million, down from $81 million in 2014, due primarily to $24 million in gains in 2014 from the sale of 50-percent equity interests in the Copper Mountain Solar 3 and Broken Bow 2 Wind projects.

2016 ADJUSTED EARNINGS GUIDANCE

Sempra Energy today set its 2016 adjusted earnings-per-share guidance range at $4.80 to $5.20.  The adjusted earnings guidance for 2016 excludes any gains or losses on potential acquisitions or asset sales. This adjusted guidance has been updated based on several new assumptions for 2016 with the inclusion of projected LNG development expenses, revised forecasts for natural gas prices and foreign currency effects, and estimates based on the multi-party settlement agreement filed in the California utilities' 2016 General Rate Case, among other factors. 

NON-GAAP FINANCIAL MEASURES

Non-GAAP financial measures for Sempra Energy include fourth-quarter and full-year 2015 and 2014 adjusted earnings and adjusted earnings per share, and 2016 and 2015 adjusted earnings-per-share guidance, as well as fourth-quarter and full-year 2015 and 2014 SDG&E adjusted earnings.  Additional information regarding these non-GAAP financial measures is in the appendix on Table A of the fourth-quarter 2015 financial tables.

INTERNET BROADCAST

Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. EST with senior management of the company.  Access is available by logging onto the website at www.sempra.com.  For those unable to log onto the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 2934710.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2015 revenues of more than $10 billion.  The Sempra Energy companies' 17,000 employees serve more than 32 million consumers worldwide.

This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements can be identified by words like "believes," "expects," "anticipates," "plans," "estimates,"  "projects," "forecasts," "contemplates," "intends," "assumes," "depends," "should," "could," "would," "will," "confident," "may," "potential," "possible,"  "proposed,"  "target," "pursue," "goals," "outlook," "maintain," or similar expressions or discussions of guidance, strategies, plans, goals, opportunities, projections, initiatives, objectives or intentions.  Forward-looking statements are not guarantees of performance.  They involve risks, uncertainties and assumptions.  Future results may differ materially from those expressed in the forward-looking statements. 

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

These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the Securities and Exchange Commission. These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on the company's website at www.sempra.comInvestors should not rely unduly on any forward-looking statements.  These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.

Sempra International, LLC, Sempra U.S. Gas & Power, LLC, and Sempra Partners, LP, are not the same companies as the California utilities, San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra International, LLC, Sempra U.S. Gas & Power, LLC, and Sempra Partners, LP, are not regulated by the California Public Utilities Commission. Sempra International's underlying entities include Sempra Mexico and Sempra South American Utilities. Sempra U.S. Gas & Power's underlying entities include Sempra Renewables and Sempra Natural Gas.

 

SEMPRA ENERGY

Table A

CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended

Years ended

December 31,

December 31,

(Dollars in millions, except per share amounts)

2015 (1)

2014

2015

2014

(unaudited)

REVENUES

Utilities

$  2,486

$  2,440

$  9,254

$  9,758

Energy-related businesses

215

307

977

1,277

    Total revenues

2,701

2,747

10,231

11,035

EXPENSES AND OTHER INCOME

Utilities:

    Cost of natural gas

(348)

(450)

(1,134)

(1,758)

    Cost of electric fuel and purchased power

(491)

(520)

(2,136)

(2,281)

Energy-related businesses:

    Cost of natural gas, electric fuel and purchased power

(73)

(125)

(335)

(552)

    Other cost of sales

(37)

(41)

(148)

(163)

Operation and maintenance

(823)

(804)

(2,895)

(2,935)

Depreciation and amortization

(325)

(290)

(1,250)

(1,156)

Franchise fees and other taxes

(109)

(107)

(423)

(408)

Plant closure adjustment (loss)

5

(19)

26

(6)

Gain on sale of equity interests and assets

8

14

70

62

Equity earnings, before income tax 

25

19

104

81

Other income, net

38

19

126

137

Interest income

6

7

29

22

Interest expense

(145)

(136)

(561)

(554)

Income before income taxes and equity earnings of certain unconsolidated subsidiaries

 

432

 

314

 

1,704

 

1,524

Income tax expense

(65)

(9)

(341)

(300)

Equity earnings, net of income tax

21

16

85

38

Net income

388

321

1,448

1,262

Earnings attributable to noncontrolling interests

(19)

(24)

(98)

(100)

Preferred dividends of subsidiary

         ―

         ―

(1)

(1)

Earnings

$     369

$     297

$  1,349

$  1,161

Basic earnings per common share

$    1.48

$    1.21

$    5.43

$    4.72

Weighted-average number of shares outstanding, basic (thousands)

248,722

246,448

248,249

245,891

Diluted earnings per common share

$    1.47

$    1.18

$    5.37

$    4.63

Weighted-average number of shares outstanding, diluted (thousands)

251,450

251,333

250,923

250,655

Dividends declared per share of common stock

$    0.70

$    0.66

$    2.80

$    2.64

(1) Reflects the impact of seasonalization at Southern California Gas as discussed on Table D.

 

SEMPRA ENERGY

Table A (Continued)

Sempra Energy Consolidated

RECONCILIATION OF SEMPRA ENERGY GAAP EARNINGS TO SEMPRA ENERGY ADJUSTED EARNINGS EXCLUDING GAIN ON SALE IN 2015, PLANT CLOSURE ADJUSTMENTS IN 2015 AND 2014 AND LNG LIQUEFACTION EXPENSES IN 2015 (Unaudited)

Sempra Energy Adjusted Earnings and Adjusted Earnings Per Share exclude 1) in the year ended December 31, 2015, a $36 million gain on the sale of the remaining block of the Mesquite Power plant, 2) also in the year ended December 31, 2015, a $15 million reduction in the plant closure loss related to the San Onofre Nuclear Generating Station (SONGS), including $13 million in the first quarter, primarily due to California Public Utilities Commission (CPUC) approval of a compliance filing related to San Diego Gas & Electric Company's (SDG&E) authorized recovery of its investment in SONGS and $2 million in net proceeds received in the fourth quarter for the shareholder portion of a settlement agreement with Nuclear Electric Insurance Limited (NEIL) to resolve all of SONGS' insurance claims arising out of the failures of replacement steam generators, 3) in the year ended December 31, 2014, a $21 million charge, including $12 million in the fourth quarter, to adjust the total plant closure loss resulting from the early retirement of SONGS, and 4) in the three months and year ended December 31, 2015, $3 million and $10 million, respectively, of liquefied natural gas (LNG) liquefaction development expenses. Sempra Energy Adjusted Earnings and Adjusted Earnings Per Share, and the Earnings-Per-Share Growth Rate based on Adjusted Earnings Per Share, are non-GAAP financial measures (GAAP represents accounting principles generally accepted in the United States of America). Because of the significance and nature of these items, management believes that these non-GAAP financial measures provide a more meaningful comparison of the performance of Sempra Energy's business operations from 2014 to 2015 and to future periods, and also as a base for projection of future compounded annual growth rate. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. The table below reconciles for historical periods these non-GAAP financial measures to Sempra Energy Earnings, Diluted Earnings Per Common Share and the Earnings-Per-Share Growth Rate, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.

Three months ended

Years ended

December 31,

December 31,

(Dollars in millions, except per share amounts)

2015

2014

2015

2014

Sempra Energy GAAP Earnings

$      369

$      297

$   1,349

$   1,161

Exclude:

   Gain on sale of Mesquite Power block 2

           ―

           ―

(36)

           ―

   Plant closure (adjustment) loss

(2)

12

(15)

21

   LNG liquefaction development expenses

3

           ―

10

           ―

Sempra Energy Adjusted Earnings

$      370

$      309

$   1,308

$   1,182

Diluted earnings per common share:

Sempra Energy GAAP Earnings

$     1.47(1)

$     1.18

$     5.37(1)

$     4.63

Sempra Energy Adjusted Earnings

$     1.47(2)

$     1.23

$     5.21(2)

$     4.71

Weighted-average number of shares outstanding, diluted (thousands)

251,450

251,333

250,923

250,655

(1)

Percentage increases in 2015 compared to 2014 based on GAAP Earnings Per Share for fourth quarter and year-to-date (Earnings-Per-Share Growth Rate) were 25% and 16%, respectively.

(2)

Percentage increases in 2015 compared to 2014 based on Adjusted Earnings Per Share for fourth quarter and year-to-date (Earnings-Per-Share Growth Rate) were 20% and 11%, respectively.

SEMPRA ENERGY 2015 AND 2016 ADJUSTED EARNINGS-PER-SHARE GUIDANCE RANGES (Unaudited)

Sempra Energy 2015 Adjusted Earnings-Per-Share Guidance Range of $4.95 to $5.15 excluded 1) a $0.14 per diluted share after-tax gain from the April 2015 sale of the remaining block of the Mesquite Power plant, 2) $0.05 per diluted share from a reduction in the first quarter of 2015 in the plant closure loss related to SONGS, and 3) $0.05 per diluted share for estimated after-tax development expenses associated with LNG liquefaction development. Sempra Energy 2016 Adjusted Earnings-Per-Share Guidance Range of $4.80 to $5.20 excludes 1) any potential gain from the remeasurement of our equity method investment in Gasoductos de Chihuahua (GdC), a 50-50 joint venture between our Mexican subsidiary, IEnova, and Petróleos Mexicanos (PEMEX), in connection with the potential acquisition by IEnova of PEMEX's 50-percent interest in GdC, and 2) any earnings impact as a result of our plan to market and sell the Termoeléctrica de Mexicali natural gas-fired power plant in Mexico. Sempra Energy 2015 and 2016 Adjusted Earnings-Per-Share Guidance are non-GAAP financial measures. Because of the significance and nature of the excluded items, management believes these non-GAAP measures provide better clarity into the ongoing results of the business and the comparability of such results to prior and future periods. Sempra Energy 2015 and 2016 Adjusted Earnings-Per-Share Guidance should not be considered an alternative to diluted earnings per share determined in accordance with GAAP. As the parties are in the process of restructuring the GdC transaction and an agreement for the sale of the Termoeléctrica de Mexicali plant has yet to be obtained, any potential earnings impact from these transactions cannot be reasonably estimated at this time, and accordingly, we are not able to provide a corresponding GAAP equivalent to our 2016 Adjusted Earnings-Per-Share Guidance.

San Diego Gas & Electric Company (SDG&E)

RECONCILIATION OF SDG&E GAAP EARNINGS TO ADJUSTED EARNINGS EXCLUDING PLANT CLOSURE ADJUSTMENTS IN 2015 AND 2014 (Unaudited)

SDG&E Adjusted Earnings exclude 1) in the year ended December 31, 2015, a $15 million reduction in the plant closure loss related to SONGS, including $13 million in the first quarter, primarily due to CPUC approval of a compliance filing related to SDG&E's authorized recovery of its investment in SONGS and $2 million in net proceeds received in the fourth quarter for the shareholder portion of a settlement agreement with NEIL to resolve all of SONGS' insurance claims arising out of the failures of replacement steam generators, and 2) in the year ended December 31, 2014, a $21 million charge, including $12 million in the fourth quarter, to adjust the total plant closure loss resulting from the early retirement of SONGS. SDG&E Adjusted Earnings is a non-GAAP financial measure. Because of the significance and nature of these items, management believes that this non-GAAP financial measure provides a more meaningful comparison of the performance of SDG&E's business operations from 2014 to 2015 and to future periods. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. The table below reconciles for historical periods this non-GAAP financial measure to SDG&E Earnings, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP.

Three months ended

Years ended

December 31,

December 31,

(Dollars in millions)

2015

2014

2015

2014

SDG&E GAAP Earnings

$      144

$      128

$      587

$      507

Exclude:

   Plant closure (adjustment) loss

(2)

12

(15)

21

SDG&E Adjusted Earnings

$      142

$      140

$      572

$      528

 

SEMPRA ENERGY

Table B

CONSOLIDATED BALANCE SHEETS

December 31,

December 31,

(Dollars in millions)

2015

2014(1)

Assets

Current assets:

Cash and cash equivalents

$           403

$           570

Restricted cash

27

11

Accounts receivable, net

1,473

1,394

Due from unconsolidated affiliates

6

38

Income taxes receivable

30

45

Deferred income taxes

                ―

305

Inventories

298

396

Regulatory balancing accounts – undercollected

307

746

Fixed-price contracts and other derivatives

80

93

Asset held for sale, power plant

                ―

293

Other

267

293

Total current assets

2,891

4,184

Investments and other assets:

Restricted cash

20

29

Due from unconsolidated affiliates

186

188

Regulatory assets

3,273

3,031

Nuclear decommissioning trusts

1,063

1,131

Investments

2,905

2,848

Goodwill

819

931

Other intangible assets

404

415

Dedicated assets in support of certain benefit plans

464

512

Insurance receivable for Aliso Canyon costs

325

                ―

Sundry

761

480

Total investments and other assets

10,220

9,565

Property, plant and equipment, net

28,039

25,902

Total assets

$       41,150

$       39,651

Liabilities and Equity

Current liabilities:

Short-term debt

$           622

$         1,733

Accounts payable

1,275

1,353

Due to unconsolidated affiliates

14

2

Dividends and interest payable

303

282

Accrued compensation and benefits

423

373

Regulatory balancing accounts – overcollected

34

                ―

Current portion of long-term debt

907

469

Fixed-price contracts and other derivatives

56

55

Customer deposits

153

153

Reserve for Aliso Canyon costs

274

                ―

Other

551

649

Total current liabilities

4,612

5,069

Long-term debt

13,134

12,086

Deferred credits and other liabilities:

Customer advances for construction

149

144

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

1,152

1,064

Deferred income taxes

3,157

3,003

Deferred investment tax credits

32

37

Regulatory liabilities arising from removal obligations

2,793

2,741

Asset retirement obligations

2,126

2,048

Fixed-price contracts and other derivatives

240

255

Deferred credits and other 

1,176

1,104

Total deferred credits and other liabilities

10,825

10,396

Equity:

Total Sempra Energy shareholders' equity

11,809

11,326

Preferred stock of subsidiary

20

20

Other noncontrolling interests

750

754

Total equity

12,579

12,100

Total liabilities and equity

$       41,150

$       39,651

(1)

As adjusted for the retrospective adoption of Accounting Standards Update 2015-03, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs.

 

SEMPRA ENERGY

Table C

CONSOLIDATED STATEMENTS OF CASH FLOWS 

Years ended December 31,

(Dollars in millions)

2015

2014

Cash Flows from Operating Activities

Net income

$1,448

$1,262

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

Depreciation and amortization

1,250

1,156

Deferred income taxes and investment tax credits

239

146

Gain on sale of equity interests and assets

(70)

(62)

Plant closure (adjustment) loss

(26)

6

Equity earnings

(189)

(119)

Fixed-price contracts and other derivatives

(10)

(25)

Other

75

108

Net change in other working capital components

699

(375)

Insurance receivable for Aliso Canyon costs

(325)

        ―

Changes in other assets

(162)

19

Changes in other liabilities

(24)

45

Net cash provided by operating activities

2,905

2,161

Cash Flows from Investing Activities

Expenditures for property, plant and equipment

(3,156)

(3,123)

Expenditures for investments and acquisition of businesses

(200)

(240)

Proceeds from sale of equity interests and assets, net of cash sold

373

149

Distributions from investments

15

13

Proceeds from sales by nuclear decommissioning and other trusts

577

601

Purchases of nuclear decommissioning and other trust assets

(531)

(613)

Increases in restricted cash

(100)

(152)

Decreases in restricted cash

93

155

Advances to unconsolidated affiliates

(31)

(185)

Repayments of advances to unconsolidated affiliates

74

18

Other 

1

35

Net cash used in investing activities

(2,885)

(3,342)

Cash Flows from Financing Activities

Common dividends paid

(628)

(598)

Preferred dividends paid by subsidiary

(1)

(1)

Issuances of common stock

52

56

Repurchases of common stock

(74)

(38)

Issuances of debt (maturities greater than 90 days)

2,992

3,272

Payments on debt (maturities greater than 90 days)

(1,854)

(2,034)

(Decrease) increase in short-term debt, net

(622)

412

Purchase of noncontrolling interests

        ―

(74)

Net distributions to noncontrolling interests

(73)

(104)

Tax benefit related to share-based compensation

52

        ―

Other 

(17)

(37)

Net cash (used in) provided by financing activities

(173)

854

Effect of exchange rate changes on cash and cash equivalents

(14)

(7)

Decrease in cash and cash equivalents

(167)

(334)

Cash and cash equivalents, January 1

570

904

Cash and cash equivalents, December 31

$   403

$   570

 

SEMPRA ENERGY

Table D

SEGMENT EARNINGS AND CAPITAL EXPENDITURES & INVESTMENTS 

Three months ended

Years ended

December 31,

December 31,

(Dollars in millions)

2015

2014

2015

2014

(unaudited)

Earnings (Losses) 

California Utilities:

San Diego Gas & Electric

$    144

$    128

$    587

$     507

Southern California Gas

143

(1)

76

419

332

Sempra International:

Sempra South American Utilities

46

63

175

172

Sempra Mexico

53

53

213

192

Sempra U.S. Gas & Power:

Sempra Renewables

16

18

63

81

Sempra Natural Gas

1

11

44

50

Parent and other 

(34)

(52)

(152)

(173)

Earnings

$    369

$    297

$  1,349

$  1,161

Three months ended

Years ended

December 31,

December 31,

(Dollars in millions)

2015

2014

2015

2014

(unaudited)

Capital Expenditures and Investments

California Utilities:

San Diego Gas & Electric

$    298

$    310

$  1,133

$  1,100

Southern California Gas

406

340

1,352

1,104

Sempra International:

Sempra South American Utilities

49

48

154

174

Sempra Mexico

117

63

302

325

Sempra U.S. Gas & Power:

Sempra Renewables

38

45

105

404

Sempra Natural Gas

38

38

260

230

Parent and other

     ―

7

50

26

Consolidated Capital Expenditures and Investments

$    946

$    851

$  3,356

$  3,363

(1)

Results for the three months ended December 31, 2015 for Southern California Gas (SoCalGas) reflect the adoption of a California Public Utilities Commission decision requiring SoCalGas to recognize annual revenue for core natural gas customers using seasonal factors, instead of recognizing such revenue ratably over the year as was previously required. For the three months ended December 31, 2015 compared to the same period in 2014, this "seasonalization" resulted in $48 million higher earnings. While this seasonalization caused variability in results from quarter to quarter within the year, it did not impact full-year 2015 results.

 

SEMPRA ENERGY

Table E

OTHER OPERATING STATISTICS (Unaudited)

Three months ended

Years ended

December 31,

December 31,

UTILITIES

2015

2014

2015

2014

California Utilities – SDG&E and SoCalGas

Gas Sales (Bcf)(1)

102

87

329

326

Transportation (Bcf)(1)

169

179

669

691

Total Deliveries (Bcf)(1)

271

266

998

1,017

Total Gas Customers (Thousands)

6,774

6,735

Electric Sales (Millions of kWhs)(1)

4,314

4,099

16,264

16,467

Direct Access (Millions of kWhs)

969

887

3,652

3,648

Total Deliveries (Millions of kWhs)(1)

5,283

4,986

19,916

20,115

Total Electric Customers (Thousands)

1,426

1,417

Other Utilities

Natural Gas Sales (Bcf)

Sempra Mexico

6

6

25

24

Mobile Gas(2)

12

9

47

38

Willmut Gas

1

1

3

3

Natural Gas Customers (Thousands)

Sempra Mexico

113

106

Mobile Gas(2)

85

86

Willmut Gas

19

19

Electric Sales (Millions of kWhs)

Peru

1,854

1,829

7,549

7,287

Chile

715

752

2,887

2,944

Electric Customers (Thousands)

Peru

1,053

1,029

Chile

672

657

ENERGY-RELATED BUSINESSES

Sempra International

Power Sold (Millions of kWhs)

Sempra Mexico

1,039

1,144

3,821

4,225

Sempra U.S. Gas & Power

Power Sold (Millions of kWhs)

Sempra Renewables(3)

740

717

2,851

2,536

Sempra Natural Gas(4)

806

1,439

3,129

5,309

(1)

Includes intercompany sales.

(2)

Includes transportation.

(3)

Includes 50 percent of total power sold related to solar and wind projects in which Sempra Energy has 50-percent ownership. These subsidiaries are not consolidated within Sempra Energy, and the related investments are accounted for under the equity method.

(4)

Sempra Natural Gas sold the remaining 625-megawatt block of its Mesquite Power natural gas-fired power plant in April 2015.

 

SEMPRA ENERGY

Table F (Unaudited)

Statement of Operations Data by Segment

Three Months Ended December 31, 2015

(Dollars in millions)

SDG&E

SoCalGas

Sempra South American Utilities

Sempra Mexico

Sempra Renewables

Sempra Natural Gas

Consolidating Adjustments, Parent & Other

Total

Revenues

$  1,051

$  1,041

(1)

$    393

$    161

$       6

$     141

$     (92)

$   2,701

Cost of sales and other expenses

(649)

(715)

(309)

(101)

(15)

(153)

61

(1,881)

Depreciation and amortization

(158)

(119)

(13)

(18)

(1)

(13)

(3)

(325)

Plant closure adjustment

5

-

-

-

-

-

-

5

Gain on sale of asset

-

-

-

-

8

-

-

8

Equity earnings (losses), before income tax

-

-

-

-

4

25

(4)

25

Other income, net

10

5

4

9

1

-

9

38

Income (loss) before interest and tax (2)

259

212

75

51

3

-

(29)

571

Net interest (expense) income (3)

(49)

(22)

(5)

(3)

1

-

(61)

(139)

Income tax (expense) benefit

(67)

(47)

(1)

(17)

(4)

12

1

57

(65)

Equity  earnings, net of income tax

-

-

-

21

-

-

-

21

Losses (earnings) attributable to noncontrolling interests

1

-

(7)

(12)

-

-

(1)

(19)

Earnings (losses)

$    144

$    143

(1)

$     46

$     53

$     16

$       1

$     (34)

$    369

Three Months Ended December 31, 2014

(Dollars in millions)

SDG&E

SoCalGas

Sempra South American Utilities

Sempra Mexico

Sempra Renewables

Sempra Natural Gas

Consolidating Adjustments, Parent & Other

Total

Revenues

$  1,046

$    998

$    387

$    197

$     10

$    231

$   (122)

$   2,747

Cost of sales and other expenses

(672)

(771)

(309)

(137)

(15)

(232)

89

(2,047)

Depreciation and amortization

(135)

(110)

(14)

(17)

(1)

(11)

(2)

(290)

Plant closure loss

(19)

-

-

-

-

-

-

(19)

Gain on sale of equity interest

-

-

-

-

14

-

-

14

Equity earnings (losses), before income tax

-

-

-

-

2

18

(1)

19

Other income (expense), net

11

7

15

(23)

-

-

9

19

Income (loss) before interest and tax (2)

231

124

79

20

10

6

(27)

443

Net interest (expense) income (3)

(50)

(19)

(5)

(2)

(1)

7

(59)

(129)

Income tax (expense) benefit

(53)

(29)

1

32

9

(2)

33

(9)

Equity earnings, net of income tax

-

-

-

16

-

-

-

16

(Earnings) losses attributable to noncontrolling interests

-

-

(12)

(13)

-

-

1

(24)

Earnings (losses)

$    128

$     76

$     63

$      53

$     18

$     11

$    (52)

$    297

(1)

Reflects the impact of seasonalization at Southern California Gas as discussed on Table D.

(2)

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.

(3)

Includes interest income, interest expense and preferred dividends of subsidiary.

 

SEMPRA ENERGY

Table F (Unaudited)

Statement of Operations Data by Segment

Year Ended December 31, 2015

(Dollars in millions)

SDG&E

SoCalGas

Sempra South American Utilities

Sempra Mexico

Sempra Renewables

Sempra Natural Gas

Consolidating Adjustments, Parent & Other

Total

Revenues

$    4,219

$    3,489

$    1,544

$     669

$      36

$     653

$     (379)

$  10,231

Cost of sales and other expenses

(2,583)

(2,420)

(1,232)

(415)

(51)

(681)

311

(7,071)

Depreciation and amortization

(604)

(461)

(50)

(70)

(6)

(49)

(10)

(1,250)

Plant closure adjustment

26

-

-

-

-

-

-

26

Gain on sale of assets

-

-

1

-

8

61

-

70

Equity earnings (losses), before income tax

-

-

-

-

24

84

(4)

104

Other income, net

36

30

22

20

2

-

16

126

Income (loss) before interest and tax (1)

1,094

638

285

204

13

68

(66)

2,236

Net interest (expense) income (2)

(204)

(81)

(13)

(16)

1

3

(223)

(533)

Income tax (expense) benefit

(284)

(138)

(67)

(11)

49

(28)

138

(341)

Equity (losses) earnings, net of income tax

-

-

(4)

89

-

-

-

85

(Earnings) losses attributable to noncontrolling interests

(19)

-

(26)

(53)

-

1

(1)

(98)

Earnings (losses)

$     587

$     419

$     175

$     213

$      63

$      44

$     (152)

$   1,349

Year Ended December 31, 2014

(Dollars in millions)

SDG&E

SoCalGas

Sempra South American Utilities

Sempra Mexico

Sempra Renewables

Sempra Natural Gas

Consolidating Adjustments, Parent & Other

Total

Revenues

$  4,329

$  3,855

$  1,534

$    818

$      35

$     979

$     (515)

$  11,035

Cost of sales and other expenses

(2,834)

(2,903)

(1,225)

(562)

(51)

(955)

433

(8,097)

Depreciation and amortization

(530)

(431)

(55)

(64)

(5)

(61)

(10)

(1,156)

Plant closure loss

(6)

(3)

-

-

-

-

-

-

(6)

Gain on sale of equity interests and assets

-

-

2

19

41

-

-

62

Equity earnings (losses), before income tax

-

-

-

-

20

62

(1)

81

Other income, net

40

20

30

4

1

2

40

137

Income (loss) before interest and tax (1)

999

541

286

215

41

27

(53)

2,056

Net interest (expense) income(2)

(202)

(70)

(19)

(13)

(4)

4

(229)

(533)

Income tax (expense) benefit

(270)

(139)

(58)

(5)

44

20

108

(300)

Equity (losses) earnings, net of income tax

-

-

(4)

42

-

-

-

38

(Earnings) losses attributable to noncontrolling interests

(20)

-

(33)

(47)

-

(1)

1

(100)

Earnings (losses)

$     507

$     332

$     172

$    192

$      81

$       50

$     (173)

$   1,161

(1)

Management believes Income (Loss) Before Interest and Tax is a useful measurement of our segments' performance because it can be used to evaluate the effectiveness of our operations

exclusive of interest and income tax, neither of which is directly relevant to the efficiency of those operations.

(2)

Includes interest income, interest expense, and preferred dividends of subsidiary.

(3)

After taxes, including a $17 million charge to reduce certain tax regulatory assets attributed to SONGS, the adjustment to loss from plant closure is a $21 million charge to earnings.

 

[SRE-F]

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SOURCE Sempra Energy



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