Market Overview

Sempra Energy Earnings Rise In 2015

Share:

- 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

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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