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GENERAL INFORMATION AND OTHER FINANCIAL DATA (Tables)
 3 Months Ended
Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Cash and Cash Equivalents The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Condensed Consolidated Balance Sheets to the sum of such amounts reported on the Condensed Consolidated Statements of Cash Flows. We provide information about the nature of restricted cash in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
 
March 31,
December 31,
 
2019
2018
Sempra Energy Consolidated:
 
 
Cash and cash equivalents
$
78

$
102

Restricted cash, current
41

35

Restricted cash, noncurrent
21

21

Cash, cash equivalents and restricted cash in discontinued operations
67

88

Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows
$
207

$
246

SDG&E:
 

 
Cash and cash equivalents
$
10

$
8

Restricted cash, current
21

11

Restricted cash, noncurrent
18

18

Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows
$
49

$
37
Inventory Table The following table presents the components of inventories by segment.
INVENTORY BALANCES
(Dollars in millions)
 
Natural gas
 
 
LNG
 
 
Materials and supplies
 
 
Total
 
March 31, 2019
 
December 31, 2018
 
 
March 31, 2019
 
December 31, 2018
 
 
March 31, 2019
 
December 31, 2018
 
 
March 31, 2019
 
December 31, 2018
SDG&E
$
—

 
$
—

 
 
$
—

 
$
—

 
 
$
99

 
$
102

 
 
$
99

 
$
102

SoCalGas
12

 
92

 
 
—

 
—

 
 
46

 
42

 
 
58

 
134

Sempra Mexico
—

 
—

 
 
7

 
4

 
 
16

 
15

 
 
23

 
19

Sempra LNG
9

 
3

 
 
—

 
—

 
 
—

 
—

 
 
9

 
3

Sempra Energy Consolidated
$
21

 
$
95

 
 
$
7

 
$
4

 
 
$
161

 
$
159

 
 
$
189

 
$
258
Capitalized Financing Costs Table The table below summarizes capitalized interest and AFUDC.
CAPITALIZED FINANCING COSTS
 
 
 
(Dollars in millions)
 
 
 
 
Three months ended March 31,
 
2019
 
2018
Sempra Energy Consolidated
$
47

 
$
49

SDG&E
17

 
24

SoCalGas
11

 
13
Variable Interest Entity Table Sempra Energy’s Condensed Consolidated Statements of Operations include the following amounts associated with the tax equity limited liability companies, net of eliminations of transactions between Sempra Energy and these entities.
AMOUNTS ASSOCIATED WITH TAX EQUITY ARRANGEMENTS
 
 
(Dollars in millions)
 
 
 
 
 
Three months ended March 31,
 
 
2019
 
2018
REVENUES
 
 
 
Energy-related businesses
$
6

 
$
17

EXPENSES
 
 
 
Operation and maintenance
(2
)
 
(4
)
Depreciation and amortization
(3
)
 
(11
)
Income before income taxes
1

 
2

Income tax benefit (expense)
1

 
(5
)
Net income (loss)
2

 
(3
)
(Earnings) losses attributable to noncontrolling interests(1)
(3
)
 
21

(Losses) earnings attributable to common shares
$
(1
)
 
$
18

(1)
Net income or loss attributable to NCI is computed using the HLBV method and is not based on ownership percentages.The Condensed Consolidated Statements of Operations of Sempra Energy and SDG&E include the following amounts associated with Otay Mesa VIE. The amounts are net of eliminations of transactions between SDG&E and Otay Mesa VIE. The captions in the table below correspond to SDG&E’s Condensed Consolidated Statements of Operations.
AMOUNTS ASSOCIATED WITH OTAY MESA VIE
 
 
 
 
(Dollars in millions)
 
 
 
 
 
 
Three months ended March 31,
 
 
2019
 
2018
Operating expenses
 
 
 
 
Cost of electric fuel and purchased power
 
$
(16
)
 
$
(16
)
Operation and maintenance
 
4

 
4

Depreciation and amortization
 
7

 
8

Total operating expenses
 
(5
)
 
(4
)
Operating income
 
5

 
4

Interest expense
 
(4
)
 
(5
)
Income (losses) before income taxes/Net income (loss)
 
1

 
(1
)
(Earnings) losses attributable to noncontrolling interest
 
(1
)
 
1

Earnings attributable to common shares
 
$
—

 
$
—
Net Periodic Benefit Cost Table The following three tables provide the components of net periodic benefit cost.
NET PERIODIC BENEFIT COST – SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended March 31,
 
2019
 
2018
 
2019
 
2018
Service cost
$
27

 
$
33

 
$
4

 
$
6

Interest cost
35

 
35

 
9

 
9

Expected return on assets
(36
)
 
(42
)
 
(18
)
 
(18
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost
3

 
3

 
—

 
—

Actuarial loss (gain)
14

 
9

 
(2
)
 
(1
)
Settlement charges
—

 
14

 
—

 
—

Net periodic benefit cost (credit)
43

 
52

 
(7
)
 
(4
)
Regulatory adjustment
(36
)
 
(45
)
 
7

 
4

Total expense recognized
$
7

 
$
7

 
$
—

 
$
—

NET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended March 31,
 
2019
 
2018
 
2019
 
2018
Service cost
$
8

 
$
8

 
$
1

 
$
1

Interest cost
9

 
9

 
2

 
2

Expected return on assets
(11
)
 
(13
)
 
(3
)
 
(3
)
Amortization of:

 
 
 

 
 
Prior service cost
1

 
—

 
1

 
1

Actuarial loss (gain)
4

 
1

 
(1
)
 
(1
)
Settlement charges
—

 
14

 
—

 
—

Net periodic benefit cost
11

 
19

 
—

 
—

Regulatory adjustment
(11
)
 
(19
)
 
—

 
—

Total expense recognized
$
—

 
$
—

 
$
—

 
$
—

NET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended March 31,
 
2019
 
2018
 
2019
 
2018
Service cost
$
16

 
$
22

 
$
3

 
$
4

Interest cost
23

 
23

 
7

 
7

Expected return on assets
(24
)
 
(26
)
 
(14
)
 
(14
)
Amortization of:
 
 
 
 

 
 
Prior service cost (credit)
2

 
2

 
(1
)
 
(1
)
Actuarial loss (gain)
9

 
6

 
(2
)
 
—

Net periodic benefit cost (credit)
26

 
27

 
(7
)
 
(4
)
Regulatory adjustment
(25
)
 
(26
)
 
7

 
4

Total expense recognized
$
1

 
$
1

 
$
—

 
$
—
Contributions to Benefit Plans Table The following table shows our year-to-date contributions to pension and other postretirement benefit plans and the amounts we expect to contribute in 2019.
BENEFIT PLAN CONTRIBUTIONS
(Dollars in millions)
 
 
Sempra Energy
Consolidated
 
SDG&E
 
SoCalGas
Contributions through March 31, 2019:
 
 
 
 
 
 
Pension plans
 
$
9

 
$
—

 
$
1

Other postretirement benefit plans
 
2

 
—

 
—

Total expected contributions in 2019:
 
 
 
 
 
 
Pension plans
 
$
234

 
$
40

 
$
118

Other postretirement benefit plans
 
9

 
—

 
1
Earnings Per Share Computations Table The following table provides EPS computations for the three months ended March 31, 2019 and 2018. Basic EPS is calculated by dividing earnings attributable to common shares (from both continuing and discontinued operations) by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
EARNINGS PER COMMON SHARE COMPUTATIONS
 
 
 
(Dollars in millions, except per share amounts; shares in thousands)
 
 
 
 
Three months ended March 31,
 
2019
 
2018
Numerator for continuing operations:
 
 
 
Income from continuing operations, net of income tax
$
560

 
$
330

(Earnings) losses attributable to noncontrolling interests
(32
)
 
24

Mandatory convertible preferred stock dividends
(36
)
 
(28
)
Earnings from continuing operations attributable to common shares
$
492

 
$
326

 
 
 
 
Numerator for discontinued operations:
 
 
 
(Loss) income from discontinued operations, net of income tax
$
(42
)
 
$
28

Earnings attributable to noncontrolling interests
(9
)
 
(7
)
(Losses) earnings from discontinued operations attributable to common shares
$
(51
)
 
$
21

 
 
 
 
Numerator for earnings:
 
 
 
Earnings attributable to common shares
$
441

 
$
347

 
 
 
 
Denominator:
 
 
 
Weighted-average common shares outstanding for basic EPS(1)
274,674

 
257,932

Dilutive effect of stock options and RSUs(2)
969

 
933

Dilutive effect of common shares sold forward
1,585

 
625

Weighted-average common shares outstanding for diluted EPS
277,228

 
259,490

 
 
 
 
Basic EPS:
 
 
 
Earnings from continuing operations attributable to common shares
$
1.79

 
$
1.26

(Losses) earnings from discontinued operations attributable to common shares
$
(0.19
)
 
$
0.08

Earnings attributable to common shares
$
1.60

 
$
1.34

 
 
 
 
Diluted EPS:
 
 
 
Earnings from continuing operations attributable to common shares
$
1.78

 
$
1.25

(Losses) earnings from discontinued operations attributable to common shares
$
(0.19
)
 
$
0.08

Earnings attributable to common shares
$
1.59

 
$
1.33

(1)
Includes 613 and 628 average fully vested RSUs held in our Deferred Compensation Plan for the three months ended March 31, 2019 and 2018, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.
(2) 
Due to market fluctuations of both Sempra Energy common stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.
Schedule of Accumulated Other Comprehensive Income (Loss) Table The following tables present the changes in AOCI by component and amounts reclassified out of AOCI to net income, excluding amounts attributable to NCI.
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
(Dollars in millions)
 
Foreign
currency
translation
adjustments
 
Financial
instruments
 
Pension
and other
postretirement
benefits
 
Total
accumulated other
comprehensive
income (loss)
 
Three months ended March 31, 2019 and 2018
Sempra Energy Consolidated(2):
 
 
 
 
 
 
 
Balance as of December 31, 2018
$
(564
)
 
$
(82
)
 
$
(118
)
 
$
(764
)
Cumulative-effect adjustment from change in accounting principle
—

 
(25
)
 
(17
)
 
(42
)
OCI before reclassifications
32

 
(45
)
 
1

 
(12
)
Amounts reclassified from AOCI
—

 
(1
)
 
2

 
1

Net OCI
32

 
(46
)
 
3

 
(11
)
Balance as of March 31, 2019
$
(532
)
 
$
(153
)
 
$
(132
)
 
$
(817
)
 
 
 
 
 
 
 
 
Balance as of December 31, 2017
$
(420
)
 
$
(122
)
 
$
(84
)
 
$
(626
)
Cumulative-effect adjustment from change in accounting principle
—

 
(3
)
 
—

 
(3
)
OCI before reclassifications
24

 
66

 
—

 
90

Amounts reclassified from AOCI
—

 
(8
)
 
2

 
(6
)
Net OCI
24

 
58

 
2

 
84

Balance as of March 31, 2018
$
(396
)
 
$
(67
)
 
$
(82
)
 
$
(545
)
SDG&E:
 
 
 
 
 
 
 
Balance as of December 31, 2018
 
 
 
 
$
(10
)
 
$
(10
)
Cumulative-effect adjustment from change in accounting principle
 
 
 
 
(2
)
 
(2
)
Balance as of March 31, 2019
 
 
 
 
$
(12
)
 
$
(12
)
 
 
 
 
 
 
 
 
Balance as of December 31, 2017 and March 31, 2018
 
 
 
 
$
(8
)
 
$
(8
)
SoCalGas:
 
 
 
 
 
 
 
Balance as of December 31, 2018
 
 
$
(12
)
 
$
(8
)
 
$
(20
)
Cumulative-effect adjustment from change in accounting principle
 
 
(2
)
 
(2
)
 
(4
)
Balance as of March 31, 2019
 
 
$
(14
)
 
$
(10
)
 
$
(24
)
 
 
 
 
 
 
 
 
Balance as of December 31, 2017 and March 31, 2018
 
 
$
(13
)
 
$
(8
)
 
$
(21
)
(1) 
All amounts are net of income tax, if subject to tax, and exclude NCI.
(2) 
Includes discontinued operations.
 
 
 
 
 
 
 
 
Reclassifications out of AOCI Table
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
Details about accumulated other
comprehensive income (loss) components
Amounts reclassified
from accumulated other
comprehensive income (loss)
 
Affected line item on Condensed
Consolidated Statements of Operations
 
Three months ended March 31,
 
 
 
2019
 
2018
 
 
Sempra Energy Consolidated:
 
 
 
 
 
Financial instruments:
 
 
 
 
 
Interest rate and foreign exchange instruments(1)
$
1

 
$
(2
)
 
Interest Expense
 
(3
)
 
(18
)
 
Other Income, Net
Interest rate and foreign exchange instruments
1

 
4

 
Equity Earnings (Losses)
Foreign exchange instruments
1

 
—

 
Revenues: Energy-Related Businesses
Total before income tax
—

 
(16
)
 
 
 
—

 
3

 
Income Tax Expense
Net of income tax
—

 
(13
)
 
 
 
(1
)
 
5

 
(Earnings) Losses Attributable to Noncontrolling Interests
 
$
(1
)
 
$
(8
)
 
 
Pension and other postretirement benefits:
 
 
 
 
 
Amortization of actuarial loss(2)
$
2

 
$
3

 
Other Income, Net
Amortization of prior service cost(2)
1

 
—

 
Other Income, Net
Total before income tax
3

 
3

 
 
 
(1
)
 
(1
)
 
Income Tax Expense
Net of income tax
$
2

 
$
2

 
 
 
 
 
 
 
 
Total reclassifications for the period, net of tax
$
1

 
$
(6
)
 
 
SDG&E:
 
 
 
 
 
Financial instruments:
 
 
 
 
 
Interest rate instruments(1)
$
1

 
$
3

 
Interest Expense
 
(1
)
 
(3
)
 
(Earnings) Losses Attributable to Noncontrolling Interest
Total reclassifications for the period, net of tax
$
—

 
$
—

 
 

(1) 
Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
(2) 
Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).

For the three months ended March 31, 2019 and 2018, reclassifications out of AOCI to net income were negligible for SoCalGas.
 
 
 
 
 
 
Ownership Interests Held By Others Table The following table provides information on noncontrolling ownership interests held by others (not including preferred shareholders) in Other Noncontrolling Interests in Total Equity on Sempra Energy’s Condensed Consolidated Balance Sheets.
OTHER NONCONTROLLING INTERESTS
(Dollars in millions)
 
 
 
Percent ownership held by noncontrolling interests
 
 Equity (deficit) held by
noncontrolling interests
 
March 31,
2019
 
December 31,
2018
 
March 31,
2019
 
December 31,
2018
SDG&E:
 
 
 
 
 
 
 
Otay Mesa VIE
100
%
100
%
$
102

 
$
100

Sempra Mexico:
 
 
 
 
 
 
 
IEnova
33.4
 
33.5
 
1,611

 
1,592

IEnova subsidiaries(1)
10.0 – 47.6
 
10.0 – 49.0
 
13

 
13

Sempra Renewables:
 
 
 
 
 
 
 
Tax equity arrangements – wind(2)
NA
 
 NA
 
161

 
158

PXiSE Energy Solutions, LLC
11.1
 
11.1
 
—

 
1

Sempra LNG:
 
 
 
 
 
 
 
Bay Gas
—
 
9.1
 
—

 
18

Liberty Gas Storage, LLC
24.6
 
24.6
 
(12
)
 
(12
)
Discontinued Operations:
 
 
 
 
 
 
 
Chilquinta Energía subsidiaries(1)
19.7 – 43.4
 
19.7 – 43.4
 
24

 
23

Luz del Sur
16.4
 
16.4
 
201

 
193

Tecsur
9.8
 
9.8
 
4

 
4

Total Sempra Energy
 
 
 
 
$
2,104

 
$
2,090

(1) 
IEnova and Chilquinta Energía have subsidiaries with NCI held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.
(2) 
Net income or loss attributable to NCI is computed using the HLBV method and is not based on ownership percentages.
Transactions with Affiliates Table We summarize amounts due from and to unconsolidated affiliates at Sempra Energy Consolidated, SDG&E and SoCalGas in the following table.
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
 
March 31,
2019
 
December 31,
2018
Sempra Energy Consolidated:
 
 
 
Total due from various unconsolidated affiliates – current
$
50

 
$
37

 
 
 
 
Sempra Mexico(1):
 
 
 
IMG – Note due March 15, 2022(2)
$
668

 
$
641

Energía Sierra Juárez – Note(3)
—

 
3

Total due from unconsolidated affiliates – noncurrent
$
668

 
$
644

 
 
 
 
Total due to various unconsolidated affiliates – current
$
(10
)
 
$
(10
)
 
 
 
 
Sempra Mexico(1):
 
 
 
Total due to unconsolidated affiliates – noncurrent – TAG – Note due December 20, 2021(4)
$
(38
)
 
$
(37
)
SDG&E:
 
 
 
Sempra Energy
$
(37
)
 
$
(43
)
SoCalGas
(14
)
 
(6
)
Various affiliates
(12
)
 
(12
)
Total due to unconsolidated affiliates – current
$
(63
)
 
$
(61
)
 
 
 
 
Income taxes due (to) from Sempra Energy(5)
$
(29
)
 
$
5

SoCalGas:
 
 
 
SDG&E
$
14

 
$
6

Various affiliates
1

 
1

Total due from unconsolidated affiliates – current
$
15

 
$
7

 
 
 
 
Sempra Energy
$
(39
)
 
$
(34
)
Various affiliates
(3
)
 
—

Total due to unconsolidated affiliates – current
$
(42
)
 
$
(34
)
 
 
 
 
Income taxes due to Sempra Energy(5)
$
(88
)
 
$
(4
)
(1) 
Amounts include principal balances plus accumulated interest outstanding.
(2) 
Mexican peso-denominated revolving line of credit for up to 14.2 billion Mexican pesos or approximately $729 million U.S. dollar-equivalent, at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 bps (10.69 percent at March 31, 2019), to finance construction of the natural gas marine pipeline.
(3) 
U.S. dollar-denominated loan, at a variable interest rate based on the 30-day LIBOR plus 637.5 bps (8.89 percent at December 31, 2018).
(4) 
U.S. dollar-denominated loan, at a variable interest rate based on the 6-month LIBOR plus 290 bps (5.54 percent at March 31, 2019).
(5) 
SDG&E and SoCalGas are included in the consolidated income tax return of Sempra Energy and are allocated income tax expense from Sempra Energy in an amount equal to that which would result from each company having always filed a separate return.

The following table summarizes revenues and cost of sales from unconsolidated affiliates.
REVENUES AND COST OF SALES FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)
 
Three months ended March 31,
 
2019
 
2018
Revenues:
 
 
 
Sempra Energy Consolidated
$
14

 
$
16

SDG&E
1

 
2

SoCalGas
17

 
17

Cost of Sales:
 
 
 
Sempra Energy Consolidated
$
14

 
$
12

SDG&E
20

 
19

SoCalGas
4

 
—
Other Income and Expense Table Other Income, Net on the Condensed Consolidated Statements of Operations consisted of the following:
OTHER INCOME, NET
 
 
(Dollars in millions)
 
 
 
Three months ended March 31,
 
2019
 
2018
Sempra Energy Consolidated:
 
 
 
Allowance for equity funds used during construction
$
21

 
$
27

Investment gains (losses)(1)
26

 
(1
)
Gains on interest rate and foreign exchange instruments, net
13

 
62

Foreign currency transaction gains, net(2)
7

 
30

Non-service component of net periodic benefit credit
24

 
32

Penalties related to billing practices OII
(8
)
 
—

Interest on regulatory balancing accounts, net
(1
)
 
—

Sundry, net
—

 
2

Total
$
82

 
$
152

SDG&E:
 
 
 
Allowance for equity funds used during construction
$
12

 
$
18

Non-service component of net periodic benefit credit
9

 
9

Sundry, net
1

 
1

Total
$
22

 
$
28

SoCalGas:
 
 
 
Allowance for equity funds used during construction
$
8

 
$
9

Non-service component of net periodic benefit credit
18

 
25

Penalties related to billing practices OII
(8
)
 
—

Interest on regulatory balancing accounts, net
(1
)
 
—

Sundry, net
(1
)
 
(1
)
Total
$
16

 
$
33

(1) 
Represents investment gains (losses) on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are partially offset by corresponding changes in compensation expense related to the plans, recorded in O&M on the Condensed Consolidated Statements of Operations.
(2) 
Includes gains of $10 million and $39 million in the three months ended March 31, 2019 and 2018, respectively, from translation to U.S. dollars of a Mexican peso-denominated loan to the IMG JV, which are offset by corresponding amounts included in Equity Earnings (Losses) on the Condensed Consolidated Statements of Operations.
Income Tax Expense and Effective Income Tax Rates Table We provide our calculations of ETRs in the following table.
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
 
Three months ended March 31,
 
2019
 
2018
Sempra Energy Consolidated:
 
 
 
Income tax expense from continuing operations
$
42

 
$
242

 
 
 
 
Income from continuing operations before income taxes
 
 
 
 and equity earnings (losses) of unconsolidated entities
$
501

 
$
593

Equity earnings, before income tax(1)
5

 
5

Pretax income
$
506

 
$
598

 
 
 
 
Effective income tax rate
8
%
 
40
%
SDG&E:
 
 
 
Income tax expense
$
5

 
$
56

Income before income taxes
$
182

 
$
225

Effective income tax rate
3
%
 
25
%
SoCalGas:
 
 
 
Income tax expense
$
19

 
$
59

Income before income taxes
$
283

 
$
284

Effective income tax rate
7
%
 
21
%

(1) 
We discuss how we recognize equity earnings in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.