|
||||||||||||
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|
||||||||||||
FORM 10-Q
|
||||||||||||
(Mark One)
|
||||||||||||
[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|||||||||||
For the quarterly period ended
|
September 30, 2013
|
|||||||||||
or
|
||||||||||||
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|||||||||||
For the transition period from
|
to
|
|||||||||||
Commission File No.
|
Exact Name of Registrants as Specified in their Charters, Address and Telephone Number
|
States of Incorporation
|
I.R.S. Employer
Identification Nos.
|
Former name, former address and former fiscal year, if changed since last report
|
||||||||
1-14201
|
SEMPRA ENERGY
|
California
|
33-0732627
|
No change
|
||||||||
101 Ash Street
|
||||||||||||
San Diego, California 92101
|
||||||||||||
(619)696-2000
|
||||||||||||
1-03779
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
California
|
95-1184800
|
No change
|
||||||||
8326 Century Park Court
|
||||||||||||
San Diego, California 92123
|
||||||||||||
(619)696-2000
|
||||||||||||
1-01402
|
SOUTHERN CALIFORNIA GAS COMPANY
|
California
|
95-1240705
|
No change
|
||||||||
555 West Fifth Street
|
||||||||||||
Los Angeles, California 90013
|
||||||||||||
(213)244-1200
|
||||||||||||
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
|
||||||||||||
Yes
|
X
|
No
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|
||||||||||||
Sempra Energy
|
Yes
|
X
|
No
|
|||||||||
San Diego Gas & Electric Company
|
Yes
|
X
|
No
|
|||||||||
Southern California Gas Company
|
Yes
|
X
|
No
|
|||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
||||||||||||
Large
accelerated filer
|
Accelerated filer
|
Non-accelerated filer
|
Smaller reporting company
|
|||||||||
Sempra Energy
|
[ X ]
|
[ ]
|
[ ]
|
[ ]
|
||||||||
San Diego Gas & Electric Company
|
[ ]
|
[ ]
|
[ X ]
|
[ ]
|
||||||||
Southern California Gas Company
|
[ ]
|
[ ]
|
[ X ]
|
[ ]
|
||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
||||||||||||
Sempra Energy
|
Yes
|
No
|
X
|
|||||||||
San Diego Gas & Electric Company
|
Yes
|
No
|
X
|
|||||||||
Southern California Gas Company
|
Yes
|
No
|
X
|
|||||||||
Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date.
|
||||||||||||
Common stock outstanding on November 1, 2013:
|
||||||||||||
Sempra Energy
|
244,399,914 shares
|
|||||||||||
San Diego Gas & Electric Company
|
Wholly owned by Enova Corporation, which is wholly owned by Sempra Energy
|
|||||||||||
Southern California Gas Company
|
Wholly owned by Pacific Enterprises, which is wholly owned by Sempra Energy
|
|||||||||||
SEMPRA ENERGY FORM 10-Q
SAN DIEGO GAS & ELECTRIC COMPANY FORM 10-Q
SOUTHERN CALIFORNIA GAS COMPANY FORM 10-Q
TABLE OF CONTENTS
|
||
Page
|
||
Information Regarding Forward-Looking Statements
|
4
|
|
PART I – FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements
|
5
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
77
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
119
|
Item 4.
|
Controls and Procedures
|
120
|
PART II – OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
121
|
Item 1A.
|
Risk Factors
|
121
|
Item 6.
|
Exhibits
|
123
|
Signatures
|
125
|
|
§
|
local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments;
|
§
|
actions and the timing of actions by the California Public Utilities Commission, California State Legislature, U.S. Department of Energy, Federal Energy Regulatory Commission, Nuclear Regulatory Commission, Atomic Safety and Licensing Board, California Energy Commission, California Air Resources Board, and other regulatory, governmental and environmental bodies in the United States and other countries in which we operate;
|
§
|
capital markets conditions, including the availability of credit and the liquidity of our investments;
|
§
|
the timing and success of business development efforts and construction, maintenance and capital projects, including risks inherent in the ability to obtain, and the timing of granting of, permits, licenses, certificates and other authorizations;
|
§
|
inflation, interest and exchange rates;
|
§
|
the impact of benchmark interest rates, generally Moody’s A-rated utility bond yields, on our California Utilities’ cost of capital;
|
§
|
energy markets, including the timing and extent of changes and volatility in commodity prices;
|
§
|
the availability of electric power, natural gas and liquefied natural gas, including disruptions caused by failures in the North American transmission grid, pipeline explosions, equipment failures and the decommissioning of San Onofre Nuclear Generating Station (SONGS);
|
§
|
weather conditions, natural disasters, catastrophic accidents, and conservation efforts;
|
§
|
risks inherent with nuclear power facilities and radioactive materials storage, including the catastrophic release of such materials, the disallowance of the recovery of the investment in, or operating costs of, the nuclear facility due to an extended outage and facility closure, and increased regulatory oversight;
|
§
|
risks posed by decisions and actions of third parties who control the operations of investments in which we do not have a controlling interest;
|
§
|
wars, terrorist attacks and cybersecurity threats;
|
§
|
business, regulatory, environmental and legal decisions and requirements;
|
§
|
expropriation of assets by foreign governments and title and other property disputes;
|
§
|
the impact on reliability of San Diego Gas & Electric Company’s electric transmission and distribution system due to increased power supply from renewable energy sources;
|
§
|
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 our 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;
|
§
|
the resolution of litigation; and
|
§
|
other uncertainties, all of which are difficult to predict and many of which are beyond our control.
|
SEMPRA ENERGY
|
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||
(Dollars in millions, except per share amounts)
|
|||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||
2013
|
2012
|
2013
|
2012
|
||||||
(unaudited)
|
|||||||||
REVENUES
|
|||||||||
Utilities
|
$
|
2,223
|
$
|
2,170
|
$
|
6,889
|
$
|
6,099
|
|
Energy-related businesses
|
328
|
337
|
963
|
880
|
|||||
Total revenues
|
2,551
|
2,507
|
7,852
|
6,979
|
|||||
EXPENSES AND OTHER INCOME
|
|||||||||
Utilities:
|
|||||||||
Cost of natural gas
|
(261)
|
(212)
|
(1,182)
|
(864)
|
|||||
Cost of electric fuel and purchased power
|
(537)
|
(515)
|
(1,461)
|
(1,252)
|
|||||
Energy-related businesses:
|
|||||||||
Cost of natural gas, electric fuel and purchased power
|
(120)
|
(136)
|
(325)
|
(346)
|
|||||
Other cost of sales
|
(47)
|
(43)
|
(144)
|
(117)
|
|||||
Operation and maintenance
|
(698)
|
(732)
|
(2,162)
|
(2,130)
|
|||||
Depreciation and amortization
|
(286)
|
(280)
|
(828)
|
(803)
|
|||||
Franchise fees and other taxes
|
(96)
|
(89)
|
(283)
|
(264)
|
|||||
Loss from plant closure
|
―
|
―
|
(200)
|
―
|
|||||
Gain on sale of assets
|
39
|
―
|
113
|
7
|
|||||
Equity earnings (losses), before income tax
|
3
|
(94)
|
21
|
(375)
|
|||||
Other income, net
|
16
|
44
|
79
|
137
|
|||||
Interest income
|
5
|
5
|
15
|
14
|
|||||
Interest expense
|
(137)
|
(126)
|
(413)
|
(352)
|
|||||
Income before income taxes and equity earnings
|
|||||||||
of certain unconsolidated subsidiaries
|
432
|
329
|
1,082
|
634
|
|||||
Income tax expense
|
(117)
|
(49)
|
(327)
|
(48)
|
|||||
Equity earnings, net of income tax
|
8
|
10
|
13
|
29
|
|||||
Net income
|
323
|
290
|
768
|
615
|
|||||
Earnings attributable to noncontrolling interests
|
(22)
|
(20)
|
(41)
|
(44)
|
|||||
Call premium on preferred stock of subsidiary
|
(3)
|
―
|
(3)
|
―
|
|||||
Preferred dividends of subsidiaries
|
(2)
|
(2)
|
(5)
|
(5)
|
|||||
Earnings
|
$
|
296
|
$
|
268
|
$
|
719
|
$
|
566
|
|
Basic earnings per common share
|
$
|
1.21
|
$
|
1.11
|
$
|
2.95
|
$
|
2.35
|
|
Weighted-average number of shares outstanding, basic (thousands)
|
244,140
|
241,689
|
243,682
|
241,133
|
|||||
Diluted earnings per common share
|
$
|
1.19
|
$
|
1.09
|
$
|
2.89
|
$
|
2.31
|
|
Weighted-average number of shares outstanding, diluted (thousands)
|
249,259
|
245,802
|
248,723
|
245,013
|
|||||
Dividends declared per share of common stock
|
$
|
0.63
|
$
|
0.60
|
$
|
1.89
|
$
|
1.80
|
|
See Notes to Condensed Consolidated Financial Statements.
|
SEMPRA ENERGY
|
||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||||||||
(Dollars in millions)
|
||||||||||||||
Three months ended September 30,
|
||||||||||||||
2013
|
2012
|
|||||||||||||
(unaudited)
|
||||||||||||||
Non-
|
Non-
|
|||||||||||||
Sempra
|
controlling
|
Sempra
|
controlling
|
|||||||||||
Energy
|
Interests
|
Total
|
Energy
|
Interests
|
Total
|
|||||||||
Net income
|
$
|
301
|
$
|
22
|
$
|
323
|
$
|
270
|
$
|
20
|
$
|
290
|
||
Other comprehensive income (loss), net of income tax:
|
||||||||||||||
Foreign currency translation adjustments
|
5
|
―
|
5
|
80
|
8
|
88
|
||||||||
Net actuarial gain (loss)
|
3
|
―
|
3
|
(10)
|
―
|
(10)
|
||||||||
Financial instruments
|
(4)
|
(2)
|
(6)
|
(3)
|
(4)
|
(7)
|
||||||||
Total other comprehensive income (loss)
|
4
|
(2)
|
2
|
67
|
4
|
71
|
||||||||
Total comprehensive income
|
305
|
20
|
325
|
337
|
24
|
361
|
||||||||
Preferred dividends of subsidiaries
|
(2)
|
―
|
(2)
|
(2)
|
―
|
(2)
|
||||||||
Total comprehensive income, after preferred
|
||||||||||||||
dividends of subsidiaries
|
$
|
303
|
$
|
20
|
$
|
323
|
$
|
335
|
$
|
24
|
$
|
359
|
||
Nine months ended September 30,
|
||||||||||||||
2013
|
2012
|
|||||||||||||
(unaudited)
|
||||||||||||||
Non-
|
Non-
|
|||||||||||||
Sempra
|
controlling
|
Sempra
|
controlling
|
|||||||||||
Energy
|
Interests
|
Total
|
Energy
|
Interests
|
Total
|
|||||||||
Net income
|
$
|
727
|
$
|
41
|
$
|
768
|
$
|
571
|
$
|
44
|
$
|
615
|
||
Other comprehensive income (loss), net of income tax:
|
||||||||||||||
Foreign currency translation adjustments
|
149
|
(24)
|
125
|
114
|
11
|
125
|
||||||||
Net actuarial gain (loss)
|
7
|
―
|
7
|
(5)
|
―
|
(5)
|
||||||||
Financial instruments
|
5
|
16
|
21
|
(9)
|
(13)
|
(22)
|
||||||||
Total other comprehensive income (loss)
|
161
|
(8)
|
153
|
100
|
(2)
|
98
|
||||||||
Total comprehensive income
|
888
|
33
|
921
|
671
|
42
|
713
|
||||||||
Preferred dividends of subsidiaries
|
(5)
|
―
|
(5)
|
(5)
|
―
|
(5)
|
||||||||
Total comprehensive income, after preferred
|
||||||||||||||
dividends of subsidiaries
|
$
|
883
|
$
|
33
|
$
|
916
|
$
|
666
|
$
|
42
|
$
|
708
|
||
See Notes to Condensed Consolidated Financial Statements.
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
September 30,
|
December 31,
|
||||
2013
|
2012(1)
|
||||
(unaudited)
|
|||||
ASSETS
|
|||||
Current assets:
|
|||||
Cash and cash equivalents
|
$
|
1,061
|
$
|
475
|
|
Restricted cash
|
28
|
46
|
|||
Trade accounts receivable, net
|
982
|
1,146
|
|||
Other accounts and notes receivable, net
|
194
|
153
|
|||
Income taxes receivable
|
132
|
56
|
|||
Deferred income taxes
|
119
|
148
|
|||
Inventories
|
463
|
408
|
|||
Regulatory balancing accounts – undercollected
|
346
|
395
|
|||
Regulatory assets
|
100
|
62
|
|||
Fixed-price contracts and other derivatives
|
76
|
95
|
|||
U.S. Treasury grants receivable
|
―
|
258
|
|||
Asset held for sale, power plant
|
―
|
296
|
|||
Other
|
211
|
157
|
|||
Total current assets
|
3,712
|
3,695
|
|||
Investments and other assets:
|
|||||
Restricted cash
|
21
|
22
|
|||
Regulatory assets arising from pension and other postretirement
|
|||||
benefit obligations
|
1,173
|
1,151
|
|||
Regulatory assets arising from wildfire litigation costs
|
339
|
364
|
|||
Other regulatory assets
|
1,947
|
1,227
|
|||
Nuclear decommissioning trusts
|
981
|
908
|
|||
Investments
|
1,564
|
1,516
|
|||
Goodwill
|
1,045
|
1,111
|
|||
Other intangible assets
|
428
|
436
|
|||
Sundry
|
928
|
878
|
|||
Total investments and other assets
|
8,426
|
7,613
|
|||
Property, plant and equipment:
|
|||||
Property, plant and equipment
|
33,573
|
33,528
|
|||
Less accumulated depreciation and amortization
|
(8,810)
|
(8,337)
|
|||
Property, plant and equipment, net ($445 and $466 at September 30, 2013 and
December 31, 2012, respectively, related to VIE)
|
24,763
|
25,191
|
|||
Total assets
|
$
|
36,901
|
$
|
36,499
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
September 30,
|
December 31,
|
||||
2013
|
2012(1)
|
||||
(unaudited)
|
|||||
LIABILITIES AND EQUITY
|
|||||
Current liabilities:
|
|||||
Short-term debt
|
$
|
522
|
$
|
546
|
|
Accounts payable – trade
|
859
|
976
|
|||
Accounts payable – other
|
131
|
134
|
|||
Dividends and interest payable
|
314
|
266
|
|||
Accrued compensation and benefits
|
286
|
337
|
|||
Regulatory balancing accounts – overcollected
|
82
|
141
|
|||
Current portion of long-term debt
|
1,441
|
725
|
|||
Fixed-price contracts and other derivatives
|
64
|
77
|
|||
Customer deposits
|
155
|
143
|
|||
Reserve for wildfire litigation
|
127
|
305
|
|||
Other
|
549
|
608
|
|||
Total current liabilities
|
4,530
|
4,258
|
|||
Long-term debt ($327 and $335 at September 30, 2013 and December 31, 2012, respectively,
related to VIE)
|
10,478
|
11,621
|
|||
Deferred credits and other liabilities:
|
|||||
Customer advances for construction
|
145
|
144
|
|||
Pension and other postretirement benefit obligations, net of plan assets
|
1,472
|
1,456
|
|||
Deferred income taxes
|
2,543
|
2,100
|
|||
Deferred investment tax credits
|
43
|
46
|
|||
Regulatory liabilities arising from removal obligations
|
2,541
|
2,720
|
|||
Asset retirement obligations
|
2,111
|
2,033
|
|||
Fixed-price contracts and other derivatives
|
239
|
252
|
|||
Deferred credits and other
|
1,045
|
1,107
|
|||
Total deferred credits and other liabilities
|
10,139
|
9,858
|
|||
Contingently redeemable preferred stock of subsidiary
|
―
|
79
|
|||
Commitments and contingencies (Note 10)
|
|||||
Equity:
|
|||||
Preferred stock (50 million shares authorized; none issued)
|
―
|
―
|
|||
Common stock (750 million shares authorized; 244 million and 242 million shares
|
|||||
outstanding at September 30, 2013 and December 31, 2012, respectively; no par value)
|
2,424
|
2,217
|
|||
Retained earnings
|
8,700
|
8,441
|
|||
Accumulated other comprehensive income (loss)
|
(215)
|
(376)
|
|||
Total Sempra Energy shareholders’ equity
|
10,909
|
10,282
|
|||
Preferred stock of subsidiary
|
20
|
20
|
|||
Other noncontrolling interests
|
825
|
381
|
|||
Total equity
|
11,754
|
10,683
|
|||
Total liabilities and equity
|
$
|
36,901
|
$
|
36,499
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||
(Dollars in millions)
|
|||||
Nine months ended September 30,
|
|||||
2013
|
2012
|
||||
(unaudited)
|
|||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|||||
Net income
|
$
|
768
|
$
|
615
|
|
Adjustments to reconcile net income to net cash provided
|
|||||
by operating activities:
|
|||||
Depreciation and amortization
|
828
|
803
|
|||
Deferred income taxes and investment tax credits
|
327
|
(45)
|
|||
Gain on sale of assets
|
(113)
|
(7)
|
|||
Loss from plant closure
|
200
|
―
|
|||
Equity (earnings) losses
|
(34)
|
346
|
|||
Fixed-price contracts and other derivatives
|
(25)
|
1
|
|||
Other
|
23
|
(1)
|
|||
Net change in other working capital components
|
(454)
|
(373)
|
|||
Changes in other assets
|
(203)
|
202
|
|||
Changes in other liabilities
|
13
|
147
|
|||
Net cash provided by operating activities
|
1,330
|
1,688
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|||||
Expenditures for property, plant and equipment
|
(1,785)
|
(2,241)
|
|||
Expenditures for investments and acquisition of businesses, net of cash acquired
|
(21)
|
(359)
|
|||
Proceeds from sale of assets and investment
|
566
|
9
|
|||
Proceeds from U.S. Treasury grants
|
238
|
―
|
|||
Distributions from investments
|
141
|
43
|
|||
Purchases of nuclear decommissioning and other trust assets
|
(514)
|
(534)
|
|||
Proceeds from sales by nuclear decommissioning and other trusts
|
510
|
534
|
|||
Decrease in restricted cash
|
285
|
89
|
|||
Increase in restricted cash
|
(311)
|
(105)
|
|||
Other
|
(10)
|
(12)
|
|||
Net cash used in investing activities
|
(901)
|
(2,576)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|||||
Common dividends paid
|
(452)
|
(405)
|
|||
Preferred dividends paid by subsidiaries
|
(5)
|
(5)
|
|||
Issuances of common stock
|
57
|
50
|
|||
Repurchases of common stock
|
(45)
|
(16)
|
|||
Issuances of debt (maturities greater than 90 days)
|
1,404
|
2,294
|
|||
Payments on debt (maturities greater than 90 days)
|
(1,444)
|
(563)
|
|||
Proceeds from sale of noncontrolling interests, net of $25 in offering costs
|
574
|
―
|
|||
Increase (decrease) in short-term debt, net
|
81
|
(142)
|
|||
Distributions to noncontrolling interests
|
(28)
|
(36)
|
|||
Other
|
15
|
(20)
|
|||
Net cash provided by financing activities
|
157
|
1,157
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
―
|
9
|
|||
Increase in cash and cash equivalents
|
586
|
278
|
|||
Cash and cash equivalents, January 1
|
475
|
252
|
|||
Cash and cash equivalents, September 30
|
$
|
1,061
|
$
|
530
|
|
See Notes to Condensed Consolidated Financial Statements.
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
|
|||||
(Dollars in millions)
|
|||||
Nine months ended September 30,
|
|||||
2013
|
2012
|
||||
(unaudited)
|
|||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|||||
Interest payments, net of amounts capitalized
|
$
|
359
|
$
|
278
|
|
Income tax payments, net of refunds
|
106
|
99
|
|||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
|
|||||
Acquisition of businesses:
|
|||||
Assets acquired
|
$
|
13
|
$
|
29
|
|
Cash paid, net of cash acquired
|
(11)
|
(19)
|
|||
Liabilities assumed
|
$
|
2
|
$
|
10
|
|
Nuclear facility plant reclassified to regulatory asset, net of depreciation and amortization
|
$
|
512
|
$
|
―
|
|
Accrued capital expenditures
|
285
|
315
|
|||
Capital expenditures recoverable by U.S. Treasury grants receivable
|
3
|
136
|
|||
Sequestration of U.S. Treasury grants receivable
|
(23)
|
―
|
|||
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES
|
|||||
Call premium on preferred stock of subsidiary
|
$
|
3
|
$
|
―
|
|
Dividends declared but not paid
|
158
|
149
|
|||
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||
(Dollars in millions)
|
||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
(unaudited)
|
||||||||
Operating revenues
|
||||||||
Electric
|
$
|
970
|
$
|
998
|
$
|
2,685
|
$
|
2,349
|
Natural gas
|
93
|
94
|
381
|
357
|
||||
Total operating revenues
|
1,063
|
1,092
|
3,066
|
2,706
|
||||
Operating expenses
|
||||||||
Cost of electric fuel and purchased power
|
315
|
301
|
776
|
604
|
||||
Cost of natural gas
|
36
|
29
|
157
|
130
|
||||
Operation and maintenance
|
266
|
309
|
852
|
852
|
||||
Depreciation and amortization
|
126
|
128
|
367
|
359
|
||||
Franchise fees and other taxes
|
57
|
55
|
158
|
144
|
||||
Loss from plant closure
|
―
|
―
|
200
|
―
|
||||
Total operating expenses
|
800
|
822
|
2,510
|
2,089
|
||||
Operating income
|
263
|
270
|
556
|
617
|
||||
Other income, net
|
10
|
5
|
30
|
59
|
||||
Interest income
|
―
|
―
|
1
|
―
|
||||
Interest expense
|
(50)
|
(49)
|
(147)
|
(124)
|
||||
Income before income taxes
|
223
|
226
|
440
|
552
|
||||
Income tax expense
|
(84)
|
(38)
|
(147)
|
(151)
|
||||
Net income
|
139
|
188
|
293
|
401
|
||||
Earnings attributable to noncontrolling interest
|
(5)
|
(12)
|
(1)
|
(23)
|
||||
Earnings
|
134
|
176
|
292
|
378
|
||||
Call premium on preferred stock
|
(3)
|
―
|
(3)
|
―
|
||||
Preferred dividend requirements
|
(2)
|
(2)
|
(4)
|
(4)
|
||||
Earnings attributable to common shares
|
$
|
129
|
$
|
174
|
$
|
285
|
$
|
374
|
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||||||||||
(Dollars in millions)
|
|||||||||||||
Three months ended September 30,
|
|||||||||||||
2013
|
2012
|
||||||||||||
(unaudited)
|
|||||||||||||
Non-
|
Non-
|
||||||||||||
controlling
|
controlling
|
||||||||||||
SDG&E
|
Interest
|
Total
|
SDG&E
|
Interest
|
Total
|
||||||||
Net income
|
$
|
134
|
$
|
5
|
$
|
139
|
$
|
176
|
$
|
12
|
$
|
188
|
|
Other comprehensive income (loss), net of income tax:
|
|||||||||||||
Net actuarial gain
|
1
|
―
|
1
|
―
|
―
|
―
|
|||||||
Financial instruments
|
―
|
(1)
|
(1)
|
―
|
(4)
|
(4)
|
|||||||
Total other comprehensive income (loss)
|
1
|
(1)
|
―
|
―
|
(4)
|
(4)
|
|||||||
Total comprehensive income
|
$
|
135
|
$
|
4
|
$
|
139
|
$
|
176
|
$
|
8
|
$
|
184
|
|
Nine months ended September 30,
|
|||||||||||||
2013
|
2012
|
||||||||||||
(unaudited)
|
|||||||||||||
Non-
|
Non-
|
||||||||||||
controlling
|
controlling
|
||||||||||||
SDG&E
|
Interest
|
Total
|
SDG&E
|
Interest
|
Total
|
||||||||
Net income
|
$
|
292
|
$
|
1
|
$
|
293
|
$
|
378
|
$
|
23
|
$
|
401
|
|
Other comprehensive income (loss), net of income tax:
|
|||||||||||||
Net actuarial gain
|
2
|
―
|
2
|
―
|
―
|
―
|
|||||||
Financial instruments
|
―
|
14
|
14
|
―
|
(13)
|
(13)
|
|||||||
Total other comprehensive income (loss)
|
2
|
14
|
16
|
―
|
(13)
|
(13)
|
|||||||
Total comprehensive income
|
$
|
294
|
$
|
15
|
$
|
309
|
$
|
378
|
$
|
10
|
$
|
388
|
|
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
September 30,
|
December 31,
|
||||
2013
|
2012(1)
|
||||
(unaudited)
|
|||||
ASSETS
|
|||||
Current assets:
|
|||||
Cash and cash equivalents
|
$
|
167
|
$
|
87
|
|
Restricted cash
|
9
|
10
|
|||
Accounts receivable – trade, net
|
335
|
252
|
|||
Accounts receivable – other, net
|
36
|
21
|
|||
Due from unconsolidated affiliates
|
1
|
39
|
|||
Income taxes receivable
|
―
|
35
|
|||
Deferred income taxes
|
53
|
―
|
|||
Inventories
|
78
|
82
|
|||
Regulatory balancing accounts, net
|
346
|
395
|
|||
Regulatory assets arising from fixed-price contracts and other derivatives
|
40
|
39
|
|||
Other regulatory assets
|
48
|
10
|
|||
Fixed-price contracts and other derivatives
|
21
|
41
|
|||
Other
|
82
|
76
|
|||
Total current assets
|
1,216
|
1,087
|
|||
Other assets:
|
|||||
Restricted cash
|
21
|
22
|
|||
Deferred taxes recoverable in rates
|
755
|
718
|
|||
Regulatory assets arising from fixed-price contracts and other derivatives
|
90
|
110
|
|||
Regulatory assets arising from pension and other postretirement
|
|||||
benefit obligations
|
292
|
303
|
|||
Regulatory assets arising from wildfire litigation costs
|
339
|
364
|
|||
Other regulatory assets
|
834
|
252
|
|||
Nuclear decommissioning trusts
|
981
|
908
|
|||
Sundry
|
164
|
117
|
|||
Total other assets
|
3,476
|
2,794
|
|||
Property, plant and equipment:
|
|||||
Property, plant and equipment
|
14,049
|
14,124
|
|||
Less accumulated depreciation and amortization
|
(3,466)
|
(3,261)
|
|||
Property, plant and equipment, net ($445 and $466 at September 30, 2013 and
December 31, 2012, respectively, related to VIE)
|
10,583
|
10,863
|
|||
Total assets
|
$
|
15,275
|
$
|
14,744
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
September 30,
|
December 31,
|
||||
2013
|
2012(1)
|
||||
(unaudited)
|
|||||
LIABILITIES AND EQUITY
|
|||||
Current liabilities:
|
|||||
Accounts payable
|
$
|
320
|
$
|
300
|
|
Due to unconsolidated affiliates
|
13
|
19
|
|||
Income taxes payable
|
30
|
―
|
|||
Deferred income taxes
|
―
|
26
|
|||
Dividends and interest payable
|
53
|
36
|
|||
Accrued compensation and benefits
|
82
|
129
|
|||
Current portion of long-term debt
|
45
|
16
|
|||
Fixed-price contracts and other derivatives
|
45
|
56
|
|||
Customer deposits
|
71
|
60
|
|||
Construction deposits
|
8
|
51
|
|||
Reserve for wildfire litigation
|
127
|
305
|
|||
Preferred stock pending redemption
|
82
|
―
|
|||
Other
|
213
|
106
|
|||
Total current liabilities
|
1,089
|
1,104
|
|||
Long-term debt ($327 and $335 at September 30, 2013 and December 31, 2012,
respectively, related to VIE)
|
4,527
|
4,292
|
|||
Deferred credits and other liabilities:
|
|||||
Customer advances for construction
|
24
|
17
|
|||
Pension and other postretirement benefit obligations, net of plan assets
|
328
|
340
|
|||
Deferred income taxes
|
1,872
|
1,636
|
|||
Deferred investment tax credits
|
24
|
25
|
|||
Regulatory liabilities arising from removal obligations
|
1,347
|
1,603
|
|||
Asset retirement obligations
|
901
|
733
|
|||
Fixed-price contracts and other derivatives
|
183
|
209
|
|||
Deferred credits and other
|
392
|
408
|
|||
Total deferred credits and other liabilities
|
5,071
|
4,971
|
|||
Contingently redeemable preferred stock
|
―
|
79
|
|||
Commitments and contingencies (Note 10)
|
|||||
Equity:
|
|||||
Common stock (255 million shares authorized; 117 million shares outstanding;
|
|||||
no par value)
|
1,338
|
1,338
|
|||
Retained earnings
|
3,180
|
2,895
|
|||
Accumulated other comprehensive income (loss)
|
(9)
|
(11)
|
|||
Total SDG&E shareholder's equity
|
4,509
|
4,222
|
|||
Noncontrolling interest
|
79
|
76
|
|||
Total equity
|
4,588
|
4,298
|
|||
Total liabilities and equity
|
$
|
15,275
|
$
|
14,744
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||
(Dollars in millions)
|
||||
Nine months ended
September 30,
|
||||
2013
|
2012
|
|||
(unaudited)
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||
Net income
|
$
|
293
|
$
|
401
|
Adjustments to reconcile net income to net cash provided by
|
||||
operating activities:
|
||||
Depreciation and amortization
|
367
|
359
|
||
Deferred income taxes and investment tax credits
|
100
|
262
|
||
Loss from plant closure
|
200
|
―
|
||
Fixed-price contracts and other derivatives
|
(7)
|
(9)
|
||
Other
|
(9)
|
(55)
|
||
Net change in other working capital components
|
(284)
|
(518)
|
||
Changes in other assets
|
(164)
|
201
|
||
Changes in other liabilities
|
13
|
129
|
||
Net cash provided by operating activities
|
509
|
770
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||
Expenditures for property, plant and equipment
|
(679)
|
(998)
|
||
Proceeds from sale of assets
|
8
|
―
|
||
Purchases of nuclear decommissioning trust assets
|
(511)
|
(530)
|
||
Proceeds from sales by nuclear decommissioning trusts
|
507
|
524
|
||
Decrease in restricted cash
|
54
|
74
|
||
Increase in restricted cash
|
(52)
|
(62)
|
||
Other
|
(5)
|
―
|
||
Net cash used in investing activities
|
(678)
|
(992)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||
Capital distribution at Otay Mesa VIE
|
(12)
|
(22)
|
||
Preferred dividends paid
|
(4)
|
(4)
|
||
Issuances of long-term debt
|
450
|
249
|
||
Payments on long-term debt
|
(183)
|
(7)
|
||
Increase in short-term debt, net
|
―
|
2
|
||
Other
|
(2)
|
(3)
|
||
Net cash provided by financing activities
|
249
|
215
|
||
Increase (decrease) in cash and cash equivalents
|
80
|
(7)
|
||
Cash and cash equivalents, January 1
|
87
|
29
|
||
Cash and cash equivalents, September 30
|
$
|
167
|
$
|
22
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
||||
Interest payments, net of amounts capitalized
|
$
|
127
|
$
|
96
|
Income tax payments (refunds), net
|
33
|
(121)
|
||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
|
||||
Nuclear facility plant reclassified to regulatory asset, net of depreciation and amortization
|
$
|
512
|
$
|
―
|
Accrued capital expenditures
|
108
|
87
|
||
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES
|
||||
Call premium on preferred stock
|
$
|
3
|
$
|
―
|
Dividends declared but not paid
|
1
|
1
|
||
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||
(Dollars in millions)
|
||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
(unaudited)
|
||||||||
Operating revenues
|
$
|
807
|
$
|
728
|
$
|
2,694
|
$
|
2,328
|
Operating expenses
|
||||||||
Cost of natural gas
|
209
|
175
|
966
|
703
|
||||
Operation and maintenance
|
314
|
316
|
936
|
933
|
||||
Depreciation and amortization
|
100
|
91
|
280
|
268
|
||||
Franchise fees and other taxes
|
29
|
27
|
95
|
91
|
||||
Total operating expenses
|
652
|
609
|
2,277
|
1,995
|
||||
Operating income
|
155
|
119
|
417
|
333
|
||||
Other income, net
|
2
|
6
|
9
|
14
|
||||
Interest expense
|
(17)
|
(17)
|
(52)
|
(51)
|
||||
Income before income taxes
|
140
|
108
|
374
|
296
|
||||
Income tax expense
|
(38)
|
(37)
|
(107)
|
(105)
|
||||
Net income
|
102
|
71
|
267
|
191
|
||||
Preferred dividend requirements
|
―
|
―
|
(1)
|
(1)
|
||||
Earnings attributable to common shares
|
$
|
102
|
$
|
71
|
$
|
266
|
$
|
190
|
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
|||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||
(Dollars in millions)
|
|||||
Three months ended September 30,
|
|||||
2013
|
2012
|
||||
(unaudited)
|
|||||
Net income
|
$
|
102
|
$
|
71
|
|
Total other comprehensive income, net of income tax
|
―
|
―
|
|||
Total comprehensive income
|
$
|
102
|
$
|
71
|
|
Nine months ended September 30,
|
|||||
2013
|
2012
|
||||
(unaudited)
|
|||||
Net income
|
$
|
267
|
$
|
191
|
|
Other comprehensive income, net of income tax:
|
|||||
Financial instruments
|
1
|
1
|
|||
Total other comprehensive income
|
1
|
1
|
|||
Total comprehensive income
|
$
|
268
|
$
|
192
|
|
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
September 30,
|
December 31,
|
||||
2013
|
2012(1)
|
||||
(unaudited)
|
|||||
ASSETS
|
|||||
Current assets:
|
|||||
Cash and cash equivalents
|
$
|
15
|
$
|
83
|
|
Accounts receivable – trade, net
|
314
|
539
|
|||
Accounts receivable – other, net
|
77
|
51
|
|||
Due from unconsolidated affiliates
|
14
|
24
|
|||
Income taxes receivable
|
139
|
104
|
|||
Deferred income taxes
|
―
|
3
|
|||
Inventories
|
177
|
151
|
|||
Regulatory assets
|
4
|
4
|
|||
Other
|
34
|
35
|
|||
Total current assets
|
774
|
994
|
|||
Other assets:
|
|||||
Regulatory assets arising from pension and other postretirement
|
|||||
benefit obligations
|
869
|
835
|
|||
Other regulatory assets
|
267
|
148
|
|||
Sundry
|
125
|
77
|
|||
Total other assets
|
1,261
|
1,060
|
|||
Property, plant and equipment:
|
|||||
Property, plant and equipment
|
11,558
|
11,187
|
|||
Less accumulated depreciation and amortization
|
(4,305)
|
(4,170)
|
|||
Property, plant and equipment, net
|
7,253
|
7,017
|
|||
Total assets
|
$
|
9,288
|
$
|
9,071
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
September 30,
|
December 31,
|
||||
2013
|
2012(1)
|
||||
(unaudited)
|
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||
Current liabilities:
|
|||||
Accounts payable – trade
|
$
|
256
|
$
|
383
|
|
Accounts payable – other
|
81
|
82
|
|||
Due to unconsolidated affiliate
|
20
|
37
|
|||
Deferred income taxes
|
32
|
―
|
|||
Accrued compensation and benefits
|
118
|
116
|
|||
Regulatory balancing accounts, net
|
82
|
141
|
|||
Current portion of long-term debt
|
252
|
4
|
|||
Customer deposits
|
76
|
76
|
|||
Other
|
124
|
124
|
|||
Total current liabilities
|
1,041
|
963
|
|||
Long-term debt
|
1,159
|
1,409
|
|||
Deferred credits and other liabilities:
|
|||||
Customer advances for construction
|
107
|
111
|
|||
Pension and other postretirement benefit obligations, net of plan assets
|
888
|
855
|
|||
Deferred income taxes
|
978
|
881
|
|||
Deferred investment tax credits
|
19
|
20
|
|||
Regulatory liabilities arising from removal obligations
|
1,178
|
1,103
|
|||
Asset retirement obligations
|
1,170
|
1,238
|
|||
Deferred credits and other
|
296
|
256
|
|||
Total deferred credits and other liabilities
|
4,636
|
4,464
|
|||
Commitments and contingencies (Note 10)
|
|||||
Shareholders' equity:
|
|||||
Preferred stock
|
22
|
22
|
|||
Common stock (100 million shares authorized; 91 million shares outstanding;
|
|||||
no par value)
|
866
|
866
|
|||
Retained earnings
|
1,581
|
1,365
|
|||
Accumulated other comprehensive income (loss)
|
(17)
|
(18)
|
|||
Total shareholders' equity
|
2,452
|
2,235
|
|||
Total liabilities and shareholders' equity
|
$
|
9,288
|
$
|
9,071
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY AND SUBSIDIARIES
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||
(Dollars in millions)
|
||||
Nine months ended September 30,
|
||||
2013
|
2012
|
|||
(unaudited)
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||
Net income
|
$
|
267
|
$
|
191
|
Adjustments to reconcile net income to net cash provided by
|
||||
operating activities:
|
||||
Depreciation and amortization
|
280
|
268
|
||
Deferred income taxes and investment tax credits
|
72
|
39
|
||
Other
|
(6)
|
(9)
|
||
Net change in other working capital components
|
(56)
|
240
|
||
Changes in other assets
|
(65)
|
4
|
||
Changes in other liabilities
|
(5)
|
13
|
||
Net cash provided by operating activities
|
487
|
746
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||
Expenditures for property, plant and equipment
|
(521)
|
(462)
|
||
Decrease (increase) in loans to affiliates, net
|
17
|
(257)
|
||
Net cash used in investing activities
|
(504)
|
(719)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||
Issuances of long-term debt
|
―
|
348
|
||
Common dividends paid
|
(50)
|
(150)
|
||
Preferred dividends paid
|
(1)
|
(1)
|
||
Debt issuance costs
|
―
|
(3)
|
||
Net cash (used in) provided by financing activities
|
(51)
|
194
|
||
(Decrease) increase in cash and cash equivalents
|
(68)
|
221
|
||
Cash and cash equivalents, January 1
|
83
|
36
|
||
Cash and cash equivalents, September 30
|
$
|
15
|
$
|
257
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
||||
Interest payments, net of amounts capitalized
|
$
|
44
|
$
|
36
|
Income tax payments, net of refunds
|
66
|
46
|
||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
|
||||
Accrued capital expenditures
|
$
|
97
|
$
|
69
|
See Notes to Condensed Consolidated Financial Statements.
|
§
|
San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas), which are separate, reportable segments;
|
§
|
Sempra International, which includes our Sempra South American Utilities and Sempra Mexico reportable segments; and
|
§
|
Sempra U.S. Gas & Power, which includes our Sempra Renewables and Sempra Natural Gas reportable segments.
|
(Dollars in millions)
|
Copper Mountain Solar 2
|
Mesquite Solar 1
|
|||
Proceeds from sale, net of transaction costs(1)
|
$
|
68
|
$
|
100
|
|
Property, plant and equipment, net
|
(266)
|
(461)
|
|||
Other assets
|
(30)
|
(72)
|
|||
Long-term debt, including current portion
|
146
|
297
|
|||
Other liabilities
|
19
|
31
|
|||
Gain on sale of assets
|
(4)
|
(36)
|
|||
Equity method investments upon deconsolidation
|
$
|
(67)
|
$
|
(141)
|
|
(1)
|
Transaction costs were $3 million at both Copper Mountain Solar 2 and Mesquite Solar 1.
|
INVENTORY BALANCES
|
|||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||
Natural Gas
|
Liquefied Natural Gas
|
Materials and Supplies
|
Total
|
||||||||||||||
September 30, 2013
|
December 31, 2012
|
September 30, 2013
|
December 31, 2012
|
September 30, 2013
|
December 31, 2012
|
September 30, 2013
|
December 31, 2012
|
||||||||||
SDG&E
|
$
|
5
|
$
|
3
|
$
|
―
|
$
|
―
|
$
|
73
|
$
|
79
|
$
|
78
|
$
|
82
|
|
SoCalGas
|
150
|
128
|
―
|
―
|
27
|
23
|
177
|
151
|
|||||||||
Sempra South American
|
|||||||||||||||||
Utilities
|
―
|
―
|
―
|
―
|
43
|
34
|
43
|
34
|
|||||||||
Sempra Mexico
|
―
|
―
|
3
|
8
|
16
|
8
|
19
|
16
|
|||||||||
Sempra Renewables
|
―
|
―
|
―
|
―
|
2
|
3
|
2
|
3
|
|||||||||
Sempra Natural Gas
|
133
|
109
|
5
|
8
|
6
|
5
|
144
|
122
|
|||||||||
Sempra Energy
|
|||||||||||||||||
Consolidated
|
$
|
288
|
$
|
240
|
$
|
8
|
$
|
16
|
$
|
167
|
$
|
152
|
$
|
463
|
$
|
408
|
|
§
|
the purpose and design of the VIE;
|
§
|
the nature of the VIE’s risks and the risks we absorb;
|
§
|
the power to direct activities that most significantly impact the economic performance of the VIE; and
|
§
|
the obligation to absorb losses or right to receive benefits that could be significant to the VIE.
|
AMOUNTS ASSOCIATED WITH OTAY MESA VIE
|
||||||||
(Dollars in millions)
|
||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Operating revenues
|
||||||||
Electric
|
$
|
(4)
|
$
|
―
|
$
|
―
|
$
|
―
|
Natural gas
|
―
|
―
|
―
|
―
|
||||
Total operating revenues
|
(4)
|
―
|
―
|
―
|
||||
Operating expenses
|
||||||||
Cost of electric fuel and purchased power
|
(27)
|
(26)
|
(65)
|
(66)
|
||||
Operation and maintenance
|
7
|
4
|
33
|
15
|
||||
Depreciation and amortization
|
7
|
7
|
20
|
19
|
||||
Total operating expenses
|
(13)
|
(15)
|
(12)
|
(32)
|
||||
Operating income
|
9
|
15
|
12
|
32
|
||||
Other loss, net
|
―
|
―
|
―
|
(1)
|
||||
Interest expense
|
(4)
|
(3)
|
(11)
|
(8)
|
||||
Income before income taxes/Net income
|
5
|
12
|
1
|
23
|
||||
Earnings attributable to noncontrolling interest
|
(5)
|
(12)
|
(1)
|
(23)
|
||||
Earnings
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
―
|
CHANGES IN ASSET RETIREMENT OBLIGATIONS
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
Sempra Energy
|
|||||||||||||||
Consolidated
|
SDG&E
|
SoCalGas
|
|||||||||||||
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
||||||||||
Balance at January 1(1)
|
$
|
2,056
|
$
|
1,925
|
$
|
741
|
$
|
698
|
$
|
1,253
|
$
|
1,175
|
|||
Accretion expense
|
74
|
69
|
35
|
31
|
37
|
36
|
|||||||||
Liabilities incurred
|
4
|
15
|
―
|
―
|
―
|
―
|
|||||||||
Payments
|
(1)
|
(1)
|
―
|
―
|
―
|
―
|
|||||||||
Revisions, GRC-related(2)
|
(135)
|
(8)
|
(30)
|
―
|
(105)
|
―
|
|||||||||
Revisions, other(3)
|
181
|
―
|
207
|
―
|
―
|
―
|
|||||||||
Balance at September 30(1)
|
$
|
2,179
|
$
|
2,000
|
$
|
953
|
$
|
729
|
$
|
1,185
|
$
|
1,211
|
|||
(1)
|
The current portions of the obligations are included in Other Current Liabilities on the Condensed Consolidated Balance Sheets.
|
||||||||||||||
(2)
|
The decreases in asset retirement obligations in 2013 at SDG&E and SoCalGas are due to revised estimates related to the 2012 General Rate Case (GRC) that received final approval in May 2013. At SDG&E, these revisions included increases in asset service lives ranging from 2 percent to 7 percent, and lower estimated cost of removal. At SoCalGas, the decrease includes increases in asset service lives ranging from 4 percent to 6 percent, partially offset by a higher estimated cost of removal.
|
||||||||||||||
(3)
|
The increase in asset retirement obligations in 2013 at SDG&E is due to revised estimates recorded in the third quarter of 2013 related to the early decommissioning of SONGS Units 2 and 3 (see Note 9).
|
NET PERIODIC BENEFIT COST – SEMPRA ENERGY CONSOLIDATED
|
||||||||
(Dollars in millions)
|
||||||||
Pension Benefits
|
Other Postretirement Benefits
|
|||||||
Three months ended September 30,
|
Three months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Service cost
|
$
|
28
|
$
|
23
|
$
|
8
|
$
|
4
|
Interest cost
|
35
|
40
|
10
|
11
|
||||
Expected return on assets
|
(39)
|
(38)
|
(15)
|
(13)
|
||||
Amortization of:
|
||||||||
Prior service cost (credit)
|
1
|
―
|
(1)
|
―
|
||||
Actuarial loss
|
11
|
12
|
―
|
2
|
||||
Settlement
|
1
|
1
|
―
|
―
|
||||
Regulatory adjustment
|
(14)
|
9
|
3
|
3
|
||||
Total net periodic benefit cost
|
$
|
23
|
$
|
47
|
$
|
5
|
$
|
7
|
Nine months ended September 30,
|
Nine months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Service cost
|
$
|
82
|
$
|
68
|
$
|
21
|
$
|
19
|
Interest cost
|
111
|
122
|
33
|
39
|
||||
Expected return on assets
|
(121)
|
(116)
|
(44)
|
(40)
|
||||
Amortization of:
|
||||||||
Prior service cost (credit)
|
3
|
2
|
(3)
|
(2)
|
||||
Actuarial loss
|
41
|
35
|
5
|
9
|
||||
Settlement
|
1
|
8
|
―
|
―
|
||||
Regulatory adjustment
|
(65)
|
(9)
|
7
|
8
|
||||
Total net periodic benefit cost
|
$
|
52
|
$
|
110
|
$
|
19
|
$
|
33
|
NET PERIODIC BENEFIT COST – SDG&E
|
||||||||
(Dollars in millions)
|
||||||||
Pension Benefits
|
Other Postretirement Benefits
|
|||||||
Three months ended September 30,
|
Three months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Service cost
|
$
|
8
|
$
|
7
|
$
|
2
|
$
|
1
|
Interest cost
|
9
|
11
|
2
|
2
|
||||
Expected return on assets
|
(13)
|
(11)
|
(3)
|
(1)
|
||||
Amortization of:
|
||||||||
Prior service cost
|
―
|
―
|
1
|
1
|
||||
Actuarial loss
|
3
|
4
|
―
|
―
|
||||
Settlement
|
1
|
(1)
|
―
|
―
|
||||
Regulatory adjustment
|
3
|
7
|
1
|
1
|
||||
Total net periodic benefit cost
|
$
|
11
|
$
|
17
|
$
|
3
|
$
|
4
|
Nine months ended September 30,
|
Nine months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Service cost
|
$
|
24
|
$
|
21
|
$
|
6
|
$
|
5
|
Interest cost
|
30
|
34
|
6
|
6
|
||||
Expected return on assets
|
(39)
|
(35)
|
(7)
|
(5)
|
||||
Amortization of:
|
||||||||
Prior service cost
|
1
|
1
|
3
|
3
|
||||
Actuarial loss
|
10
|
11
|
―
|
―
|
||||
Settlement
|
1
|
1
|
―
|
―
|
||||
Regulatory adjustment
|
(3)
|
7
|
1
|
2
|
||||
Total net periodic benefit cost
|
$
|
24
|
$
|
40
|
$
|
9
|
$
|
11
|
NET PERIODIC BENEFIT COST – SOCALGAS
|
||||||||
(Dollars in millions)
|
||||||||
Pension Benefits
|
Other Postretirement Benefits
|
|||||||
Three months ended September 30,
|
Three months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Service cost
|
$
|
17
|
$
|
13
|
$
|
5
|
$
|
2
|
Interest cost
|
22
|
24
|
8
|
9
|
||||
Expected return on assets
|
(24)
|
(23)
|
(12)
|
(10)
|
||||
Amortization of:
|
||||||||
Prior service credit
|
―
|
―
|
(2)
|
(1)
|
||||
Actuarial loss
|
6
|
6
|
―
|
1
|
||||
Regulatory adjustment
|
(17)
|
2
|
2
|
2
|
||||
Total net periodic benefit cost
|
$
|
4
|
$
|
22
|
$
|
1
|
$
|
3
|
Nine months ended September 30,
|
Nine months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Service cost
|
$
|
50
|
$
|
40
|
$
|
13
|
$
|
12
|
Interest cost
|
68
|
74
|
26
|
31
|
||||
Expected return on assets
|
(73)
|
(72)
|
(36)
|
(33)
|
||||
Amortization of:
|
||||||||
Prior service cost (credit)
|
1
|
1
|
(6)
|
(5)
|
||||
Actuarial loss
|
23
|
17
|
4
|
8
|
||||
Settlement
|
―
|
1
|
―
|
―
|
||||
Regulatory adjustment
|
(62)
|
(16)
|
6
|
6
|
||||
Total net periodic benefit cost
|
$
|
7
|
$
|
45
|
$
|
7
|
$
|
19
|
Sempra Energy
|
||||||
(Dollars in millions)
|
Consolidated
|
SDG&E
|
SoCalGas
|
|||
Contributions through September 30, 2013:
|
||||||
Pension plans
|
$
|
48
|
$
|
26
|
$
|
8
|
Other postretirement benefit plans
|
19
|
9
|
7
|
|||
Total expected contributions in 2013:
|
||||||
Pension plans
|
$
|
132
|
$
|
53
|
$
|
59
|
Other postretirement benefit plans
|
23
|
12
|
7
|
EARNINGS PER SHARE COMPUTATIONS
|
||||||||||
(Dollars in millions, except per share amounts; shares in thousands)
|
||||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||
2013
|
2012
|
2013
|
2012
|
|||||||
Numerator:
|
||||||||||
Earnings/Income attributable to common shares
|
$
|
296
|
$
|
268
|
$
|
719
|
$
|
566
|
||
Denominator:
|
||||||||||
Weighted-average common shares
|
||||||||||
outstanding for basic EPS
|
244,140
|
241,689
|
243,682
|
241,133
|
||||||
Dilutive effect of stock options, restricted
|
||||||||||
stock awards and restricted stock units
|
5,119
|
4,113
|
5,041
|
3,880
|
||||||
Weighted-average common shares
|
||||||||||
|
outstanding for diluted EPS
|
249,259
|
245,802
|
248,723
|
245,013
|
|||||
Earnings per share:
|
||||||||||
Basic
|
$
|
1.21
|
$
|
1.11
|
$
|
2.95
|
$
|
2.35
|
||
Diluted
|
$
|
1.19
|
$
|
1.09
|
$
|
2.89
|
$
|
2.31
|
Four-Year Cumulative Total Shareholder Return Ranking versus S&P 500 Utilities Index(1)
|
Number of Sempra Energy Common Shares Received for Each Performance-Based Restricted Stock Unit(2)
|
|
75th Percentile or Above
|
1.5
|
|
50th Percentile
|
1
|
|
35th Percentile or Below
|
―
|
|
(1)
|
If Sempra Energy ranks at or above the 50th percentile compared to the S&P 500 Index, participants will receive a minimum of 1.0 share for each RSU.
|
|
(2)
|
Participants also receive additional shares for dividend equivalents on shares subject to RSUs, which are reinvested to purchase additional units that become subject to the same vesting conditions as the RSUs to which the dividends relate.
|
CAPITALIZED FINANCING COSTS
|
||||||||
(Dollars in millions)
|
||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Sempra Energy Consolidated:
|
||||||||
AFUDC related to debt
|
$
|
6
|
$
|
5
|
$
|
17
|
$
|
32
|
AFUDC related to equity
|
14
|
13
|
44
|
80
|
||||
Other capitalized financing costs
|
9
|
13
|
22
|
40
|
||||
Total Sempra Energy Consolidated
|
$
|
29
|
$
|
31
|
$
|
83
|
$
|
152
|
SDG&E:
|
||||||||
AFUDC related to debt
|
$
|
4
|
$
|
3
|
$
|
12
|
$
|
26
|
AFUDC related to equity
|
10
|
6
|
30
|
61
|
||||
Total SDG&E
|
$
|
14
|
$
|
9
|
$
|
42
|
$
|
87
|
SoCalGas:
|
||||||||
AFUDC related to debt
|
$
|
2
|
$
|
2
|
$
|
5
|
$
|
6
|
AFUDC related to equity
|
4
|
7
|
14
|
19
|
||||
Total SoCalGas
|
$
|
6
|
$
|
9
|
$
|
19
|
$
|
25
|
CHANGES IN COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (1)
|
|||||||||||
(Dollars in millions)
|
|||||||||||
Three months ended September 30, 2013
|
|||||||||||
Foreign
|
Total
|
||||||||||
Currency
|
Unamortized
|
Unamortized
|
Accumulated Other
|
||||||||
Translation
|
Net
|
Prior Service
|
Financial
|
Comprehensive
|
|||||||
Adjustments
|
Actuarial Loss
|
Credit
|
Instruments
|
Income (Loss)
|
|||||||
Sempra Energy Consolidated:
|
|||||||||||
Balance as of June 30, 2013
|
$
|
(96)
|
$
|
(98)
|
$
|
1
|
$
|
(26)
|
$
|
(219)
|
|
Other comprehensive income (loss) before
|
|||||||||||
reclassifications
|
5
|
―
|
―
|
(6)
|
(1)
|
||||||
Amounts reclassified from accumulated other
|
|||||||||||
comprehensive income
|
―
|
|
3
|
―
|
2
|
5
|
|||||
Net other comprehensive income (loss)
|
5
|
3
|
―
|
(4)
|
4
|
||||||
Balance as of September 30, 2013
|
$
|
(91)
|
$
|
(95)
|
$
|
1
|
$
|
(30)
|
$
|
(215)
|
|
SDG&E:
|
|||||||||||
Balance as of June 30, 2013
|
$
|
―
|
$
|
(11)
|
$
|
1
|
$
|
―
|
$
|
(10)
|
|
Amounts reclassified from accumulated other
|
|||||||||||
comprehensive income
|
―
|
1
|
―
|
―
|
1
|
||||||
Net other comprehensive income
|
―
|
1
|
―
|
―
|
1
|
||||||
Balance as of September 30, 2013
|
$
|
―
|
$
|
(10)
|
$
|
1
|
$
|
―
|
$
|
(9)
|
|
(1)
|
All amounts are net of income tax, if subject to tax, and exclude noncontrolling interests.
|
CHANGES IN COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (1)
|
|||||||||||
(Dollars in millions)
|
|||||||||||
Nine months ended September 30, 2013
|
|||||||||||
Foreign
|
Total
|
||||||||||
Currency
|
Unamortized
|
Unamortized
|
Accumulated Other
|
||||||||
Translation
|
Net
|
Prior Service
|
Financial
|
Comprehensive
|
|||||||
Adjustments
|
Actuarial Loss
|
Credit
|
Instruments
|
Income (Loss)
|
|||||||
Sempra Energy Consolidated:
|
|||||||||||
Balance as of December 31, 2012
|
$
|
(240)
|
$
|
(102)
|
$
|
1
|
$
|
(35)
|
$
|
(376)
|
|
Other comprehensive income (loss) before
|
|||||||||||
reclassifications
|
(121)
|
―
|
―
|
1
|
(120)
|
||||||
Amounts reclassified from accumulated other
|
|||||||||||
comprehensive income
|
270
|
(2)
|
7
|
―
|
4
|
281
|
|||||
Net other comprehensive income
|
149
|
7
|
―
|
5
|
161
|
||||||
Balance as of September 30, 2013
|
$
|
(91)
|
$
|
(95)
|
$
|
1
|
$
|
(30)
|
$
|
(215)
|
|
SDG&E:
|
|||||||||||
Balance as of December 31, 2012
|
$
|
―
|
$
|
(12)
|
$
|
1
|
$
|
―
|
$
|
(11)
|
|
Amounts reclassified from accumulated other
|
|||||||||||
comprehensive income
|
―
|
2
|
―
|
―
|
2
|
||||||
Net other comprehensive income
|
―
|
2
|
―
|
―
|
2
|
||||||
Balance as of September 30, 2013
|
$
|
―
|
$
|
(10)
|
$
|
1
|
$
|
―
|
$
|
(9)
|
|
SoCalGas:
|
|||||||||||
Balance as of December 31, 2012
|
$
|
―
|
$
|
(4)
|
$
|
1
|
$
|
(15)
|
$
|
(18)
|
|
Amounts reclassified from accumulated other
|
|||||||||||
comprehensive income
|
―
|
―
|
―
|
1
|
1
|
||||||
Net other comprehensive income
|
―
|
―
|
―
|
1
|
1
|
||||||
Balance as of September 30, 2013
|
$
|
―
|
$
|
(4)
|
$
|
1
|
$
|
(14)
|
$
|
(17)
|
|
(1)
|
All amounts are net of income tax, if subject to tax, and exclude noncontrolling interests.
|
||||||||||
(2)
|
Represents cumulative foreign currency translation adjustment related to the impairment of our Argentine investments in 2006, which is substantially offset by an accrued liability established at that time. We provide additional information about these investments in Note 4.
|
RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||||
(Dollars in millions)
|
||||||||||
Three months ended September 30, 2013
|
||||||||||
Amount reclassified
|
||||||||||
Details about accumulated
|
from accumulated other
|
Affected line item
|
||||||||
other comprehensive income (loss) components
|
comprehensive income (loss)
|
on Condensed Consolidated Statement of Operations
|
||||||||
Sempra Energy Consolidated:
|
||||||||||
Financial instruments:
|
||||||||||
Interest rate instruments
|
$
|
3
|
Interest Expense
|
|||||||
Interest rate instruments
|
3
|
Equity Losses, Before Income Tax
|
||||||||
Total before income tax
|
6
|
|||||||||
(2)
|
Income Tax
|
|||||||||
Net of income tax
|
4
|
|||||||||
(2)
|
Earnings Attributable to Noncontrolling Interests
|
|||||||||
$
|
2
|
|||||||||
Amortization of defined benefit pension
|
||||||||||
and postretirement benefits items:
|
||||||||||
Actuarial gain
|
$
|
5
|
(1)
|
|||||||
(2)
|
Income Tax
|
|||||||||
Net of income tax
|
$
|
3
|
||||||||
SDG&E:
|
||||||||||
Financial instruments:
|
||||||||||
Interest rate instruments
|
$
|
2
|
Interest Expense
|
|||||||
(2)
|
Earnings Attributable to Noncontrolling Interest
|
|||||||||
$
|
―
|
|||||||||
Amortization of defined benefit pension
|
||||||||||
and postretirement benefits items:
|
||||||||||
Actuarial gain
|
$
|
2
|
(1)
|
|||||||
(1)
|
Income Tax
|
|||||||||
Net of income tax
|
$
|
1
|
||||||||
(1)
|
Amounts are included in the computation of net periodic benefit cost (see "Pension and Other Postretirement Benefits" above).
|
RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||||
(Dollars in millions)
|
||||||||||
Nine months ended September 30, 2013
|
||||||||||
Amount reclassified
|
||||||||||
Details about accumulated
|
from accumulated other
|
Affected line item
|
||||||||
other comprehensive income (loss) components
|
comprehensive income (loss)
|
on Condensed Consolidated Statement of Operations
|
||||||||
Sempra Energy Consolidated:
|
||||||||||
Foreign currency translation
|
$
|
270
|
Equity Earnings, Net of Income Tax(1)
|
|||||||
Financial instruments:
|
||||||||||
Interest rate instruments
|
$
|
9
|
Interest Expense
|
|||||||
Interest rate instruments
|
7
|
Equity Losses, Before Income Tax
|
||||||||
Commodity contracts not subject to
|
Cost of Natural Gas, Electric Fuel and Purchased
|
|||||||||
rate recovery
|
(5)
|
Power
|
||||||||
Total before income tax
|
11
|
|||||||||
(1)
|
Income Tax
|
|||||||||
Net of income tax
|
10
|
|||||||||
(6)
|
Earnings Attributable to Noncontrolling Interests
|
|||||||||
$
|
4
|
|||||||||
Amortization of defined benefit pension
|
||||||||||
and postretirement benefits items:
|
||||||||||
Actuarial gain
|
$
|
12
|
(2)
|
|||||||
(5)
|
Income Tax
|
|||||||||
Net of income tax
|
$
|
7
|
||||||||
SDG&E:
|
||||||||||
Financial instruments:
|
||||||||||
Interest rate instruments
|
$
|
6
|
Interest Expense
|
|||||||
(6)
|
Earnings Attributable to Noncontrolling Interest
|
|||||||||
$
|
―
|
|||||||||
Amortization of defined benefit pension
|
||||||||||
and postretirement benefits items:
|
||||||||||
Actuarial gain
|
$
|
3
|
(2)
|
|||||||
(1)
|
Income Tax
|
|||||||||
Net of income tax
|
$
|
2
|
||||||||
SoCalGas:
|
||||||||||
Financial instruments:
|
||||||||||
Interest rate instruments
|
$
|
1
|
Interest Expense
|
|||||||
―
|
Income Tax
|
|||||||||
Net of income tax
|
$
|
1
|
||||||||
(1)
|
Represents cumulative foreign currency translation adjustment related to the impairment of our Argentine investments in 2006, which is substantially offset by an accrued liability established at that time. We provide additional information about these investments in Note 4.
|
|||||||||
(2)
|
Amounts are included in the computation of net periodic benefit cost (see "Pension and Other Postretirement Benefits" above).
|
INCOME TAX EXPENSE (BENEFIT) ASSOCIATED WITH OTHER COMPREHENSIVE INCOME
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
Three months ended September 30,
|
|||||||||||||||
2013
|
2012
|
||||||||||||||
Share-
|
Non-
|
Share-
|
Non-
|
||||||||||||
holders'
|
controlling
|
Total
|
holders'
|
controlling
|
Total
|
||||||||||
Equity(1)
|
Interests
|
Equity
|
Equity(1)
|
Interests
|
Equity
|
||||||||||
Sempra Energy Consolidated:
|
|||||||||||||||
Other comprehensive income before
|
|||||||||||||||
reclassifications:
|
|||||||||||||||
Financial instruments
|
$
|
(2)
|
$
|
―
|
$
|
(2)
|
$
|
(3)
|
$
|
―
|
$
|
(3)
|
|||
Amounts reclassified from accumulated other
|
|||||||||||||||
comprehensive income:
|
|||||||||||||||
Pension and other postretirement benefits
|
$
|
2
|
$
|
―
|
$
|
2
|
$
|
(7)
|
$
|
―
|
$
|
(7)
|
|||
Financial instruments
|
2
|
―
|
2
|
2
|
―
|
2
|
|||||||||
SDG&E:
|
|||||||||||||||
Amounts reclassified from accumulated other
|
|||||||||||||||
comprehensive income:
|
|||||||||||||||
Pension and other postretirement benefits
|
$
|
1
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
―
|
|||
SoCalGas:
|
|||||||||||||||
Amounts reclassified from accumulated other
|
|||||||||||||||
comprehensive income:
|
|||||||||||||||
Financial instruments
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
1
|
|||
Nine months ended September 30,
|
|||||||||||||||
2013
|
2012
|
||||||||||||||
Share-
|
Non-
|
Share-
|
Non-
|
||||||||||||
holders'
|
controlling
|
Total
|
holders'
|
controlling
|
Total
|
||||||||||
Equity(1)
|
Interests
|
Equity
|
Equity(1)
|
Interests
|
Equity
|
||||||||||
Sempra Energy Consolidated:
|
|||||||||||||||
Other comprehensive income before
|
|||||||||||||||
reclassifications:
|
|||||||||||||||
Financial instruments
|
$
|
3
|
$
|
―
|
$
|
3
|
$
|
(8)
|
$
|
―
|
$
|
(8)
|
|||
Amounts reclassified from accumulated other
|
|||||||||||||||
comprehensive income:
|
|||||||||||||||
Pension and other postretirement benefits
|
$
|
5
|
$
|
―
|
$
|
5
|
$
|
(4)
|
$
|
―
|
$
|
(4)
|
|||
Financial instruments
|
1
|
―
|
1
|
3
|
―
|
3
|
|||||||||
SDG&E:
|
|||||||||||||||
Amounts reclassified from accumulated other
|
|||||||||||||||
comprehensive income:
|
|||||||||||||||
Pension and other postretirement benefits
|
$
|
1
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
―
|
|||
SoCalGas:
|
|||||||||||||||
Amounts reclassified from accumulated other
|
|||||||||||||||
comprehensive income:
|
|||||||||||||||
Financial instruments
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
1
|
|||
(1)
|
Shareholders' equity of Sempra Energy Consolidated, SDG&E or SoCalGas as indicated in left margin.
|
SHAREHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS
|
|||||||
(Dollars in millions)
|
|||||||
Sempra
|
|||||||
Energy
|
Non-
|
||||||
Shareholders’
|
controlling
|
Total
|
|||||
Equity
|
Interests
|
Equity
|
|||||
Balance at December 31, 2012
|
$
|
10,282
|
$
|
401
|
$
|
10,683
|
|
Comprehensive income
|
888
|
33
|
921
|
||||
Preferred dividends of subsidiaries
|
(5)
|
―
|
(5)
|
||||
Share-based compensation expense
|
30
|
―
|
30
|
||||
Common stock dividends declared
|
(460)
|
―
|
(460)
|
||||
Issuance of common stock
|
57
|
―
|
57
|
||||
Repurchase of common stock
|
(45)
|
―
|
(45)
|
||||
Tax benefit related to share-based compensation
|
30
|
―
|
30
|
||||
Sale of noncontrolling interests, net of offering costs
|
135
|
439
|
574
|
||||
Distributions to noncontrolling interests
|
―
|
(28)
|
(28)
|
||||
Call premium on preferred stock of subsidiary
|
(3)
|
―
|
(3)
|
||||
Balance at September 30, 2013
|
$
|
10,909
|
$
|
845
|
$
|
11,754
|
|
Balance at December 31, 2011
|
$
|
9,775
|
$
|
403
|
$
|
10,178
|
|
Comprehensive income
|
671
|
42
|
713
|
||||
Preferred dividends of subsidiaries
|
(5)
|
―
|
(5)
|
||||
Share-based compensation expense
|
33
|
―
|
33
|
||||
Common stock dividends declared
|
(435)
|
―
|
(435)
|
||||
Issuance of common stock
|
50
|
―
|
50
|
||||
Repurchase of common stock
|
(16)
|
―
|
(16)
|
||||
Common stock released from ESOP(1)
|
9
|
―
|
9
|
||||
Equity contributed by noncontrolling interest
|
―
|
5
|
5
|
||||
Distributions to noncontrolling interests
|
―
|
(36)
|
(36)
|
||||
Balance at September 30, 2012
|
$
|
10,082
|
$
|
414
|
$
|
10,496
|
|
(1)
|
Employee Stock Ownership Plan
|
SHAREHOLDER’S EQUITY AND NONCONTROLLING INTEREST
|
||||||
(Dollars in millions)
|
||||||
SDG&E
|
Non-
|
|||||
Shareholder’s
|
controlling
|
Total
|
||||
Equity
|
Interest
|
Equity
|
||||
Balance at December 31, 2012
|
$
|
4,222
|
$
|
76
|
$
|
4,298
|
Comprehensive income
|
294
|
15
|
309
|
|||
Preferred stock dividends declared
|
(4)
|
―
|
(4)
|
|||
Distributions to noncontrolling interest
|
―
|
(12)
|
(12)
|
|||
Call premium on preferred stock
|
(3)
|
―
|
(3)
|
|||
Balance at September 30, 2013
|
$
|
4,509
|
$
|
79
|
$
|
4,588
|
Balance at December 31, 2011
|
$
|
3,739
|
$
|
102
|
$
|
3,841
|
Comprehensive income
|
378
|
10
|
388
|
|||
Preferred stock dividends declared
|
(4)
|
―
|
(4)
|
|||
Distributions to noncontrolling interest
|
―
|
(22)
|
(22)
|
|||
Balance at September 30, 2012
|
$
|
4,113
|
$
|
90
|
$
|
4,203
|
OTHER NONCONTROLLING INTERESTS
|
|||||||
(Dollars in millions)
|
|||||||
Percent Ownership Held by Others
|
September 30, 2013
|
December 31, 2012
|
|||||
SDG&E:
|
|||||||
Otay Mesa VIE
|
100
|
%
|
$
|
79
|
$
|
76
|
|
Sempra South American Utilities:
|
|||||||
Chilquinta Energía subsidiaries(1)
|
24.4 – 43.4
|
27
|
29
|
||||
Luz del Sur
|
20.2
|
222
|
236
|
||||
Tecsur
|
9.8
|
3
|
4
|
||||
Sempra Mexico:
|
|||||||
IEnova, S.A.B. de C.V.
|
18.9
|
457
|
―
|
||||
Sempra Natural Gas:
|
|||||||
Bay Gas Storage, Ltd.
|
9.1
|
21
|
20
|
||||
Liberty Gas Storage, LLC
|
25.0
|
15
|
15
|
||||
Southern Gas Transmission Company
|
49.0
|
1
|
1
|
||||
Total Sempra Energy
|
$
|
825
|
$
|
381
|
|||
(1)
|
Chilquinta Energía has four subsidiaries with noncontrolling interests held by others. Percentage range reflects the highest and lowest ownership percentages amongst these subsidiaries.
|
AMOUNTS DUE TO AND FROM AFFILIATES AT SDG&E AND SOCALGAS
|
||||||
(Dollars in millions)
|
||||||
September 30,
|
December 31,
|
|||||
2013
|
2012
|
|||||
SDG&E
|
||||||
Current:
|
||||||
Due from SoCalGas
|
$
|
―
|
$
|
37
|
||
Due from various affiliates
|
1
|
2
|
||||
$
|
1
|
$
|
39
|
|||
Due to Sempra Energy
|
$
|
11
|
$
|
19
|
||
Due to SoCalGas
|
2
|
―
|
||||
$
|
13
|
$
|
19
|
|||
Income taxes due (to) from Sempra Energy(1)
|
$
|
(2)
|
$
|
12
|
||
SoCalGas
|
||||||
Current:
|
||||||
Due from Sempra Energy
|
$
|
12
|
$
|
24
|
||
Due from SDG&E
|
2
|
―
|
||||
$
|
14
|
$
|
24
|
|||
Due to SDG&E
|
$
|
―
|
$
|
37
|
||
Due to affiliate
|
20
|
―
|
||||
$
|
20
|
$
|
37
|
|||
Income taxes due from Sempra Energy(1)
|
$
|
130
|
$
|
99
|
||
(1)
|
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 the companies’ having always filed a separate return.
|
REVENUES FROM UNCONSOLIDATED AFFILIATES AT SDG&E AND SOCALGAS
|
||||||||
(Dollars in millions)
|
||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
SDG&E
|
$
|
3
|
$
|
2
|
$
|
8
|
$
|
6
|
SoCalGas
|
17
|
17
|
48
|
48
|
OTHER INCOME, NET
|
|||||||||
(Dollars in millions)
|
|||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||
2013
|
2012
|
2013
|
2012
|
||||||
Sempra Energy Consolidated:
|
|||||||||
Allowance for equity funds used during construction
|
$
|
14
|
$
|
13
|
$
|
44
|
$
|
80
|
|
Investment (losses) gains(1)
|
(6)
|
17
|
16
|
27
|
|||||
Gains on interest rate and foreign exchange instruments, net
|
4
|
1
|
17
|
11
|
|||||
Regulatory interest, net(2)
|
1
|
―
|
3
|
1
|
|||||
Sundry, net
|
3
|
13
|
(1)
|
18
|
|||||
Total
|
$
|
16
|
$
|
44
|
$
|
79
|
$
|
137
|
|
SDG&E:
|
|||||||||
Allowance for equity funds used during construction
|
$
|
10
|
$
|
6
|
$
|
30
|
$
|
61
|
|
Regulatory interest, net(2)
|
1
|
―
|
3
|
1
|
|||||
Sundry, net
|
(1)
|
(1)
|
(3)
|
(3)
|
|||||
Total
|
$
|
10
|
$
|
5
|
$
|
30
|
$
|
59
|
|
SoCalGas:
|
|||||||||
Allowance for equity funds used during construction
|
$
|
4
|
$
|
7
|
$
|
14
|
$
|
19
|
|
Sundry, net
|
(2)
|
(1)
|
(5)
|
(5)
|
|||||
Total
|
$
|
2
|
$
|
6
|
$
|
9
|
$
|
14
|
|
(1)
|
Represents investment (losses) gains 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.
|
||||||||
(2)
|
Interest on regulatory balancing accounts.
|
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
|
|||||||||||
(Dollars in millions)
|
|||||||||||
Three months ended September 30,
|
|||||||||||
2013
|
2012
|
||||||||||
Effective
|
Effective
|
||||||||||
Income Tax
|
Income
|
Income Tax
|
Income
|
||||||||
Expense
|
Tax Rate
|
Expense
|
Tax Rate
|
||||||||
Sempra Energy Consolidated
|
$
|
117
|
27
|
%
|
$
|
49
|
15
|
%
|
|||
SDG&E
|
84
|
38
|
38
|
17
|
|||||||
SoCalGas
|
38
|
27
|
37
|
34
|
|||||||
Nine months ended September 30,
|
|||||||||||
2013
|
2012
|
||||||||||
Effective
|
Effective
|
||||||||||
Income Tax
|
Income
|
Income Tax
|
Income
|
||||||||
Expense
|
Tax Rate
|
Expense
|
Tax Rate
|
||||||||
Sempra Energy Consolidated
|
$
|
327
|
30
|
%
|
$
|
48
|
8
|
%
|
|||
SDG&E
|
147
|
33
|
151
|
27
|
|||||||
SoCalGas
|
107
|
29
|
105
|
35
|
§
|
$33 million income tax benefit at SDG&E in 2012 resulting from a favorable change made in the third quarter in the income tax treatment of certain repairs expenditures that are capitalized for book purposes, including $22 million recorded in 2012 for 2011 and $11 million recorded for the first two quarters of 2012; and
|
§
|
lower exclusions from taxable income of the equity portion of AFUDC; offset by
|
§
|
income tax benefit in 2013 resulting from a favorable change made in the fourth quarter of 2012 in the income tax treatment of certain repairs expenditures at SoCalGas that are capitalized for financial statement purposes;
|
§
|
income tax benefit in 2013 from favorable adjustments to prior years’ income tax items; and
|
§
|
lower income tax expense from Mexican currency translation and inflation adjustments.
|
§
|
$54 million income tax benefit in 2012 primarily associated with our decision in the second quarter of 2012 to hold life insurance contracts kept in support of certain benefit plans to term. Previously, we took the position that we might cash in or sell these contracts before maturity, which required that we record deferred income taxes on unrealized gains on investments held within the insurance contracts;
|
§
|
$63 million income tax expense in 2013 resulting from a corporate reorganization in connection with the IEnova stock offerings. We discuss the stock offerings further in Note 5;
|
§
|
lower deferred income tax benefits related to renewable energy projects, offset by higher renewable energy income tax credits; and
|
§
|
$22 million income tax benefit at SDG&E recorded in 2012 for 2011 resulting from a favorable change made in the third quarter in the income tax treatment of certain repairs expenditures that are capitalized for book purposes; offset by
|
§
|
income tax benefit in 2013 resulting from changes made in the fourth quarter of 2012 in the income tax treatment of certain repairs expenditures at SoCalGas that are capitalized for financial statement purposes, as we discuss above; and
|
§
|
lower income tax expense from Mexican currency translation and inflation adjustments.
|
§
|
$33 million income tax benefit in 2012 resulting from a favorable change made in the third quarter in the income tax treatment of certain repairs expenditures that are capitalized for book purposes, including $22 million recorded in 2012 for 2011 and $11 million recorded for the first two quarters of 2012;
|
§
|
higher unfavorable adjustments to prior years’ income tax items in 2013;
|
§
|
higher reversal through book depreciation in 2013 of previously recognized tax benefits for a certain portion of utility fixed assets; and
|
§
|
lower favorable impact of exclusions from taxable income of the equity portion of AFUDC.
|
§
|
$22 million income tax benefit recorded in 2012 for 2011 resulting from a favorable change made in the third quarter in the income tax treatment of certain repairs expenditures that are capitalized for book purposes; and
|
§
|
higher reversal through book depreciation in 2013 of previously recognized tax benefits for a certain portion of utility fixed assets; offset by
|
§
|
higher deductions for self-developed software expenditures in 2013.
|
§
|
income tax benefit in 2013 resulting from a favorable change, not made until the fourth quarter of 2012, in the income tax treatment of certain repairs expenditures for gas assets that are capitalized for financial statement purposes; and
|
§
|
income tax benefit in 2013 due to favorable adjustments to prior years’ income tax items; offset by
|
§
|
higher reversal through book depreciation in 2013 of previously recognized tax benefits for a certain portion of utility fixed assets.
|
§
|
income tax benefit in 2013 resulting from a favorable change, not made until the fourth quarter of 2012, in the income tax treatment of certain repairs expenditures for gas assets that are capitalized for financial statement purposes; and
|
§
|
income tax benefit in 2013 due to favorable adjustments to prior years’ income tax items.
|
§
|
repairs expenditures related to a certain portion of utility plant fixed assets
|
§
|
the equity portion of AFUDC
|
§
|
a portion of the cost of removal of utility plant assets
|
§
|
self-developed software expenditures
|
§
|
depreciation on a certain portion of utility plant fixed assets
|
§
|
The California Utilities use natural gas energy derivatives, on their customers’ behalf, with the objective of managing price risk and basis risks, and lowering natural gas costs. These derivatives include fixed price natural gas positions, options, and basis risk instruments, which are either exchange-traded or over-the-counter financial instruments. This activity is governed by risk management and transacting activity plans that have been filed with and approved by the CPUC. Natural gas derivative activities are recorded as commodity costs that are offset by regulatory account balances and are recovered in rates. Net commodity cost impacts on the Condensed Consolidated Statements of Operations are reflected in Cost of Electric Fuel and Purchased Power or in Cost of Natural Gas.
|
§
|
SDG&E is allocated and may purchase congestion revenue rights (CRRs), which serve to reduce the regional electricity price volatility risk that may result from local transmission capacity constraints. Unrealized gains and losses do not impact earnings, as they are offset by regulatory account balances. Realized gains and losses associated with CRRs are recorded in Cost of Electric Fuel and Purchased Power, which is recoverable in rates, on the Condensed Consolidated Statements of Operations.
|
§
|
Sempra Mexico and Sempra Natural Gas may use natural gas and electricity derivatives, as appropriate, to optimize the earnings of their assets which support the following businesses: liquefied natural gas (LNG), natural gas transportation, power generation, and Sempra Natural Gas’ storage. Gains and losses associated with undesignated derivatives are recognized in Energy-Related Businesses Revenues or in Cost of Natural Gas, Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. Certain of these derivatives may also be designated as cash flow hedges. Sempra Mexico also uses natural gas energy derivatives with the objective of managing price risk and lowering natural gas prices at its Mexican distribution operations. These derivatives, which are recorded as commodity costs that are offset by regulatory account balances and recovered in rates, are recognized in Cost of Natural Gas on the Condensed Consolidated Statements of Operations.
|
§
|
From time to time, our various businesses, including the California Utilities, may use other energy derivatives to hedge exposures such as the price of vehicle fuel.
|
NET ENERGY DERIVATIVE VOLUMES
|
|||||
Segment and Commodity
|
September 30, 2013
|
December 31, 2012
|
|||
California Utilities:
|
|||||
SDG&E:
|
|||||
Natural gas
|
34 million MMBtu
|
25 million MMBtu
|
(1)
|
||
Congestion revenue rights
|
27 million MWh
|
30 million MWh
|
(2)
|
||
Energy-Related Businesses:
|
|||||
Sempra Natural Gas:
|
|||||
Electric power
|
2 million MWh
|
1 million MWh
|
|||
Natural gas
|
46 million MMBtu
|
36 million MMBtu
|
|||
Sempra Mexico - natural gas
|
―
|
1 million MMBtu
|
|||
(1)
|
Million British thermal units
|
||||
(2)
|
Megawatt hours
|
INTEREST RATE DERIVATIVES
|
|||||||
(Dollars in millions)
|
|||||||
September 30, 2013
|
December 31, 2012
|
||||||
Notional Debt
|
Maturities
|
Notional Debt
|
Maturities
|
||||
Sempra Energy Consolidated:
|
|||||||
Cash flow hedges(1)
|
$
|
419
|
2013-2028
|
$
|
439
|
2013-2028
|
|
Fair value hedges
|
500
|
2013-2016
|
500
|
2013-2016
|
|||
SDG&E:
|
|||||||
Cash flow hedge(1)
|
337
|
2019
|
345
|
2019
|
|||
(1)
|
Includes Otay Mesa VIE. All of SDG&E’s interest rate derivatives relate to Otay Mesa VIE.
|
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||
(Dollars in millions)
|
|||||||||
September 30, 2013
|
|||||||||
Deferred
|
|||||||||
credits
|
|||||||||
Current
|
Current
|
and other
|
|||||||
assets:
|
liabilities:
|
liabilities:
|
|||||||
Fixed-price
|
Investments
|
Fixed-price
|
Fixed-price
|
||||||
contracts
|
and other
|
contracts
|
contracts
|
||||||
and other
|
assets:
|
and other
|
and other
|
||||||
derivatives(1)
|
Sundry
|
derivatives(2)
|
derivatives
|
||||||
Sempra Energy Consolidated:
|
|||||||||
Derivatives designated as hedging instruments:
|
|||||||||
Interest rate and foreign exchange instruments(3)
|
$
|
15
|
$
|
13
|
$
|
(19)
|
$
|
(77)
|
|
Commodity contracts not subject to rate recovery
|
5
|
―
|
―
|
―
|
|||||
Derivatives not designated as hedging instruments:
|
|||||||||
Interest rate and foreign exchange instruments
|
9
|
26
|
(7)
|
(21)
|
|||||
Commodity contracts not subject to rate recovery:
|
67
|
11
|
(70)
|
(10)
|
|||||
Associated offsetting commodity contracts
|
(55)
|
(8)
|
55
|
8
|
|||||
Associated offsetting cash collateral
|
―
|
―
|
6
|
1
|
|||||
Commodity contracts subject to rate recovery:
|
6
|
49
|
(23)
|
(8)
|
|||||
Associated offsetting commodity contracts
|
(2)
|
(1)
|
2
|
1
|
|||||
Associated offsetting cash collateral
|
―
|
―
|
12
|
1
|
|||||
Net amounts presented on the balance sheet
|
45
|
90
|
(44)
|
(105)
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
not subject to rate recovery
|
14
|
―
|
―
|
―
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
subject to rate recovery
|
17
|
―
|
―
|
―
|
|||||
Total
|
$
|
76
|
$
|
90
|
$
|
(44)
|
$
|
(105)
|
|
SDG&E:
|
|||||||||
Derivatives designated as hedging instruments:
|
|||||||||
Interest rate instruments(3)
|
$
|
―
|
$
|
―
|
$
|
(16)
|
$
|
(43)
|
|
Derivatives not designated as hedging instruments:
|
|||||||||
Commodity contracts subject to rate recovery:
|
5
|
49
|
(22)
|
(8)
|
|||||
Associated offsetting commodity contracts
|
(1)
|
(1)
|
1
|
1
|
|||||
Associated offsetting cash collateral
|
―
|
―
|
12
|
1
|
|||||
Net amounts presented on the balance sheet
|
4
|
48
|
(25)
|
(49)
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
not subject to rate recovery(4)
|
2
|
―
|
―
|
―
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
subject to rate recovery
|
15
|
―
|
―
|
―
|
|||||
Total
|
$
|
21
|
$
|
48
|
$
|
(25)
|
$
|
(49)
|
|
SoCalGas:
|
|||||||||
Derivatives not designated as hedging instruments:
|
|||||||||
Commodity contracts subject to rate recovery:
|
$
|
1
|
$
|
―
|
$
|
(1)
|
$
|
―
|
|
Associated offsetting commodity contracts
|
(1)
|
―
|
1
|
―
|
|||||
Net amounts presented on the balance sheet
|
―
|
―
|
―
|
―
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
not subject to rate recovery(4)
|
3
|
―
|
―
|
―
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
subject to rate recovery
|
2
|
―
|
―
|
―
|
|||||
Total
|
$
|
5
|
$
|
―
|
$
|
―
|
$
|
―
|
|
(1)
|
Included in Current Assets: Other for SoCalGas.
|
||||||||
(2)
|
Included in Current Liabilities: Other for SoCalGas.
|
||||||||
(3)
|
Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE.
|
||||||||
(4)
|
Includes cash collateral not offset related to a negligible amount of commodity contracts not subject to rate recovery.
|
||||||||
|
|||||||||
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||
(Dollars in millions)
|
|||||||||
December 31, 2012
|
|||||||||
Deferred
|
|||||||||
credits
|
|||||||||
Current
|
Current
|
and other
|
|||||||
assets:
|
liabilities:
|
liabilities:
|
|||||||
Fixed-price
|
Investments
|
Fixed-price
|
Fixed-price
|
||||||
contracts
|
and other
|
contracts
|
contracts
|
||||||
and other
|
assets:
|
and other
|
and other
|
||||||
derivatives(1)
|
Sundry
|
derivatives(2)
|
derivatives
|
||||||
Sempra Energy Consolidated:
|
|||||||||
Derivatives designated as hedging instruments:
|
|||||||||
Interest rate instruments(3)
|
$
|
7
|
$
|
12
|
$
|
(19)
|
$
|
(64)
|
|
Commodity contracts not subject to rate recovery
|
1
|
―
|
―
|
―
|
|||||
Derivatives not designated as hedging instruments:
|
|||||||||
Interest rate instruments
|
8
|
40
|
(8)
|
(35)
|
|||||
Commodity contracts not subject to rate recovery:
|
117
|
15
|
(116)
|
(27)
|
|||||
Associated offsetting commodity contracts
|
(102)
|
(12)
|
102
|
12
|
|||||
Associated offsetting cash collateral
|
―
|
―
|
4
|
7
|
|||||
Commodity contracts subject to rate recovery:
|
30
|
35
|
(35)
|
(1)
|
|||||
Associated offsetting commodity contracts
|
(4)
|
―
|
4
|
―
|
|||||
Associated offsetting cash collateral
|
―
|
―
|
22
|
1
|
|||||
Net amounts presented on the balance sheet
|
57
|
90
|
(46)
|
(107)
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
not subject to rate recovery
|
22
|
―
|
―
|
―
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
subject to rate recovery
|
13
|
―
|
―
|
―
|
|||||
Total
|
$
|
92
|
$
|
90
|
$
|
(46)
|
$
|
(107)
|
|
SDG&E:
|
|||||||||
Derivatives designated as hedging instruments:
|
|||||||||
Interest rate instruments(3)
|
$
|
―
|
$
|
―
|
$
|
(17)
|
$
|
(64)
|
|
Derivatives not designated as hedging instruments:
|
|||||||||
Commodity contracts subject to rate recovery:
|
28
|
35
|
(33)
|
(1)
|
|||||
Associated offsetting commodity contracts
|
(3)
|
―
|
3
|
―
|
|||||
Associated offsetting cash collateral
|
―
|
―
|
22
|
1
|
|||||
Net amounts presented on the balance sheet
|
25
|
35
|
(25)
|
(64)
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
not subject to rate recovery(4)
|
1
|
―
|
―
|
―
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
subject to rate recovery
|
12
|
―
|
―
|
―
|
|||||
Total
|
$
|
38
|
$
|
35
|
$
|
(25)
|
$
|
(64)
|
|
SoCalGas:
|
|||||||||
Derivatives not designated as hedging instruments:
|
|||||||||
Commodity contracts subject to rate recovery:
|
$
|
2
|
$
|
―
|
$
|
(2)
|
$
|
―
|
|
Associated offsetting commodity contracts
|
(1)
|
―
|
1
|
―
|
|||||
Net amounts presented on the balance sheet
|
1
|
―
|
(1)
|
―
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
not subject to rate recovery(4)
|
2
|
―
|
―
|
―
|
|||||
Additional margin posted for commodity contracts
|
|||||||||
subject to rate recovery
|
1
|
―
|
―
|
―
|
|||||
Total
|
$
|
4
|
$
|
―
|
$
|
(1)
|
$
|
―
|
|
(1)
|
Included in Current Assets: Other for SoCalGas.
|
||||||||
(2)
|
Included in Current Liabilities: Other for SoCalGas.
|
||||||||
(3)
|
Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE.
|
||||||||
(4)
|
Includes cash collateral not offset related to a negligible amount of commodity contracts not subject to rate recovery.
|
FAIR VALUE HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||
(Dollars in millions)
|
||||||||||
Gain on derivatives recognized in earnings
|
Gain (loss) on derivatives recognized in earnings
|
|||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||
Location
|
2013
|
2012
|
2013
|
2012
|
||||||
Sempra Energy Consolidated:
|
||||||||||
Interest rate instruments
|
Interest Expense
|
$
|
2
|
$
|
1
|
$
|
6
|
$
|
5
|
|
Interest rate instruments
|
Other Income, Net
|
1
|
4
|
(4)
|
6
|
|||||
Total(1)
|
$
|
3
|
$
|
5
|
$
|
2
|
$
|
11
|
||
(1)
|
There has been no hedge ineffectiveness on these swaps. Changes in the fair values of the interest rate swap agreements are exactly offset by changes in the fair value of the underlying long-term debt.
|
CASH FLOW HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
Pretax gain (loss) recognized
|
Gain (loss) reclassified from AOCI
|
||||||||||
in OCI (effective portion)
|
into earnings (effective portion)
|
||||||||||
Three months ended September 30,
|
Three months ended September 30,
|
||||||||||
2013
|
2012
|
Location
|
2013
|
2012
|
|||||||
Sempra Energy Consolidated:
|
|||||||||||
Interest rate and foreign
|
|||||||||||
exchange instruments(1)
|
$
|
(8)
|
$
|
(6)
|
Interest Expense
|
$
|
(3)
|
$
|
(3)
|
||
Equity Earnings (Losses),
|
|||||||||||
Interest rate instruments
|
(3)
|
(6)
|
Before Income Tax
|
(3)
|
(4)
|
||||||
Commodity contracts not subject
|
Cost of Natural Gas, Electric
|
||||||||||
to rate recovery
|
1
|
(3)
|
Fuel and Purchased Power
|
―
|
―
|
||||||
Total
|
$
|
(10)
|
$
|
(15)
|
$
|
(6)
|
$
|
(7)
|
|||
SDG&E:
|
|||||||||||
Interest rate instruments(1)
|
$
|
(3)
|
$
|
(6)
|
Interest Expense
|
$
|
(2)
|
$
|
(2)
|
||
SoCalGas:
|
|||||||||||
Interest rate instruments
|
$
|
―
|
$
|
―
|
Interest Expense
|
$
|
―
|
$
|
(1)
|
||
Nine months ended September 30,
|
Nine months ended September 30,
|
||||||||||
2013
|
2012
|
Location
|
2013
|
2012
|
|||||||
Sempra Energy Consolidated:
|
|||||||||||
Interest rate and foreign
|
|||||||||||
exchange instruments(1)
|
$
|
(3)
|
$
|
(21)
|
Interest Expense
|
$
|
(9)
|
$
|
(5)
|
||
Equity Earnings (Losses),
|
|||||||||||
Interest rate instruments
|
11
|
(12)
|
Before Income Tax
|
(7)
|
(4)
|
||||||
Commodity contracts not subject
|
Cost of Natural Gas, Electric
|
||||||||||
to rate recovery
|
5
|
(3)
|
Fuel and Purchased Power
|
5
|
―
|
||||||
Total
|
$
|
13
|
$
|
(36)
|
$
|
(11)
|
$
|
(9)
|
|||
SDG&E:
|
|||||||||||
Interest rate instruments(1)
|
$
|
8
|
$
|
(16)
|
Interest Expense
|
$
|
(6)
|
$
|
(3)
|
||
SoCalGas:
|
|||||||||||
Interest rate instruments
|
$
|
―
|
$
|
―
|
Interest Expense
|
$
|
(1)
|
$
|
(2)
|
||
(1)
|
Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE; there has been a negligible amount of ineffectiveness related to these swaps.
|
UNDESIGNATED DERIVATIVE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||
(Dollars in millions)
|
||||||||||
Gain (loss) on derivatives recognized in earnings
|
||||||||||
Three months ended September 30,
|
Nine months ended
September 30,
|
|||||||||
Location
|
2013
|
2012
|
2013
|
2012
|
||||||
Sempra Energy Consolidated:
|
||||||||||
Interest rate and foreign exchange
|
||||||||||
instruments
|
Other Income, Net
|
$
|
4
|
$
|
1
|
$
|
17
|
$
|
11
|
|
Foreign exchange instruments
|
Equity Earnings,
|
|||||||||
Net of Income Tax
|
―
|
―
|
(3)
|
―
|
||||||
Commodity contracts not subject
|
Revenues: Energy-Related
|
|||||||||
to rate recovery
|
Businesses
|
1
|
(5)
|
2
|
(3)
|
|||||
Commodity contracts not subject
|
||||||||||
to rate recovery
|
Operation and Maintenance
|
―
|
1
|
―
|
1
|
|||||
Commodity contracts subject
|
Cost of Electric Fuel
|
|||||||||
to rate recovery
|
and Purchased Power
|
―
|
41
|
(9)
|
32
|
|||||
Commodity contracts subject
|
||||||||||
to rate recovery
|
Cost of Natural Gas
|
1
|
―
|
―
|
(1)
|
|||||
Total
|
$
|
6
|
$
|
38
|
$
|
7
|
$
|
40
|
||
SDG&E:
|
||||||||||
Commodity contracts subject
|
Cost of Electric Fuel
|
|||||||||
to rate recovery
|
and Purchased Power
|
$
|
―
|
$
|
41
|
$
|
(9)
|
$
|
32
|
|
SoCalGas:
|
||||||||||
Commodity contracts not subject
|
||||||||||
to rate recovery
|
Operation and Maintenance
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
1
|
|
Commodity contracts subject
|
||||||||||
to rate recovery
|
Cost of Natural Gas
|
1
|
―
|
―
|
(1)
|
|||||
Total
|
$
|
1
|
$
|
1
|
$
|
―
|
$
|
―
|
§
|
Nuclear decommissioning trusts reflect the assets of SDG&E’s nuclear decommissioning trusts, excluding cash balances. A third party trustee values the trust assets using prices from a pricing service based on a market approach. We validate these prices by comparison to prices from other independent data sources. Equity and certain debt securities are valued using quoted prices listed on nationally recognized securities exchanges or based on closing prices reported in the active market in which the identical security is traded (Level 1). Other debt securities are valued based on yields that are currently available for comparable securities of issuers with similar credit ratings (Level 2).
|
§
|
We enter into commodity contracts and interest rate derivatives primarily as a means to manage price exposures. We primarily use a market approach with market participant assumptions to value these derivatives. Market participant assumptions include those about risk, and the risk inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable. We have exchange-traded derivatives that are valued based on quoted prices in active markets for the identical instruments (Level 1). We also may have other commodity derivatives that are valued using industry standard models that consider quoted forward prices for commodities, time value, current market and contractual prices for the underlying instruments, volatility factors, and other relevant economic measures (Level 2). All Level 3 recurring items are related to CRRs at SDG&E, as we discuss below under “Level 3 Information.” We record commodity derivative contracts that are subject to rate recovery as commodity costs that are offset by regulatory account balances and are recovered in rates.
|
§
|
Investments include marketable securities that we value using a market approach based on closing prices reported in the active market in which the identical security is traded (Level 1).
|
RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED
|
|||||||||||
(Dollars in millions)
|
|||||||||||
At fair value as of September 30, 2013
|
|||||||||||
Collateral
|
|||||||||||
Level 1
|
Level 2
|
Level 3
|
netted
|
Total
|
|||||||
Assets:
|
|||||||||||
Nuclear decommissioning trusts:
|
|||||||||||
Equity securities
|
$
|
599
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
599
|
|
Debt securities:
|
|||||||||||
Debt securities issued by the U.S. Treasury and other
|
|||||||||||
U.S. government corporations and agencies
|
77
|
56
|
―
|
―
|
133
|
||||||
Municipal bonds
|
―
|
104
|
―
|
―
|
104
|
||||||
Other securities
|
―
|
134
|
―
|
―
|
134
|
||||||
Total debt securities
|
77
|
294
|
―
|
―
|
371
|
||||||
Total nuclear decommissioning trusts(1)
|
676
|
294
|
―
|
―
|
970
|
||||||
Interest rate instruments
|
―
|
63
|
―
|
―
|
63
|
||||||
Commodity contracts subject to rate recovery
|
12
|
―
|
57
|
―
|
69
|
||||||
Commodity contracts not subject to rate recovery
|
22
|
12
|
―
|
―
|
34
|
||||||
Total
|
$
|
710
|
$
|
369
|
$
|
57
|
$
|
―
|
$
|
1,136
|
|
Liabilities:
|
|||||||||||
Interest rate and foreign exchange instruments
|
$
|
―
|
$
|
124
|
$
|
―
|
$
|
―
|
$
|
124
|
|
Commodity contracts subject to rate recovery
|
13
|
15
|
―
|
(13)
|
15
|
||||||
Commodity contracts not subject to rate recovery
|
2
|
15
|
―
|
(7)
|
10
|
||||||
Total
|
$
|
15
|
$
|
154
|
$
|
―
|
$
|
(20)
|
$
|
149
|
|
At fair value as of December 31, 2012
|
|||||||||||
Collateral
|
|||||||||||
Level 1
|
Level 2
|
Level 3
|
netted
|
Total
|
|||||||
Assets:
|
|||||||||||
Nuclear decommissioning trusts:
|
|||||||||||
Equity securities
|
$
|
539
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
539
|
|
Debt securities:
|
|||||||||||
Debt securities issued by the U.S. Treasury and other
|
|||||||||||
U.S. government corporations and agencies
|
87
|
69
|
―
|
―
|
156
|
||||||
Municipal bonds
|
―
|
63
|
―
|
―
|
63
|
||||||
Other securities
|
―
|
130
|
―
|
―
|
130
|
||||||
Total debt securities
|
87
|
262
|
―
|
―
|
349
|
||||||
Total nuclear decommissioning trusts(1)
|
626
|
262
|
―
|
―
|
888
|
||||||
Interest rate instruments
|
―
|
68
|
―
|
―
|
68
|
||||||
Commodity contracts subject to rate recovery
|
13
|
―
|
61
|
―
|
74
|
||||||
Commodity contracts not subject to rate recovery
|
28
|
15
|
―
|
―
|
43
|
||||||
Investments
|
1
|
―
|
―
|
―
|
1
|
||||||
Total
|
$
|
668
|
$
|
345
|
$
|
61
|
$
|
―
|
$
|
1,074
|
|
Liabilities:
|
|||||||||||
Interest rate instruments
|
$
|
―
|
$
|
126
|
$
|
―
|
$
|
―
|
$
|
126
|
|
Commodity contracts subject to rate recovery
|
23
|
9
|
―
|
(23)
|
9
|
||||||
Commodity contracts not subject to rate recovery
|
6
|
23
|
―
|
(11)
|
18
|
||||||
Total
|
$
|
29
|
$
|
158
|
$
|
―
|
$
|
(34)
|
$
|
153
|
|
(1)
|
Excludes cash balances and cash equivalents.
|
RECURRING FAIR VALUE MEASURES – SDG&E
|
|||||||||||
(Dollars in millions)
|
|||||||||||
At fair value as of September 30, 2013
|
|||||||||||
Collateral
|
|||||||||||
Level 1
|
Level 2
|
Level 3
|
netted
|
Total
|
|||||||
Assets:
|
|||||||||||
Nuclear decommissioning trusts:
|
|||||||||||
Equity securities
|
$
|
599
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
599
|
|
Debt securities:
|
|||||||||||
Debt securities issued by the U.S. Treasury and other
|
|||||||||||
U.S. government corporations and agencies
|
77
|
56
|
―
|
―
|
133
|
||||||
Municipal bonds
|
―
|
104
|
―
|
―
|
104
|
||||||
Other securities
|
―
|
134
|
―
|
―
|
134
|
||||||
Total debt securities
|
77
|
294
|
―
|
―
|
371
|
||||||
Total nuclear decommissioning trusts(1)
|
676
|
294
|
―
|
―
|
970
|
||||||
Commodity contracts subject to rate recovery
|
10
|
―
|
57
|
―
|
67
|
||||||
Commodity contracts not subject to rate recovery
|
2
|
―
|
―
|
―
|
2
|
||||||
Total
|
$
|
688
|
$
|
294
|
$
|
57
|
$
|
―
|
$
|
1,039
|
|
Liabilities:
|
|||||||||||
Interest rate instruments
|
$
|
―
|
$
|
59
|
$
|
―
|
$
|
―
|
$
|
59
|
|
Commodity contracts subject to rate recovery
|
13
|
15
|
―
|
(13)
|
15
|
||||||
Total
|
$
|
13
|
$
|
74
|
$
|
―
|
$
|
(13)
|
$
|
74
|
|
At fair value as of December 31, 2012
|
|||||||||||
Collateral
|
|||||||||||
Level 1
|
Level 2
|
Level 3
|
netted
|
Total
|
|||||||
Assets:
|
|||||||||||
Nuclear decommissioning trusts:
|
|||||||||||
Equity securities
|
$
|
539
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
539
|
|
Debt securities:
|
|||||||||||
Debt securities issued by the U.S. Treasury and other
|
|||||||||||
U.S. government corporations and agencies
|
87
|
69
|
―
|
―
|
156
|
||||||
Municipal bonds
|
―
|
63
|
―
|
―
|
63
|
||||||
Other securities
|
―
|
130
|
―
|
―
|
130
|
||||||
Total debt securities
|
87
|
262
|
―
|
―
|
349
|
||||||
Total nuclear decommissioning trusts(1)
|
626
|
262
|
―
|
―
|
888
|
||||||
Commodity contracts subject to rate recovery
|
12
|
―
|
61
|
―
|
73
|
||||||
Commodity contracts not subject to rate recovery
|
1
|
―
|
―
|
―
|
1
|
||||||
Total
|
$
|
639
|
$
|
262
|
$
|
61
|
$
|
―
|
$
|
962
|
|
Liabilities:
|
|||||||||||
Interest rate instruments
|
$
|
―
|
$
|
81
|
$
|
―
|
$
|
―
|
$
|
81
|
|
Commodity contracts subject to rate recovery
|
23
|
8
|
―
|
(23)
|
8
|
||||||
Total
|
$
|
23
|
$
|
89
|
$
|
―
|
$
|
(23)
|
$
|
89
|
|
(1)
|
Excludes cash balances and cash equivalents.
|
RECURRING FAIR VALUE MEASURES – SOCALGAS
|
||||||||||
(Dollars in millions)
|
||||||||||
At fair value as of September 30, 2013
|
||||||||||
Collateral
|
||||||||||
Level 1
|
Level 2
|
Level 3
|
netted
|
Total
|
||||||
Assets:
|
||||||||||
Commodity contracts subject to rate recovery
|
$
|
2
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
2
|
Commodity contracts not subject to rate recovery
|
3
|
―
|
―
|
―
|
3
|
|||||
Total
|
$
|
5
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
5
|
At fair value as of December 31, 2012
|
||||||||||
Collateral
|
||||||||||
Level 1
|
Level 2
|
Level 3
|
netted
|
Total
|
||||||
Assets:
|
||||||||||
Commodity contracts subject to rate recovery
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
1
|
Commodity contracts not subject to rate recovery
|
3
|
―
|
―
|
―
|
3
|
|||||
Total
|
$
|
4
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
4
|
Liabilities:
|
||||||||||
Commodity contracts subject to rate recovery
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
1
|
Total
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
1
|
LEVEL 3 RECONCILIATIONS
|
||||
(Dollars in millions)
|
||||
Three months ended September 30,
|
||||
2013
|
2012
|
|||
Balance at July 1
|
$
|
47
|
$
|
13
|
Realized and unrealized gains
|
1
|
16
|
||
Allocated transmission instruments
|
15
|
17
|
||
Settlements
|
(6)
|
(23)
|
||
Balance at September 30
|
$
|
57
|
$
|
23
|
Change in unrealized gains or losses relating to
|
||||
instruments still held at September 30
|
$
|
2
|
$
|
―
|
LEVEL 3 RECONCILIATIONS
|
||||
(Dollars in millions)
|
||||
Nine months ended September 30,
|
||||
2013
|
2012
|
|||
Balance at January 1
|
$
|
61
|
$
|
23
|
Realized and unrealized (losses) gains
|
(2)
|
23
|
||
Allocated transmission instruments
|
15
|
18
|
||
Settlements
|
(17)
|
(41)
|
||
Balance at September 30
|
$
|
57
|
$
|
23
|
Change in unrealized gains or losses relating to
|
||||
instruments still held at September 30
|
$
|
1
|
$
|
―
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
||||||||||||
(Dollars in millions)
|
||||||||||||
September 30, 2013
|
||||||||||||
Carrying
|
Fair Value
|
|||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Sempra Energy Consolidated:
|
||||||||||||
Total long-term debt(1)
|
$
|
11,750
|
$
|
―
|
$
|
11,818
|
$
|
745
|
$
|
12,563
|
||
Preferred stock of subsidiary
|
20
|
―
|
21
|
―
|
21
|
|||||||
SDG&E:
|
||||||||||||
Total long-term debt(2)
|
$
|
4,402
|
$
|
―
|
$
|
4,325
|
$
|
337
|
$
|
4,662
|
||
SoCalGas:
|
||||||||||||
Total long-term debt(3)
|
$
|
1,413
|
$
|
―
|
$
|
1,504
|
$
|
―
|
$
|
1,504
|
||
Preferred stock
|
22
|
―
|
23
|
―
|
23
|
|||||||
December 31, 2012
|
||||||||||||
Carrying
|
Fair Value
|
|||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Sempra Energy Consolidated:
|
||||||||||||
Investments in affordable housing partnerships(4)
|
$
|
12
|
$
|
―
|
$
|
―
|
$
|
36
|
$
|
36
|
||
Total long-term debt(1)
|
11,873
|
―
|
12,287
|
956
|
13,243
|
|||||||
Preferred stock of subsidiaries
|
99
|
―
|
107
|
―
|
107
|
|||||||
SDG&E:
|
||||||||||||
Total long-term debt(2)
|
$
|
4,135
|
$
|
―
|
$
|
4,243
|
$
|
345
|
$
|
4,588
|
||
Contingently redeemable preferred stock (5)
|
79
|
―
|
85
|
―
|
85
|
|||||||
SoCalGas:
|
||||||||||||
Total long-term debt(3)
|
$
|
1,413
|
$
|
―
|
$
|
1,599
|
$
|
―
|
$
|
1,599
|
||
Preferred stock
|
22
|
―
|
24
|
―
|
24
|
|||||||
(1)
|
Before reductions for unamortized discount (net of premium) of $15 million at September 30, 2013 and $16 million at December 31, 2012, and excluding capital leases of $184 million at September 30, 2013 and $189 million at December 31, 2012, and commercial paper classified as long-term debt of $300 million at December 31, 2012. We discuss our long-term debt in Note 6 above and in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report.
|
|||||||||||
(2)
|
Before reductions for unamortized discount of $11 million at September 30, 2013 and $12 million at December 31, 2012, and excluding capital leases of $181 million at September 30, 2013 and $185 million at December 31, 2012.
|
|||||||||||
(3)
|
Before reductions for unamortized discount of $4 million at both September 30, 2013 and December 31, 2012, and excluding capital leases of $2 million at September 30, 2013 and $4 million at December 31, 2012.
|
|||||||||||
(4)
|
Investments in affordable housing partnerships at Parent and Other.
|
|||||||||||
(5)
|
On September 30, 2013, SDG&E announced that it would redeem all outstanding shares of its contingently redeemable preferred stock on October 15, 2013 for $82 million. See Note 5 for additional details.
|
NUCLEAR DECOMMISSIONING TRUSTS
|
|||||||||
(Dollars in millions)
|
|||||||||
Gross
|
Gross
|
Estimated
|
|||||||
Unrealized
|
Unrealized
|
Fair
|
|||||||
Cost
|
Gains
|
Losses
|
Value
|
||||||
As of September 30, 2013:
|
|||||||||
Debt securities:
|
|||||||||
Debt securities issued by the U.S. Treasury and other
|
|||||||||
U.S. government corporations and agencies(1)
|
$
|
130
|
$
|
4
|
$
|
(1)
|
$
|
133
|
|
Municipal bonds(2)
|
102
|
3
|
(1)
|
104
|
|||||
Other securities(3)
|
135
|
3
|
(4)
|
134
|
|||||
Total debt securities
|
367
|
10
|
(6)
|
371
|
|||||
Equity securities
|
231
|
370
|
(2)
|
599
|
|||||
Cash and cash equivalents
|
11
|
―
|
―
|
11
|
|||||
Total
|
$
|
609
|
$
|
380
|
$
|
(8)
|
$
|
981
|
|
As of December 31, 2012:
|
|||||||||
Debt securities:
|
|||||||||
Debt securities issued by the U.S. Treasury and other
|
|||||||||
U.S. government corporations and agencies
|
$
|
147
|
$
|
9
|
$
|
―
|
$
|
156
|
|
Municipal bonds
|
57
|
6
|
―
|
63
|
|||||
Other securities
|
121
|
10
|
(1)
|
130
|
|||||
Total debt securities
|
325
|
25
|
(1)
|
349
|
|||||
Equity securities
|
249
|
292
|
(2)
|
539
|
|||||
Cash and cash equivalents
|
20
|
―
|
―
|
20
|
|||||
Total
|
$
|
594
|
$
|
317
|
$
|
(3)
|
$
|
908
|
|
(1)
|
Maturity dates are 2014-2056.
|
||||||||
(2)
|
Maturity dates are 2014-2062.
|
||||||||
(3)
|
Maturity dates are 2013-2111.
|
SALES OF SECURITIES
|
||||||||
(Dollars in millions)
|
||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Proceeds from sales
|
$
|
181
|
$
|
204
|
$
|
507
|
$
|
524
|
Gross realized gains
|
2
|
3
|
13
|
12
|
||||
Gross realized losses
|
(8)
|
(1)
|
(15)
|
(6)
|
§
|
The net book value of SDG&E’s investment in SONGS plant and nuclear fuel of $516 million, which prior to the date of the plant retirement, had been reported as Property, Plant and Equipment on the Condensed Consolidated Balance Sheet;
|
§
|
SDG&E’s SONGS-related materials and supplies of $10 million, which prior to the date of the plant retirement, had been reported as Inventory on the Condensed Consolidated Balance Sheet;
|
§
|
SDG&E’s 2013 cost of replacement power that is in excess of the amount previously authorized for recovery in ERRA of $74 million which, prior to the date of the plant retirement, would have been reported as Regulatory Balancing Accounts, Net in Current Assets on the Condensed Consolidated Balance Sheet;
|
§
|
Miscellaneous costs incurred or expected to be incurred by SDG&E associated with the early closure of the plant of $31 million; net of
|
§
|
A reserve for disallowance of rate recovery of $200 million reported as Loss from Plant Closure on the Condensed Consolidated Statement of Operations.
|
1.
|
SDG&E provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County.
|
2.
|
SoCalGas is a natural gas distribution utility, serving customers throughout most of Southern California and part of central California.
|
3.
|
Sempra South American Utilities operates electric transmission and distribution utilities in Chile and Peru. In June 2013, we sold our interests in two Argentine utilities, which we discuss further in Note 4 above.
|
4.
|
Sempra Mexico develops, owns and operates, or holds interests in, natural gas transmission pipelines and propane and ethane systems, a natural gas distribution utility, electric generation facilities (including wind), a terminal for the import of LNG, and marketing operations for the purchase of LNG and the purchase and sale of natural gas in Mexico.
|
5.
|
Sempra Renewables develops, owns and operates, or holds interests in, wind and solar energy projects in Arizona, California, Colorado, Hawaii, Indiana, Kansas, Nebraska, Nevada and Pennsylvania to serve wholesale electricity markets in the United States.
|
6.
|
Sempra Natural Gas develops, owns and operates, or holds interests in, a natural gas-fired electric generation asset, natural gas pipelines and storage facilities, natural gas distribution utilities and a terminal for the import and export of LNG and sale of natural gas, all within the United States.
|
SEGMENT INFORMATION
|
|||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||||||||
2013
|
2012
|
2013
|
2012
|
||||||||||||||
REVENUES
|
|||||||||||||||||
SDG&E
|
$
|
1,063
|
42
|
%
|
$
|
1,092
|
44
|
%
|
$
|
3,066
|
39
|
%
|
$
|
2,706
|
39
|
%
|
|
SoCalGas
|
807
|
32
|
728
|
29
|
2,694
|
34
|
2,328
|
33
|
|||||||||
Sempra South American Utilities
|
364
|
14
|
356
|
14
|
1,119
|
14
|
1,061
|
15
|
|||||||||
Sempra Mexico
|
188
|
7
|
181
|
7
|
519
|
7
|
435
|
6
|
|||||||||
Sempra Renewables
|
25
|
1
|
27
|
1
|
76
|
1
|
49
|
1
|
|||||||||
Sempra Natural Gas
|
212
|
8
|
294
|
12
|
683
|
9
|
761
|
11
|
|||||||||
Adjustments and eliminations
|
―
|
―
|
―
|
―
|
(2)
|
―
|
(2)
|
―
|
|||||||||
Intersegment revenues(1)
|
(108)
|
(4)
|
(171)
|
(7)
|
(303)
|
(4)
|
(359)
|
(5)
|
|||||||||
Total
|
$
|
2,551
|
100
|
%
|
$
|
2,507
|
100
|
%
|
$
|
7,852
|
100
|
%
|
$
|
6,979
|
100
|
%
|
|
INTEREST EXPENSE
|
|||||||||||||||||
SDG&E
|
$
|
50
|
$
|
49
|
$
|
147
|
$
|
124
|
|||||||||
SoCalGas
|
17
|
17
|
52
|
51
|
|||||||||||||
Sempra South American Utilities
|
8
|
6
|
20
|
22
|
|||||||||||||
Sempra Mexico
|
―
|
3
|
5
|
6
|
|||||||||||||
Sempra Renewables
|
5
|
6
|
22
|
13
|
|||||||||||||
Sempra Natural Gas
|
34
|
26
|
80
|
72
|
|||||||||||||
All other
|
60
|
62
|
182
|
185
|
|||||||||||||
Intercompany eliminations
|
(37)
|
(43)
|
(95)
|
(121)
|
|||||||||||||
Total
|
$
|
137
|
$
|
126
|
$
|
413
|
$
|
352
|
|||||||||
INTEREST INCOME
|
|||||||||||||||||
SDG&E
|
$
|
―
|
$
|
―
|
$
|
1
|
$
|
―
|
|||||||||
Sempra South American Utilities
|
3
|
3
|
11
|
11
|
|||||||||||||
Sempra Mexico
|
―
|
―
|
1
|
1
|
|||||||||||||
Sempra Renewables
|
7
|
2
|
14
|
3
|
|||||||||||||
Sempra Natural Gas
|
26
|
15
|
57
|
41
|
|||||||||||||
All other
|
2
|
2
|
1
|
1
|
|||||||||||||
Intercompany eliminations
|
(33)
|
(17)
|
(70)
|
(43)
|
|||||||||||||
Total
|
$
|
5
|
$
|
5
|
$
|
15
|
$
|
14
|
|||||||||
DEPRECIATION AND AMORTIZATION
|
|||||||||||||||||
SDG&E
|
$
|
126
|
44
|
%
|
$
|
128
|
46
|
%
|
$
|
367
|
44
|
%
|
$
|
359
|
45
|
%
|
|
SoCalGas
|
100
|
35
|
91
|
33
|
280
|
34
|
268
|
33
|
|||||||||
Sempra South American Utilities
|
14
|
5
|
15
|
5
|
44
|
5
|
42
|
5
|
|||||||||
Sempra Mexico
|
16
|
5
|
15
|
5
|
47
|
6
|
46
|
6
|
|||||||||
Sempra Renewables
|
5
|
2
|
4
|
1
|
20
|
3
|
10
|
1
|
|||||||||
Sempra Natural Gas
|
20
|
7
|
24
|
9
|
60
|
7
|
69
|
9
|
|||||||||
All other
|
5
|
2
|
3
|
1
|
10
|
1
|
9
|
1
|
|||||||||
Total
|
$
|
286
|
100
|
%
|
$
|
280
|
100
|
%
|
$
|
828
|
100
|
%
|
$
|
803
|
100
|
%
|
|
INCOME TAX EXPENSE (BENEFIT)
|
|||||||||||||||||
SDG&E
|
$
|
84
|
$
|
38
|
$
|
147
|
$
|
151
|
|||||||||
SoCalGas
|
38
|
37
|
107
|
105
|
|||||||||||||
Sempra South American Utilities
|
16
|
27
|
50
|
57
|
|||||||||||||
Sempra Mexico
|
16
|
31
|
44
|
61
|
|||||||||||||
Sempra Renewables
|
9
|
(12)
|
(8)
|
(47)
|
|||||||||||||
Sempra Natural Gas
|
(4)
|
(45)
|
35
|
(171)
|
|||||||||||||
All other
|
(42)
|
(27)
|
(48)
|
(108)
|
|||||||||||||
Total
|
$
|
117
|
$
|
49
|
$
|
327
|
$
|
48
|
|||||||||
SEGMENT INFORMATION (Continued)
|
|||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||||||||
2013
|
2012
|
2013
|
2012
|
||||||||||||||
EQUITY EARNINGS (LOSSES)
|
|||||||||||||||||
Earnings (losses) recorded before tax:
|
|||||||||||||||||
Sempra Renewables
|
$
|
(10)
|
$
|
(6)
|
$
|
(12)
|
$
|
(7)
|
|||||||||
Sempra Natural Gas
|
13
|
(87)
|
33
|
(366)
|
|||||||||||||
All other
|
―
|
(1)
|
―
|
(2)
|
|||||||||||||
Total
|
$
|
3
|
$
|
(94)
|
$
|
21
|
$
|
(375)
|
|||||||||
Earnings (losses) recorded net of tax:
|
|||||||||||||||||
Sempra South American Utilities
|
$
|
―
|
$
|
―
|
$
|
(14)
|
$
|
―
|
|||||||||
Sempra Mexico
|
8
|
10
|
27
|
29
|
|||||||||||||
Total
|
$
|
8
|
$
|
10
|
$
|
13
|
$
|
29
|
|||||||||
EARNINGS (LOSSES)
|
|||||||||||||||||
SDG&E(2)
|
$
|
129
|
44
|
%
|
$
|
174
|
65
|
%
|
$
|
285
|
40
|
%
|
$
|
374
|
66
|
%
|
|
SoCalGas(3)
|
102
|
34
|
71
|
26
|
266
|
37
|
190
|
34
|
|||||||||
Sempra South American Utilities
|
39
|
13
|
40
|
15
|
110
|
15
|
118
|
21
|
|||||||||
Sempra Mexico
|
39
|
13
|
42
|
16
|
96
|
13
|
122
|
22
|
|||||||||
Sempra Renewables
|
37
|
13
|
13
|
5
|
56
|
8
|
47
|
8
|
|||||||||
Sempra Natural Gas
|
(7)
|
(2)
|
(68)
|
(25)
|
55
|
8
|
(260)
|
(46)
|
|||||||||
All other
|
(43)
|
(15)
|
(4)
|
(2)
|
(149)
|
(21)
|
(25)
|
(5)
|
|||||||||
Total
|
$
|
296
|
100
|
%
|
$
|
268
|
100
|
%
|
$
|
719
|
100
|
%
|
$
|
566
|
100
|
%
|
|
Nine months ended September 30,
|
|||||||||||||||||
2013
|
2012
|
||||||||||||||||
EXPENDITURES FOR PROPERTY PLANT & EQUIPMENT
|
|||||||||||||||||
SDG&E
|
$
|
679
|
38
|
%
|
$
|
998
|
44
|
%
|
|||||||||
SoCalGas
|
521
|
29
|
462
|
21
|
|||||||||||||
Sempra South American Utilities
|
120
|
7
|
117
|
5
|
|||||||||||||
Sempra Mexico
|
280
|
16
|
13
|
1
|
|||||||||||||
Sempra Renewables
|
119
|
7
|
564
|
25
|
|||||||||||||
Sempra Natural Gas
|
65
|
3
|
84
|
4
|
|||||||||||||
All other
|
1
|
―
|
3
|
―
|
|||||||||||||
Total
|
$
|
1,785
|
100
|
%
|
$
|
2,241
|
100
|
%
|
|||||||||
September 30, 2013
|
December 31, 2012
|
||||||||||||||||
ASSETS
|
|||||||||||||||||
SDG&E
|
$
|
15,275
|
41
|
%
|
$
|
14,744
|
40
|
%
|
|||||||||
SoCalGas
|
9,288
|
25
|
9,071
|
25
|
|||||||||||||
Sempra South American Utilities
|
3,492
|
10
|
3,310
|
9
|
|||||||||||||
Sempra Mexico
|
3,315
|
9
|
2,591
|
7
|
|||||||||||||
Sempra Renewables
|
1,898
|
5
|
2,439
|
7
|
|||||||||||||
Sempra Natural Gas
|
7,078
|
19
|
5,145
|
14
|
|||||||||||||
All other
|
621
|
2
|
818
|
2
|
|||||||||||||
Intersegment receivables
|
(4,066)
|
(11)
|
(1,619)
|
(4)
|
|||||||||||||
Total
|
$
|
36,901
|
100
|
%
|
$
|
36,499
|
100
|
%
|
|||||||||
INVESTMENTS IN EQUITY METHOD INVESTEES
|
|||||||||||||||||
Sempra South American Utilities
|
$
|
(2)
|
$
|
―
|
|||||||||||||
Sempra Mexico
|
367
|
340
|
|||||||||||||||
Sempra Renewables
|
701
|
592
|
|||||||||||||||
Sempra Natural Gas
|
330
|
361
|
|||||||||||||||
All other
|
76
|
134
|
|||||||||||||||
Total
|
$
|
1,472
|
$
|
1,427
|
|||||||||||||
(1)
|
Revenues for reportable segments include intersegment revenues of:
|
||||||||||||||||
$3 million, $17 million, $23 million and $65 million for the three months ended September 30, 2013; $7 million, $48 million, $68 million and $180 million for the nine months ended September 30, 2013; $3 million, $17 million, $78 million and $73 million for the three months ended September 30, 2012; and $6 million, $48 million, $161 million and $144 million for the nine months ended September 30, 2012 for SDG&E, SoCalGas, Sempra Mexico and Sempra Natural Gas, respectively.
|
|||||||||||||||||
(2)
|
After preferred dividends and call premium on preferred stock.
|
||||||||||||||||
(3)
|
After preferred dividends.
|
§
|
Sempra Energy and its consolidated entities
|
§
|
SDG&E
|
§
|
SoCalGas
|
CALIFORNIA UTILITIES
|
||
MARKET
|
SERVICE TERRITORY
|
|
SAN DIEGO GAS & ELECTRIC COMPANY (SDG&E)
A regulated public utility; infrastructure supports electric generation, transmission and distribution, and natural gas distribution
|
§ Provides electricity to 3.4 million consumers (1.4 million meters)
§ Provides natural gas to 3.1 million consumers (860,000 meters)
|
Serves the county of San Diego, California and an adjacent portion of southern Orange County covering 4,100 square miles
|
SOUTHERN CALIFORNIA GAS COMPANY (SOCALGAS)
A regulated public utility; infrastructure supports natural gas distribution, transmission and storage
|
§ Residential, commercial, industrial, utility electric generation and wholesale customers
§ Covers a population of 21.1 million (5.8 million meters)
|
Southern California and portions of central California (excluding San Diego County, the city of Long Beach and the desert area of San Bernardino County) covering 20,000 square miles
|
SEMPRA INTERNATIONAL
|
||
MARKET
|
GEOGRAPHIC REGION
|
|
SEMPRA SOUTH AMERICAN UTILITIES
Infrastructure supports electric transmission and distribution
|
§ Provides electricity to approximately 620,000 customers in Chile and more than 950,000 customers in Peru
|
§ Chile
§ Peru
|
SEMPRA MEXICO
Develops, owns and operates, or holds interests in:
§ natural gas transmission pipelines and propane and ethane systems
§ a natural gas distribution utility
§ electric generation facilities, including wind
§ a terminal for the importation of liquefied natural gas (LNG)
§ marketing operations for the purchase of LNG and the purchase and sale of natural gas
|
§ Natural gas
§ Wholesale electricity
§ Liquefied natural gas
|
§ Mexico
|
SEMPRA U.S. GAS & POWER
|
||
MARKET
|
GEOGRAPHIC REGION
|
|
SEMPRA RENEWABLES
Develops, owns, operates, or holds interests in renewable energy generation projects
|
§ Wholesale electricity
|
§ U.S.A.
|
SEMPRA NATURAL GAS
Develops, owns and operates, or holds interests in:
§ a natural gas-fired electric generation asset
§ natural gas pipelines and storage facilities
§ natural gas distribution utilities
§ a terminal in the U.S. for the import and export of LNG and sale of natural gas
§ marketing operations
|
§ Wholesale electricity
§ Natural gas
§ Liquefied natural gas
|
§ U.S.A.
|
§
|
Overall results of our operations and factors affecting those results
|
§
|
Our segment results
|
§
|
Significant changes in revenues, costs and earnings between periods
|
§
|
a $60 million noncash impairment charge in 2012 to further write down our investment in the joint venture, Rockies Express Pipeline LLC (Rockies Express), that operates the Rockies Express natural gas pipeline;
|
§
|
$31 million higher earnings at SoCalGas; and
|
§
|
$24 million in gains from Sempra Renewables’ sale of 50-percent equity interests in Mesquite Solar 1 and Copper Mountain Solar 2 in 2013; offset by
|
§
|
$45 million lower earnings at SDG&E primarily due to a favorable income tax item in 2012, lower CPUC-authorized rate of return in the cost of capital proceeding and loss of SONGS rate base; and
|
§
|
$39 million higher losses at Parent and Other primarily from lower investment gains and higher net interest expense.
|
§
|
$52 million favorable impact on 2013 earnings from the retroactive impact for 2012 of the 2012 General Rate Case (GRC), for which a final decision by the California Public Utilities Commission (CPUC) was issued in the second quarter of 2013
|
§
|
$36 million higher earnings at SDG&E from electric transmission, including Sunrise Powerlink, and CPUC base operations
|
§
|
$(119) million charge for loss from plant closure associated with SDG&E’s investment in the San Onofre Nuclear Generating Station (SONGS) nuclear facility
|
§
|
$27 million higher operating margin and newly recovered costs at SoCalGas as a result of the 2012 GRC
|
§
|
$25 million favorable impact on 2013 earnings from the retroactive impact for 2012 of the 2012 GRC
|
§
|
$(18) million decrease in Sempra Mexico’s earnings for earnings attributable to noncontrolling interests at IEnova
|
§
|
$24 million in gains from the sale of 50-percent equity interests in Mesquite Solar 1 and Copper Mountain Solar 2 in 2013
|
§
|
$(38) million lower deferred income tax benefits at Sempra Renewables, including $5 million decrease from U.S. Treasury grant sequestration in 2013, as a result of solar and wind generating assets placed in service in 2012
|
§
|
$239 million cumulative noncash impairment charge in 2012 to write down our investment in Rockies Express
|
§
|
$44 million gain on the sale of one 625-megawatt (MW) block of Sempra Natural Gas’ 1,250-MW Mesquite Power natural gas-fired power plant in the first quarter of 2013
|
§
|
$24 million higher earnings at Sempra Natural Gas primarily from LNG operations
|
§
|
$(63) million income tax expense in the first quarter of 2013 resulting from a corporate reorganization in connection with the IEnova stock offerings
|
§
|
$(54) million income tax benefit in 2012 primarily associated with our decision to hold life insurance contracts kept in support of certain benefit plans to term
|
SEMPRA ENERGY EARNINGS (LOSSES) BY SEGMENT
|
|||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||||||||
2013
|
2012
|
2013
|
2012
|
||||||||||||||
California Utilities:
|
|||||||||||||||||
SDG&E(1)
|
$
|
129
|
44
|
%
|
$
|
174
|
65
|
%
|
$
|
285
|
40
|
%
|
$
|
374
|
66
|
%
|
|
SoCalGas(2)
|
102
|
34
|
71
|
26
|
266
|
37
|
190
|
34
|
|||||||||
Sempra International:
|
|||||||||||||||||
Sempra South American Utilities
|
39
|
13
|
40
|
15
|
110
|
15
|
118
|
21
|
|||||||||
Sempra Mexico
|
39
|
13
|
42
|
16
|
96
|
13
|
122
|
22
|
|||||||||
Sempra U.S. Gas & Power:
|
|||||||||||||||||
Sempra Renewables
|
37
|
13
|
13
|
5
|
56
|
8
|
47
|
8
|
|||||||||
Sempra Natural Gas
|
(7)
|
(2)
|
(68)
|
(25)
|
55
|
8
|
(260)
|
(46)
|
|||||||||
Parent and other(3)
|
(43)
|
(15)
|
(4)
|
(2)
|
(149)
|
(21)
|
(25)
|
(5)
|
|||||||||
Earnings
|
$
|
296
|
100
|
%
|
$
|
268
|
100
|
%
|
$
|
719
|
100
|
%
|
$
|
566
|
100
|
%
|
|
(1)
|
After preferred dividends and call premium on preferred stock.
|
||||||||||||||||
(2)
|
After preferred dividends.
|
||||||||||||||||
(3)
|
Includes after-tax interest expense ($36 million and $37 million for the three months ended September 30, 2013 and 2012, respectively, and $109 million and $110 million for the nine months ended September 30, 2013 and 2012, respectively), intercompany eliminations recorded in consolidation and certain corporate costs.
|
EARNINGS BY SEGMENT – CALIFORNIA UTILITIES
|
(Dollars in millions)
|
§
|
$129 million in the three months ended September 30, 2013 ($134 million before preferred dividends and call premium)
|
§
|
$174 million in the three months ended September 30, 2012 ($176 million before preferred dividends)
|
§
|
$285 million for the first nine months of 2013 ($292 million before preferred dividends and call premium)
|
§
|
$374 million for the first nine months of 2012 ($378 million before preferred dividends)
|
§
|
$46 million increase in income tax expense including
|
o
|
$33 million income tax benefit recorded in the third quarter of 2012 from the change in the income tax treatment of certain repairs expenditures ($22 million for full year 2011 and $11 million for the first six months of 2012), as we discuss below in “Income Taxes,” and
|
o
|
$7 million higher unfavorable adjustments to prior years’ income tax items;
|
§
|
$6 million lower CPUC-authorized rate of return established in the CPUC cost of capital proceeding effective as of January 1, 2013;
|
§
|
$5 million loss of revenue from SONGS due to the early closure of the plant; and
|
§
|
$3 million call premium on the redemption of preferred stock; offset by
|
§
|
$9 million higher CPUC base operating margin as a result of the final GRC decision, net of operating costs; and
|
§
|
$6 million higher electric transmission margin.
|
§
|
$119 million charge for loss from plant closure associated with SDG&E’s investment in SONGS;
|
§
|
$22 million income tax benefit recorded in the third quarter of 2012 for full year 2011 from the change in the income tax treatment of certain repairs expenditures, as we discuss below in “Income Taxes;”
|
§
|
$15 million lower CPUC-authorized rate of return established in the CPUC cost of capital proceeding effective as of January 1, 2013;
|
§
|
$12 million higher interest expense;
|
§
|
$7 million loss of revenue from SONGS due to the early closure of the plant;
|
§
|
$6 million for the recovery in 2012 of incremental costs incurred in prior years for the long-term storage of spent nuclear fuel; and
|
§
|
$3 million call premium on the redemption of preferred stock; offset by
|
§
|
$52 million favorable impact from the retroactive application for 2012 of the final decision in the 2012 GRC;
|
§
|
$26 million higher electric transmission margin (including Sunrise Powerlink);
|
§
|
$10 million higher CPUC base operating margin as a result of the final GRC decision, net of operating costs; and
|
§
|
$6 million increase in allowance for funds used during construction (AFUDC) related to equity (excluding Sunrise).
|
§
|
$102 million in the three months ended September 30, 2013 (both before and after preferred dividends)
|
§
|
$71 million in the three months ended September 30, 2012 (both before and after preferred dividends)
|
§
|
$266 million for the first nine months of 2013 ($267 million before preferred dividends)
|
§
|
$190 million for the first nine months of 2012 ($191 million before preferred dividends)
|
§
|
$12 million primarily due to higher CPUC base operating margin as a result of the final GRC decision;
|
§
|
$10 million reduction in 2013 income tax expense primarily due to a change made beginning in the fourth quarter of 2012 in the income tax treatment of certain repairs expenditures for gas transmission and distribution assets that are capitalized for financial statement purposes, as we discuss below in “Income Taxes;”
|
§
|
$4 million insurance recovery of previously expensed costs;
|
§
|
$4 million expensing of costs associated with the transmission integrity management program in 2012 now fully recovered (balanced) in revenues pursuant to the 2012 GRC; and
|
§
|
$3 million favorable resolution of prior year tax issues in 2013; offset by
|
§
|
$3 million lower CPUC-authorized rate of return established in the CPUC cost of capital proceeding effective as of January 1, 2013.
|
§
|
$26 million reduction in 2013 income tax expense primarily due to a change made beginning in the fourth quarter of 2012 in the income tax treatment of certain repairs expenditures for gas transmission and distribution assets that are capitalized for financial statement purposes, as we discuss below in “Income Taxes;”
|
§
|
$25 million favorable impact from the retroactive application for 2012 of the final decision in the 2012 GRC;
|
§
|
$17 million primarily due to higher CPUC base operating margin as a result of the final GRC decision;
|
§
|
$10 million expensing of costs associated with the transmission integrity management program in 2012 now fully recovered (balanced) in revenues pursuant to the 2012 GRC;
|
§
|
$8 million favorable resolution of prior year tax issues in 2013; and
|
§
|
$4 million insurance recovery of previously expensed costs; offset by
|
§
|
$10 million lower CPUC-authorized rate of return established in the CPUC cost of capital proceeding effective as of January 1, 2013; and
|
§
|
$5 million decrease in AFUDC related to equity.
|
EARNINGS BY SEGMENT – SEMPRA INTERNATIONAL
|
(Dollars in millions)
|
§
|
$39 million in the three months ended September 30, 2013
|
§
|
$40 million in the three months ended September 30, 2012
|
§
|
$110 million for the first nine months of 2013
|
§
|
$118 million for the first nine months of 2012
|
§
|
$3 million lower earnings from operations in 2013 from foreign currency effects; and
|
§
|
$2 million higher interest expense; offset by
|
§
|
$4 million lower income tax expense from an unfavorable resolution of prior years’ tax matters in 2012.
|
§
|
$11 million equity losses related to our investments in two Argentine natural gas utility holding companies, including $7 million noncash impairment charge in the first quarter of 2013 and $4 million loss from the sale of the investments in the second quarter of 2013; and
|
§
|
$3 million equity losses from our joint venture in Chile in 2013 resulting from a forward exchange contract to manage foreign currency exchange rate risk; offset by
|
§
|
$4 million lower income tax expense from an unfavorable resolution of prior years’ tax matters in 2012; and
|
§
|
$2 million higher earnings from operations, net of $1 million from foreign currency effects.
|
§
|
$39 million in the three months ended September 30, 2013
|
§
|
$42 million in the three months ended September 30, 2012
|
§
|
$96 million for the first nine months of 2013
|
§
|
$122 million for the first nine months of 2012
|
§
|
$9 million decrease in Sempra Mexico’s earnings for earnings attributable to noncontrolling interests at IEnova; and
|
§
|
$2 million lower earnings from operations mainly due to:
|
o
|
ongoing administrative expenses related to the new IEnova public company structure, offset by
|
o
|
higher electricity and gas prices and the net impact of changes in affiliate agreements; offset by
|
§
|
$7 million net favorable impact on earnings, primarily from inflation and foreign currency effects for Mexican income tax purposes, and translation effects, primarily on Mexican tax receivables.
|
§
|
$18 million decrease in Sempra Mexico’s earnings for earnings attributable to noncontrolling interests at IEnova;
|
§
|
$7 million lower earnings from operations mainly due to:
|
o
|
scheduled plant maintenance at our Mexicali power plant in 2013, and ongoing administrative expenses related to the new IEnova public company structure, offset by
|
o
|
higher electricity and gas prices and the net impact of changes in affiliate agreements; and
|
§
|
$7 million negative translation effect primarily on Peso-denominated tax receivables; offset by
|
§
|
$5 million lower income tax expense primarily related to Mexican currency and inflation adjustments.
|
EARNINGS (LOSSES) BY SEGMENT – SEMPRA U.S. GAS & POWER
|
(Dollars in millions)
|
§
|
$37 million in the three months ended September 30, 2013
|
§
|
$13 million in the three months ended September 30, 2012
|
§
|
$56 million for the first nine months of 2013
|
§
|
$47 million for the first nine months of 2012
|
§
|
$24 million gains from the sale of 50-percent equity interests in Mesquite Solar 1 and Copper Mountain Solar 2;
|
§
|
$6 million higher earnings from our solar assets, including $2 million from interest rate hedges; and
|
§
|
$4 million higher earnings attributable to our wind assets; offset by
|
§
|
$10 million lower deferred income tax benefits as a result of solar and wind generating assets placed in service in 2012.
|
§
|
$24 million gains from the sale of 50-percent equity interests in Mesquite Solar 1 and Copper Mountain Solar 2;
|
§
|
$12 million higher earnings attributable to our wind assets; and
|
§
|
$7 million higher earnings from our solar assets, including $5 million from interest rate hedges; offset by
|
§
|
$38 million lower deferred income tax benefits, including $5 million decrease from U.S. Treasury grant sequestration in 2013, as a result of solar and wind generating assets placed in service in 2012.
|
§
|
$(7) million in the three months ended September 30, 2013
|
§
|
$(68) million in the three months ended September 30, 2012
|
§
|
$55 million for the first nine months of 2013
|
§
|
$(260) million for the first nine months of 2012
|
§
|
$60 million write-down of our investment in Rockies Express in 2012; and
|
§
|
$6 million higher earnings from LNG operations, primarily due to lower costs resulting from commercial arrangements entered into with affiliates and the impact of higher natural gas prices on marketing operations; offset by
|
§
|
$4 million lower earnings at Sempra Rockies Marketing due to expiring capacity release contracts.
|
§
|
$239 million cumulative write-down of our investment in Rockies Express in 2012;
|
§
|
$44 million gain in 2013 on the sale of a 625-MW block of the Mesquite Power plant, net of related expenses;
|
§
|
$24 million higher earnings from LNG operations, primarily due to the timing of cargos and impact of higher natural gas prices on marketing operations, and lower costs resulting from commercial arrangements entered into with affiliates;
|
§
|
$14 million higher earnings primarily from mark-to-market gains in 2013 compared to losses in 2012 from natural gas storage operations driven by changes in gas prices; and
|
§
|
$7 million lower operating costs at the Mesquite Power plant due to the sale of one block of the plant in the first quarter of 2013; offset by
|
§
|
$8 million lower earnings at Sempra Rockies Marketing due to expiring capacity release contracts.
|
§
|
$43 million in the three months ended September 30, 2013
|
§
|
$4 million in the three months ended September 30, 2012
|
§
|
$149 million for the first nine months of 2013
|
§
|
$25 million for the first nine months of 2012
|
§
|
$22 million lower investment gains on dedicated assets in support of our executive retirement and deferred compensation plans, net of the decrease in deferred compensation liability associated with the investments;
|
§
|
$12 million higher net interest expense; and
|
§
|
$4 million higher retained operating costs.
|
§
|
$63 million income tax expense resulting from a corporate reorganization in connection with the IEnova stock offerings;
|
§
|
$54 million income tax benefit in 2012 primarily associated with our decision to hold life insurance contracts kept in support of certain benefit plans to term;
|
§
|
$33 million higher net interest expense; and
|
§
|
$11 million lower investment gains on dedicated assets in support of our executive retirement and deferred compensation plans, net of the change in deferred compensation liability associated with the investments; offset by
|
§
|
$26 million higher income tax benefits, excluding income tax items discussed above.
|
§
|
SDG&E
|
§
|
SoCalGas
|
§
|
Sempra Mexico’s Ecogas
|
§
|
Sempra Natural Gas’ Mobile Gas and Willmut Gas
|
§
|
SDG&E
|
§
|
Sempra South American Utilities’ Chilquinta Energía and Luz del Sur
|
UTILITIES REVENUES AND COST OF SALES
|
|||||||||
(Dollars in millions)
|
|||||||||
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||
2013
|
2012
|
2013
|
2012
|
||||||
Electric revenues:
|
|||||||||
SDG&E
|
$
|
970
|
$
|
998
|
$
|
2,685
|
$
|
2,349
|
|
Sempra South American Utilities
|
334
|
335
|
1,034
|
997
|
|||||
Eliminations and adjustments
|
(2)
|
(1)
|
(6)
|
(5)
|
|||||
Total
|
1,302
|
1,332
|
3,713
|
3,341
|
|||||
Natural gas revenues:
|
|||||||||
SoCalGas
|
807
|
728
|
2,694
|
2,328
|
|||||
SDG&E
|
93
|
94
|
381
|
357
|
|||||
Sempra Mexico
|
21
|
17
|
72
|
55
|
|||||
Sempra Natural Gas
|
17
|
17
|
79
|
67
|
|||||
Eliminations and adjustments
|
(17)
|
(18)
|
(50)
|
(49)
|
|||||
Total
|
921
|
838
|
3,176
|
2,758
|
|||||
Total utilities revenues
|
$
|
2,223
|
$
|
2,170
|
$
|
6,889
|
$
|
6,099
|
|
Cost of electric fuel and purchased power:
|
|||||||||
SDG&E
|
$
|
315
|
$
|
301
|
$
|
776
|
$
|
604
|
|
Sempra South American Utilities
|
222
|
212
|
685
|
647
|
|||||
Eliminations and adjustments
|
―
|
2
|
―
|
1
|
|||||
Total
|
$
|
537
|
$
|
515
|
$
|
1,461
|
$
|
1,252
|
|
Cost of natural gas:
|
|||||||||
SoCalGas
|
$
|
209
|
$
|
175
|
$
|
966
|
$
|
703
|
|
SDG&E
|
36
|
29
|
157
|
130
|
|||||
Sempra Mexico
|
15
|
10
|
47
|
32
|
|||||
Sempra Natural Gas
|
5
|
4
|
25
|
16
|
|||||
Eliminations and adjustments
|
(4)
|
(6)
|
(13)
|
(17)
|
|||||
Total
|
$
|
261
|
$
|
212
|
$
|
1,182
|
$
|
864
|
§
|
$48 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses;
|
§
|
$14 million loss of revenue from SONGS due to the early closure of the plant; and
|
§
|
$8 million lower CPUC-authorized rate of return established in the CPUC cost of capital proceeding effective as of January 1, 2013; offset by
|
§
|
$30 million increase primarily due to higher authorized revenue in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SDG&E’s 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue;
|
§
|
$14 million increase in cost of electric fuel and purchased power; and
|
§
|
$9 million higher authorized revenues from electric transmission.
|
§
|
$336 million increase at SDG&E, including:
|
§
|
$172 million increase in cost of electric fuel and purchased power,
|
§
|
$144 million higher authorized revenues from electric transmission,
|
§
|
$74 million increase primarily due to higher authorized revenue in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue, and
|
§
|
$61 million favorable impact from the retroactive application of the 2012 GRC decision for the period from January 2012 through December 2012, offset by
|
§
|
$59 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses,
|
§
|
$22 million lower CPUC-authorized rate of return established in the CPUC cost of capital proceeding effective as of January 1, 2013, and
|
§
|
$19 million loss of revenue from SONGS due to the early closure of the plant; and
|
§
|
$37 million increase at our South American utilities primarily due to higher volumes at both Luz del Sur and Chilquinta Energía.
|
§
|
$14 million increase at SDG&E primarily due to the incremental cost and purchases of renewable energy, and increased cost of other purchased power primarily due to higher power prices; and
|
§
|
$10 million increase at our South American utilities driven primarily by higher volumes at both Luz del Sur and Chilquinta Energía, offset by foreign currency exchange rate effects.
|
§
|
$172 million increase in SDG&E’s cost of electric fuel and purchased power primarily due to the incremental cost and purchases of renewable energy, and increased cost of other purchased power primarily due to higher power prices; and
|
§
|
$38 million increase at our South American utilities driven primarily by higher volumes at both Luz del Sur and Chilquinta Energía.
|
§
|
an increase in cost of natural gas sold at both SoCalGas and SDG&E, as we discuss below;
|
§
|
higher recovery of costs at SoCalGas associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses; and
|
§
|
increases of $15 million and $2 million at SoCalGas and SDG&E, respectively, primarily due to higher authorized revenues in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue.
|
§
|
an increase in cost of natural gas sold at both SoCalGas and SDG&E, as we discuss below;
|
§
|
increases of $48 million and $14 million at SoCalGas and SDG&E, respectively, primarily due to higher authorized revenues in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue;
|
§
|
higher recovery of costs at SoCalGas associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses; and
|
§
|
$30 million favorable impact from the retroactive application of the 2012 GRC decision for the period from January 2012 through December 2012.
|
SDG&E
|
|||||||
ELECTRIC DISTRIBUTION AND TRANSMISSION
|
|||||||
(Volumes in millions of kilowatt-hours, dollars in millions)
|
|||||||
Nine months ended
September 30, 2013
|
Nine months ended
September 30, 2012
|
||||||
Customer class
|
Volumes
|
Revenue
|
Volumes
|
Revenue
|
|||
Residential
|
5,645
|
$
|
962
|
5,650
|
$
|
907
|
|
Commercial
|
5,110
|
815
|
5,157
|
753
|
|||
Industrial
|
1,485
|
192
|
1,529
|
184
|
|||
Direct access(1)
|
2,681
|
110
|
2,473
|
110
|
|||
Street and highway lighting
|
65
|
9
|
70
|
9
|
|||
14,986
|
2,088
|
14,879
|
1,963
|
||||
CAISO shared transmission revenue - net(2)
|
210
|
49
|
|||||
Other revenues
|
130
|
76
|
|||||
Balancing accounts
|
257
|
261
|
|||||
Total(3)
|
$
|
2,685
|
$
|
2,349
|
|||
(1)
|
The Direct Access (DA) program, which offered all customers the option to purchase their electric commodity services from a third-party Energy Service Provider (ESP) instead of continuing to receive these services from SDG&E, was implemented in 1998 and suspended in 2001. In 2009, Senate Bill 695 required the CPUC to develop a process and rules for a limited re-opening of DA to be phased in over a period of time. In 2010, the CPUC adopted the process and rules for the limited re-opening of DA for non-residential customers under a 4-year phase-in schedule. The 2013 tranche of non-residential customers switching to DA resulted in higher volumes in 2013. The increase in revenues from the higher volumes was offset by lower tariffs in 2013 compared to 2012.
|
||||||
(2)
|
California Independent System Operator.
|
||||||
(3)
|
Includes sales to affiliates of $6 million in 2013 and $5 million in 2012.
|
§
|
$48 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses;
|
§
|
$14 million loss of revenue from SONGS due to the early closure of the plant; and
|
§
|
$8 million lower CPUC-authorized rate of return established in the CPUC cost of capital proceeding effective as of January 1, 2013; offset by
|
§
|
$30 million increase primarily due to higher authorized revenue in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SDG&E’s 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue;
|
§
|
$14 million increase in cost of electric fuel and purchased power primarily due to the incremental cost and purchases of renewable energy, and increased cost of other purchased power primarily due to higher power prices; and
|
§
|
$9 million higher authorized revenues from electric transmission.
|
§
|
$172 million increase in cost of electric fuel and purchased power primarily due to the incremental cost and purchases of renewable energy, and increased cost of other purchased power primarily due to higher power prices;
|
§
|
$144 million higher authorized revenues from electric transmission including:
|
§
|
$85 million from placing the Sunrise Powerlink transmission line in service in June 2012, and
|
§
|
$59 million from increased investment in other transmission assets;
|
§
|
$74 million increase primarily due to higher authorized revenue in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SDG&E’s 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue; and
|
§
|
$61 million favorable impact from the retroactive application of the 2012 GRC decision for the period from January 2012 through December 2012; offset by
|
§
|
$59 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses;
|
§
|
$22 million lower CPUC-authorized rate of return established in the CPUC cost of capital proceeding effective as of January 1, 2013; and
|
§
|
$19 million loss of revenue from SONGS due to the early closure of the plant.
|
SDG&E
|
||||||||||
NATURAL GAS SALES AND TRANSPORTATION
|
||||||||||
(Volumes in billion cubic feet, dollars in millions)
|
||||||||||
Natural Gas Sales
|
Transportation
|
Total
|
||||||||
Customer class
|
Volumes
|
Revenue
|
Volumes
|
Revenue
|
Volumes
|
Revenue
|
||||
Nine months ended September 30, 2013:
|
||||||||||
Residential
|
24
|
$
|
245
|
―
|
$
|
1
|
24
|
$
|
246
|
|
Commercial and industrial
|
11
|
74
|
7
|
9
|
18
|
83
|
||||
Electric generation plants
|
―
|
―
|
19
|
12
|
19
|
12
|
||||
35
|
$
|
319
|
26
|
$
|
22
|
61
|
341
|
|||
Other revenues
|
30
|
|||||||||
Balancing accounts
|
10
|
|||||||||
Total(1)
|
$
|
381
|
||||||||
Nine months ended September 30, 2012:
|
||||||||||
Residential
|
24
|
$
|
210
|
―
|
$
|
1
|
24
|
$
|
211
|
|
Commercial and industrial
|
11
|
58
|
7
|
7
|
18
|
65
|
||||
Electric generation plants
|
―
|
―
|
26
|
7
|
26
|
7
|
||||
35
|
$
|
268
|
33
|
$
|
15
|
68
|
283
|
|||
Other revenues
|
30
|
|||||||||
Balancing accounts
|
44
|
|||||||||
Total(1)
|
$
|
357
|
||||||||
(1)
|
Includes sales to affiliates of $2 million in 2013 and $1 million in 2012.
|
§
|
$6 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses; offset by
|
§
|
higher cost of natural gas sold, as we discuss below; and
|
§
|
$2 million increase primarily due to higher authorized revenue in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SDG&E’s 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue.
|
§
|
higher cost of natural gas sold, as we discuss below;
|
§
|
$14 million increase primarily due to higher authorized revenue in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SDG&E’s 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue; and
|
§
|
$5 million from the retroactive application of the 2012 GRC decision for the period from January 2012 through December 2012; offset by
|
§
|
$12 million lower recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses.
|
SOCALGAS
|
||||||||||
NATURAL GAS SALES AND TRANSPORTATION
|
||||||||||
(Volumes in billion cubic feet, dollars in millions)
|
||||||||||
Natural Gas Sales
|
Transportation
|
Total
|
||||||||
Customer class
|
Volumes
|
Revenue
|
Volumes
|
Revenue
|
Volumes
|
Revenue
|
||||
Nine months ended September 30, 2013:
|
||||||||||
Residential
|
167
|
$
|
1,566
|
2
|
$
|
6
|
169
|
$
|
1,572
|
|
Commercial and industrial
|
74
|
510
|
218
|
180
|
292
|
690
|
||||
Electric generation plants
|
―
|
―
|
158
|
35
|
158
|
35
|
||||
Wholesale
|
―
|
―
|
123
|
20
|
123
|
20
|
||||
241
|
$
|
2,076
|
501
|
$
|
241
|
742
|
2,317
|
|||
Other revenues
|
76
|
|||||||||
Balancing accounts
|
301
|
|||||||||
Total(1)
|
$
|
2,694
|
||||||||
Nine months ended September 30, 2012:
|
||||||||||
Residential
|
168
|
$
|
1,382
|
1
|
$
|
6
|
169
|
$
|
1,388
|
|
Commercial and industrial
|
75
|
438
|
212
|
181
|
287
|
619
|
||||
Electric generation plants
|
―
|
―
|
180
|
34
|
180
|
34
|
||||
Wholesale
|
―
|
―
|
129
|
18
|
129
|
18
|
||||
243
|
$
|
1,820
|
522
|
$
|
239
|
765
|
2,059
|
|||
Other revenues
|
74
|
|||||||||
Balancing accounts
|
195
|
|||||||||
Total(1)
|
$
|
2,328
|
||||||||
(1)
|
Includes sales to affiliates of $48 million in both 2013 and 2012.
|
§
|
an increase in cost of natural gas sold, as we discuss below;
|
§
|
$19 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses; and
|
§
|
$15 million increase primarily due to higher authorized revenue in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SoCalGas’ 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue.
|
§
|
an increase in cost of natural gas sold, as we discuss below;
|
§
|
$48 million increase primarily due to higher authorized revenue in the 2012 GRC decision and 2013 attrition. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SoCalGas’ 2012 authorized revenue was essentially unchanged from the 2011 authorized revenue;
|
§
|
$32 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses; and
|
§
|
$25 million favorable impact from the retroactive application of the 2012 GRC decision for the period from January 2012 through December 2012.
|
OTHER UTILITIES
|
|||||||
NATURAL GAS AND ELECTRIC REVENUES
|
|||||||
(Dollars in millions)
|
|||||||
Nine months ended
September 30, 2013
|
Nine months ended
September 30, 2012
|
||||||
Volumes
|
Revenue
|
Volumes
|
Revenue
|
||||
Natural Gas Sales (billion cubic feet):
|
|||||||
Sempra Mexico — Ecogas
|
18
|
$
|
72
|
17
|
$
|
55
|
|
Sempra Natural Gas:
|
|||||||
Mobile Gas
|
29
|
64
|
33
|
62
|
|||
Willmut Gas(1)
|
2
|
15
|
1
|
5
|
|||
Total
|
49
|
$
|
151
|
51
|
$
|
122
|
|
Electric Sales (million kilowatt hours):
|
|||||||
Sempra South American Utilities:
|
|||||||
Luz del Sur
|
5,221
|
$
|
585
|
4,996
|
$
|
563
|
|
Chilquinta Energía
|
2,127
|
405
|
2,015
|
393
|
|||
7,348
|
990
|
7,011
|
956
|
||||
Other service revenues
|
44
|
41
|
|||||
Total
|
$
|
1,034
|
$
|
997
|
|||
(1)
|
We acquired Willmut Gas in May 2012.
|
ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES
|
|||||||||
(Dollars in millions)
|
|||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||
2013
|
2012
|
2013
|
2012
|
||||||
Energy-related businesses revenues:
|
|||||||||
Sempra South American Utilities
|
$
|
30
|
$
|
21
|
$
|
85
|
$
|
64
|
|
Sempra Mexico
|
167
|
164
|
447
|
380
|
|||||
Sempra Renewables
|
25
|
27
|
76
|
49
|
|||||
Sempra Natural Gas
|
195
|
277
|
604
|
694
|
|||||
Intersegment revenues, adjustments and eliminations(1)
|
(89)
|
(152)
|
(249)
|
(307)
|
|||||
Total energy-related businesses revenues
|
$
|
328
|
$
|
337
|
$
|
963
|
$
|
880
|
|
Cost of natural gas, electric fuel and purchased power(2):
|
|||||||||
Sempra Mexico
|
$
|
72
|
$
|
72
|
$
|
189
|
$
|
145
|
|
Sempra Renewables
|
―
|
2
|
3
|
2
|
|||||
Sempra Natural Gas
|
134
|
215
|
378
|
504
|
|||||
Adjustments and eliminations(1)
|
(86)
|
(153)
|
(245)
|
(305)
|
|||||
Total cost of natural gas, electric fuel
|
|||||||||
and purchased power
|
$
|
120
|
$
|
136
|
$
|
325
|
$
|
346
|
|
Other cost of sales(2):
|
|||||||||
Sempra South American Utilities
|
$
|
23
|
$
|
20
|
$
|
63
|
$
|
48
|
|
Sempra Mexico
|
3
|
1
|
18
|
3
|
|||||
Sempra Natural Gas
|
22
|
22
|
69
|
66
|
|||||
Adjustments and eliminations(1)
|
(1)
|
―
|
(6)
|
―
|
|||||
Total other cost of sales
|
$
|
47
|
$
|
43
|
$
|
144
|
$
|
117
|
|
(1)
|
Includes eliminations of intercompany activity.
|
||||||||
(2)
|
Excludes depreciation and amortization, which are shown separately on the Condensed Consolidated Statements of Operations.
|
§
|
$82 million at Sempra Natural Gas due to lower revenues as a result of an energy management agreement (EMA) with Sempra Mexico, lower power production at Mesquite Power, a portion of which was due to the sale of one 625-MW block of the natural gas-fired power plant, and expiring capacity release contracts at Sempra Rockies Marketing; offset by
|
§
|
$63 million primarily from decreased intercompany activity, which is eliminated in consolidation.
|
§
|
$67 million increase at Sempra Mexico primarily due to higher natural gas and power prices and a change in an affiliate agreement in 2013;
|
§
|
$58 million primarily from decreased intercompany activity, which is eliminated in consolidation;
|
§
|
$27 million increase at Sempra Renewables mainly from revenues generated by our solar assets placed in service during 2012; and
|
§
|
$21 million increase at Sempra South American Utilities primarily due to higher electric construction service and energy distribution revenues; offset by
|
§
|
$90 million decrease at Sempra Natural Gas primarily due to lower revenues as a result of the EMA with Sempra Mexico, lower power production at Mesquite Power, a portion of which was due to the sale of one 625-MW block of the natural gas-fired power plant, and expiring capacity release contracts at Sempra Rockies Marketing, offset by increased revenues from its LNG operations as a result of higher natural gas prices, and mark-to-market gains in 2013 compared to losses in 2012 from gas storage operations driven by changes in gas prices.
|
§
|
an $81 million decrease at Sempra Natural Gas primarily due to lower costs associated with the EMA with Sempra Mexico and lower natural gas costs as a result of lower power production at Mesquite Power, as discussed above; offset by
|
§
|
$67 million primarily from decreased intercompany activity, which is eliminated in consolidation.
|
§
|
a $126 million decrease at Sempra Natural Gas primarily due to lower costs associated with the EMA with Sempra Mexico and lower natural gas costs as a result of lower power production at Mesquite Power, as discussed above, offset by an increase at its LNG operations as a result of higher natural gas prices; offset by
|
§
|
$60 million primarily from decreased intercompany activity, which is eliminated in consolidation; and
|
§
|
a $44 million increase at Sempra Mexico primarily due to higher natural gas costs and volumes.
|
§
|
$54 million lower expenses associated with CPUC-authorized refundable programs for which all costs incurred are fully recovered in revenue (refundable program expenses); offset by
|
§
|
$6 million higher operation and maintenance costs, including labor, contract services and administrative and support costs (non-refundable operating costs).
|
§
|
$71 million lower refundable program expenses; offset by
|
§
|
$53 million higher non-refundable operating costs, including
|
o
|
$10 million recovery in 2012 of incremental costs incurred in prior years for the long-term storage of spent nuclear fuel, and
|
o
|
$5 million increase in liability insurance premiums for wildfire coverage in 2013; and
|
§
|
$18 million higher operation and maintenance expenses at Otay Mesa VIE.
|
§
|
$32 million higher refundable program expenses; offset by
|
§
|
$22 million lower non-refundable operating costs; and
|
§
|
$7 million insurance recovery in 2013 of previously expensed costs.
|
§
|
$27 million higher depreciation and amortization at SoCalGas from higher utility plant base;
|
§
|
$26 million increase in depreciation and amortization at SDG&E mainly from Sunrise Powerlink going into service in June 2012; and
|
§
|
$10 million higher depreciation at Sempra Renewables mainly due to Mesquite Solar 1 and Copper Mountain Solar 2 going into service in the fourth quarter of 2012; offset by
|
§
|
extension of the useful lives of depreciable assets as a result of the retroactive impact of the 2012 GRC decision, which reduced depreciation and amortization at SDG&E and SoCalGas by $18 million and $15 million, respectively; and
|
§
|
$9 million lower depreciation expense at Sempra Natural Gas largely due to the sale of one block of the Mesquite Power plant in February 2013.
|
§
|
$36 million decrease in equity-related AFUDC primarily at SDG&E due to completion of construction on the Sunrise Powerlink project in June 2012;
|
§
|
$11 million lower gains from investment activity related to our executive retirement and deferred compensation plans in 2013; and
|
§
|
$10 million foreign currency gains in 2012.
|
§
|
$33 million decrease in capitalized interest mainly due to projects placed in service, including: SDG&E’s Sunrise Powerlink, which was placed in service in June 2012; Sempra Renewables’ solar and wind projects, which went online in the fourth quarter of 2012; and Sempra Natural Gas’ Mississippi Hub Cavern, which went online in September 2012; and
|
§
|
$28 million increase primarily from long-term debt issuances at Sempra Mexico in 2013, long-term debt issuances in 2012 and 2013 and remarketing of industrial development bonds in 2012 from floating to fixed rates at SDG&E, and from project financing at Sempra Renewables.
|
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
|
|||||||||||
(Dollars in millions)
|
|||||||||||
Three months ended September 30,
|
|||||||||||
2013
|
2012
|
||||||||||
Effective
|
Effective
|
||||||||||
Income Tax
|
Income
|
Income Tax
|
Income
|
||||||||
Expense
|
Tax Rate
|
Expense
|
Tax Rate
|
||||||||
Sempra Energy Consolidated
|
$
|
117
|
27
|
%
|
$
|
49
|
15
|
%
|
|||
SDG&E
|
84
|
38
|
38
|
17
|
|||||||
SoCalGas
|
38
|
27
|
37
|
34
|
|||||||
Nine months ended September 30,
|
|||||||||||
2013
|
2012
|
||||||||||
Effective
|
Effective
|
||||||||||
Income Tax
|
Income
|
Income Tax
|
Income
|
||||||||
Expense
|
Tax Rate
|
Expense
|
Tax Rate
|
||||||||
Sempra Energy Consolidated
|
$
|
327
|
30
|
%
|
$
|
48
|
8
|
%
|
|||
SDG&E
|
147
|
33
|
151
|
27
|
|||||||
SoCalGas
|
107
|
29
|
105
|
35
|
§
|
$33 million income tax benefit at SDG&E in 2012 resulting from a favorable change made in the third quarter in the income tax treatment of certain repairs expenditures that are capitalized for book purposes, including $22 million recorded in 2012 for 2011 and $11 million recorded for the first two quarters of 2012; and
|
§
|
lower exclusions from taxable income of the equity portion of AFUDC; offset by
|
§
|
income tax benefit in 2013 resulting from a favorable change made in the fourth quarter of 2012 in the income tax treatment of certain repairs expenditures at SoCalGas that are capitalized for financial statement purposes;
|
§
|
income tax benefit in 2013 from favorable adjustments to prior years’ income tax items; and
|
§
|
lower income tax expense from Mexican currency translation and inflation adjustments.
|
§
|
$54 million income tax benefit in 2012 primarily associated with our decision in the second quarter of 2012 to hold life insurance contracts kept in support of certain benefit plans to term. Previously, we took the position that we might cash in or sell these contracts before maturity, which required that we record deferred income taxes on unrealized gains on investments held within the insurance contracts;
|
§
|
$63 million income tax expense in 2013 resulting from a corporate reorganization in connection with the IEnova stock offerings. We discuss the stock offerings further in Note 5 of the Notes to Condensed Consolidated Financial Statements herein;
|
§
|
lower deferred income tax benefits related to renewable energy projects, offset by higher renewable energy income tax credits; and
|
§
|
$22 million income tax benefit at SDG&E recorded in 2012 for 2011 resulting from a favorable change made in the third quarter in the income tax treatment of certain repairs expenditures that are capitalized for book purposes; offset by
|
§
|
income tax benefit in 2013 resulting from changes made in the fourth quarter of 2012 in the income tax treatment of certain repairs expenditures at SoCalGas that are capitalized for financial statement purposes, as we discuss above; and
|
§
|
lower income tax expense from Mexican currency translation and inflation adjustments.
|
·
|
Higher Corporate Tax Rate: Previously, the law provided that the corporate income tax rate would go down to 28 percent for 2014 and future years. The proposal would make the current 30 percent income tax rate permanent. We estimate the earnings impact of this rate change to be:
|
o
|
For 2013, approximately $12 million additional income tax expense related to the revaluation of deferred tax liabilities when the law is enacted.
|
o
|
For 2014 through 2017, higher income tax expense of approximately $18 million in total over the four years.
|
·
|
Tax Consolidation: The current tax consolidation regime would be replaced with a new tax consolidation regime, under which tax benefits would be recaptured in three years instead of five years. Subject to clarification of certain details should this part of the proposal be enacted, we do not expect the change to have a material financial impact to Sempra Energy.
|
·
|
10 Percent Dividends Tax: A proposed new “corporate” tax on dividends would be payable by the Mexican entity that distributes the dividend, which would increase Mexico’s income tax rate to an effective 37 percent. The preliminary view of advisors is mixed on whether this tax could be reduced or offset in accordance with bilateral tax treaties. As we discuss below, the Chamber of Deputies made changes to this original proposal. However, if the changes are not ultimately enacted into law, we estimate the earnings effect would be:
|
o
|
For 2014 through 2017, higher income tax expense of approximately $72 million in total over the four years.
|
o
|
A potential tax expense in 2013 on the dividends that will be declared in 2014.
|
§
|
$33 million income tax benefit in 2012 resulting from a favorable change made in the third quarter in the income tax treatment of certain repairs expenditures that are capitalized for book purposes, including $22 million recorded in 2012 for 2011 and $11 million recorded for the first two quarters of 2012;
|
§
|
higher unfavorable adjustments to prior years’ income tax items in 2013;
|
§
|
higher reversal through book depreciation in 2013 of previously recognized tax benefits for a certain portion of utility fixed assets; and
|
§
|
lower favorable impact of exclusions from taxable income of the equity portion of AFUDC.
|
§
|
$22 million income tax benefit recorded in 2012 for 2011 resulting from a favorable change made in the third quarter in the income tax treatment of certain repairs expenditures that are capitalized for book purposes; and
|
§
|
higher reversal through book depreciation in 2013 of previously recognized tax benefits for a certain portion of utility fixed assets; offset by
|
§
|
higher deductions for self-developed software expenditures in 2013.
|
§
|
income tax benefit in 2013 resulting from a favorable change, not made until the fourth quarter of 2012, in the income tax treatment of certain repairs expenditures for gas assets that are capitalized for financial statement purposes; and
|
§
|
income tax benefit in 2013 due to favorable adjustments to prior years’ income tax items; offset by
|
§
|
higher reversal through book depreciation in 2013 of previously recognized tax benefits for a certain portion of utility fixed assets.
|
§
|
income tax benefit in 2013 resulting from a favorable change, not made until the fourth quarter of 2012, in the income tax treatment of certain repairs expenditures for gas assets that are capitalized for financial statement purposes; and
|
§
|
income tax benefit in 2013 due to favorable adjustments to prior years’ income tax items.
|
MEXICAN CURRENCY IMPACT ON INCOME TAXES AND RELATED ECONOMIC HEDGING ACTIVITY
|
||||||||||
(Dollars in millions)
|
||||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||
2013
|
2012
|
2013
|
2012
|
|||||||
Income tax benefit (expense) on currency exchange
|
||||||||||
rate movement of monetary assets and liabilities
|
$
|
1
|
$
|
(5)
|
$
|
(6)
|
$
|
(7)
|
||
Translation of non-U.S. deferred income tax balances
|
―
|
(7)
|
―
|
(7)
|
||||||
Income tax expense on inflation
|
―
|
(1)
|
―
|
(2)
|
||||||
Total impact on income taxes
|
1
|
(13)
|
(6)
|
(16)
|
||||||
After-tax gains on Mexican peso exchange rate
|
||||||||||
instruments (included in Other Income, Net)
|
―
|
―
|
4
|
6
|
||||||
Net impacts on Sempra Energy Condensed
|
||||||||||
Consolidated Statements of Operations
|
$
|
1
|
$
|
(13)
|
$
|
(2)
|
$
|
(10)
|
§
|
$11 million equity losses related to our investments in two Argentine natural gas utility holding companies, including $7 million noncash impairment charge in the first quarter of 2013 and $4 million loss from the sale of the investments in the second quarter of 2013, as we discuss in Note 4 of the Notes to Condensed Consolidated Financial Statements herein; and
|
§
|
$3 million of equity losses in the second quarter of 2013 from our joint venture in Chile.
|
§
|
$9 million earnings attributable to noncontrolling interests of IEnova in 2013. We discuss the stock offerings of IEnova in Note 5 of the Notes to Condensed Consolidated Financial Statements herein; offset by
|
§
|
$7 million lower earnings attributable to noncontrolling interest at Otay Mesa VIE in 2013.
|
§
|
$22 million lower earnings attributable to noncontrolling interest at Otay Mesa VIE in 2013; offset by
|
§
|
$18 million earnings attributable to noncontrolling interests of IEnova in 2013.
|
AVAILABLE FUNDS AT SEPTEMBER 30, 2013
|
|||||||
(Dollars in millions)
|
|||||||
Sempra Energy
|
|||||||
Consolidated
|
SDG&E
|
SoCalGas
|
|||||
Unrestricted cash and cash equivalents
|
$
|
1,061
|
$
|
167
|
$
|
15
|
|
Available unused credit(1)
|
3,676
|
658
|
658
|
||||
(1)
|
Borrowings on the shared line of credit at SDG&E and SoCalGas, discussed in Note 6 of the Notes to Condensed Consolidated Financial Statements herein, are limited to $658 million for each utility and a combined total of $877 million.
|
§
|
finance capital expenditures
|
§
|
meet liquidity requirements
|
§
|
fund shareholder dividends
|
§
|
fund new business acquisitions or start-ups
|
§
|
repay maturing long-term debt
|
CASH PROVIDED BY OPERATING ACTIVITIES
|
||||||||
(Dollars in millions)
|
||||||||
2013
|
2013 Change
|
2012
|
||||||
Sempra Energy Consolidated
|
$
|
1,330
|
$
|
(358)
|
(21)
|
%
|
$
|
1,688
|
SDG&E
|
509
|
(261)
|
(34)
|
770
|
||||
SoCalGas
|
487
|
(259)
|
(35)
|
746
|
§
|
$130 million decrease in net overcollected regulatory balancing accounts in 2013 at SoCalGas (including long-term amounts included in regulatory assets) due to the adoption of the 2012 GRC in 2013;
|
§
|
$85 million decrease in accounts receivable in 2013 compared to a $265 million decrease in 2012;
|
§
|
$99 million decrease in accounts payable in 2013 compared to an $8 million decrease in 2012;
|
§
|
$190 million of funds received from a wildfire settlement in 2012; and
|
§
|
$85 million payment received by SDG&E in 2012 for third party transmission line access; offset by
|
§
|
$262 million higher net income, adjusted for noncash items included in earnings, in 2013 compared to 2012; and
|
§
|
a $146 million decrease in settlement payments and associated legal fees in 2013 for wildfire claims at SDG&E.
|
§
|
$190 million of funds received from a wildfire settlement in 2012;
|
§
|
$85 million payment received in 2012 for third party transmission line access;
|
§
|
$103 million increase in accounts receivable in 2013 compared to a $29 million increase in 2012;
|
§
|
$38 million payment received in 2012 for third party electric interconnection upgrades; and
|
§
|
$14 million lower net income, adjusted for noncash items included in earnings, in 2013 compared to 2012; offset by
|
§
|
$146 million decrease in settlement payments and associated legal fees in 2013 for wildfire claims; and
|
§
|
$7 million lower undercollection in 2013 of regulatory balancing accounts, including:
|
o
|
$163 million reduction in the undercollected balance due to the adoption of the 2012 GRC in 2013; offset by
|
o
|
$153 million increase in the undercollected balance associated with other balanced operations and activities.
|
§
|
$130 million decrease in net overcollected regulatory balancing accounts in 2013, including $39 million due to the adoption of the 2012 GRC in 2013;
|
§
|
$192 million decrease in accounts receivable in 2013 compared to a $286 million decrease in 2012;
|
§
|
$31 million increase in income taxes receivable in 2013 compared to a $2 million decrease in 2012; and
|
§
|
$110 million decrease in accounts payable in 2013 compared to a $33 million decrease in 2012; offset by
|
§
|
$124 million higher net income, adjusted for noncash items included in earnings, in 2013 compared to 2012.
|
Other
|
||||
Pension
|
Postretirement
|
|||
(Dollars in millions)
|
Benefits
|
Benefits
|
||
Sempra Energy Consolidated
|
$
|
48
|
$
|
19
|
SDG&E
|
26
|
9
|
||
SoCalGas
|
8
|
7
|
CASH USED IN INVESTING ACTIVITIES
|
||||||||
(Dollars in millions)
|
||||||||
2013
|
2013 Change
|
2012
|
||||||
Sempra Energy Consolidated
|
$
|
(901)
|
$
|
(1,675)
|
(65)
|
%
|
$
|
(2,576)
|
SDG&E
|
(678)
|
(314)
|
(32)
|
(992)
|
||||
SoCalGas
|
(504)
|
(215)
|
(30)
|
(719)
|
§
|
$456 million decrease in capital expenditures;
|
§
|
$371 million of proceeds received from Sempra Natural Gas’ 2013 sale of a 625-MW block of its Mesquite Power plant;
|
§
|
$249 million invested in the Flat Ridge 2 Wind Farm in 2012;
|
§
|
$238 million of U.S. Treasury grant proceeds;
|
§
|
$98 million higher distributions received from investments, including $50 million received from RBS Sempra Commodities;
|
§
|
$103 million of proceeds received from the sale of a 50-percent equity interest in Mesquite Solar 1; and
|
§
|
$71 million of proceeds received from the sale of a 50-percent equity interest in Copper Mountain Solar 2.
|
§
|
a $257 million increase in advances to Sempra Energy in 2012; offset by
|
§
|
a $59 million increase in capital expenditures.
|
§
|
$1.9 billion at the California Utilities for capital projects and plant improvements ($1.1 billion at SDG&E and $0.8 billion at SoCalGas)
|
§
|
$1.0 billion at our other subsidiaries for capital projects in Mexico and South America, and development of natural gas and renewable generation projects
|
§
|
$550 million for improvements to SDG&E’s natural gas and electric distribution systems
|
§
|
$250 million for improvements to SDG&E’s electric transmission systems
|
§
|
$200 million at SDG&E for substation expansions (transmission)
|
§
|
$50 million for SDG&E’s electric generation plants and equipment
|
§
|
$650 million for improvements to SoCalGas’ distribution and transmission systems and storage and for pipeline safety
|
§
|
$170 million for SoCalGas’ advanced metering infrastructure
|
§
|
$10 million for SoCalGas’ other natural gas projects
|
§
|
approximately $200 million to $250 million for capital projects in South America (approximately $150 million to $200 million in Peru and approximately $50 million in Chile)
|
§
|
approximately $500 million to $550 million for capital projects in Mexico, including approximately $400 million for the development of natural gas pipeline projects developed solely by Sempra Mexico
|
§
|
approximately $100 million for investment in Copper Mountain Solar 3, a 250-MW solar project located near Boulder City, Nevada
|
§
|
approximately $100 million for development of natural gas projects
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|||||||
(Dollars in millions)
|
|||||||
2013
|
2013 Change
|
2012
|
|||||
Sempra Energy Consolidated
|
$
|
157
|
$
|
(1,000)
|
$
|
1,157
|
|
SDG&E
|
249
|
34
|
215
|
||||
SoCalGas
|
(51)
|
(245)
|
194
|
§
|
$890 million lower issuances of debt, including a decrease in issuances of long-term debt of $822 million ($1,088 million in 2013 compared to $1,910 million in 2012) and a decrease in issuances of commercial paper with maturities greater than 90 days of $68 million ($316 million in 2013 compared to $384 million in 2012);
|
§
|
$881 million higher debt payments, including $635 million higher payments on long-term debt ($688 million in 2013 compared to $53 million in 2012) and $246 million higher payments of commercial paper with maturities greater than 90 days ($756 million in 2013 compared to $510 million in 2012); and
|
§
|
$47 million increase in common dividends paid primarily due to an increase in the dividend rate; offset by
|
§
|
$81 million increase in short-term debt in 2013 compared to $142 million decrease in 2012; and
|
§
|
$574 million net proceeds received from the sale of noncontrolling interests at Sempra Mexico.
|
§
|
$201 million higher issuances of long-term debt; offset by
|
§
|
$176 million higher payments on long-term debt.
|
§
|
$348 million issuance of long-term debt in 2012; offset by
|
§
|
$100 million reduction in the payment of common dividends ($50 million in 2013 compared to $150 million in 2012).
|
§
|
The net book value of SDG&E’s investment in SONGS plant and nuclear fuel of $516 million, which prior to the date of the plant retirement, had been reported as Property, Plant and Equipment on the Condensed Consolidated Balance Sheet;
|
§
|
SDG&E’s SONGS-related materials and supplies of $10 million, which prior to the date of the plant retirement, had been reported as Inventory on the Condensed Consolidated Balance Sheet;
|
§
|
SDG&E’s 2013 cost of replacement power that is in excess of the amount previously authorized for recovery in ERRA of $74 million which, prior to the date of the plant retirement, would have been reported as Regulatory Balancing Accounts, Net in Current Assets on the Condensed Consolidated Balance Sheet;
|
§
|
Miscellaneous costs incurred or expected to be incurred by SDG&E associated with the early closure of the plant of $31 million; net of
|
§
|
A reserve for disallowance of rate recovery of $200 million reported as Loss from Plant Closure on the Condensed Consolidated Statement of Operations.
|
§
|
Bay Gas, a facility located 40 miles north of Mobile, Alabama, that provides underground storage and delivery of natural gas. Sempra Natural Gas owns 91 percent of the project. It is the easternmost salt dome storage facility on the Gulf Coast, with direct service to the Florida market and markets across the Southeast, Mid-Atlantic and Northeast regions.
|
§
|
Mississippi Hub, located 45 miles southeast of Jackson, Mississippi, an underground salt dome natural gas storage project with access to shale basins of East Texas and Louisiana, traditional gulf supplies and LNG, with multiple interconnections to serve the Southeast and Northeast regions.
|
§
|
LA Storage, previously referred to as Liberty natural gas storage expansion, a salt cavern development project in Cameron Parish, Louisiana. Sempra Natural Gas owns 75 percent of the project and ProLiance Transportation LLC owns the remaining 25 percent. The project’s location provides access to several LNG facilities in the area.
|
Sempra Energy
|
||||||||||||
Consolidated
|
SDG&E
|
SoCalGas
|
||||||||||
Nominal
|
One-Year
|
Nominal
|
One-Year
|
Nominal
|
One-Year
|
|||||||
(Dollars in millions)
|
Debt
|
VaR(1)
|
Debt
|
VaR(1)
|
Debt
|
VaR(1)
|
||||||
At September 30, 2013:
|
||||||||||||
California Utilities fixed-rate
|
$
|
5,478
|
$
|
687
|
$
|
4,065
|
$
|
527
|
$
|
1,413
|
$
|
160
|
California Utilities variable-rate
|
337
|
26
|
337
|
26
|
―
|
―
|
||||||
All other, fixed-rate and variable-rate
|
5,920
|
394
|
―
|
―
|
―
|
―
|
||||||
At December 31, 2012:
|
||||||||||||
California Utilities fixed-rate
|
$
|
5,203
|
$
|
601
|
$
|
3,790
|
$
|
451
|
$
|
1,413
|
$
|
150
|
California Utilities variable-rate
|
345
|
14
|
345
|
14
|
―
|
―
|
||||||
All other, fixed-rate and variable-rate
|
6,306
|
302
|
―
|
―
|
―
|
―
|
||||||
(1) After the effects of interest rate swaps.
|
§
|
the potential that a natural disaster such as an earthquake or tsunami could cause a catastrophic failure of the safety systems in place that are designed to prevent the release of radioactive material. If such a failure were to occur, a substantial amount of radiation could be released and cause catastrophic harm to human health and the environment;
|
§
|
the potential harmful effects on the environment and human health resulting from the prior operation of nuclear facilities and the storage, handling and disposal of radioactive materials;
|
§
|
limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with nuclear operations and the decommissioning of the facility;
|
§
|
uncertainties with respect to the technological and financial aspects of the decommissioning of the facility; and
|
§
|
the results of the CPUC’s Order Instituting Investigation (OII), as described in more detail below, into the SONGS outage that began in the first quarter of 2012.
|
EXHIBIT 10 -- MATERIAL CONTRACTS
|
||
Sempra Energy
|
||
10.1
|
Form of Sempra Energy 2013 Long Term Incentive Plan 2013 Performance-Based Restricted Stock Unit Award.
|
|
EXHIBIT 12 -- STATEMENTS RE: COMPUTATION OF RATIOS
|
||
Sempra Energy
|
||
12.1
|
Sempra Energy Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
|
San Diego Gas & Electric Company
|
||
12.2
|
San Diego Gas & Electric Company Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
|
Southern California Gas Company
|
||
12.3
|
Southern California Gas Company Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.
|
|
EXHIBIT 31 -- SECTION 302 CERTIFICATIONS
|
||
Sempra Energy
|
||
31.1
|
Statement of Sempra Energy’s Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
|
|
31.2
|
Statement of Sempra Energy’s Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
|
|
San Diego Gas & Electric Company
|
||
31.3
|
Statement of San Diego Gas & Electric Company’s Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
|
|
31.4
|
Statement of San Diego Gas & Electric Company’s Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
|
|
Southern California Gas Company
|
||
31.5
|
Statement of Southern California Gas Company’s Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
|
|
31.6
|
Statement of Southern California Gas Company’s Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
|
EXHIBIT 32 -- SECTION 906 CERTIFICATIONS
|
|
Sempra Energy
|
|
32.1
|
Statement of Sempra Energy’s Chief Executive Officer pursuant to 18 U.S.C. Sec. 1350.
|
32.2
|
Statement of Sempra Energy’s Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350.
|
San Diego Gas & Electric Company
|
|
32.3
|
Statement of San Diego Gas & Electric Company’s Chief Executive Officer pursuant to 18 U.S.C. Sec. 1350.
|
32.4
|
Statement of San Diego Gas & Electric Company’s Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350.
|
Southern California Gas Company
|
|
32.5
|
Statement of Southern California Gas Company’s Chief Executive Officer pursuant to 18 U.S.C. Sec. 1350.
|
32.6
|
Statement of Southern California Gas Company’s Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350.
|
EXHIBIT 101 -- INTERACTIVE DATA FILE
|
|
Sempra Energy / San Diego Gas & Electric / Southern California Gas Company
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
SIGNATURES
|
|
Sempra Energy:
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
SEMPRA ENERGY,
(Registrant)
|
|
Date: November 5, 2013
|
By: /s/ Trevor I. Mihalik
|
Trevor I. Mihalik
Controller and Chief Accounting Officer
|
San Diego Gas & Electric Company:
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
SAN DIEGO GAS & ELECTRIC COMPANY,
(Registrant)
|
|
Date: November 5, 2013
|
By: /s/ Robert M. Schlax
|
Robert M. Schlax
Vice President, Controller, Chief Financial Officer and Chief Accounting Officer
|
Southern California Gas Company:
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
SOUTHERN CALIFORNIA GAS COMPANY,
(Registrant)
|
|
Date: November 5, 2013
|
By: /s/ Robert M. Schlax
|
Robert M. Schlax
Vice President, Controller, Chief Financial Officer and Chief Accounting Officer
|