SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We have six separately managed, reportable segments, as follows:

▪ SDG&E provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County.

▪ SoCalGas is a natural gas distribution utility, serving customers throughout most of Southern California and part of central California.

▪ Sempra South American Utilities develops, owns and operates, or holds interests in, electric transmission, distribution and generation infrastructure in Chile and Peru.

▪ Sempra Mexico develops, owns and operates, or holds interests in, natural gas transmission systems and an ethane system, a liquid petroleum gas pipeline and associated storage terminal, a natural gas distribution utility, electric generation facilities (including wind and solar electric generation facilities and a natural gas-fired power plant), 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. In February 2016, management approved a plan to market and sell the TdM natural gas-fired power plant located in Mexicali, Baja California, as we discuss in Note 3.

▪ Sempra Renewables develops, owns and operates, or holds interests in, wind and solar energy generation facilities serving wholesale electricity markets in the United States.

▪ Sempra LNG & Midstream develops, owns and operates, or holds interests in, a terminal for the import and export of LNG and sale of natural gas, and natural gas pipelines and storage facilities, all within the United States. In September 2016, Sempra LNG & Midstream sold EnergySouth Inc., the parent company of Mobile Gas and Willmut Gas, and in May 2016, sold its 25-percent interest in Rockies Express. We discuss these divestitures in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.

We evaluate each segment’s performance based on its contribution to Sempra Energy’s reported earnings. The California Utilities operate in essentially separate service territories, under separate regulatory frameworks and rate structures set by the CPUC. The California Utilities’ operations are based on rates set by the CPUC and the FERC. We describe the accounting policies of all of our segments in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.

Common services shared by the business segments are assigned directly or allocated based on various cost factors, depending on the nature of the service provided. Interest income and expense is recorded on intercompany loans. The loan balances and related interest are eliminated in consolidation.

The following tables show selected information by segment from our Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets. Amounts labeled as “All other” in the following tables consist primarily of parent organizations.

SEGMENT INFORMATION
(Dollars in millions)
	Three months ended March 31,
	2017			2016
REVENUES
SDG&E	$	1,057		$	991
SoCalGas	1,241			1,033
Sempra South American Utilities	412			400
Sempra Mexico	264			138
Sempra Renewables	22			7
Sempra LNG & Midstream	132			130
Intersegment revenues(1)	(97		)	(77		)
Total	$	3,031		$	2,622
INTEREST EXPENSE
SDG&E	$	49		$	48
SoCalGas	25			22
Sempra South American Utilities	9			9
Sempra Mexico	32			4
Sempra Renewables	4			—
Sempra LNG & Midstream	11			12
All other	68			72
Intercompany eliminations	(29		)	(24		)
Total	$	169		$	143
INTEREST INCOME
Sempra South American Utilities	$	5		$	5
Sempra Mexico	2			2
Sempra Renewables	1			1
Sempra LNG & Midstream	17			16
Intercompany eliminations	(19		)	(18		)
Total	$	6		$	6
DEPRECIATION AND AMORTIZATION
SDG&E	$	163		$	159
SoCalGas	126			122
Sempra South American Utilities	13			13
Sempra Mexico	36			17
Sempra Renewables	9			1
Sempra LNG & Midstream	10			13
All other	3			3
Total	$	360		$	328
INCOME TAX EXPENSE (BENEFIT)(2)
SDG&E	$	90		$	65
SoCalGas	98			83
Sempra South American Utilities	19			14
Sempra Mexico	142			40
Sempra Renewables	(11		)	(13		)
Sempra LNG & Midstream	1			(29		)
All other	(44		)	(52		)
Total	$	295		$	108

SEGMENT INFORMATION (CONTINUED)
(Dollars in millions)
	Three months ended March 31,
	2017			2016
EQUITY EARNINGS (LOSSES)
Earnings (losses) recorded before tax:
Sempra Renewables	$	2		$	7
Sempra LNG & Midstream	1			(29		)
Total	$	3		$	(22	)
Earnings (losses) recorded net of tax:
Sempra South American Utilities	$	1		$	2
Sempra Mexico	(9		)	15
Total	$	(8	)	$	17
EARNINGS (LOSSES)(2)
SDG&E	$	155		$	136
SoCalGas(3)	203			199
Sempra South American Utilities	47			38
Sempra Mexico	48			18
Sempra Renewables	11			14
Sempra LNG & Midstream	1			(32		)
All other	(24		)	(20		)
Total	$	441		$	353
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
SDG&E	$	418		$	329
SoCalGas	357			340
Sempra South American Utilities	43			43
Sempra Mexico	94			40
Sempra Renewables	69			181
Sempra LNG & Midstream	3			35
All other	8			3
Total	$	992		$	971
	March 31, 2017			December 31, 2016
ASSETS
SDG&E	$	17,900		$	17,719
SoCalGas	13,602			13,424
Sempra South American Utilities	3,729			3,591
Sempra Mexico	7,702			7,542
Sempra Renewables	2,282			3,644
Sempra LNG & Midstream	5,092			5,564
All other	644			475
Intersegment receivables	(2,667		)	(4,173		)
Total	$	48,284		$	47,786
EQUITY METHOD AND OTHER INVESTMENTS
Sempra South American Utilities	$	20		$	—
Sempra Mexico	212			180
Sempra Renewables	812			844
Sempra LNG & Midstream	999			997
All other	77			76
Total	$	2,120		$	2,097

(1) Revenues for reportable segments include intersegment revenues of $1 million, $18 million, $25 million and $53 million for the three months ended March 31, 2017 and $3 million, $17 million, $27 million and $30 million for the three months ended March 31, 2016 for SDG&E, SoCalGas, Sempra Mexico and Sempra LNG & Midstream, respectively.

(2) Amounts for the three months ended March 31, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.

(3)

After preferred dividends.