On March 9, 2018, Sempra Energy completed the acquisition of an indirect, 100-percent interest in Oncor Holdings, which owned 80.03 percent of Oncor, and other EFH assets and liabilities unrelated to Oncor, pursuant to the Merger Agreement with EFH. Under the Merger Agreement, we paid Merger Consideration of $9.45 billion in cash and an additional $31 million representing an adjustment for dividends and payments pursuant to a tax sharing agreement with Oncor and Oncor Holdings. Also on March 9, 2018, in a separate transaction, Sempra Energy, through its interest in Oncor Holdings, acquired an additional 0.22 percent of the outstanding membership interests in Oncor from OMI for $26 million in cash, bringing Sempra Energy’s indirect ownership in Oncor to 80.25 percent. TTI, an investment vehicle indirectly owned by third parties unaffiliated with Oncor Holdings or Sempra Energy, continues to own 19.75 percent of Oncor’s outstanding membership interests. We discuss this acquisition, including the purchase price allocation, in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report.

After satisfying all conditions precedent, including final approval from the PUCT, on May 16, 2019, Oncor completed the acquisition of 100 percent of the issued and outstanding shares of InfraREIT and 100 percent of the limited partnership units of its subsidiary, InfraREIT Partners, pursuant to the InfraREIT Merger Agreement. Under the InfraREIT Merger Agreement, Oncor paid merger consideration of $1,275 million, or $21 per share, plus certain transaction costs incurred by InfraREIT and its

subsidiaries and paid by Oncor on their behalf, including $40 million for a management agreement termination fee. In connection with and immediately after the closing, Oncor also extinguished all of InfraREIT’s outstanding debt (totaling $953 million) by repaying an aggregate principal amount of $602 million on behalf of InfraREIT’s subsidiaries (using proceeds from a term loan and issuances of commercial paper), and exchanging an aggregate principal amount of $351 million of secured senior notes issued by InfraREIT subsidiaries for secured senior notes issued by Oncor. Oncor received a total of $1,330 million in capital contributions from Sempra Energy and certain indirect equity holders of TTI, proportionate to their respective ownership interest in Oncor, to fund the purchase price and certain expenses. We discuss Sempra Energy’s contribution in Note 6.

As part of Oncor’s acquisition of interests in InfraREIT, immediately prior to closing the InfraREIT Merger Agreement, SDTS accepted and assumed certain assets and liabilities of SU in exchange for certain SDTS assets, pursuant to the Asset Exchange Agreement. SDTS received real property and other assets used in the electric transmission and distribution business in Central, North and West Texas, as well as the equity interests in GS Project Entity, LLC (a wholly owned subsidiary of SU) and SU received real property and other assets used in the electric transmission and distribution business near the Texas-Mexico border. Pursuant to the Asset Exchange Agreement, immediately prior to the completion of the exchange, SDTS became a wholly owned, indirect subsidiary of InfraREIT Partners.

On May 16, 2019, Sempra Energy acquired an indirect, 50-percent interest in Sharyland Holdings for $102 million (subject to customary closing adjustments) pursuant to the Securities Purchase Agreement. In connection with and prior to the consummation of the Securities Purchase Agreement, Sharyland Holdings owned 100 percent of the membership interests in SU and SU converted into a limited liability company, named Sharyland Utilities, L.L.C. We account for our indirect 50-percent interest in Sharyland Holdings as an equity method investment.

On December 18, 2018, Chilquinta Energía acquired a 100-percent interest in Compañía Transmisora del Norte Grande S.A. through a sales and purchase agreement with AES Gener S.A. and its subsidiary Sociedad Eléctrica Angamos S.A. We completed the acquisition for a purchase price of $226 million and paid $208 million (net of $18 million cash acquired) with available cash on hand at Sempra South American Utilities.

We accounted for this business combination using the acquisition method of accounting. We allocated the $208 million in cash paid ($226 million purchase price less $18 million of cash acquired) to the identifiable assets acquired and liabilities assumed based on their respective fair values, with the excess recognized as goodwill, which is included in assets held for sale in discontinued operations. We consider the purchase price allocation at the acquisition date to be final.

As we discuss in Note 1, OMEC LLC, the owner of the 605-MW power plant, exercised the put option requiring SDG&E to purchase the power plant by October 3, 2019. If the put is not waived, SDG&E will acquire the power plant through the acquisition of the NCI in October 2019, and expects to fund the $280 million purchase price, subject to adjustments, with proceeds from issuances of commercial paper that may be replaced by long-term debt issuances. Upon acquisition of the NCI, the power plant will be subject to rate recovery.

In June 2018, our board of directors approved a plan to divest certain non-utility natural gas storage assets in the southeast U.S., and all our U.S. wind and U.S. solar assets (collectively, the Assets). The plan to sell the Assets resulted from a comprehensive strategic portfolio review by the board of directors and management.

As a result of our plan to sell the Assets, we recorded impairment charges totaling $1.5 billion ($900 million after tax and NCI) in June 2018. These charges included $1.3 billion ($755 million after tax and NCI) at Sempra LNG, which is included in Impairment Losses on Sempra Energy’s Condensed Consolidated Statements of Operations, and $200 million ($145 million after tax) at

Sempra Renewables, which is included in Equity Earnings (Losses) on Sempra Energy’s Condensed Consolidated Statements of Operations. These impairment charges primarily represented an adjustment of the related assets’ carrying values to estimated fair values, less costs to sell when applicable, which we discuss in Notes 6 and 12 of the Notes to Consolidated Financial Statements in the Annual Report.

On April 22, 2019, Sempra Renewables completed the sale of its remaining wind assets and investments to AEP for $569 million, net of transaction costs, and recorded a $61 million ($45 million after tax and NCI) gain, which is included in Gain on Sale of Assets on the Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 2019. Upon completion of the sale, remaining nominal business activities at Sempra Renewables were subsumed into Parent and other and the Sempra Renewables segment ceased to exist.

On January 25, 2019, our board of directors approved a plan to sell our South American businesses. We launched a formal process to sell our South American businesses and expect to complete the sale by the end of 2019. We determined that these businesses, which previously constituted the Sempra South American Utilities segment, and certain activities associated with those businesses, met the held-for-sale criteria. These businesses are presented as discontinued operations, as the planned sale represents a strategic shift that will have a major effect on our operations and financial results. We do not plan to have significant continuing involvement in or be able to exercise significant influence on the operating or financial policies of these operations after they are sold. Accordingly, the results of operations, financial position and cash flows for these businesses have been reclassified to discontinued operations for all periods presented.

Discontinued operations that were previously in the Sempra South American Utilities segment include our 100-percent interest in Chilquinta Energía in Chile, our 83.6-percent interest in Luz del Sur in Peru and our interests in two energy-services companies, Tecnored and Tecsur, which provide electric construction and infrastructure services to Chilquinta Energía and Luz del Sur, respectively, as well as third parties.



DISCONTINUED OPERATIONS
(Dollars in millions)
	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Revenues	$	403		$	389		$	824		$	815
Cost of sales	(251		)	(255		)	(516		)	(548		)
Operating expenses	(40		)	(56		)	(85		)	(110		)
Interest and other	(6		)	(4		)	(9		)	(9		)
Income before income taxes and equity earnings	106			74			214			148
Income tax expense	(29		)	(19		)	(180		)	(66		)
Equity earnings	1			—			2			1
Income from discontinued operations, net of income tax	78			55			36			83
Earnings attributable to noncontrolling interests	(8		)	(7		)	(17		)	(14		)
Earnings from discontinued operations attributable to common shares	$	70		$	48		$	19		$	69



ASSETS HELD FOR SALE IN DISCONTINUED OPERATIONS
(Dollars in millions)
	June 30, 2019		December 31, 2018
Cash and cash equivalents	$	54	$	88
Restricted cash⁽¹⁾	1		—
Accounts receivable, net	311		315
Due from unconsolidated affiliates	16		2
Inventories	41		38
Other current assets	22		16
Current assets	$	445	$	459

Due from unconsolidated affiliates	$	48	$	44
Goodwill and other intangible assets	838		819
Property, plant and equipment, net	2,528		2,357
Other noncurrent assets	39		39
Noncurrent assets	$	3,453	$	3,259

Short-term debt	$	38	$	55
Accounts payable	175		176
Current portion of long-term debt and finance leases	22		29
Other current liabilities	101		108
Current liabilities	$	336	$	368

Long-term debt and finance leases	$	753	$	708
Deferred income taxes	273		250
Other noncurrent liabilities	64		55
Noncurrent liabilities	$	1,090	$	1,013