SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2019

SEGMENT INFORMATION

At June 30, 2019, we had five 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 Texas Utilities holds our investment in Oncor Holdings, which owns an 80.25-percent interest in Oncor, a regulated electric transmission and distribution utility serving customers in the north-central, eastern and western parts of Texas, and our 50-percent interest in Sharyland Holdings, which owns a regulated electric transmission and distribution utility serving customers near the Texas-Mexico border. As we discuss in Note 5, we acquired an indirect 50-percent interest in Sharyland Holdings in May 2019.


▪	Sempra Mexico develops, owns and operates, or holds interests in, natural gas, electric, LNG, LPG, ethane and liquid fuels infrastructure, and has marketing operations for the purchase of LNG and the purchase and sale of natural gas in Mexico.


▪	Sempra LNG (previously known as Sempra LNG & Midstream) develops, owns and operates, or holds interests in, terminals for the import and export of LNG and sale of natural gas, natural gas pipelines and marketing operations, all within the U.S. and Mexico. In February 2019, we completed the sale of our natural gas storage assets at Mississippi Hub and Bay Gas.

In December 2018, Sempra Renewables completed the sale of all its operating solar assets, solar and battery storage development projects and one wind generation facility. In April 2019, Sempra Renewables completed the sale of its remaining wind assets and investments. Upon completion of this sale, remaining nominal business activities at Sempra Renewables were subsumed into Parent and other and the Sempra Renewables segment ceased to exist. The tables below include amounts from Sempra Renewables up until the cessation of the segment.

As we discuss in Note 5, the financial information related to our businesses that constituted the Sempra South American Utilities segment has been reclassified to discontinued operations for all periods presented. The information in the tables below excludes amounts from discontinued operations unless otherwise noted.

We evaluate each segment’s performance based on its contribution to Sempra Energy’s reported earnings and cash flows. 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.

The cost of common services shared by the business segments is 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 activities of parent organizations and include certain nominal amounts from our South American businesses that did not qualify for treatment as discontinued operations.



SEGMENT INFORMATION
(Dollars in millions)
	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
REVENUES
SDG&E	$	1,094		$	1,051		$	2,239		$	2,106
SoCalGas	806			772			2,167			1,898
Sempra Mexico	318			310			701			618
Sempra Renewables	3			40			10			65
Sempra LNG	86			79			227			183
Adjustments and eliminations	(1		)	(1		)	(1		)	(2		)
Intersegment revenues⁽¹⁾	(76		)	(76		)	(215		)	(157		)
Total	$	2,230		$	2,175		$	5,128		$	4,711
INTEREST EXPENSE
SDG&E⁽²⁾	$	102		$	53		$	205		$	105
SoCalGas	34			26			68			53
Sempra Mexico	29			30			59			60
Sempra Renewables	—			5			3			10
Sempra LNG	3			7			7			15
All other	110			137			219			249
Intercompany eliminations	(20		)	(30		)	(43		)	(58		)
Total	$	258		$	228		$	518		$	434
INTEREST INCOME
SDG&E	$	1		$	1		$	2		$	2
SoCalGas	1			1			1			1
Sempra Mexico	19			16			38			31
Sempra Renewables	1			2			11			4
Sempra LNG	16			13			30			26
All other	—			(3		)	1			13
Intercompany eliminations	(17		)	(12		)	(41		)	(30		)
Total	$	21		$	18		$	42		$	47
DEPRECIATION AND AMORTIZATION
SDG&E	$	189		$	169		$	375		$	335
SoCalGas	148			138			295			273
Sempra Mexico	46			43			90			86
Sempra Renewables	—			14			—			27
Sempra LNG	3			11			5			22
All other	3			2			7			6
Total	$	389		$	377		$	772		$	749
INCOME TAX EXPENSE (BENEFIT)
SDG&E	$	35		$	42		$	40		$	98
SoCalGas	(4		)	23			15			82
Sempra Mexico	44			(55		)	116			100
Sempra Renewables	14			(58		)	4			(65		)
Sempra LNG	2			(506		)	6			(494		)
All other	(44		)	(48		)	(92		)	(81		)
Total	$	47		$	(602	)	$	89		$	(360	)
EQUITY EARNINGS (LOSSES)
Equity earnings (losses), before income tax:
Sempra Texas Utilities	$	1		$	—		$	1		$	—
Sempra Renewables	2			(187		)	5			(182		)
Sempra LNG	—			1			2			1
All other	(1		)	(3		)	(1		)	(3		)
	2			(189		)	7			(184		)
Equity earnings, net of income tax:
Sempra Texas Utilities	112			114			206			129
Sempra Mexico	4			71			6			30
	116			185			212			159
Total	$	118		$	(4	)	$	219		$	(25	)



SEGMENT INFORMATION (CONTINUED)
(Dollars in millions)
	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
EARNINGS (LOSSES) ATTRIBUTABLE TO COMMON SHARES
SDG&E	$	143		$	146		$	319		$	316
SoCalGas	30			33			294			258
Sempra Texas Utilities	113			114			207			129
Sempra Mexico	73			97			130			117
Sempra Renewables	46			(109		)	59			(88		)
Sempra LNG	6			(764		)	11			(780		)
Discontinued operations	70			48			19			69
All other	(127		)	(126		)	(244		)	(235		)
Total	$	354		$	(561	)	$	795		$	(214	)
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
SDG&E							$	708		$	851
SoCalGas							659			783
Sempra Mexico							240			140
Sempra Renewables							2			37
Sempra LNG							40			13
All other							2			10
Total							$	1,651		$	1,834

							June 30, 2019			December 31, 2018
ASSETS
SDG&E							$	19,888		$	19,225
SoCalGas							15,767			15,389
Sempra Texas Utilities							11,033			9,652
Sempra Mexico							9,609			9,165
Sempra Renewables							—			2,549
Sempra LNG							3,736			4,060
Discontinued operations							3,898			3,718
All other							1,196			1,070
Intersegment receivables							(2,400		)	(4,190		)
Total							$	62,727		$	60,638
EQUITY METHOD AND OTHER INVESTMENTS
Sempra Texas Utilities							$	11,033		$	9,652
Sempra Mexico							729			747
Sempra Renewables							—			291
Sempra LNG							1,244			1,271
All other							6			11
Total							$	13,012		$	11,972

⁽¹⁾

Revenues for reportable segments include intersegment revenues of $2 million, $17 million, $32 million and $25 million for the three months ended June 30, 2019; $3 million, $34 million, $60 million and $118 million for the six months ended June 30, 2019; $1 million, $15 million, $28 million and $32 million for the three months ended June 30, 2018; and $2 million, $32 million, $57 million, and $66 million for the six months ended June 30, 2018 for SDG&E, SoCalGas, Sempra Mexico and Sempra LNG, respectively.

⁽²⁾

As we discuss in Note 2, in accordance with adoption of the lease standard on January 1, 2019, on a prospective basis, a significant portion of finance lease costs for PPAs that have historically been presented in Cost of Electric Fuel and Purchased Power are now presented in Interest Expense.