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GENERAL INFORMATION AND OTHER FINANCIAL DATA (Tables)
 6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Cash and Cash Equivalents
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Condensed Consolidated Balance Sheets to the sum of such amounts reported on the Condensed Consolidated Statements of Cash Flows. We provide information about the nature of restricted cash in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
 
June 30,
December 31,
 
2019
2018
Sempra Energy Consolidated:
 
 
Cash and cash equivalents
$
168

$
102

Restricted cash, current
50

35

Restricted cash, noncurrent
21

21

Cash, cash equivalents and restricted cash in discontinued operations
55

88

Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows
$
294

$
246

SDG&E:
 

 
Cash and cash equivalents
$
3

$
8

Restricted cash, current
13

11

Restricted cash, noncurrent
18

18

Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows
$
34

$
37
Inventory Table
The following table presents the components of inventories by segment.
INVENTORY BALANCES
(Dollars in millions)
 
Natural gas
 
 
LNG
 
 
Materials and supplies
 
 
Total
 
June
30, 2019
 
December 31, 2018
 
 
June
30, 2019
 
December 31, 2018
 
 
June
 30, 2019
 
December 31, 2018
 
 
June
30, 2019
 
December 31, 2018
SDG&E
$
—

 
$
—

 
 
$
—

 
$
—

 
 
$
96

 
$
102

 
 
$
96

 
$
102

SoCalGas
28

 
92

 
 
—

 
—

 
 
47

 
42

 
 
75

 
134

Sempra Mexico
—

 
—

 
 
10

 
4

 
 
14

 
15

 
 
24

 
19

Sempra LNG
19

 
3

 
 
—

 
—

 
 
—

 
—

 
 
19

 
3

Sempra Energy Consolidated
$
47

 
$
95

 
 
$
10

 
$
4

 
 
$
157

 
$
159

 
 
$
214

 
$
258
Capitalized Financing Costs Table
The table below summarizes capitalized interest and AFUDC.
CAPITALIZED FINANCING COSTS
 
 
 
 
 
 
 
(Dollars in millions)
 
 
 
 
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Sempra Energy Consolidated
$
51

 
$
54

 
$
98

 
$
103

SDG&E
20

 
23

 
37

 
47

SoCalGas
11

 
16

 
22

 
29
Variable Interest Entity Table Sempra Energy’s Condensed Consolidated Statements of Operations include the following amounts associated with the tax equity limited liability companies, net of eliminations of transactions between Sempra Energy and these entities.
AMOUNTS ASSOCIATED WITH TAX EQUITY ARRANGEMENTS
 
 
(Dollars in millions)
 
 
 
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2019
2018
 
2019
 
2018
REVENUES
 
 
 
 
 
 
Energy-related businesses
$
2

$
32

 
$
8

 
$
49

EXPENSES
 
 
 
 
 
 
Operation and maintenance
—

(4
)
 
(2
)
 
(8
)
Depreciation and amortization
(1
)
(12
)
 
(4
)
 
(23
)
Income before income taxes
1

16

 
2

 
18

Income tax expense
(1
)
(7
)
 
—

 
(12
)
Net income
—

9

 
2

 
6

Losses (earnings) attributable to noncontrolling interests(1)
2

20

 
(1
)
 
41

Earnings attributable to common shares
$
2

$
29

 
$
1

 
$
47

(1)
Net income or loss attributable to NCI is computed using the HLBV method and is not based on ownership percentages.
The Condensed Consolidated Statements of Operations of Sempra Energy and SDG&E include the following amounts associated with Otay Mesa VIE. The amounts are net of eliminations of transactions between SDG&E and Otay Mesa VIE. The captions in the table below correspond to SDG&E’s Condensed Consolidated Statements of Operations.
AMOUNTS ASSOCIATED WITH OTAY MESA VIE
 
 
 
 
(Dollars in millions)
 
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Operating expenses
 
 
 
 
 
 
 
Cost of electric fuel and purchased power
$
(19
)
 
$
(16
)
 
$
(35
)
 
$
(32
)
Operation and maintenance
4

 
4

 
8

 
8

Depreciation and amortization
8

 
7

 
15

 
15

Total operating expenses
(7
)
 
(5
)
 
(12
)
 
(9
)
Operating income
7

 
5

 
12

 
9

Interest expense
(4
)
 
(5
)
 
(8
)
 
(10
)
Income (loss) before income taxes/Net income (loss)
3

 
—

 
4

 
(1
)
(Earnings) losses attributable to noncontrolling interest
(3
)
 
—

 
(4
)
 
1

Earnings attributable to common shares
$
—

 
$
—

 
$
—

 
$
—
Net Periodic Benefit Cost Table
The following three tables provide the components of net periodic benefit cost.
NET PERIODIC BENEFIT COST – SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended June 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
28

 
$
33

 
$
4

 
$
5

Interest cost
35

 
34

 
9

 
9

Expected return on assets
(36
)
 
(40
)
 
(17
)
 
(17
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost
3

 
2

 
—

 
—

Actuarial loss (gain)
7

 
10

 
(3
)
 
(1
)
Settlement charges
22

 
25

 
—

 
—

Net periodic benefit cost (credit)
59

 
64

 
(7
)
 
(4
)
Regulatory adjustments
3

 
(35
)
 
7

 
5

Total expense recognized
$
62

 
$
29

 
$
—

 
$
1

 
 
 
 
 
 
 
 
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
55

 
$
66

 
$
8

 
$
11

Interest cost
70

 
69

 
18

 
18

Expected return on assets
(72
)
 
(82
)
 
(35
)
 
(35
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost
6

 
5

 
—

 
—

Actuarial loss (gain)
21

 
19

 
(5
)
 
(2
)
Settlement charges
22

 
39

 
—

 
—

Net periodic benefit cost (credit)
102

 
116

 
(14
)
 
(8
)
Regulatory adjustments
(33
)
 
(80
)
 
14

 
9

Total expense recognized
$
69

 
$
36

 
$
—

 
$
1

NET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended June 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
7

 
$
8

 
$
1

 
$
1

Interest cost
8

 
8

 
2

 
1

Expected return on assets
(9
)
 
(12
)
 
(3
)
 
(4
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost
1

 
1

 
—

 
1

Actuarial loss
3

 
2

 
—

 
—

Settlement charges
—

 
2

 
—

 
—

Net periodic benefit cost (credit)
10

 
9

 
—

 
(1
)
Regulatory adjustments
(1
)
 
(8
)
 
—

 
1

Total expense recognized
$
9

 
$
1

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
15

 
$
16

 
$
2

 
$
2

Interest cost
17

 
17

 
4

 
3

Expected return on assets
(20
)
 
(25
)
 
(6
)
 
(7
)
Amortization of:

 
 
 

 
 
Prior service cost
2

 
1

 
1

 
2

Actuarial loss (gain)
7

 
3

 
(1
)
 
(1
)
Settlement charges
—

 
16

 
—

 
—

Net periodic benefit cost (credit)
21

 
28

 
—

 
(1
)
Regulatory adjustments
(12
)
 
(27
)
 
—

 
1

Total expense recognized
$
9

 
$
1

 
$
—

 
$
—

NET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended June 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
18

 
$
21

 
$
3

 
$
4

Interest cost
22

 
22

 
7

 
7

Expected return on assets
(23
)
 
(25
)
 
(15
)
 
(14
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost
2

 
2

 
—

 
—

Actuarial loss (gain)
2

 
6

 
(2
)
 
(1
)
Settlement charges
—

 
23

 
—

 
—

Net periodic benefit cost (credit)
21

 
49

 
(7
)
 
(4
)
Regulatory adjustments
4

 
(27
)
 
7

 
4

Total expense recognized
$
25

 
$
22

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
34

 
$
43

 
$
6

 
$
8

Interest cost
45

 
45

 
14

 
14

Expected return on assets
(47
)
 
(51
)
 
(29
)
 
(28
)
Amortization of:
 
 
 
 

 
 
Prior service cost (credit)
4

 
4

 
(1
)
 
(1
)
Actuarial loss (gain)
11

 
12

 
(4
)
 
(1
)
Settlement charges
—

 
23

 
—

 
—

Net periodic benefit cost (credit)
47

 
76

 
(14
)
 
(8
)
Regulatory adjustments
(21
)
 
(53
)
 
14

 
8

Total expense recognized
$
26

 
$
23

 
$
—

 
$
—
Contributions to Benefit Plans Table
The following table shows our year-to-date contributions to pension and other postretirement benefit plans and the amounts we expect to contribute in 2019.
BENEFIT PLAN CONTRIBUTIONS
(Dollars in millions)
 
 
Sempra Energy
Consolidated
 
SDG&E
 
SoCalGas
Contributions through June 30, 2019:
 
 
 
 
 
 
Pension plans
 
$
93

 
$
8

 
$
26

Other postretirement benefit plans
 
5

 
—

 
—

Total expected contributions in 2019:
 
 
 
 
 
 
Pension plans
 
$
234

 
$
40

 
$
118

Other postretirement benefit plans
 
8

 
—

 
1
Earnings Per Share Computations Table
Basic EPS is calculated by dividing earnings attributable to common shares (from both continuing and discontinued operations) by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
EARNINGS (LOSSES) PER COMMON SHARE COMPUTATIONS
 
 
 
 
 
 
 
(Dollars in millions, except per share amounts; shares in thousands)
 
 
 
 
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Numerator for continuing operations:
 
 
 
 
 
 
 
Income (loss) from continuing operations, net of income tax
$
357

 
$
(585
)
 
$
917

 
$
(255
)
(Earnings) losses attributable to noncontrolling interests
(37
)
 
2

 
(69
)
 
26

Mandatory convertible preferred stock dividends
(35
)
 
(25
)
 
(71
)
 
(53
)
Preferred dividends of subsidiary
(1
)
 
(1
)
 
(1
)
 
(1
)
Earnings (losses) from continuing operations attributable to common shares
$
284

 
$
(609
)
 
$
776

 
$
(283
)
 
 
 
 
 
 
 
 
Numerator for discontinued operations:
 
 
 
 
 
 
 
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

 
 
 
 
 
 
 
 
Numerator for earnings:
 
 
 
 
 
 
 
Earnings (losses) attributable to common shares
$
354

 
$
(561
)
 
$
795

 
$
(214
)
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Weighted-average common shares outstanding for basic EPS(1)
274,987

 
265,837

 
274,831

 
261,906

Dilutive effect of stock options and RSUs(2)(3)
1,541

 
—

 
1,255

 
—

Dilutive effect of common shares sold forward(2)
3,091

 
—

 
2,338

 
—

Weighted-average common shares outstanding for diluted EPS
279,619

 
265,837

 
278,424

 
261,906

 
 
 
 
 
 
 
 
Basic EPS:
 
 
 
 
 
 
 
Earnings (losses) from continuing operations attributable to common shares
$
1.03

 
$
(2.29
)
 
$
2.82

 
$
(1.08
)
Earnings from discontinued operations attributable to common shares
$
0.26

 
$
0.18

 
$
0.07

 
$
0.26

Earnings (losses) attributable to common shares
$
1.29

 
$
(2.11
)
 
$
2.89

 
$
(0.82
)
 
 
 
 
 
 
 
 
Diluted EPS:
 
 
 
 
 
 
 
Earnings (losses) from continuing operations attributable to common shares
$
1.01

 
$
(2.29
)
 
$
2.78

 
$
(1.08
)
Earnings from discontinued operations attributable to common shares
$
0.25

 
$
0.18

 
$
0.07

 
$
0.26

Earnings (losses) attributable to common shares
$
1.26

 
$
(2.11
)
 
$
2.85

 
$
(0.82
)
(1)
Includes 613 and 640 average fully vested RSUs held in our Deferred Compensation Plan for the three months ended June 30, 2019 and 2018, respectively, and 613 and 634 of such RSUs for the six months ended June 30, 2019 and 2018, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.
(2) 
In the three months and six months ended June 30, 2018, the total weighted-average potentially dilutive stock options and RSUs was 986 and 931, respectively, and the total weighted-average potentially dilutive common stock shares sold forward was 714 and 746, respectively. However, these securities were not included in the computation of EPS since to do so would have decreased the loss per share.
(3) 
Due to market fluctuations of both Sempra Energy common stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.
Schedule of Accumulated Other Comprehensive Income (Loss) Table
The following tables present the changes in AOCI by component and amounts reclassified out of AOCI to net income, excluding amounts attributable to NCI.
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
(Dollars in millions)
 
Foreign
currency
translation
adjustments
 
Financial
instruments
 
Pension
and other
postretirement
benefits
 
Total
accumulated other
comprehensive
income (loss)
 
Three months ended June 30, 2019 and 2018
Sempra Energy Consolidated(2):
 
 
 
 
 
 
 
Balance as of March 31, 2019
$
(532
)
 
$
(153
)
 
$
(132
)
 
$
(817
)
OCI before reclassifications(3)
14

 
(67
)
 
(7
)
 
(60
)
Amounts reclassified from AOCI(3)
—

 
7

 
22

 
29

Net OCI
14

 
(60
)
 
15

 
(31
)
Balance as of June 30, 2019
$
(518
)
 
$
(213
)
 
$
(117
)
 
$
(848
)
 
 
 
 
 
 
 
 
Balance as of March 31, 2018
$
(396
)
 
$
(67
)
 
$
(82
)
 
$
(545
)
OCI before reclassifications
(86
)
 
19

 
1

 
(66
)
Amounts reclassified from AOCI
—

 
8

 
2

 
10

Net OCI
(86
)
 
27

 
3

 
(56
)
Balance as of June 30, 2018
$
(482
)
 
$
(40
)
 
$
(79
)
 
$
(601
)
SDG&E:
 
 
 
 
 
 
 
Balance as of March 31, 2019
 
 
 
 
$
(12
)
 
$
(12
)
Amounts reclassified from AOCI
 
 
 
 
1

 
1

Net OCI
 
 
 
 
1

 
1

Balance as of June 30, 2019
 
 
 
 
$
(11
)
 
$
(11
)
 
 
 
 
 
 
 
 
Balance as of March 31, 2018 and June 30, 2018
 
 
 
 
$
(8
)
 
$
(8
)
SoCalGas:
 
 
 
 
 
 
 
Balance as of March 31, 2019
 
 
$
(14
)
 
$
(10
)
 
$
(24
)
Amounts reclassified from AOCI(3)
 
 
—

 
4

 
4

Net OCI
 
 
—

 
4

 
4

Balance as of June 30, 2019
 
 
$
(14
)
 
$
(6
)
 
$
(20
)
 
 
 
 
 
 
 
 
Balance as of March 31, 2018
 
 
$
(13
)
 
$
(8
)
 
$
(21
)
Amounts reclassified from AOCI
 
 
—

 
1

 
1

Net OCI
 
 
—

 
1

 
1

Balance as of June 30, 2018
 
 
$
(13
)
 
$
(7
)
 
$
(20
)
(1) 
All amounts are net of income tax, if subject to tax, and exclude NCI.
(2) 
Includes discontinued operations.
(3) 
Pension and Other Postretirement Benefits and Total AOCI include a $4 million transfer of liabilities from SoCalGas to Sempra Energy related to the nonqualified pension plan.
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) (CONTINUED)
(Dollars in millions)
 
Foreign
currency
translation
adjustments
 
Financial
instruments
 
Pension
and other
postretirement
benefits
 
Total
accumulated other
comprehensive
income (loss)
 
Six months ended June 30, 2019 and 2018
Sempra Energy Consolidated(2):
 
 
 
 
 
 
 
Balance as of December 31, 2018
$
(564
)
 
$
(82
)
 
$
(118
)
 
$
(764
)
Cumulative-effect adjustment from change in accounting principle
—

 
(25
)
 
(17
)
 
(42
)
OCI before reclassifications(3)
46

 
(112
)
 
(6
)
 
(72
)
Amounts reclassified from AOCI(3)
—

 
6

 
24

 
30

Net OCI
46

 
(106
)
 
18

 
(42
)
Balance as of June 30, 2019
$
(518
)
 
$
(213
)
 
$
(117
)
 
$
(848
)
 
 
 
 
 
 
 
 
Balance as of December 31, 2017
$
(420
)
 
$
(122
)
 
$
(84
)
 
$
(626
)
Cumulative-effect adjustment from change in accounting principle
—

 
(3
)
 
—

 
(3
)
OCI before reclassifications
(62
)
 
85

 
1

 
24

Amounts reclassified from AOCI
—

 
—

 
4

 
4

Net OCI
(62
)
 
85

 
5

 
28

Balance as of June 30, 2018
$
(482
)
 
$
(40
)
 
$
(79
)
 
$
(601
)
SDG&E:
 
 
 
 
 
 
 
Balance as of December 31, 2018
 
 
 
 
$
(10
)
 
$
(10
)
Cumulative-effect adjustment from change in accounting principle
 
 
 
 
(2
)
 
(2
)
Amounts reclassified from AOCI
 
 
 
 
1

 
1

Net OCI
 
 
 
 
1

 
1

Balance as of June 30, 2019
 
 
 
 
$
(11
)
 
$
(11
)
 
 
 
 
 
 
 
 
Balance as of December 31, 2017 and June 30, 2018
 
 
 
 
$
(8
)
 
$
(8
)
SoCalGas:
 
 
 
 
 
 
 
Balance as of December 31, 2018
 
 
$
(12
)
 
$
(8
)
 
$
(20
)
Cumulative-effect adjustment from change in accounting principle
 
 
(2
)
 
(2
)
 
(4
)
Amounts reclassified from AOCI(3)
 
 
—

 
4

 
4

Net OCI
 
 
—

 
4

 
4

Balance as of June 30, 2019
 
 
$
(14
)
 
$
(6
)
 
$
(20
)
 
 
 
 
 
 
 
 
Balance as of December 31, 2017
 
 
$
(13
)
 
$
(8
)
 
$
(21
)
Amounts reclassified from AOCI
 
 
—

 
1

 
1

Net OCI
 
 
—

 
1

 
1

Balance as of June 30, 2018
 
 
$
(13
)
 
$
(7
)
 
$
(20
)

(1) 
All amounts are net of income tax, if subject to tax, and exclude NCI.
(2) 
Includes discontinued operations.
(3) 
Pension and Other Postretirement Benefits and Total AOCI include a $4 million transfer of liabilities from SoCalGas to Sempra Energy related to the nonqualified pension plan.
Reclassifications out of AOCI Table
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
Details about accumulated other
comprehensive income (loss) components
Amounts reclassified
from accumulated other
comprehensive income (loss)
 
Affected line item on Condensed
Consolidated Statements of Operations
 
Three months ended June 30,
 
 
 
2019
 
2018
 
 
Sempra Energy Consolidated:
 
 
 
 
 
Financial instruments:
 
 
 
 
 
Interest rate and foreign exchange instruments(1)
$
—

 
$
1

 
Interest Expense
 
(2
)
 
18

 
Other Income (Expense), Net
Interest rate instruments
10

 
—

 
Gain on Sale of Assets
Interest rate and foreign exchange instruments
—

 
1

 
Equity Earnings (Losses)
Foreign exchange instruments
—

 
(1
)
 
Revenues: Energy-Related Businesses
Total before income tax
8

 
19

 
 
 
(1
)
 
(4
)
 
Income Tax (Expense) Benefit
Net of income tax
7

 
15

 
 
 
—

 
(7
)
 
(Earnings) Losses Attributable to Noncontrolling Interests
 
$
7

 
$
8

 
 
Pension and other postretirement benefits:
 
 
 
 
 
Amortization of actuarial loss(2)
$
2

 
$
3

 
Other Income (Expense), Net
Settlements(2)
22

 
—

 
Other Income (Expense), Net
Total before income tax
24

 
3

 
 
 
(6
)
 
(1
)
 
Income Tax (Expense) Benefit
Net of income tax
$
18

 
$
2

 
 
 
 
 
 
 
 
Total reclassifications for the period, net of tax
$
25

 
$
10

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

 
$
1

 
Interest Expense
 
(1
)
 
(1
)
 
(Earnings) Losses Attributable to Noncontrolling Interest
 
$
—

 
$
—

 
 
Pension and other postretirement benefits:
 
 
 
 
 
Amortization of prior service cost(2)
$
1

 
$
—

 
Other Income, Net
 
 
 
 
 
 
Total reclassifications for the period, net of tax
$
1

 
$
—

 
 
SoCalGas:
 

 
 

 
 
Pension and other postretirement benefits:
 

 
 

 
 
Amortization of actuarial loss(2)
$
—

 
$
1

 
Other Income, Net
Total reclassifications for the period, net of tax
$
—

 
$
1

 
 

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

RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
(Dollars in millions)
Details about accumulated other
comprehensive income (loss) components
Amounts reclassified
from accumulated other
comprehensive income (loss)
 
Affected line item on Condensed
Consolidated Statements of Operations
 
Six months ended June 30,
 
 
 
2019
 
2018
 
 
Sempra Energy Consolidated:
 
 
 
 
 
Financial instruments:
 
 
 
 
 
Interest rate and foreign exchange instruments(1)
$
1

 
$
(1
)
 
Interest Expense
 
(5
)
 
—

 
Other Income (Expense), Net
Interest rate instruments
10

 
—

 
Gain on Sale of Assets
Interest rate and foreign exchange instruments
1

 
5

 
Equity Earnings (Losses)
Foreign exchange instruments
1

 
(1
)
 
Revenues: Energy-Related Businesses
Total before income tax
8

 
3

 
 
 
(1
)
 
(1
)
 
Income Tax (Expense) Benefit
Net of income tax
7

 
2

 
 
 
(1
)
 
(2
)
 
(Earnings) Losses Attributable to Noncontrolling Interests
 
$
6

 
$
—

 
 
Pension and other postretirement benefits:
 
 
 
 
 
Amortization of actuarial loss(2)
$
4

 
$
6

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

 
—

 
Other Income (Expense), Net
Settlements(2)
22

 
—

 
Other Income (Expense), Net
Total before income tax
27

 
6

 
 
 
(7
)
 
(2
)
 
Income Tax (Expense) Benefit
Net of income tax
$
20

 
$
4

 
 
 
 
 
 
 
 
Total reclassifications for the period, net of tax
$
26

 
$
4

 
 
SDG&E:
 
 
 
 
 
Financial instruments:
 
 
 
 
 
Interest rate instruments(1)
$
2

 
$
4

 
Interest Expense
 
(2
)
 
(4
)
 
(Earnings) Losses Attributable to Noncontrolling Interest
 
$
—

 
$
—

 
 
Pension and other postretirement benefits:
 
 
 
 
 
Amortization of prior service cost(2)
$
1

 
$
—

 
Other Income, Net
 
 
 
 
 
 
Total reclassifications for the period, net of tax
$
1

 
$
—

 
 
SoCalGas:
 

 
 

 
 
Pension and other postretirement benefits:
 

 
 

 
 
Amortization of actuarial loss(2)
$
—

 
$
1

 
Other Income, Net
Total reclassifications for the period, net of tax
$
—

 
$
1

 
 

(1) 
Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
(2) 
Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).
Ownership Interests Held By Others Table
The following table provides information on noncontrolling ownership interests held by others (not including preferred shareholders) in Other Noncontrolling Interests in Total Equity on Sempra Energy’s Condensed Consolidated Balance Sheets.
OTHER NONCONTROLLING INTERESTS
(Dollars in millions)
 
 
 
Percent ownership held by noncontrolling interests
 
 Equity (deficit) held by
noncontrolling interests
 
June 30,
2019
 
December 31,
2018
 
June 30,
2019
 
December 31,
2018
SDG&E:
 
 
 
 
 
 
 
Otay Mesa VIE
100
%
100
%
$
103

 
$
100

Sempra Mexico:
 
 
 
 
 
 
 
IEnova
33.4
 
33.5
 
1,637

 
1,592

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

 
13

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

 
158

PXiSE Energy Solutions, LLC(3)
11.1
 
11.1
 
—

 
1

Sempra LNG:
 
 
 
 
 
 
 
Bay Gas
—
 
9.1
 
—

 
18

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

 
23

Luz del Sur
16.4
 
16.4
 
205

 
193

Tecsur
9.8
 
9.8
 
4

 
4

Total Sempra Energy
 
 
 
 
$
1,974

 
$
2,090

(1) 
IEnova and Chilquinta Energía have subsidiaries with NCI held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.
(2) 
Net income or loss attributable to NCI is computed using the HLBV method and is not based on ownership percentages.
(3) 
In April 2019, PXiSE Energy Solutions, LLC was subsumed into Parent and other. At June 30, 2019, equity held by NCI was negligible.
Transactions with Affiliates Table
We summarize amounts due from and to unconsolidated affiliates at Sempra Energy Consolidated, SDG&E and SoCalGas in the following table.
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
 
June 30,
2019
 
December 31,
2018
Sempra Energy Consolidated:
 
 
 
Total due from various unconsolidated affiliates – current
$
23

 
$
37

 
 
 
 
Sempra Mexico(1):
 
 
 
IMG – Note due March 15, 2022(2)
$
710

 
$
641

Energía Sierra Juárez – Note(3)
—

 
3

Total due from unconsolidated affiliates – noncurrent
$
710

 
$
644

 
 
 
 
Total due to various unconsolidated affiliates – current
$
(9
)
 
$
(10
)
 
 
 
 
Sempra Mexico(1):
 
 
 
Total due to unconsolidated affiliates – noncurrent – TAG – Note due December 20, 2021(4)
$
(38
)
 
$
(37
)
SDG&E:
 
 
 
Sempra Energy
$
(78
)
 
$
(43
)
SoCalGas
(9
)
 
(6
)
Various affiliates
(9
)
 
(12
)
Total due to unconsolidated affiliates – current
$
(96
)
 
$
(61
)
 
 
 
 
Income taxes due from Sempra Energy(5)
$
44

 
$
5

SoCalGas:
 
 
 
Sempra Energy(6)
$
26

 
$
—

SDG&E
9

 
6

Various affiliates
—

 
1

Total due from unconsolidated affiliates – current
$
35

 
$
7

 
 
 
 
Total due to unconsolidated affiliates – current – Sempra Energy
$
—

 
$
(34
)
 
 
 
 
Income taxes due to Sempra Energy(5)
$
(7
)
 
$
(4
)
(1) 
Amounts include principal balances plus accumulated interest outstanding.
(2) 
Mexican peso-denominated revolving line of credit for up to 14.2 billion Mexican pesos or approximately $737 million U.S. dollar-equivalent, at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 bps (10.68 percent at June 30, 2019), to finance construction of the natural gas marine pipeline.
(3) 
U.S. dollar-denominated loan, at a variable interest rate based on the 30-day LIBOR plus 637.5 bps (8.89 percent at December 31, 2018).
(4) 
U.S. dollar-denominated loan, at a variable interest rate based on the 6-month LIBOR plus 290 bps (5.10 percent at June 30, 2019).
(5) 
SDG&E and SoCalGas are included in the consolidated income tax return of Sempra Energy and their respective income tax expense is computed as an amount equal to that which would result from each company having always filed a separate return.
(6) 
At June 30, 2019, net receivable includes outstanding advances to Sempra Energy of $94 million at an interest rate of 2.57 percent.

The following table summarizes revenues and cost of sales from unconsolidated affiliates.
REVENUES AND COST OF SALES FROM UNCONSOLIDATED AFFILIATES
 
 
 
 
(Dollars in millions)
 
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
Sempra Energy Consolidated
$
13

 
$
16

 
$
27

 
$
32

SDG&E
2

 
1

 
3

 
3

SoCalGas
17

 
15

 
34

 
32

Cost of Sales:
 
 
 
 
 
 
 
Sempra Energy Consolidated
$
14

 
$
15

 
$
28

 
$
27

SDG&E
20

 
16

 
40

 
35

SoCalGas
—

 
—

 
4

 
—
Other Income and Expense Table
Other Income (Expense), Net on the Condensed Consolidated Statements of Operations consisted of the following:
OTHER INCOME (EXPENSE), NET
 
 
 
 
 
 
(Dollars in millions)
 
 
 
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Sempra Energy Consolidated:
 
 
 
 
 
 
 
Allowance for equity funds used during construction
$
23

 
$
29

 
$
44

 
$
56

Investment gains(1)
11

 
6

 
37

 
5

Gains (losses) on interest rate and foreign exchange instruments, net
11

 
(55
)
 
24

 
7

Foreign currency transaction gains (losses), net(2)
4

 
(42
)
 
11

 
(12
)
Non-service component of net periodic benefit (cost) credit
(30
)
 
8

 
(6
)
 
40

Penalties related to billing practices OII
—

 
—

 
(8
)
 
—

Interest on regulatory balancing accounts, net
6

 
1

 
5

 
1

Sundry, net
3

 
(3
)
 
3

 
(1
)
Total
$
28

 
$
(56
)
 
$
110

 
$
96

SDG&E:
 
 
 
 
 
 
 
Allowance for equity funds used during construction
$
15

 
$
16

 
$
27

 
$
34

Non-service component of net periodic benefit (cost) credit
(1
)
 
8

 
8

 
17

Interest on regulatory balancing accounts, net
6

 
2

 
6

 
2

Sundry, net
(1
)
 
(1
)
 
—

 
—

Total
$
19

 
$
25

 
$
41

 
$
53

SoCalGas:
 
 
 
 
 
 
 
Allowance for equity funds used during construction
$
8

 
$
13

 
$
16

 
$
22

Non-service component of net periodic benefit (cost) credit
(4
)
 
3

 
14

 
28

Penalties related to billing practices OII
—

 
—

 
(8
)
 
—

Interest on regulatory balancing accounts, net
—

 
(1
)
 
(1
)
 
(1
)
Sundry, net
(3
)
 
(2
)
 
(4
)
 
(3
)
Total
$
1

 
$
13

 
$
17

 
$
46

(1) 
Represents investment 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, recorded in O&M on the Condensed Consolidated Statements of Operations.
(2) 
Includes gains of $7 million and $17 million in the three months and six months ended June 30, 2019, respectively, and losses of $47 million and $8 million in the three months and six months ended June 30, 2018, respectively, from translation to U.S. dollars of a Mexican peso-denominated loan to the IMG JV, which are offset by corresponding amounts included in Equity Earnings (Losses) on the Condensed Consolidated Statements of Operations.
Income Tax Expense and Effective Income Tax Rates Table
We provide our calculations of ETRs in the following table.
INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Sempra Energy Consolidated:
 
 
 
 
 
 
 
Income tax expense (benefit) from continuing operations
$
47

 
$
(602
)
 
$
89

 
$
(360
)
 
 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes
 
 
 
 
 
 
 
 and equity earnings (losses)
$
286

 
$
(1,183
)
 
$
787

 
$
(590
)
Equity earnings (losses), before income tax(1)
2

 
(189
)
 
7

 
(184
)
Pretax income (loss)
$
288

 
$
(1,372
)
 
$
794

 
$
(774
)
 
 
 
 
 
 
 
 
Effective income tax rate
16
 %
 
44
%
 
11
%
 
47
%
SDG&E:
 
 
 
 
 
 
 
Income tax expense
$
35

 
$
42

 
$
40

 
$
98

Income before income taxes
$
181

 
$
188

 
$
363

 
$
413

Effective income tax rate
19
 %
 
22
%
 
11
%
 
24
%
SoCalGas:
 
 
 
 
 
 
 
Income tax (benefit) expense
$
(4
)
 
$
23

 
$
15

 
$
82

Income before income taxes
$
27

 
$
57

 
$
310

 
$
341

Effective income tax rate
(15
)%
 
40
%
 
5
%
 
24
%

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