|
||||||||||||
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
|
March 31, 2014
|
|||||||||||
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 April 28, 2014:
|
||||||||||||
Sempra Energy
|
245,426,641 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
|
66
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
96
|
Item 4.
|
Controls and Procedures
|
97
|
PART II – OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
98
|
Item 1A.
|
Risk Factors
|
98
|
Item 6.
|
Exhibits
|
99
|
Signatures
|
101
|
|
§
|
local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments;
|
§
|
actions and the timing of actions, including issuances of permits to construct and licenses for operation, 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 in obtaining permits, licenses, certificates and other authorizations on a timely basis and risks in obtaining adequate and competitive financing for such projects;
|
§
|
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 and 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 that our partners or counterparties will be unable or unwilling to fulfill their contractual commitments;
|
§
|
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 that threaten system operations and critical infrastructure, and cybersecurity threats to the energy grid and the confidentiality of our proprietary information and the personal information of our customers;
|
§
|
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 (SDG&E) electric transmission and distribution system due to increased amount and variability of 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 SDG&E’s 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 March 31,
|
|||
|
|
2014
|
2013
|
||
|
|
(unaudited)
|
|||
REVENUES
|
|
|
|
|
|
Utilities
|
$
|
2,485
|
$
|
2,334
|
|
Energy-related businesses
|
|
310
|
|
316
|
|
Total revenues
|
|
2,795
|
|
2,650
|
|
EXPENSES AND OTHER INCOME
|
|
|
|
|
|
Utilities:
|
|
|
|
|
|
Cost of natural gas
|
|
(620)
|
|
(556)
|
|
Cost of electric fuel and purchased power
|
|
(510)
|
|
(447)
|
|
Energy-related businesses:
|
|
|
|
|
|
Cost of natural gas, electric fuel and purchased power
|
|
(138)
|
|
(111)
|
|
Other cost of sales
|
|
(38)
|
|
(48)
|
|
Operation and maintenance
|
|
(676)
|
|
(724)
|
|
Depreciation and amortization
|
|
(286)
|
|
(295)
|
|
Franchise fees and other taxes
|
|
(105)
|
|
(106)
|
|
Gain on sale of equity interest and assets
|
|
27
|
|
74
|
|
Adjustment to loss from plant closure
|
|
13
|
|
―
|
|
Equity earnings, before income tax
|
|
17
|
|
10
|
|
Other income, net
|
|
40
|
|
37
|
|
Interest income
|
|
4
|
|
6
|
|
Interest expense
|
|
(136)
|
|
(138)
|
|
Income before income taxes and equity earnings
|
|
|
|
|
|
of certain unconsolidated subsidiaries
|
|
387
|
|
352
|
|
Income tax expense
|
|
(127)
|
|
(178)
|
|
Equity earnings, net of income tax
|
|
6
|
|
4
|
|
Net income
|
|
266
|
|
178
|
|
(Earnings) losses attributable to noncontrolling interests
|
|
(19)
|
|
2
|
|
Preferred dividends of subsidiaries
|
|
―
|
|
(2)
|
|
Earnings
|
$
|
247
|
$
|
178
|
|
|
|
|
|
|
|
Basic earnings per common share
|
$
|
1.01
|
$
|
0.73
|
|
Weighted-average number of shares outstanding, basic (thousands)
|
|
245,277
|
|
243,294
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
$
|
0.99
|
$
|
0.72
|
|
Weighted-average number of shares outstanding, diluted (thousands)
|
|
249,669
|
|
247,534
|
|
Dividends declared per share of common stock
|
$
|
0.66
|
$
|
0.63
|
|
See Notes to Condensed Consolidated Financial Statements.
|
SEMPRA ENERGY
|
|||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
|
Three months ended March 31, 2014 and 2013
|
|||||||||
|
|
(unaudited)
|
|||||||||
|
|
Sempra Energy Shareholders' Equity
|
|
|
|
|
|||||
|
|
Pretax
|
Income Tax
|
Net-of-Tax
|
Noncontrolling
|
|
|||||
|
|
Amount
|
(Expense) Benefit
|
Amount
|
Interests (After-Tax)
|
Total
|
|||||
2014:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
374
|
$
|
(127)
|
$
|
247
|
$
|
19
|
$
|
266
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
(43)
|
|
―
|
|
(43)
|
|
(2)
|
|
(45)
|
|
Pension and other postretirement benefits
|
|
5
|
|
(2)
|
|
3
|
|
―
|
|
3
|
|
Financial instruments
|
|
(8)
|
|
3
|
|
(5)
|
|
―
|
|
(5)
|
|
Total other comprehensive income (loss)
|
|
(46)
|
|
1
|
|
(45)
|
|
(2)
|
|
(47)
|
|
Comprehensive income
|
$
|
328
|
$
|
(126)
|
$
|
202
|
$
|
17
|
$
|
219
|
|
2013:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
358
|
$
|
(178)
|
$
|
180
|
$
|
(2)
|
$
|
178
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
10
|
|
―
|
|
10
|
|
(4)
|
|
6
|
|
Pension and other postretirement benefits
|
|
5
|
|
(2)
|
|
3
|
|
―
|
|
3
|
|
Financial instruments
|
|
(20)
|
|
6
|
|
(14)
|
|
3
|
|
(11)
|
|
Total other comprehensive income (loss)
|
|
(5)
|
|
4
|
|
(1)
|
|
(1)
|
|
(2)
|
|
Comprehensive income (loss)
|
|
353
|
|
(174)
|
|
179
|
|
(3)
|
|
176
|
|
Preferred dividends of subsidiaries
|
|
(2)
|
|
―
|
|
(2)
|
|
―
|
|
(2)
|
|
Comprehensive income (loss), after preferred
|
|
|
|
|
|
|
|
|
|
|
|
dividends of subsidiaries
|
$
|
351
|
$
|
(174)
|
$
|
177
|
$
|
(3)
|
$
|
174
|
|
See Notes to Condensed Consolidated Financial Statements.
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
2014
|
2013(1)
|
|||
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
844
|
$
|
904
|
|
Restricted cash
|
|
26
|
|
24
|
|
Trade accounts receivable, net
|
|
1,230
|
|
1,308
|
|
Other accounts and notes receivable, net
|
|
175
|
|
214
|
|
Due from unconsolidated affiliates
|
|
2
|
|
4
|
|
Income taxes receivable
|
|
88
|
|
85
|
|
Deferred income taxes
|
|
375
|
|
301
|
|
Inventories
|
|
197
|
|
287
|
|
Regulatory balancing accounts – undercollected
|
|
665
|
|
556
|
|
Other regulatory assets
|
|
35
|
|
38
|
|
Fixed-price contracts and other derivatives
|
|
114
|
|
106
|
|
Asset held for sale, power plant
|
|
293
|
|
―
|
|
Other
|
|
180
|
|
170
|
|
Total current assets
|
|
4,224
|
|
3,997
|
|
|
|
|
|
|
|
Investments and other assets:
|
|
|
|
|
|
Restricted cash
|
|
27
|
|
25
|
|
Due from unconsolidated affiliate
|
|
31
|
|
14
|
|
Regulatory assets arising from pension and other postretirement
|
|
|
|
|
|
benefit obligations
|
|
454
|
|
435
|
|
Other regulatory assets
|
|
2,039
|
|
2,113
|
|
Nuclear decommissioning trusts
|
|
1,055
|
|
1,034
|
|
Investments
|
|
1,634
|
|
1,575
|
|
Goodwill
|
|
999
|
|
1,024
|
|
Other intangible assets
|
|
423
|
|
426
|
|
Sundry
|
|
1,146
|
|
1,141
|
|
Total investments and other assets
|
|
7,808
|
|
7,787
|
|
|
|
|
|
|
|
Property, plant and equipment:
|
|
|
|
|
|
Property, plant and equipment
|
|
34,463
|
|
34,407
|
|
Less accumulated depreciation and amortization
|
|
(9,011)
|
|
(8,947)
|
|
Property, plant and equipment, net ($431 and $438 at March 31, 2014 and
December 31, 2013, respectively, related to VIE)
|
|
25,452
|
|
25,460
|
|
Total assets
|
$
|
37,484
|
$
|
37,244
|
|
(1)
|
Derived from audited financial statements.
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
2014
|
2013(1)
|
|||
|
|
(unaudited)
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Short-term debt
|
$
|
1,084
|
$
|
545
|
|
Accounts payable – trade
|
|
1,062
|
|
1,088
|
|
Accounts payable – other
|
|
138
|
|
127
|
|
Dividends and interest payable
|
|
322
|
|
271
|
|
Accrued compensation and benefits
|
|
260
|
|
376
|
|
Regulatory balancing accounts – overcollected
|
|
88
|
|
91
|
|
Current portion of long-term debt
|
|
97
|
|
1,147
|
|
Fixed-price contracts and other derivatives
|
|
54
|
|
55
|
|
Customer deposits
|
|
155
|
|
154
|
|
Other
|
|
615
|
|
515
|
|
Total current liabilities
|
|
3,875
|
|
4,369
|
|
Long-term debt ($322 and $325 at March 31, 2014 and December 31, 2013, respectively,
related to VIE)
|
|
11,700
|
|
11,253
|
|
|
|
|
|
|
|
Deferred credits and other liabilities:
|
|
|
|
|
|
Customer advances for construction
|
|
158
|
|
155
|
|
Pension and other postretirement benefit obligations, net of plan assets
|
|
679
|
|
667
|
|
Deferred income taxes
|
|
2,958
|
|
2,804
|
|
Deferred investment tax credits
|
|
41
|
|
42
|
|
Regulatory liabilities arising from removal obligations
|
|
2,624
|
|
2,623
|
|
Asset retirement obligations
|
|
2,127
|
|
2,084
|
|
Fixed-price contracts and other derivatives
|
|
238
|
|
228
|
|
Deferred credits and other
|
|
1,195
|
|
1,169
|
|
Total deferred credits and other liabilities
|
|
10,020
|
|
9,772
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 11)
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Preferred stock (50 million shares authorized; none issued)
|
|
―
|
|
―
|
|
Common stock (750 million shares authorized; 245 million and 244 million shares
|
|
|
|
|
|
outstanding at March 31, 2014 and December 31, 2013, respectively; no par value)
|
|
2,401
|
|
2,409
|
|
Retained earnings
|
|
8,912
|
|
8,827
|
|
Accumulated other comprehensive income (loss)
|
|
(273)
|
|
(228)
|
|
Total Sempra Energy shareholders’ equity
|
|
11,040
|
|
11,008
|
|
Preferred stock of subsidiary
|
|
20
|
|
20
|
|
Other noncontrolling interests
|
|
829
|
|
822
|
|
Total equity
|
|
11,889
|
|
11,850
|
|
Total liabilities and equity
|
$
|
37,484
|
$
|
37,244
|
|
(1)
|
Derived from audited financial statements.
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||
(Dollars in millions)
|
|||||
|
|
Three months ended March 31,
|
|||
|
|
2014
|
2013
|
||
|
|
(unaudited)
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
Net income
|
$
|
266
|
$
|
178
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
286
|
|
295
|
|
Deferred income taxes and investment tax credits
|
|
95
|
|
252
|
|
Gain on sale of equity interest and assets
|
|
(27)
|
|
(74)
|
|
Adjustment to loss from plant closure
|
|
(13)
|
|
―
|
|
Equity earnings
|
|
(23)
|
|
(14)
|
|
Fixed-price contracts and other derivatives
|
|
(3)
|
|
17
|
|
Other
|
|
(24)
|
|
6
|
|
Net change in other working capital components
|
|
234
|
|
149
|
|
Changes in other assets
|
|
94
|
|
17
|
|
Changes in other liabilities
|
|
19
|
|
9
|
|
Net cash provided by operating activities
|
|
904
|
|
835
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
Expenditures for property, plant and equipment
|
|
(801)
|
|
(531)
|
|
Expenditures for investments
|
|
(12)
|
|
(5)
|
|
Proceeds from sale of equity interest and assets, net of cash sold
|
|
66
|
|
371
|
|
Distributions from investments
|
|
3
|
|
15
|
|
Purchases of nuclear decommissioning and other trust assets
|
|
(198)
|
|
(136)
|
|
Proceeds from sales by nuclear decommissioning and other trusts
|
|
195
|
|
134
|
|
Decrease in restricted cash
|
|
23
|
|
52
|
|
Increase in restricted cash
|
|
(27)
|
|
(60)
|
|
Advances to unconsolidated affiliates
|
|
(17)
|
|
―
|
|
Other
|
|
(2)
|
|
(2)
|
|
Net cash used in investing activities
|
|
(770)
|
|
(162)
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
Common dividends paid
|
|
(154)
|
|
(145)
|
|
Preferred dividends paid by subsidiaries
|
|
―
|
|
(2)
|
|
Issuances of common stock
|
|
11
|
|
15
|
|
Repurchases of common stock
|
|
(37)
|
|
(45)
|
|
Issuances of debt (maturities greater than 90 days)
|
|
1,188
|
|
608
|
|
Payments on debt (maturities greater than 90 days)
|
|
(1,138)
|
|
(645)
|
|
Proceeds from sale of noncontrolling interests, net of $25 in offering costs
|
|
―
|
|
574
|
|
Decrease in short-term debt, net
|
|
(69)
|
|
(43)
|
|
Other
|
|
6
|
|
3
|
|
Net cash (used in) provided by financing activities
|
|
(193)
|
|
320
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(1)
|
|
3
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
|
(60)
|
|
996
|
|
Cash and cash equivalents, January 1
|
|
904
|
|
475
|
|
Cash and cash equivalents, March 31
|
$
|
844
|
$
|
1,471
|
|
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
SEMPRA ENERGY
|
|||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
|
|||||
(Dollars in millions)
|
|||||
|
|
Three months ended March 31,
|
|||
|
2014
|
2013
|
|||
|
(unaudited)
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
Interest payments, net of amounts capitalized
|
$
|
91
|
$
|
87
|
|
Income tax payments, net of refunds
|
|
41
|
|
14
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
|
|
|
|
|
|
Accrued capital expenditures
|
$
|
249
|
$
|
275
|
|
Increase in capital lease obligations for investment in property, plant and equipment
|
|
60
|
|
―
|
|
Capital expenditures recoverable by U.S. Treasury grants receivable
|
|
―
|
|
1
|
|
Sequestration of U.S. Treasury grants receivable
|
|
―
|
|
(23)
|
|
Dividends declared but not paid
|
|
168
|
|
160
|
|
Financing of build-to-suit property
|
|
9
|
|
―
|
|
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||
(Dollars in millions)
|
||||
|
Three months ended March 31,
|
|||
|
2014
|
2013
|
||
|
(unaudited)
|
|||
Operating revenues
|
|
|
|
|
Electric
|
$
|
811
|
$
|
772
|
Natural gas
|
|
176
|
|
167
|
Total operating revenues
|
|
987
|
|
939
|
Operating expenses
|
|
|
|
|
Cost of electric fuel and purchased power
|
|
266
|
|
209
|
Cost of natural gas
|
|
75
|
|
76
|
Operation and maintenance
|
|
252
|
|
297
|
Depreciation and amortization
|
|
130
|
|
134
|
Franchise fees and other taxes
|
|
56
|
|
55
|
Adjustment to loss from plant closure
|
|
(13)
|
|
―
|
Total operating expenses
|
|
766
|
|
771
|
Operating income
|
|
221
|
|
168
|
Other income, net
|
|
13
|
|
11
|
Interest income
|
|
―
|
|
1
|
Interest expense
|
|
(50)
|
|
(48)
|
Income before income taxes
|
|
184
|
|
132
|
Income tax expense
|
|
(83)
|
|
(51)
|
Net income
|
|
101
|
|
81
|
(Earnings) losses attributable to noncontrolling interest
|
|
(2)
|
|
11
|
Earnings
|
|
99
|
|
92
|
Preferred dividend requirements
|
|
―
|
|
(1)
|
Earnings attributable to common shares
|
$
|
99
|
$
|
91
|
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||||
(Dollars in millions)
|
||||||||||
|
Three months ended March 31, 2014 and 2013
|
|||||||||
|
(unaudited)
|
|||||||||
|
SDG&E Shareholder's Equity
|
|
|
|||||||
|
Pretax
|
Income Tax
|
Net-of-Tax
|
Noncontrolling
|
|
|||||
|
Amount
|
(Expense) Benefit
|
Amount
|
Interest (After-Tax)
|
Total
|
|||||
2014:
|
|
|
|
|
|
|
|
|
|
|
Net income/Comprehensive income
|
$
|
182
|
$
|
(83)
|
$
|
99
|
$
|
2
|
$
|
101
|
2013:
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
143
|
$
|
(51)
|
$
|
92
|
$
|
(11)
|
$
|
81
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
Financial instruments
|
|
―
|
|
―
|
|
―
|
|
3
|
|
3
|
Total other comprehensive income
|
|
―
|
|
―
|
|
―
|
|
3
|
|
3
|
Comprehensive income (loss)
|
$
|
143
|
$
|
(51)
|
$
|
92
|
$
|
(8)
|
$
|
84
|
See Notes to Condensed Consolidated Financial Statements.
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
|
2014
|
2013(1)
|
||
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
12
|
$
|
27
|
|
Restricted cash
|
|
4
|
|
6
|
|
Accounts receivable – trade, net
|
|
272
|
|
266
|
|
Accounts receivable – other, net
|
|
19
|
|
28
|
|
Due from unconsolidated affiliates
|
|
12
|
|
1
|
|
Income taxes receivable
|
|
6
|
|
32
|
|
Deferred income taxes
|
|
188
|
|
103
|
|
Inventories
|
|
76
|
|
86
|
|
Regulatory balancing accounts, net
|
|
665
|
|
556
|
|
Other regulatory assets
|
|
29
|
|
29
|
|
Fixed-price contracts and other derivatives
|
|
64
|
|
61
|
|
Other
|
|
66
|
|
75
|
|
Total current assets
|
|
1,413
|
|
1,270
|
|
|
|
|
|
|
|
Other assets:
|
|
|
|
|
|
Restricted cash
|
|
27
|
|
25
|
|
Deferred taxes recoverable in rates
|
|
749
|
|
788
|
|
Regulatory assets arising from fixed-price contracts and other derivatives
|
|
62
|
|
63
|
|
Regulatory assets arising from pension and other postretirement
|
|
|
|
|
|
benefit obligations
|
|
111
|
|
106
|
|
Other regulatory assets
|
|
948
|
|
991
|
|
Nuclear decommissioning trusts
|
|
1,055
|
|
1,034
|
|
Sundry
|
|
255
|
|
254
|
|
Total other assets
|
|
3,207
|
|
3,261
|
|
|
|
|
|
|
|
Property, plant and equipment:
|
|
|
|
|
|
Property, plant and equipment
|
|
14,606
|
|
14,346
|
|
Less accumulated depreciation and amortization
|
|
(3,592)
|
|
(3,500)
|
|
Property, plant and equipment, net ($431 and $438 at March 31, 2014 and
December 31, 2013, respectively, related to VIE)
|
|
11,014
|
|
10,846
|
|
Total assets
|
$
|
15,634
|
$
|
15,377
|
|
(1)
|
Derived from audited financial statements.
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
SAN DIEGO GAS & ELECTRIC COMPANY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
|
2014
|
2013(1)
|
||
|
|
(unaudited)
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Short-term debt
|
$
|
90
|
$
|
59
|
|
Accounts payable
|
|
337
|
|
420
|
|
Due to unconsolidated affiliates
|
|
35
|
|
39
|
|
Dividends and interest payable
|
|
51
|
|
39
|
|
Accrued compensation and benefits
|
|
75
|
|
113
|
|
Current portion of long-term debt
|
|
30
|
|
29
|
|
Fixed-price contracts and other derivatives
|
|
38
|
|
38
|
|
Customer deposits
|
|
71
|
|
71
|
|
Other
|
|
310
|
|
271
|
|
Total current liabilities
|
|
1,037
|
|
1,079
|
|
Long-term debt ($322 and $325 at March 31, 2014 and December 31, 2013,
respectively, related to VIE)
|
|
4,580
|
|
4,525
|
|
|
|
|
|
|
|
Deferred credits and other liabilities:
|
|
|
|
|
|
Customer advances for construction
|
|
37
|
|
34
|
|
Pension and other postretirement benefit obligations, net of plan assets
|
|
138
|
|
132
|
|
Deferred income taxes
|
|
2,107
|
|
2,021
|
|
Deferred investment tax credits
|
|
23
|
|
24
|
|
Regulatory liabilities arising from removal obligations
|
|
1,428
|
|
1,403
|
|
Asset retirement obligations
|
|
872
|
|
861
|
|
Fixed-price contracts and other derivatives
|
|
172
|
|
175
|
|
Deferred credits and other
|
|
426
|
|
404
|
|
Total deferred credits and other liabilities
|
|
5,203
|
|
5,054
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 11)
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Common stock (255 million shares authorized; 117 million shares outstanding;
|
|
|
|
|
|
no par value)
|
|
1,338
|
|
1,338
|
|
Retained earnings
|
|
3,398
|
|
3,299
|
|
Accumulated other comprehensive income (loss)
|
|
(9)
|
|
(9)
|
|
Total SDG&E shareholder's equity
|
|
4,727
|
|
4,628
|
|
Noncontrolling interest
|
|
87
|
|
91
|
|
Total equity
|
|
4,814
|
|
4,719
|
|
Total liabilities and equity
|
$
|
15,634
|
$
|
15,377
|
|
(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)
|
||||
|
Three months ended
March 31,
|
|||
|
2014
|
2013
|
||
|
(unaudited)
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
$
|
101
|
$
|
81
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
130
|
|
134
|
Deferred income taxes and investment tax credits
|
|
57
|
|
36
|
Adjustment to loss from plant closure
|
|
(13)
|
|
―
|
Fixed-price contracts and other derivatives
|
|
(2)
|
|
(2)
|
Other
|
|
(9)
|
|
5
|
Net change in other working capital components
|
|
(76)
|
|
(2)
|
Changes in other assets
|
|
63
|
|
4
|
Changes in other liabilities
|
|
10
|
|
8
|
Net cash provided by operating activities
|
|
261
|
|
264
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
Expenditures for property, plant and equipment
|
|
(294)
|
|
(237)
|
Purchases of nuclear decommissioning trust assets
|
|
(198)
|
|
(135)
|
Proceeds from sales by nuclear decommissioning trusts
|
|
195
|
|
134
|
Decrease in restricted cash
|
|
10
|
|
17
|
Increase in restricted cash
|
|
(10)
|
|
(19)
|
Net cash used in investing activities
|
|
(297)
|
|
(240)
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
Preferred dividends paid
|
|
―
|
|
(1)
|
Payments on long-term debt
|
|
(3)
|
|
(3)
|
Increase in short-term debt, net
|
|
31
|
|
―
|
Capital distribution made by Otay Mesa VIE
|
|
(7)
|
|
(1)
|
Net cash provided by (used in) financing activities
|
|
21
|
|
(5)
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
|
(15)
|
|
19
|
Cash and cash equivalents, January 1
|
|
27
|
|
87
|
Cash and cash equivalents, March 31
|
$
|
12
|
$
|
106
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
Interest payments, net of amounts capitalized
|
$
|
36
|
$
|
28
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
|
|
|
|
|
Accrued capital expenditures
|
$
|
99
|
$
|
102
|
Increase in capital lease obligations for investment in property, plant and equipment
|
|
60
|
|
―
|
Dividends declared but not paid
|
|
―
|
|
1
|
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||
(Dollars in millions)
|
||||
|
Three months ended March 31,
|
|||
|
2014
|
2013
|
||
|
(unaudited)
|
|||
|
|
|
|
|
Operating revenues
|
$
|
1,085
|
$
|
983
|
Operating expenses
|
|
|
|
|
Cost of natural gas
|
|
508
|
|
454
|
Operation and maintenance
|
|
305
|
|
306
|
Depreciation and amortization
|
|
105
|
|
100
|
Franchise fees and other taxes
|
|
38
|
|
40
|
Total operating expenses
|
|
956
|
|
900
|
Operating income
|
|
129
|
|
83
|
Other income, net
|
|
4
|
|
4
|
Interest expense
|
|
(17)
|
|
(17)
|
Income before income taxes
|
|
116
|
|
70
|
Income tax expense
|
|
(38)
|
|
(24)
|
Net income/Earnings attributable to common shares
|
$
|
78
|
$
|
46
|
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||
(Dollars in millions)
|
||||||
|
Three months ended March 31, 2014 and 2013
|
|||||
|
(unaudited)
|
|||||
|
|
|
|
|
|
|
|
Pretax
|
Income Tax
|
Net-of-Tax
|
|||
|
Amount
|
(Expense) Benefit
|
Amount
|
|||
2014:
|
|
|
|
|
|
|
Net income/Comprehensive income
|
$
|
116
|
$
|
(38)
|
$
|
78
|
2013:
|
|
|
|
|
|
|
Net income/Comprehensive income
|
$
|
70
|
$
|
(24)
|
$
|
46
|
See Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
|
2014
|
2013(1)
|
||
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
32
|
$
|
27
|
|
Accounts receivable – trade, net
|
|
557
|
|
595
|
|
Accounts receivable – other, net
|
|
55
|
|
97
|
|
Due from unconsolidated affiliates
|
|
104
|
|
21
|
|
Income taxes receivable
|
|
41
|
|
25
|
|
Inventories
|
|
45
|
|
69
|
|
Regulatory assets
|
|
6
|
|
5
|
|
Other
|
|
39
|
|
34
|
|
Total current assets
|
|
879
|
|
873
|
|
|
|
|
|
|
|
Other assets:
|
|
|
|
|
|
Regulatory assets arising from pension obligations
|
|
341
|
|
326
|
|
Other regulatory assets
|
|
272
|
|
262
|
|
Other postretirement benefit plan assets, net of plan liabilities
|
|
95
|
|
95
|
|
Sundry
|
|
126
|
|
124
|
|
Total other assets
|
|
834
|
|
807
|
|
|
|
|
|
|
|
Property, plant and equipment:
|
|
|
|
|
|
Property, plant and equipment
|
|
12,041
|
|
11,831
|
|
Less accumulated depreciation and amortization
|
|
(4,423)
|
|
(4,364)
|
|
Property, plant and equipment, net
|
|
7,618
|
|
7,467
|
|
Total assets
|
$
|
9,331
|
$
|
9,147
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|||||
(Dollars in millions)
|
|||||
|
|
March 31,
|
December 31,
|
||
|
|
2014
|
2013(1)
|
||
|
|
(unaudited)
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Short-term debt
|
$
|
―
|
$
|
42
|
|
Accounts payable – trade
|
|
410
|
|
346
|
|
Accounts payable – other
|
|
79
|
|
79
|
|
Due to unconsolidated affiliates
|
|
11
|
|
16
|
|
Deferred income taxes
|
|
75
|
|
45
|
|
Accrued compensation and benefits
|
|
107
|
|
141
|
|
Regulatory balancing accounts, net
|
|
88
|
|
91
|
|
Current portion of long-term debt
|
|
1
|
|
252
|
|
Customer deposits
|
|
75
|
|
75
|
|
Other
|
|
175
|
|
125
|
|
Total current liabilities
|
|
1,021
|
|
1,212
|
|
Long-term debt
|
|
1,408
|
|
1,159
|
|
Deferred credits and other liabilities:
|
|
|
|
|
|
Customer advances for construction
|
|
108
|
|
108
|
|
Pension obligation, net of plan assets
|
|
354
|
|
339
|
|
Regulatory liabilities arising from other postretirement benefit assets
|
|
95
|
|
95
|
|
Deferred income taxes
|
|
1,014
|
|
993
|
|
Deferred investment tax credits
|
|
18
|
|
18
|
|
Regulatory liabilities arising from removal obligations
|
|
1,180
|
|
1,205
|
|
Asset retirement obligations
|
|
1,220
|
|
1,182
|
|
Deferred credits and other
|
|
286
|
|
287
|
|
Total deferred credits and other liabilities
|
|
4,275
|
|
4,227
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 11)
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
Preferred stock
|
|
22
|
|
22
|
|
Common stock (100 million shares authorized; 91 million shares outstanding;
|
|
|
|
|
|
no par value)
|
|
866
|
|
866
|
|
Retained earnings
|
|
1,757
|
|
1,679
|
|
Accumulated other comprehensive income (loss)
|
|
(18)
|
|
(18)
|
|
Total shareholders' equity
|
|
2,627
|
|
2,549
|
|
Total liabilities and shareholders' equity
|
$
|
9,331
|
$
|
9,147
|
|
(1)
|
Derived from audited financial statements.
|
||||
See Notes to Condensed Consolidated Financial Statements.
|
SOUTHERN CALIFORNIA GAS COMPANY
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||
(Dollars in millions)
|
||||
|
Three months ended March 31,
|
|||
|
2014
|
2013
|
||
|
(unaudited)
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
Net income
|
$
|
78
|
$
|
46
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
105
|
|
100
|
Deferred income taxes and investment tax credits
|
|
26
|
|
18
|
Net change in other working capital components
|
|
197
|
|
250
|
Changes in other assets
|
|
18
|
|
3
|
Changes in other liabilities
|
|
3
|
|
(6)
|
Net cash provided by operating activities
|
|
427
|
|
411
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
Expenditures for property, plant and equipment
|
|
(260)
|
|
(179)
|
Increase in loans to affiliates, net
|
|
(117)
|
|
(243)
|
Net cash used in investing activities
|
|
(377)
|
|
(422)
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
Issuance of long-term debt
|
|
248
|
|
―
|
Repayment of long-term debt
|
|
(250)
|
|
―
|
Decrease in short-term debt, net
|
|
(42)
|
|
―
|
Other
|
|
(1)
|
|
―
|
Net cash used in financing activities
|
|
(45)
|
|
―
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
5
|
|
(11)
|
Cash and cash equivalents, January 1
|
|
27
|
|
83
|
Cash and cash equivalents, March 31
|
$
|
32
|
$
|
72
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
Interest payments, net of amounts capitalized
|
$
|
12
|
$
|
12
|
Income tax payments, net of refunds
|
|
30
|
|
―
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
|
|
|
|
|
Accrued capital expenditures
|
$
|
111
|
$
|
76
|
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.
|
DECONSOLIDATION OF SUBSIDIARY
|
|||
(Dollars in millions)
|
|||
|
Copper Mountain Solar 3
|
||
Proceeds from sale, net of negligible transaction costs
|
$
|
68
|
|
Cash
|
|
(2)
|
|
Property, plant and equipment, net
|
|
(247)
|
|
Other assets
|
|
(11)
|
|
Accounts payable and accrued expenses
|
|
82
|
|
Long-term debt, including current portion
|
|
97
|
|
Other long-term liabilities
|
|
3
|
|
Accumulated other comprehensive income
|
|
(2)
|
|
Gain on sale of equity interest and assets
|
|
(27)
|
|
Equity method investment upon deconsolidation
|
$
|
(39)
|
|
|
|
(Dollars in millions)
|
|||
Property, plant and equipment, net
|
$
|
290
|
|
Inventories
|
|
3
|
|
Total assets held for sale
|
|
293
|
|
Liability held for sale - asset retirement obligation(1)
|
|
(6)
|
|
Total
|
$
|
287
|
|
(1)
|
Included in Other Current Liabilities on the Condensed Consolidated Balance Sheet.
|
INVENTORY BALANCES
|
|||||||||||||||||
(Dollars in millions)
|
|||||||||||||||||
|
|
Natural Gas
|
Liquefied Natural Gas
|
Materials and Supplies
|
Total
|
||||||||||||
|
|
March 31,
2014
|
December 31,
2013
|
March 31,
2014
|
December 31,
2013
|
March 31,
2014
|
December 31,
2013
|
March 31,
2014
|
December 31,
2013
|
||||||||
SDG&E
|
$
|
4
|
$
|
3
|
$
|
―
|
$
|
―
|
$
|
72
|
$
|
83
|
$
|
76
|
$
|
86
|
|
SoCalGas
|
|
17
|
|
42
|
|
―
|
|
―
|
|
28
|
|
27
|
|
45
|
|
69
|
|
Sempra South American
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utilities
|
|
―
|
|
―
|
|
―
|
|
―
|
|
39
|
|
40
|
|
39
|
|
40
|
|
Sempra Mexico
|
|
―
|
|
―
|
|
4
|
|
3
|
|
9
|
|
9
|
|
13
|
|
12
|
|
Sempra Renewables
|
|
―
|
|
―
|
|
―
|
|
―
|
|
2
|
|
2
|
|
2
|
|
2
|
|
Sempra Natural Gas
|
|
16
|
|
68
|
|
5
|
|
5
|
|
1
|
|
5
|
|
22
|
|
78
|
|
Sempra Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
$
|
37
|
$
|
113
|
$
|
9
|
$
|
8
|
$
|
151
|
$
|
166
|
$
|
197
|
$
|
287
|
|
|
|
§
|
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 March 31,
|
|||
|
2014
|
2013
|
||
|
|
|
|
|
Operating revenues
|
|
|
|
|
Electric
|
$
|
―
|
$
|
(1)
|
Natural gas
|
|
―
|
|
―
|
Total operating revenues
|
|
―
|
|
(1)
|
Operating expenses
|
|
|
|
|
Cost of electric fuel and purchased power
|
|
(18)
|
|
(17)
|
Operation and maintenance
|
|
5
|
|
17
|
Depreciation and amortization
|
|
7
|
|
7
|
Total operating expenses
|
|
(6)
|
|
7
|
Operating income (loss)
|
|
6
|
|
(8)
|
Interest expense
|
|
(4)
|
|
(3)
|
Income (loss) before income taxes/Net income (loss)
|
|
2
|
|
(11)
|
(Earnings) losses attributable to noncontrolling interest
|
|
(2)
|
|
11
|
Earnings
|
$
|
―
|
$
|
―
|
NET PERIODIC BENEFIT COST – SEMPRA ENERGY CONSOLIDATED
|
||||||||
(Dollars in millions)
|
||||||||
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||
|
Three months ended March 31,
|
Three months ended March 31,
|
||||||
|
2014
|
2013
|
2014
|
2013
|
||||
Service cost
|
$
|
26
|
$
|
27
|
$
|
6
|
$
|
7
|
Interest cost
|
|
41
|
|
37
|
|
12
|
|
11
|
Expected return on assets
|
|
(43)
|
|
(40)
|
|
(16)
|
|
(15)
|
Amortization of:
|
|
|
|
|
|
|
|
|
Prior service cost (credit)
|
|
2
|
|
1
|
|
(1)
|
|
(1)
|
Actuarial loss
|
|
5
|
|
15
|
|
―
|
|
2
|
Settlement
|
|
3
|
|
―
|
|
―
|
|
―
|
Regulatory adjustment
|
|
(24)
|
|
(32)
|
|
―
|
|
2
|
Total net periodic benefit cost
|
$
|
10
|
$
|
8
|
$
|
1
|
$
|
6
|
NET PERIODIC BENEFIT COST – SDG&E
|
||||||||
(Dollars in millions)
|
||||||||
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||
|
Three months ended March 31,
|
Three months ended March 31,
|
||||||
|
2014
|
2013
|
2014
|
2013
|
||||
Service cost
|
$
|
8
|
$
|
8
|
$
|
2
|
$
|
2
|
Interest cost
|
|
11
|
|
10
|
|
2
|
|
2
|
Expected return on assets
|
|
(14)
|
|
(13)
|
|
(3)
|
|
(2)
|
Amortization of:
|
|
|
|
|
|
|
|
|
Prior service cost
|
|
―
|
|
―
|
|
1
|
|
1
|
Actuarial loss
|
|
1
|
|
4
|
|
―
|
|
―
|
Regulatory adjustment
|
|
(5)
|
|
(8)
|
|
(2)
|
|
―
|
Total net periodic benefit cost
|
$
|
1
|
$
|
1
|
$
|
―
|
$
|
3
|
NET PERIODIC BENEFIT COST – SOCALGAS
|
||||||||
(Dollars in millions)
|
||||||||
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||
|
Three months ended March 31,
|
Three months ended March 31,
|
||||||
|
2014
|
2013
|
2014
|
2013
|
||||
Service cost
|
$
|
16
|
$
|
16
|
$
|
4
|
$
|
4
|
Interest cost
|
|
25
|
|
23
|
|
9
|
|
9
|
Expected return on assets
|
|
(26)
|
|
(25)
|
|
(13)
|
|
(12)
|
Amortization of:
|
|
|
|
|
|
|
|
|
Prior service cost (credit)
|
|
2
|
|
1
|
|
(2)
|
|
(2)
|
Actuarial loss
|
|
2
|
|
9
|
|
―
|
|
2
|
Regulatory adjustment
|
|
(19)
|
|
(24)
|
|
2
|
|
2
|
Total net periodic benefit cost
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
3
|
|
Sempra Energy
|
|
|
|||
(Dollars in millions)
|
Consolidated
|
SDG&E
|
SoCalGas
|
|||
Contributions through March 31, 2014:
|
|
|
|
|
|
|
Pension plans
|
$
|
15
|
$
|
1
|
$
|
2
|
Other postretirement benefit plans
|
|
1
|
|
―
|
|
―
|
Total expected contributions in 2014:
|
|
|
|
|
|
|
Pension plans
|
$
|
187
|
$
|
65
|
$
|
86
|
Other postretirement benefit plans
|
|
12
|
|
9
|
|
―
|
EARNINGS PER SHARE COMPUTATIONS
|
|||||
(Dollars in millions, except per share amounts; shares in thousands)
|
|||||
|
|
Three months ended March 31,
|
|||
|
|
2014
|
2013
|
||
Numerator:
|
|
|
|
|
|
Earnings/Income attributable to common shares
|
$
|
247
|
$
|
178
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
Weighted-average common shares
|
|
|
|
|
|
|
outstanding for basic EPS
|
|
245,277
|
|
243,294
|
Dilutive effect of stock options, restricted
|
|
|
|
|
|
|
stock awards and restricted stock units
|
|
4,392
|
|
4,240
|
Weighted-average common shares
|
|
|
|
|
|
|
outstanding for diluted EPS
|
|
249,669
|
|
247,534
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
Basic
|
$
|
1.01
|
$
|
0.73
|
|
Diluted
|
$
|
0.99
|
$
|
0.72
|
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)(3)
|
|
90th percentile or above (2014 awards only)
|
2.0
|
|
75th percentile or above (maximum for awards prior to 2014)
|
1.5
|
|
50th percentile
|
1.0
|
|
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.
|
|
(3)
|
If performance falls between the tiers shown above, we calculate the payout using linear interpolation.
|
Four-Year Earnings Per Share Compound Annual Growth Rate
|
Number of Sempra Energy Common Shares Received for Each Performance-Based Restricted Stock Unit(1)(2)
|
|
8.0% or above
|
2.0
|
|
6.7%
|
1.5
|
|
4.4%
|
1.0
|
|
3.3% or below
|
―
|
|
(1)
|
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.
|
|
(2)
|
If performance falls between the tiers shown above, we calculate the payout using linear interpolation.
|
CAPITALIZED FINANCING COSTS
|
|||||
(Dollars in millions)
|
|||||
|
|
Three months ended March 31,
|
|||
|
|
2014
|
2013
|
||
Sempra Energy Consolidated:
|
|
|
|
|
|
AFUDC related to debt
|
$
|
6
|
$
|
6
|
|
AFUDC related to equity
|
|
25
|
|
15
|
|
Other capitalized financing costs
|
|
8
|
|
5
|
|
Total Sempra Energy Consolidated
|
$
|
39
|
$
|
26
|
|
SDG&E:
|
|
|
|
|
|
AFUDC related to debt
|
$
|
4
|
$
|
4
|
|
AFUDC related to equity
|
|
11
|
|
10
|
|
Total SDG&E
|
$
|
15
|
$
|
14
|
|
SoCalGas:
|
|
|
|
|
|
AFUDC related to debt
|
$
|
2
|
$
|
2
|
|
AFUDC related to equity
|
|
5
|
|
5
|
|
Total SoCalGas
|
$
|
7
|
$
|
7
|
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
|
|||||||||||
SEMPRA ENERGY CONSOLIDATED
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
|
Three months ended March 31, 2014 and 2013
|
|||||||||
|
|
|
|
Pension and Other
|
|
|
|
|
|||
|
|
|
|
Postretirement Benefits
|
|
|
|
|
|||
|
|
Foreign
|
|
|
|
|
|
Total
|
|||
|
|
Currency
|
Unamortized
|
Unamortized
|
|
Accumulated Other
|
|||||
|
|
Translation
|
Net Actuarial
|
Prior Service
|
Financial
|
Comprehensive
|
|||||
|
|
Adjustments
|
Gain (Loss)
|
Credit
|
Instruments
|
Income (Loss)
|
|||||
2014:
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2013
|
$
|
(129)
|
$
|
(73)
|
$
|
―
|
$
|
(26)
|
$
|
(228)
|
|
Other comprehensive loss before
|
|
|
|
|
|
|
|
|
|
|
|
reclassifications
|
|
(43)
|
|
―
|
|
―
|
|
(14)
|
|
(57)
|
|
Amounts reclassified from accumulated other
|
|
|
|
|
|
|
|
|
|
|
|
comprehensive income
|
|
―
|
|
3
|
|
―
|
|
9
|
|
12
|
|
Net other comprehensive income (loss)
|
|
(43)
|
|
3
|
|
―
|
|
(5)
|
|
(45)
|
|
Balance as of March 31, 2014
|
$
|
(172)
|
$
|
(70)
|
$
|
―
|
$
|
(31)
|
$
|
(273)
|
|
2013:
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2012
|
$
|
(240)
|
$
|
(102)
|
$
|
1
|
$
|
(35)
|
$
|
(376)
|
|
Other comprehensive income (loss) before
|
|
|
|
|
|
|
|
|
|
|
|
reclassifications
|
|
10
|
|
―
|
|
―
|
|
(16)
|
|
(6)
|
|
Amounts reclassified from accumulated other
|
|
|
|
|
|
|
|
|
|
|
|
comprehensive income
|
|
―
|
|
3
|
|
―
|
|
2
|
|
5
|
|
Net other comprehensive income (loss)
|
|
10
|
|
3
|
|
―
|
|
(14)
|
|
(1)
|
|
Balance as of March 31, 2013
|
$
|
(230)
|
$
|
(99)
|
$
|
1
|
$
|
(49)
|
$
|
(377)
|
|
(1)
|
All amounts are net of income tax, if subject to tax, and exclude noncontrolling interests.
|
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
||||||||||||
(Dollars in millions)
|
||||||||||||
Details about accumulated
|
Amounts reclassified
|
|
|
|||||||||
other comprehensive income (loss)
|
from accumulated other
|
|
Affected line item on Condensed
|
|||||||||
components
|
comprehensive income (loss)
|
|
Consolidated Statements of Operations
|
|||||||||
|
|
|
Three months ended March 31,
|
|
|
|
|
|
||||
|
|
|
2014
|
|
2013
|
|
|
|
|
|
||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
|
||
Financial instruments:
|
|
|
|
|
|
|
|
|
|
|
||
Interest rate and foreign exchange instruments
|
$
|
3
|
|
$
|
3
|
|
Interest Expense
|
|||||
Interest rate instruments
|
|
2
|
|
|
―
|
|
Gain on Sale of Equity Interest and Assets
|
|||||
Interest rate instruments
|
|
3
|
|
|
2
|
|
Equity Earnings, Before Income Tax
|
|||||
Commodity contracts not subject
|
|
|
|
|
|
|
Cost of Natural Gas, Electric Fuel
|
|||||
|
to rate recovery
|
|
10
|
|
|
―
|
|
and Purchased Power
|
||||
Total before income tax
|
|
18
|
|
|
5
|
|
|
|||||
|
|
|
|
(6)
|
|
|
(1)
|
|
Income Tax Expense
|
|||
Net of income tax
|
|
12
|
|
|
4
|
|
|
|||||
|
|
|
|
(3)
|
|
|
(2)
|
|
Earnings Attributable to Noncontrolling Interests
|
|||
|
|
|
$
|
9
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
||
Net actuarial gain
|
$
|
5
|
|
$
|
5
|
|
(1)
|
|||||
|
|
|
|
(2)
|
|
|
(2)
|
|
Income Tax Expense
|
|||
Net of income tax
|
$
|
3
|
|
$
|
3
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reclassifications for the period, net of tax
|
$
|
12
|
|
$
|
5
|
|
|
|
|
|
||
SDG&E:
|
|
|
|
|
|
|
|
|
|
|
||
Financial instruments:
|
|
|
|
|
|
|
|
|
|
|
||
Interest rate instruments
|
$
|
3
|
|
$
|
2
|
|
Interest Expense
|
|||||
|
|
|
|
(3)
|
|
|
(2)
|
|
Earnings Attributable to Noncontrolling Interest
|
|||
|
$
|
―
|
|
$
|
―
|
|
|
|
|
|
||
(1)
|
Amounts are included in the computation of net periodic benefit cost (see "Pension and Other Postretirement Benefits" above).
|
SHAREHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS ― SEMPRA ENERGY CONSOLIDATED
|
|||||||
(Dollars in millions)
|
|||||||
|
|
|
Sempra
|
|
|
|
|
|
|
|
Energy
|
|
Non-
|
|
|
|
|
|
Shareholders’
|
|
controlling
|
|
Total
|
|
|
|
Equity
|
|
Interests
|
|
Equity
|
Balance at December 31, 2013
|
$
|
11,008
|
$
|
842
|
$
|
11,850
|
|
Comprehensive income
|
|
202
|
|
17
|
|
219
|
|
Share-based compensation expense
|
|
10
|
|
―
|
|
10
|
|
Common stock dividends declared
|
|
(162)
|
|
―
|
|
(162)
|
|
Issuance of common stock
|
|
11
|
|
―
|
|
11
|
|
Repurchase of common stock
|
|
(37)
|
|
―
|
|
(37)
|
|
Tax benefit related to share-based compensation
|
|
8
|
|
―
|
|
8
|
|
Equity contributed by noncontrolling interest
|
|
―
|
|
1
|
|
1
|
|
Distributions to noncontrolling interests
|
|
―
|
|
(11)
|
|
(11)
|
|
Balance at March 31, 2014
|
$
|
11,040
|
$
|
849
|
$
|
11,889
|
|
Balance at December 31, 2012
|
$
|
10,282
|
$
|
401
|
$
|
10,683
|
|
Comprehensive income (loss)
|
|
179
|
|
(3)
|
|
176
|
|
Preferred dividends of subsidiaries
|
|
(2)
|
|
―
|
|
(2)
|
|
Share-based compensation expense
|
|
10
|
|
―
|
|
10
|
|
Common stock dividends declared
|
|
(153)
|
|
―
|
|
(153)
|
|
Issuance of common stock
|
|
15
|
|
―
|
|
15
|
|
Repurchase of common stock
|
|
(45)
|
|
―
|
|
(45)
|
|
Tax benefit related to share-based compensation
|
|
2
|
|
―
|
|
2
|
|
Sale of noncontrolling interests, net of offering costs
|
|
135
|
|
439
|
|
574
|
|
Equity contributed by noncontrolling interest
|
|
―
|
|
4
|
|
4
|
|
Distributions to noncontrolling interests
|
|
―
|
|
(3)
|
|
(3)
|
|
Balance at March 31, 2013
|
$
|
10,423
|
$
|
838
|
$
|
11,261
|
SHAREHOLDER’S EQUITY AND NONCONTROLLING INTEREST ― SDG&E
|
||||||
(Dollars in millions)
|
||||||
|
|
SDG&E
|
|
Non-
|
|
|
|
|
Shareholder’s
|
|
controlling
|
|
Total
|
|
|
Equity
|
|
Interest
|
|
Equity
|
Balance at December 31, 2013
|
$
|
4,628
|
$
|
91
|
$
|
4,719
|
Comprehensive income
|
|
99
|
|
2
|
|
101
|
Distributions to noncontrolling interest
|
|
―
|
|
(6)
|
|
(6)
|
Balance at March 31, 2014
|
$
|
4,727
|
$
|
87
|
$
|
4,814
|
Balance at December 31, 2012
|
$
|
4,222
|
$
|
76
|
$
|
4,298
|
Comprehensive income (loss)
|
|
92
|
|
(8)
|
|
84
|
Preferred stock dividends declared
|
|
(1)
|
|
―
|
|
(1)
|
Equity contributed by noncontrolling interest
|
|
―
|
|
4
|
|
4
|
Balance at March 31, 2013
|
$
|
4,313
|
$
|
72
|
$
|
4,385
|
OTHER NONCONTROLLING INTERESTS
|
|||||||
(Dollars in millions)
|
|
|
|||||
|
|
Percent Ownership Held by Others
|
|
|
March 31, 2014
|
|
December 31, 2013
|
SDG&E:
|
|
|
|
|
|
|
|
Otay Mesa VIE
|
100
|
%
|
$
|
87
|
$
|
91
|
|
Sempra South American Utilities:
|
|
|
|
|
|
|
|
Chilquinta Energía subsidiaries(1)
|
24.4 – 43.4
|
|
|
26
|
|
27
|
|
Luz del Sur
|
20.2
|
|
|
222
|
|
222
|
|
Tecsur
|
9.8
|
|
|
4
|
|
3
|
|
Sempra Mexico:
|
|
|
|
|
|
|
|
IEnova
|
18.9
|
|
|
452
|
|
442
|
|
Sempra Natural Gas:
|
|
|
|
|
|
|
|
Bay Gas Storage, Ltd.
|
9.1
|
|
|
22
|
|
22
|
|
Liberty Gas Storage, LLC
|
25.0
|
|
|
15
|
|
14
|
|
Southern Gas Transmission Company
|
49.0
|
|
|
1
|
|
1
|
|
Total Sempra Energy
|
|
|
$
|
829
|
$
|
822
|
|
(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)
|
||||||
|
|
March 31,
|
|
December 31,
|
||
|
2014
|
|
2013
|
|||
SDG&E
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
Due from SoCalGas
|
$
|
11
|
|
$
|
―
|
|
Due from various affiliates
|
|
1
|
|
|
1
|
|
|
$
|
12
|
|
$
|
1
|
|
|
|
|
|
|
|
|
Due to Sempra Energy
|
$
|
21
|
|
$
|
25
|
|
Due to various affiliates
|
|
14
|
|
|
14
|
|
|
$
|
35
|
|
$
|
39
|
|
|
|
|
|
|
|
|
Income taxes due from Sempra Energy(1)
|
$
|
44
|
|
$
|
70
|
|
|
|
|
|
|
|
|
SoCalGas
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
Due from Sempra Energy
|
$
|
103
|
|
$
|
―
|
|
Due from various affiliates
|
|
1
|
|
|
21
|
|
|
|
$
|
104
|
|
$
|
21
|
|
|
|
|
|
|
|
Due to SDG&E
|
$
|
11
|
|
$
|
―
|
|
Due to Sempra Energy
|
|
―
|
|
|
16
|
|
|
$
|
11
|
|
$
|
16
|
|
|
|
|
|
|
|
|
Income taxes due from Sempra Energy(1)
|
$
|
35
|
|
$
|
18
|
|
(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 separate returns.
|
REVENUES FROM UNCONSOLIDATED AFFILIATES AT SDG&E AND SOCALGAS
|
||||
(Dollars in millions)
|
||||
|
Three months ended March 31,
|
|||
|
2014
|
2013
|
||
SDG&E
|
$
|
3
|
$
|
2
|
SoCalGas
|
|
18
|
|
15
|
OTHER INCOME, NET
|
|
|
|||
(Dollars in millions)
|
|
|
|||
|
|
Three months ended March 31,
|
|||
|
|
2014
|
|
2013
|
|
Sempra Energy Consolidated:
|
|
|
|
|
|
Allowance for equity funds used during construction
|
$
|
25
|
$
|
15
|
|
Investment gains(1)
|
|
8
|
|
10
|
|
Gains on interest rate and foreign exchange instruments, net
|
|
2
|
|
7
|
|
Regulatory interest, net(2)
|
|
1
|
|
1
|
|
Sundry, net
|
|
4
|
|
4
|
|
Total
|
$
|
40
|
$
|
37
|
|
SDG&E:
|
|
|
|
|
|
Allowance for equity funds used during construction
|
$
|
11
|
$
|
10
|
|
Regulatory interest, net(2)
|
|
1
|
|
1
|
|
Sundry, net
|
|
1
|
|
―
|
|
Total
|
$
|
13
|
$
|
11
|
|
SoCalGas:
|
|
|
|
|
|
Allowance for equity funds used during construction
|
$
|
5
|
$
|
5
|
|
Sundry, net
|
|
(1)
|
|
(1)
|
|
Total
|
$
|
4
|
$
|
4
|
|
(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.
|
||||
(2)
|
Interest on regulatory balancing accounts.
|
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
|
|
Three months ended March 31,
|
||||||||
|
|
2014
|
|
2013
|
|||||||
|
|
|
|
|
Effective
|
|
|
|
|
Effective
|
|
|
|
|
Income Tax
|
|
Income
|
|
|
Income Tax
|
|
Income
|
|
|
|
|
Expense
|
|
Tax Rate
|
|
|
Expense
|
|
Tax Rate
|
|
Sempra Energy Consolidated
|
$
|
127
|
|
33
|
%
|
$
|
178
|
|
51
|
%
|
|
SDG&E
|
|
83
|
|
45
|
|
|
51
|
|
39
|
|
|
SoCalGas
|
|
38
|
|
33
|
|
|
24
|
|
34
|
|
§
|
$63 million income tax expense in 2013 resulting from a corporate reorganization in connection with the IEnova stock offerings. We discuss the stock offerings above in “Shareholders’ Equity and Noncontrolling Interests – Sale of Noncontrolling Interests;” offset by
|
§
|
a $17 million charge to reduce certain tax regulatory assets attributed to SDG&E’s investment in the San Onofre Nuclear Generating Station (SONGS) that management believes may no longer be recoverable from customers in rates pursuant to the proposed settlement agreement to resolve the California Public Utilities Commission’s (CPUC) Order Instituting Investigation (OII) into the SONGS outage that we discuss in Note 9; and
|
§
|
$12 million U.S. tax on the repatriation of a portion of current year earnings from certain non-U.S. subsidiaries in Mexico and Peru.
|
§
|
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. 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
|
March 31, 2014
|
December 31, 2013
|
|
||
California Utilities:
|
|
|
|
||
SDG&E:
|
|
|
|
||
Natural gas
|
46 million MMBtu
|
43 million MMBtu
|
(1)
|
||
Congestion revenue rights
|
30 million MWh
|
33 million MWh
|
(2)
|
||
SoCalGas - natural gas
|
―
|
2 million MMBtu
|
|
||
|
|
|
|
|
|
Energy-Related Businesses:
|
|
|
|
||
Sempra Natural Gas:
|
|
|
|
||
Electric power
|
―
|
1 million MWh
|
|
||
Natural gas
|
10 million MMBtu
|
15 million MMBtu
|
|
||
(1)
|
Million British thermal units
|
||||
(2)
|
Megawatt hours
|
INTEREST RATE DERIVATIVES
|
|||||||
(Dollars in millions)
|
|||||||
|
|
March 31, 2014
|
December 31, 2013
|
||||
|
Notional Debt
|
Maturities
|
Notional Debt
|
Maturities
|
|||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
Cash flow hedges(1)
|
$
|
411
|
2014-2028
|
$
|
413
|
2014-2028
|
|
Fair value hedges
|
|
800
|
2016-2022
|
|
300
|
2016
|
|
SDG&E:
|
|
|
|
|
|
|
|
Cash flow hedge(1)
|
|
332
|
2019
|
|
335
|
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)
|
|||||||||
|
|
March 31, 2014
|
|||||||
|
|
|
|
|
|
|
|
|
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)
|
$
|
21
|
$
|
11
|
$
|
(18)
|
$
|
(83)
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
Interest rate and foreign exchange instruments
|
|
8
|
|
24
|
|
(7)
|
|
(19)
|
|
Commodity contracts not subject to rate recovery
|
|
36
|
|
5
|
|
(40)
|
|
(4)
|
|
Associated offsetting commodity contracts
|
|
(32)
|
|
(4)
|
|
32
|
|
4
|
|
Associated offsetting cash collateral
|
|
―
|
|
―
|
|
1
|
|
―
|
|
Commodity contracts subject to rate recovery
|
|
38
|
|
72
|
|
(9)
|
|
(10)
|
|
Associated offsetting commodity contracts
|
|
(3)
|
|
(1)
|
|
3
|
|
1
|
|
Net amounts presented on the balance sheet
|
|
68
|
|
107
|
|
(38)
|
|
(111)
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
not subject to rate recovery
|
|
15
|
|
―
|
|
―
|
|
―
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
subject to rate recovery
|
|
31
|
|
―
|
|
―
|
|
―
|
|
Total
|
$
|
114
|
$
|
107
|
$
|
(38)
|
$
|
(111)
|
|
SDG&E:
|
|
|
|
|
|
|
|
|
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
Interest rate instruments(3)
|
$
|
―
|
$
|
―
|
$
|
(17)
|
$
|
(36)
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
Commodity contracts subject to rate recovery
|
|
36
|
|
72
|
|
(7)
|
|
(10)
|
|
Associated offsetting commodity contracts
|
|
(2)
|
|
(1)
|
|
2
|
|
1
|
|
Net amounts presented on the balance sheet
|
|
34
|
|
71
|
|
(22)
|
|
(45)
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
not subject to rate recovery
|
|
1
|
|
―
|
|
―
|
|
―
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
subject to rate recovery
|
|
29
|
|
―
|
|
―
|
|
―
|
|
Total
|
$
|
64
|
$
|
71
|
$
|
(22)
|
$
|
(45)
|
|
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 cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
not subject to rate recovery
|
|
2
|
|
―
|
|
―
|
|
―
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
subject to rate recovery
|
|
2
|
|
―
|
|
―
|
|
―
|
|
Total
|
$
|
5
|
$
|
―
|
$
|
(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.
|
||||||||
|
|
|
|
|
|
|
|
|
|
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||||
(Dollars in millions)
|
|||||||||
|
|
December 31, 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)
|
$
|
14
|
$
|
12
|
$
|
(18)
|
$
|
(75)
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
Interest rate and foreign exchange instruments
|
|
8
|
|
22
|
|
(7)
|
|
(17)
|
|
Commodity contracts not subject to rate recovery
|
|
47
|
|
7
|
|
(51)
|
|
(5)
|
|
Associated offsetting commodity contracts
|
|
(43)
|
|
(5)
|
|
43
|
|
5
|
|
Associated offsetting cash collateral
|
|
―
|
|
―
|
|
1
|
|
―
|
|
Commodity contracts subject to rate recovery
|
|
35
|
|
72
|
|
(10)
|
|
(8)
|
|
Associated offsetting commodity contracts
|
|
(3)
|
|
(2)
|
|
3
|
|
2
|
|
Net amounts presented on the balance sheet
|
|
58
|
|
106
|
|
(39)
|
|
(98)
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
not subject to rate recovery
|
|
17
|
|
―
|
|
―
|
|
―
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
subject to rate recovery
|
|
31
|
|
―
|
|
―
|
|
―
|
|
Total
|
$
|
106
|
$
|
106
|
$
|
(39)
|
$
|
(98)
|
|
SDG&E:
|
|
|
|
|
|
|
|
|
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
Interest rate instruments(3)
|
$
|
―
|
$
|
―
|
$
|
(16)
|
$
|
(39)
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
Commodity contracts subject to rate recovery
|
|
34
|
|
72
|
|
(9)
|
|
(8)
|
|
Associated offsetting commodity contracts
|
|
(3)
|
|
(2)
|
|
3
|
|
2
|
|
Net amounts presented on the balance sheet
|
|
31
|
|
70
|
|
(22)
|
|
(45)
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
not subject to rate recovery
|
|
1
|
|
―
|
|
―
|
|
―
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
subject to rate recovery
|
|
29
|
|
―
|
|
―
|
|
―
|
|
Total
|
$
|
61
|
$
|
70
|
$
|
(22)
|
$
|
(45)
|
|
SoCalGas:
|
|
|
|
|
|
|
|
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
Commodity contracts subject to rate recovery
|
$
|
1
|
$
|
―
|
$
|
(1)
|
$
|
―
|
|
Net amounts presented on the balance sheet
|
|
1
|
|
―
|
|
(1)
|
|
―
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
not subject to rate recovery
|
|
2
|
|
―
|
|
―
|
|
―
|
|
Additional cash collateral for commodity contracts
|
|
|
|
|
|
|
|
|
|
subject to rate recovery
|
|
2
|
|
―
|
|
―
|
|
―
|
|
Total
|
$
|
5
|
$
|
―
|
$
|
(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.
|
FAIR VALUE HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||
(Dollars in millions)
|
||||||
|
|
|
Gain (loss) on derivatives recognized in earnings
|
|||
|
|
|
Three months ended March 31,
|
|||
|
Location
|
2014
|
2013
|
|||
Sempra Energy Consolidated:
|
|
|
|
|
||
Interest rate instruments
|
Interest Expense
|
$
|
3
|
$
|
2
|
|
Interest rate instruments
|
Other Income, Net
|
|
(4)
|
|
―
|
|
Total(1)
|
|
$
|
(1)
|
$
|
2
|
|
(1)
|
In 2014, there was a gain of $2 million of hedge ineffectiveness on these swaps. All other changes in the fair value of the interest rate swap agreements are exactly offset by changes in the fair value of the underlying long-term debt and recorded in Other Income, Net. There was no hedge ineffectiveness in 2013.
|
CASH FLOW HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
|
Pretax gain (loss) recognized
|
|
|
Loss reclassified from AOCI
|
||||||
|
|
in OCI (effective portion)
|
|
|
into earnings (effective portion)
|
||||||
|
|
Three months ended March 31,
|
|
|
Three months ended March 31,
|
||||||
|
2014
|
2013
|
|
Location
|
2014
|
2013
|
|||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate and foreign
|
|
|
|
|
|
|
|
|
|
|
|
exchange instruments(1)
|
$
|
(3)
|
$
|
(28)
|
|
Interest Expense
|
$
|
(3)
|
$
|
(3)
|
|
|
|
|
|
|
|
|
Gain on Sale of Equity
|
|
|
|
|
Interest rate instruments
|
|
(2)
|
|
―
|
|
Interest and Assets
|
|
(2)
|
|
―
|
|
|
|
|
|
|
|
Equity Earnings,
|
|
|
|
|
|
Interest rate instruments
|
|
(15)
|
|
1
|
|
Before Income Tax
|
|
(3)
|
|
(2)
|
|
Commodity contracts not subject
|
|
|
|
|
|
Cost of Natural Gas, Electric
|
|
|
|
|
|
to rate recovery
|
|
(6)
|
|
―
|
|
Fuel and Purchased Power
|
|
(10)
|
|
―
|
|
Total(2)
|
$
|
(26)
|
$
|
(27)
|
|
|
$
|
(18)
|
$
|
(5)
|
|
SDG&E:
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate instruments(1)(2)
|
$
|
(3)
|
$
|
1
|
|
Interest Expense
|
$
|
(3)
|
$
|
(2)
|
|
(1)
|
Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
|
||||||||||
(2)
|
There was a negligible amount of ineffectiveness related to these swaps in 2014 and 2013.
|
UNDESIGNATED DERIVATIVE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||
(Dollars in millions)
|
||||||
|
|
|
Gain (loss) on derivatives recognized in earnings
|
|||
|
|
|
Three months ended March 31,
|
|||
|
Location
|
2014
|
2013
|
|||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
Interest rate and foreign exchange
|
|
|
|
|
|
|
instruments
|
Other Income, Net
|
$
|
―
|
$
|
7
|
|
Foreign exchange instruments
|
Equity Earnings,
|
|
|
|
|
|
|
|
Net of Income Tax
|
|
(2)
|
|
―
|
Commodity contracts not subject
|
Revenues: Energy-Related
|
|
|
|
|
|
to rate recovery
|
Businesses
|
|
(5)
|
|
(20)
|
|
Commodity contracts subject
|
Cost of Electric Fuel
|
|
|
|
|
|
to rate recovery
|
and Purchased Power
|
|
12
|
|
9
|
|
Commodity contracts subject
|
|
|
|
|
|
|
to rate recovery
|
Cost of Natural Gas
|
|
2
|
|
―
|
|
Total
|
|
$
|
7
|
$
|
(4)
|
|
SDG&E:
|
|
|
|
|
|
|
Commodity contracts subject
|
Cost of Electric Fuel
|
|
|
|
|
|
to rate recovery
|
and Purchased Power
|
$
|
12
|
$
|
9
|
|
SoCalGas:
|
|
|
|
|
|
|
Commodity contracts subject
|
|
|
|
|
|
|
to rate recovery
|
Cost of Natural Gas
|
$
|
2
|
$
|
―
|
§
|
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 may also manage foreign exchange rate exposures using derivatives. 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 March 31, 2014
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
623
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
623
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government corporations and agencies
|
|
55
|
|
56
|
|
―
|
|
―
|
|
111
|
|
Municipal bonds
|
|
―
|
|
112
|
|
―
|
|
―
|
|
112
|
|
Other securities
|
|
―
|
|
178
|
|
―
|
|
―
|
|
178
|
|
Total debt securities
|
|
55
|
|
346
|
|
―
|
|
―
|
|
401
|
|
Total nuclear decommissioning trusts(2)
|
|
678
|
|
346
|
|
―
|
|
―
|
|
1,024
|
|
Interest rate instruments
|
|
―
|
|
64
|
|
―
|
|
―
|
|
64
|
|
Commodity contracts subject to rate recovery
|
|
7
|
|
4
|
|
95
|
|
31
|
|
137
|
|
Commodity contracts not subject to rate recovery
|
|
1
|
|
4
|
|
―
|
|
15
|
|
20
|
|
Total
|
$
|
686
|
$
|
418
|
$
|
95
|
$
|
46
|
$
|
1,245
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate and foreign exchange instruments
|
$
|
―
|
$
|
127
|
$
|
―
|
$
|
―
|
$
|
127
|
|
Commodity contracts subject to rate recovery
|
|
―
|
|
15
|
|
―
|
|
―
|
|
15
|
|
Commodity contracts not subject to rate recovery
|
|
1
|
|
8
|
|
―
|
|
(2)
|
|
7
|
|
Total
|
$
|
1
|
$
|
150
|
$
|
―
|
$
|
(2)
|
$
|
149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At fair value as of December 31, 2013
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
614
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
614
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government corporations and agencies
|
|
59
|
|
58
|
|
―
|
|
―
|
|
117
|
|
Municipal bonds
|
|
―
|
|
111
|
|
―
|
|
―
|
|
111
|
|
Other securities
|
|
―
|
|
153
|
|
―
|
|
―
|
|
153
|
|
Total debt securities
|
|
59
|
|
322
|
|
―
|
|
―
|
|
381
|
|
Total nuclear decommissioning trusts(2)
|
|
673
|
|
322
|
|
―
|
|
―
|
|
995
|
|
Interest rate instruments
|
|
―
|
|
56
|
|
―
|
|
―
|
|
56
|
|
Commodity contracts subject to rate recovery
|
|
2
|
|
1
|
|
99
|
|
31
|
|
133
|
|
Commodity contracts not subject to rate recovery
|
|
1
|
|
5
|
|
―
|
|
17
|
|
23
|
|
Total
|
$
|
676
|
$
|
384
|
$
|
99
|
$
|
48
|
$
|
1,207
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate and foreign exchange instruments
|
$
|
―
|
$
|
117
|
$
|
―
|
$
|
―
|
$
|
117
|
|
Commodity contracts subject to rate recovery
|
|
―
|
|
13
|
|
―
|
|
―
|
|
13
|
|
Commodity contracts not subject to rate recovery
|
|
4
|
|
8
|
|
―
|
|
(5)
|
|
7
|
|
Total
|
$
|
4
|
$
|
138
|
$
|
―
|
$
|
(5)
|
$
|
137
|
|
(1)
|
Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
|
||||||||||
(2)
|
Excludes cash balances and cash equivalents.
|
|
|
|
|
|
|
|
|
|
|
RECURRING FAIR VALUE MEASURES – SDG&E
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
At fair value as of March 31, 2014
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
623
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
623
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government corporations and agencies
|
|
55
|
|
56
|
|
―
|
|
―
|
|
111
|
|
Municipal bonds
|
|
―
|
|
112
|
|
―
|
|
―
|
|
112
|
|
Other securities
|
|
―
|
|
178
|
|
―
|
|
―
|
|
178
|
|
Total debt securities
|
|
55
|
|
346
|
|
―
|
|
―
|
|
401
|
|
Total nuclear decommissioning trusts(2)
|
|
678
|
|
346
|
|
―
|
|
―
|
|
1,024
|
|
Commodity contracts subject to rate recovery
|
|
7
|
|
3
|
|
95
|
|
29
|
|
134
|
|
Commodity contracts not subject to rate recovery
|
|
―
|
|
―
|
|
―
|
|
1
|
|
1
|
|
Total
|
$
|
685
|
$
|
349
|
$
|
95
|
$
|
30
|
$
|
1,159
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate instruments
|
$
|
―
|
$
|
53
|
$
|
―
|
$
|
―
|
$
|
53
|
|
Commodity contracts subject to rate recovery
|
|
―
|
|
14
|
|
―
|
|
―
|
|
14
|
|
Total
|
$
|
―
|
$
|
67
|
$
|
―
|
$
|
―
|
$
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At fair value as of December 31, 2013
|
||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
614
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
614
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
|
|
U.S. government corporations and agencies
|
|
59
|
|
58
|
|
―
|
|
―
|
|
117
|
|
Municipal bonds
|
|
―
|
|
111
|
|
―
|
|
―
|
|
111
|
|
Other securities
|
|
―
|
|
153
|
|
―
|
|
―
|
|
153
|
|
Total debt securities
|
|
59
|
|
322
|
|
―
|
|
―
|
|
381
|
|
Total nuclear decommissioning trusts(2)
|
|
673
|
|
322
|
|
―
|
|
―
|
|
995
|
|
Commodity contracts subject to rate recovery
|
|
1
|
|
1
|
|
99
|
|
29
|
|
130
|
|
Commodity contracts not subject to rate recovery
|
|
―
|
|
―
|
|
―
|
|
1
|
|
1
|
|
Total
|
$
|
674
|
$
|
323
|
$
|
99
|
$
|
30
|
$
|
1,126
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate instruments
|
$
|
―
|
$
|
55
|
$
|
―
|
$
|
―
|
$
|
55
|
|
Commodity contracts subject to rate recovery
|
|
―
|
|
12
|
|
―
|
|
―
|
|
12
|
|
Total
|
$
|
―
|
$
|
67
|
$
|
―
|
$
|
―
|
$
|
67
|
|
(1)
|
Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
|
||||||||||
(2)
|
Excludes cash balances and cash equivalents.
|
|
|
|
|
|
|
|
|
|
|
RECURRING FAIR VALUE MEASURES – SOCALGAS
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
|
At fair value as of March 31, 2014
|
|||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts subject to rate recovery
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
2
|
$
|
3
|
|
Commodity contracts not subject to rate recovery
|
|
―
|
|
―
|
|
―
|
|
2
|
|
2
|
|
Total
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
4
|
$
|
5
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts subject to rate recovery
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
1
|
|
Total
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At fair value as of December 31, 2013
|
|||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting(1)
|
|
Total
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts subject to rate recovery
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
2
|
$
|
3
|
|
Commodity contracts not subject to rate recovery
|
|
―
|
|
―
|
|
―
|
|
2
|
|
2
|
|
Total
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
4
|
$
|
5
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts subject to rate recovery
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
1
|
|
Total
|
$
|
―
|
$
|
1
|
$
|
―
|
$
|
―
|
$
|
1
|
|
(1)
|
Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
|
LEVEL 3 RECONCILIATIONS
|
||||
(Dollars in millions)
|
||||
|
Three months ended March 31,
|
|||
|
2014
|
2013
|
||
Balance at January 1
|
$
|
99
|
$
|
61
|
Realized and unrealized gains (losses)
|
|
1
|
|
(1)
|
Allocated transmission instruments
|
|
1
|
|
―
|
Settlements
|
|
(6)
|
|
(2)
|
Balance at March 31
|
$
|
95
|
$
|
58
|
Change in unrealized gains or losses relating to
|
|
|
|
|
instruments still held at March 31
|
$
|
―
|
$
|
―
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
||||||||||||
(Dollars in millions)
|
||||||||||||
|
|
March 31, 2014
|
||||||||||
|
|
Carrying
|
|
Fair Value
|
||||||||
|
|
Amount
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt(1)
|
$
|
11,252
|
|
$
|
―
|
$
|
11,444
|
$
|
776
|
$
|
12,220
|
|
Preferred stock of subsidiary
|
|
20
|
|
|
―
|
|
21
|
|
―
|
|
21
|
|
SDG&E:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt(2)
|
$
|
4,383
|
|
$
|
―
|
$
|
4,380
|
$
|
332
|
$
|
4,712
|
|
SoCalGas:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt(3)
|
$
|
1,413
|
|
$
|
―
|
$
|
1,523
|
$
|
―
|
$
|
1,523
|
|
Preferred stock
|
|
22
|
|
|
―
|
|
23
|
|
―
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
||||||||||
|
|
Carrying
|
|
Fair Value
|
||||||||
|
|
Amount
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||
Sempra Energy Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt(1)
|
$
|
12,022
|
|
$
|
―
|
$
|
11,925
|
$
|
751
|
$
|
12,676
|
|
Preferred stock of subsidiary
|
|
20
|
|
|
―
|
|
20
|
|
―
|
|
20
|
|
SDG&E:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt(2)
|
$
|
4,386
|
|
$
|
―
|
$
|
4,226
|
$
|
335
|
$
|
4,561
|
|
SoCalGas:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt(3)
|
$
|
1,413
|
|
$
|
―
|
$
|
1,469
|
$
|
―
|
$
|
1,469
|
|
Preferred stock
|
|
22
|
|
|
―
|
|
22
|
|
―
|
|
22
|
|
(1)
|
Before reductions for unamortized discount (net of premium) of $18 million and $17 million at March 31, 2014 and December 31, 2013, respectively, and excluding build-to-suit and capital leases of $263 million and $195 million at March 31, 2014 and December 31, 2013, respectively, and commercial paper classified as long-term debt of $300 million and $200 million at March 31, 2014 and December 31, 2013, respectively. 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 both March 31, 2014 and December 31, 2013, and excluding capital leases of $238 million and $179 million at March 31, 2014 and December 31, 2013, respectively.
|
|||||||||||
(3)
|
Before reductions for unamortized discount of $5 million and $4 million at March 31, 2014 and December 31, 2013, respectively, and excluding capital leases of $1 million and $2 million at March 31, 2014 and December 31, 2013, respectively.
|
§
|
remove from rate base, as of February 1, 2012, its investment in the SGRP and refund to its customers the amount collected for its investment in and any return on its investment in the SGRP since such date. As of February 1, 2012, SDG&E’s net book value in the SGRP was approximately $160 million;
|
§
|
be authorized to recover in rates its remaining investment in SONGS, including base plant and construction work in progress (CWIP), generally over a ten-year period commencing February 1, 2012, together with a return on investment at a reduced rate equal to:
|
□
|
SDG&E’s weighted average return on debt, plus
|
□
|
50 percent of SDG&E’s weighted average return on preferred stock, as authorized in the CPUC’s Cost of Capital proceeding then in effect (collectively, SONGS ROR).
|
§
|
be authorized to recover in rates its recorded operations and maintenance expenses for 2012, 2013 and 2014 as well as the recorded costs for the 2012 refueling outage of Unit 2, subject to customary prudency review;
|
§
|
be authorized to recover in rates its remaining investment in materials and supplies over a ten-year period commencing February 1, 2012, together with a return on investment at the SONGS ROR;
|
§
|
be authorized to recover in rates its remaining investment in nuclear fuel inventory and any costs incurred, or to be incurred, associated with nuclear fuel supply contracts over a ten-year period, together with a return equal to SDG&E’s commercial paper borrowing rate; and
|
§
|
be authorized to recover in rates through its fuel and purchased power balancing account (ERRA) all costs incurred to purchase power in the market to replace the power that would have been generated at SONGS if not for the outage and shutdown of SONGS, and to recover by December 31, 2015 any SONGS-related ERRA undercollections. SDG&E’s market power costs through June 6, 2013 (the date of SONGS’ retirement) were approximately $165 million, using the methodology followed in the SONGS OII (and approximately $79 million of additional costs incurred for the period June 7 through December 31, 2013).
|
§
|
85 percent of the first $25 million to SDG&E, and 15 percent to ratepayers;
|
§
|
66.67 percent of the next $200 million to SDG&E, and 33.33 percent to ratepayers; and
|
§
|
25 percent of any additional recoveries to SDG&E, and 75 percent to ratepayers.
|
§
|
approve the Settlement Agreement without change;
|
§
|
find the Settlement Agreement reasonable;
|
§
|
withdraw the November 19, 2013 Proposed Decision on Phase 1 and Phase 1A issues in the SONGS OII; and
|
§
|
expedite consideration of the Settlement Agreement in order to provide its benefits to ratepayers as soon as possible.
|
§
|
support and mutually defend the Settlement Agreement in its entirety;
|
§
|
oppose any modifications proposed by any non-settling party to the SONGS OII unless all Settling Parties agree; and
|
§
|
cooperate reasonably on all submissions necessary to achieve CPUC approval.
|
§
|
An evidentiary hearing will be held to evaluate the proposed Settlement Agreement and relevant facts on or about May 14, 2014.
|
§
|
The due date for reply comments on the motion to adopt the proposed Settlement Agreement shall be deferred until after the evidentiary hearing, to on or about May 22, 2014.
|
§
|
The Settling Parties shall host a community meeting on or about June 16, 2014 to present the proposed settlement to the public.
|
§
|
NRC-jurisdictional radiological decommissioning (also known as “license termination”)
|
§
|
spent fuel management and decommissioning at an independent spent fuel storage installation
|
§
|
non-radiological purposes, i.e., site restoration
|
NUCLEAR DECOMMISSIONING TRUSTS
|
|||||||||
(Dollars in millions)
|
|||||||||
|
|
|
|
|
Gross
|
|
Gross
|
|
Estimated
|
|
|
|
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
|
|
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
At March 31, 2014:
|
|
|
|
|
|
|
|
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
U.S. government corporations and agencies(1)
|
$
|
109
|
$
|
3
|
$
|
(1)
|
$
|
111
|
|
Municipal bonds(2)
|
|
108
|
|
5
|
|
(1)
|
|
112
|
|
Other securities(3)
|
|
176
|
|
5
|
|
(3)
|
|
178
|
|
Total debt securities
|
|
393
|
|
13
|
|
(5)
|
|
401
|
|
Equity securities
|
|
210
|
|
414
|
|
(1)
|
|
623
|
|
Cash and cash equivalents
|
|
31
|
|
―
|
|
―
|
|
31
|
|
Total
|
$
|
634
|
$
|
427
|
$
|
(6)
|
$
|
1,055
|
|
At December 31, 2013:
|
|
|
|
|
|
|
|
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
Debt securities issued by the U.S. Treasury and other
|
|
|
|
|
|
|
|
|
|
U.S. government corporations and agencies
|
$
|
116
|
$
|
3
|
$
|
(2)
|
$
|
117
|
|
Municipal bonds
|
|
110
|
|
2
|
|
(1)
|
|
111
|
|
Other securities
|
|
155
|
|
3
|
|
(5)
|
|
153
|
|
Total debt securities
|
|
381
|
|
8
|
|
(8)
|
|
381
|
|
Equity securities
|
|
207
|
|
409
|
|
(2)
|
|
614
|
|
Cash and cash equivalents
|
|
39
|
|
―
|
|
―
|
|
39
|
|
Total
|
$
|
627
|
$
|
417
|
$
|
(10)
|
$
|
1,034
|
|
(1)
|
Maturity dates are 2015-2056.
|
||||||||
(2)
|
Maturity dates are 2014-2062.
|
||||||||
(3)
|
Maturity dates are 2014-2111.
|
SALES OF SECURITIES
|
||||
(Dollars in millions)
|
||||
|
Three months ended March 31,
|
|||
|
2014
|
2013
|
||
Proceeds from sales(1)
|
$
|
195
|
$
|
134
|
Gross realized gains
|
|
4
|
|
5
|
Gross realized losses
|
|
(4)
|
|
(3)
|
(1) Excludes securities that are held to maturity.
|
§
|
approves the utilities’ model for implementing PSEP;
|
§
|
approves a process, including a reasonableness review, to determine the amount that the utilities will be authorized to recover from ratepayers of interim costs incurred to implement PSEP, which are recorded in the regulatory accounts authorized by the CPUC as noted above;
|
§
|
approves balancing account treatment, subject to a reasonableness review, for incremental costs yet to be incurred to implement PSEP; and
|
§
|
establishes the criteria to determine the amounts that would not be eligible for cost recovery, including certain costs incurred or to be incurred associated with records review, the cost of pressure testing pipelines installed after 1955 for which the company has not found sufficient records of testing, and any undepreciated balances for pipelines that were replaced as a result of this program.
|
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 March 31,
|
|||||||
|
|
2014
|
2013
|
||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
SDG&E
|
$
|
987
|
35
|
%
|
$
|
939
|
35
|
%
|
|
SoCalGas
|
|
1,085
|
39
|
|
|
983
|
37
|
|
|
Sempra South American Utilities
|
|
378
|
14
|
|
|
384
|
15
|
|
|
Sempra Mexico
|
|
201
|
7
|
|
|
168
|
6
|
|
|
Sempra Renewables
|
|
6
|
―
|
|
|
21
|
1
|
|
|
Sempra Natural Gas
|
|
260
|
9
|
|
|
253
|
10
|
|
|
Intersegment revenues(1)
|
|
(122)
|
(4)
|
|
|
(98)
|
(4)
|
|
|
Total
|
$
|
2,795
|
100
|
%
|
$
|
2,650
|
100
|
%
|
|
INTEREST EXPENSE
|
|
|
|
|
|
|
|
|
|
SDG&E
|
$
|
50
|
|
|
$
|
48
|
|
|
|
SoCalGas
|
|
17
|
|
|
|
17
|
|
|
|
Sempra South American Utilities
|
|
8
|
|
|
|
7
|
|
|
|
Sempra Mexico
|
|
4
|
|
|
|
2
|
|
|
|
Sempra Renewables
|
|
―
|
|
|
|
8
|
|
|
|
Sempra Natural Gas
|
|
32
|
|
|
|
23
|
|
|
|
All other
|
|
58
|
|
|
|
63
|
|
|
|
Intercompany eliminations
|
|
(33)
|
|
|
|
(30)
|
|
|
|
Total
|
$
|
136
|
|
|
$
|
138
|
|
|
|
INTEREST INCOME
|
|
|
|
|
|
|
|
|
|
SDG&E
|
$
|
―
|
|
|
$
|
1
|
|
|
|
Sempra South American Utilities
|
|
3
|
|
|
|
5
|
|
|
|
Sempra Mexico
|
|
―
|
|
|
|
1
|
|
|
|
Sempra Renewables
|
|
―
|
|
|
|
3
|
|
|
|
Sempra Natural Gas
|
|
31
|
|
|
|
11
|
|
|
|
All other
|
|
―
|
|
|
|
(1)
|
|
|
|
Intercompany eliminations
|
|
(30)
|
|
|
|
(14)
|
|
|
|
Total
|
$
|
4
|
|
|
$
|
6
|
|
|
|
DEPRECIATION AND AMORTIZATION
|
|||||||||
SDG&E
|
$
|
130
|
45
|
%
|
$
|
134
|
45
|
%
|
|
SoCalGas
|
|
105
|
37
|
|
|
100
|
34
|
|
|
Sempra South American Utilities
|
|
14
|
5
|
|
|
15
|
5
|
|
|
Sempra Mexico
|
|
16
|
6
|
|
|
16
|
5
|
|
|
Sempra Renewables
|
|
1
|
―
|
|
|
8
|
3
|
|
|
Sempra Natural Gas
|
|
17
|
6
|
|
|
20
|
7
|
|
|
All other
|
|
3
|
1
|
|
|
2
|
1
|
|
|
Total
|
$
|
286
|
100
|
%
|
$
|
295
|
100
|
%
|
|
INCOME TAX EXPENSE (BENEFIT)
|
|||||||||
SDG&E
|
$
|
83
|
|
|
$
|
51
|
|
|
|
SoCalGas
|
|
38
|
|
|
|
24
|
|
|
|
Sempra South American Utilities
|
|
15
|
|
|
|
17
|
|
|
|
Sempra Mexico
|
|
12
|
|
|
|
26
|
|
|
|
Sempra Renewables
|
|
(6)
|
|
|
|
(8)
|
|
|
|
Sempra Natural Gas
|
|
6
|
|
|
|
33
|
|
|
|
All other
|
|
(21)
|
|
|
|
35
|
|
|
|
Total
|
$
|
127
|
|
|
$
|
178
|
|
|
SEGMENT INFORMATION (Continued)
|
|
|
|
|
|
|
|||
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
||||||||
|
2014
|
2013
|
|||||||
EQUITY EARNINGS (LOSSES)
|
|
|
|
|
|
|
|
|
|
Earnings recorded before tax:
|
|
|
|
|
|
|
|||
Sempra Renewables
|
$
|
2
|
|
|
$
|
1
|
|
|
|
Sempra Natural Gas
|
|
15
|
|
|
|
9
|
|
|
|
Total
|
$
|
17
|
|
|
$
|
10
|
|
|
|
(Losses) earnings recorded net of tax:
|
|
|
|
|
|
|
|||
Sempra South American Utilities
|
$
|
(2)
|
|
|
$
|
(7)
|
|
|
|
Sempra Mexico
|
|
8
|
|
|
|
11
|
|
|
|
Total
|
$
|
6
|
|
|
$
|
4
|
|
|
|
EARNINGS (LOSSES)
|
|
|
|
|
|
|
|
|
|
SDG&E(2)
|
$
|
99
|
40
|
%
|
$
|
91
|
51
|
%
|
|
SoCalGas(3)
|
|
78
|
32
|
|
|
46
|
26
|
|
|
Sempra South American Utilities
|
|
35
|
14
|
|
|
37
|
21
|
|
|
Sempra Mexico
|
|
42
|
17
|
|
|
31
|
17
|
|
|
Sempra Renewables
|
|
28
|
11
|
|
|
4
|
2
|
|
|
Sempra Natural Gas
|
|
9
|
4
|
|
|
53
|
30
|
|
|
All other
|
|
(44)
|
(18)
|
|
|
(84)
|
(47)
|
|
|
Total
|
$
|
247
|
100
|
%
|
$
|
178
|
100
|
%
|
|
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
|
|
|
|||||||
SDG&E
|
$
|
294
|
37
|
%
|
$
|
237
|
45
|
%
|
|
SoCalGas
|
|
260
|
33
|
|
|
179
|
34
|
|
|
Sempra South American Utilities
|
|
32
|
4
|
|
|
22
|
4
|
|
|
Sempra Mexico
|
|
75
|
9
|
|
|
61
|
11
|
|
|
Sempra Renewables
|
|
99
|
12
|
|
|
6
|
1
|
|
|
Sempra Natural Gas
|
|
40
|
5
|
|
|
26
|
5
|
|
|
All other
|
|
1
|
―
|
|
|
―
|
―
|
|
|
Total
|
$
|
801
|
100
|
%
|
$
|
531
|
100
|
%
|
|
|
March 31, 2014
|
December 31, 2013
|
|||||||
ASSETS
|
|
|
|||||||
SDG&E
|
$
|
15,634
|
42
|
%
|
$
|
15,377
|
41
|
%
|
|
SoCalGas
|
|
9,331
|
25
|
|
|
9,147
|
25
|
|
|
Sempra South American Utilities
|
|
3,523
|
9
|
|
|
3,531
|
10
|
|
|
Sempra Mexico
|
|
3,337
|
9
|
|
|
3,246
|
9
|
|
|
Sempra Renewables
|
|
1,135
|
3
|
|
|
1,219
|
3
|
|
|
Sempra Natural Gas
|
|
7,492
|
20
|
|
|
7,200
|
19
|
|
|
All other
|
|
921
|
2
|
|
|
838
|
2
|
|
|
Intersegment receivables
|
|
(3,889)
|
(10)
|
|
|
(3,314)
|
(9)
|
|
|
Total
|
$
|
37,484
|
100
|
%
|
$
|
37,244
|
100
|
%
|
|
INVESTMENTS IN EQUITY METHOD INVESTEES
|
|
|
|||||||
Sempra South American Utilities
|
$
|
(5)
|
|
|
$
|
(3)
|
|
|
|
Sempra Mexico
|
|
384
|
|
|
|
379
|
|
|
|
Sempra Renewables
|
|
757
|
|
|
|
707
|
|
|
|
Sempra Natural Gas
|
|
336
|
|
|
|
329
|
|
|
|
All other
|
|
73
|
|
|
|
73
|
|
|
|
Total
|
$
|
1,545
|
|
|
$
|
1,485
|
|
|
|
(1)
|
Revenues for reportable segments include intersegment revenues of:
|
||||||||
|
$3 million, $18 million, $22 million and $79 million for the three months ended March 31, 2014 and $2 million, $15 million, $22 million and $59 million for the three months ended March 31, 2013 for SDG&E, SoCalGas, Sempra Mexico and Sempra Natural Gas, respectively.
|
||||||||
(2)
|
After preferred dividends for 2013.
|
|
|
||||||
(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 3.2 million consumers (0.9 million 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 21.3 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 640,000 customers in Chile and 996,000 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 import 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
|
§
|
$17 million reduced earnings in 2013 due to the delay in receiving the final 2012 GRC decision, as discussed above
|
§
|
$(9) million ($0.04 per share) charge to adjust the total loss from plant closure (in addition to the amount recorded in 2013) associated with SDG&E’s investment in the San Onofre Nuclear Generating Station (SONGS) based upon a proposed settlement agreement filed with the CPUC in April 2014, as we discuss in Note 9 of the Notes to Condensed Consolidated Financial Statements herein
|
§
|
$14 million higher operating margin and newly recovered costs as a result of the 2012 GRC
|
§
|
$12 million reduced earnings in 2013 due to the delay in receiving the final 2012 GRC decision, as discussed above
|
§
|
$10 million lower income tax expense including the effects from Mexican currency and translation adjustments
|
§
|
$9 million allowance for funds used during construction (AFUDC) related to equity associated with construction of the natural gas pipeline in Sonora
|
§
|
$(9) million decrease in Sempra Mexico’s earnings for earnings attributable to noncontrolling interests at IEnova following its March 2013 offerings of 18.9 percent of IEnova common stock
|
§
|
$16 million ($0.07 per share) gain from the sale of a 50-percent equity interest in Copper Mountain Solar 3
|
§
|
$(44) million ($0.18 per share) 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
|
§
|
$63 million ($0.25 per share) income tax expense in the first quarter of 2013 resulting from a corporate reorganization in connection with the IEnova stock offerings
|
SEMPRA ENERGY EARNINGS (LOSSES) BY SEGMENT
|
|||||||||
(Dollars in millions)
|
|||||||||
|
|
Three months ended March 31,
|
|||||||
|
|
2014
|
2013
|
||||||
California Utilities:
|
|
|
|
|
|
|
|
|
|
SDG&E(1)
|
$
|
99
|
40
|
%
|
$
|
91
|
51
|
%
|
|
SoCalGas(2)
|
|
78
|
32
|
|
|
46
|
26
|
|
|
Sempra International:
|
|
|
|
|
|
|
|
|
|
Sempra South American Utilities
|
|
35
|
14
|
|
|
37
|
21
|
|
|
Sempra Mexico
|
|
42
|
17
|
|
|
31
|
17
|
|
|
Sempra U.S. Gas & Power:
|
|
|
|
|
|
|
|
|
|
Sempra Renewables
|
|
28
|
11
|
|
|
4
|
2
|
|
|
Sempra Natural Gas
|
|
9
|
4
|
|
|
53
|
30
|
|
|
Parent and other(3)
|
|
(44)
|
(18)
|
|
|
(84)
|
(47)
|
|
|
Earnings
|
$
|
247
|
100
|
%
|
$
|
178
|
100
|
%
|
|
(1)
|
After preferred dividends for 2013.
|
||||||||
(2)
|
After preferred dividends.
|
||||||||
(3)
|
Includes after-tax interest expense ($35 million and $38 million for the three months ended March 31, 2014 and 2013, respectively), intercompany eliminations recorded in consolidation and certain corporate costs.
|
EARNINGS BY SEGMENT – CALIFORNIA UTILITIES
|
(Dollars in millions)
|
§
|
$99 million in the three months ended March 31, 2014
|
§
|
$91 million in the three months ended March 31, 2013 ($92 million before preferred dividends)
|
§
|
$17 million reduced earnings in 2013 due to the delay in receiving the final 2012 GRC decision as discussed above; and
|
§
|
$4 million higher CPUC base operating margin authorized for 2014 in the 2012 GRC and lower non-refundable operating costs; offset by
|
§
|
$9 million charge to adjust the total loss from plant closure (in addition to the amount recorded in 2013) associated with SDG&E’s investment in SONGS based upon a proposed settlement agreement filed with the CPUC, as we discuss in Note 9 of the Notes to Condensed Consolidated Financial Statements herein;
|
§
|
$3 million lower electric transmission margin, primarily due to lower Federal Energy Regulatory Commission (FERC)-authorized return on equity; and
|
§
|
$3 million loss of revenue from SONGS due to the early closure of the plant in the second quarter of 2013.
|
§
|
$78 million in the three months ended March 31, 2014 (both before and after preferred dividends)
|
§
|
$46 million in the three months ended March 31, 2013 (both before and after preferred dividends)
|
§
|
$12 million reduced earnings in 2013 due to the delay in receiving the final 2012 GRC decision as discussed above;
|
§
|
$11 million higher CPUC base operating margin authorized for 2014 in the 2012 GRC and lower non-refundable operating costs; and
|
§
|
$3 million due to expensing of costs associated with the Transmission Integrity Management Program in the first quarter of 2013 that are now being fully recovered (balanced) in revenues pursuant to the 2012 GRC.
|
EARNINGS BY SEGMENT – SEMPRA INTERNATIONAL
|
(Dollars in millions)
|
§
|
$35 million in the three months ended March 31, 2014
|
§
|
$37 million in the three months ended March 31, 2013
|
§
|
$5 million lower earnings from foreign currency effects; and
|
§
|
$2 million higher interest expense in Chile related to inflationary effect on local bonds; offset by
|
§
|
a $7 million impairment charge in 2013 related to our investment in two Argentine natural gas utility holding companies.
|
§
|
$42 million in the three months ended March 31, 2014
|
§
|
$31 million in the three months ended March 31, 2013
|
§
|
$10 million lower income tax expense including the effects from foreign currency adjustments; and
|
§
|
$9 million AFUDC related to equity associated with construction of the natural gas pipeline in Sonora; offset by
|
§
|
$10 million earnings attributable to noncontrolling interests at IEnova in 2014 compared to $1 million in 2013.
|
EARNINGS BY SEGMENT – SEMPRA U.S. GAS & POWER
|
(Dollars in millions)
|
§
|
$28 million in the three months ended March 31, 2014
|
§
|
$4 million in the three months ended March 31, 2013
|
§
|
$16 million gain from the sale of a 50-percent equity interest in Copper Mountain Solar 3; and
|
§
|
$7 million higher deferred income tax benefits, due in part to a $5 million reduction of income tax benefits in 2013 as a result of Treasury Grant sequestration.
|
§
|
$9 million in the three months ended March 31, 2014
|
§
|
$53 million in the three months ended March 31, 2013
|
§
|
$44 million gain in 2013 on the sale of a 625-MW block of its Mesquite Power plant, net of related expenses; and
|
§
|
$9 million higher 2013 earnings primarily from LNG cargo marketing operations, offset by the impact of higher natural gas prices in 2014; offset by
|
§
|
$4 million lower operating costs, primarily depreciation, at the Mesquite Power plant due to the classification of the remaining 625-MW block as an asset held for sale; and
|
§
|
$4 million improved results primarily from mark-to-market losses driven by change in natural gas prices in 2013, partially offset by lower natural gas marketing activities in 2014.
|
§
|
$44 million in the three months ended March 31, 2014
|
§
|
$84 million in the three months ended March 31, 2013
|
§
|
$63 million income tax expense in 2013 resulting from a corporate reorganization in connection with the IEnova stock offerings; offset by
|
§
|
$12 million income tax expense for planned repatriation of current year foreign earnings; and
|
§
|
$6 million higher net interest expense.
|
§
|
SDG&E
|
§
|
SoCalGas
|
§
|
Sempra Mexico’s Ecogas México, S. de R.L. de C.V. (Ecogas)
|
§
|
Sempra Natural Gas’ Mobile Gas Service Corporation (Mobile Gas) and Willmut Gas Company (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 March 31,
|
|||
|
|
2014
|
2013
|
||
Electric revenues:
|
|
|
|
|
|
SDG&E
|
$
|
811
|
$
|
772
|
|
Sempra South American Utilities
|
|
354
|
|
360
|
|
Eliminations and adjustments
|
|
(2)
|
|
(1)
|
|
|
Total
|
|
1,163
|
|
1,131
|
Natural gas revenues:
|
|
|
|
|
|
SoCalGas
|
|
1,085
|
|
983
|
|
SDG&E
|
|
176
|
|
167
|
|
Sempra Mexico
|
|
33
|
|
27
|
|
Sempra Natural Gas
|
|
47
|
|
42
|
|
Eliminations and adjustments
|
|
(19)
|
|
(16)
|
|
|
Total
|
|
1,322
|
|
1,203
|
Total utilities revenues
|
$
|
2,485
|
$
|
2,334
|
|
Cost of electric fuel and purchased power:
|
|
|
|
|
|
SDG&E
|
$
|
266
|
$
|
209
|
|
Sempra South American Utilities
|
|
244
|
|
238
|
|
|
Total
|
$
|
510
|
$
|
447
|
Cost of natural gas:
|
|
|
|
|
|
SoCalGas
|
$
|
508
|
$
|
454
|
|
SDG&E
|
|
75
|
|
76
|
|
Sempra Mexico
|
|
22
|
|
16
|
|
Sempra Natural Gas
|
|
20
|
|
14
|
|
Eliminations and adjustments
|
|
(5)
|
|
(4)
|
|
|
Total
|
$
|
620
|
$
|
556
|
§
|
$57 million increase in cost of electric fuel and purchased power; and
|
§
|
$27 million increase primarily due to higher authorized revenue in the 2012 GRC decision and attritions for 2013 and 2014. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SDG&E’s authorized revenue for the three months ended March 31, 2013 was essentially unchanged from the 2011 authorized revenue; offset by
|
§
|
$31 million lower recovery of costs associated with CPUC-authorized refundable programs, including $20 million due to lower operation and maintenance expenses at SONGS, which revenues are fully offset in operation and maintenance expenses; and
|
§
|
$13 million loss of revenue associated with SDG&E’s capital investment in SONGS due to the early closure of the plant.
|
§
|
$57 million increase at SDG&E, which we discuss below; and
|
§
|
$6 million increase at our South American utilities driven primarily by higher rates and volumes at both Luz del Sur and Chilquinta Energía, offset by foreign currency exchange rate effects.
|
§
|
an increase in cost of natural gas sold at SoCalGas offset by lower demand, as we discuss below;
|
§
|
increases of $28 million and $10 million at SoCalGas and SDG&E, respectively, primarily due to higher authorized revenues in the 2012 GRC decision and the attritions for 2013 and 2014. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, authorized revenue for the three months ended March 31, 2013 was essentially unchanged from the 2011 authorized revenue; and
|
§
|
$22 million higher recovery of costs at SoCalGas associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses.
|
SDG&E
|
|||||||
ELECTRIC DISTRIBUTION AND TRANSMISSION
|
|||||||
(Volumes in millions of kilowatt-hours, dollars in millions)
|
|||||||
|
|
Three months ended
March 31, 2014
|
Three months ended
March 31, 2013
|
||||
Customer class
|
Volumes
|
Revenue
|
Volumes
|
Revenue
|
|||
Residential
|
1,765
|
$
|
322
|
1,961
|
$
|
325
|
|
Commercial
|
1,626
|
|
265
|
1,588
|
|
231
|
|
Industrial
|
484
|
|
64
|
454
|
|
55
|
|
Direct access(1)
|
888
|
|
40
|
835
|
|
31
|
|
Street and highway lighting
|
22
|
|
4
|
21
|
|
3
|
|
|
|
4,785
|
|
695
|
4,859
|
|
645
|
CAISO shared transmission revenue - net(2)
|
|
|
59
|
|
|
60
|
|
Other revenues
|
|
|
49
|
|
|
40
|
|
Balancing accounts
|
|
|
8
|
|
|
27
|
|
Total(3)
|
|
$
|
811
|
|
$
|
772
|
|
(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.
|
||||||
(2)
|
California Independent System Operator (CAISO).
|
||||||
(3)
|
Includes sales to affiliates of $2 million in 2014 and $1 million in 2013.
|
§
|
$57 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, partially offset by lower sales volume in the residential customer class primarily due to warmer than normal temperatures in the first quarter of 2014 as compared to cooler than normal temperatures in the first quarter of 2013; and
|
§
|
$27 million increase primarily due to higher authorized revenue in the 2012 GRC decision and the attritions for 2013 and 2014. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SDG&E’s authorized revenue for the three months ended March 31, 2013 was essentially unchanged from the 2011 authorized revenue; offset by
|
§
|
$31 million lower recovery of costs associated with CPUC-authorized refundable programs, including $20 million lower operation and maintenance expenses at SONGS, which revenues are fully offset in operation and maintenance expenses; and
|
§
|
$13 million loss of revenue associated with SDG&E’s capital investment in 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
|
||||
Three months ended March 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
Residential
|
10
|
$
|
118
|
―
|
$
|
―
|
10
|
$
|
118
|
|
Commercial and industrial
|
5
|
|
34
|
2
|
|
3
|
7
|
|
37
|
|
Electric generation plants
|
―
|
|
―
|
6
|
|
1
|
6
|
|
1
|
|
|
|
15
|
$
|
152
|
8
|
$
|
4
|
23
|
|
156
|
Other revenues
|
|
|
|
|
|
|
|
|
12
|
|
Balancing accounts
|
|
|
|
|
|
|
|
|
8
|
|
Total(1)
|
|
|
|
|
|
|
|
$
|
176
|
|
Three months ended March 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
Residential
|
13
|
$
|
133
|
―
|
$
|
1
|
13
|
$
|
134
|
|
Commercial and industrial
|
5
|
|
30
|
2
|
|
3
|
7
|
|
33
|
|
Electric generation plants
|
―
|
|
―
|
6
|
|
3
|
6
|
|
3
|
|
|
|
18
|
$
|
163
|
8
|
$
|
7
|
26
|
|
170
|
Other revenues
|
|
|
|
|
|
|
|
|
10
|
|
Balancing accounts
|
|
|
|
|
|
|
|
|
(13)
|
|
Total(1)
|
|
|
|
|
|
|
|
$
|
167
|
|
(1)
|
Includes sales to affiliates of $1 million in each of 2014 and 2013.
|
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
|
||||
Three months ended March 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
Residential
|
69
|
$
|
732
|
1
|
$
|
3
|
70
|
$
|
735
|
|
Commercial and industrial
|
28
|
|
237
|
73
|
|
64
|
101
|
|
301
|
|
Electric generation plants
|
―
|
|
―
|
41
|
|
9
|
41
|
|
9
|
|
Wholesale
|
―
|
|
―
|
39
|
|
7
|
39
|
|
7
|
|
|
|
97
|
$
|
969
|
154
|
$
|
83
|
251
|
|
1,052
|
Other revenues
|
|
|
|
|
|
|
|
|
28
|
|
Balancing accounts
|
|
|
|
|
|
|
|
|
5
|
|
Total(1)
|
|
|
|
|
|
|
|
$
|
1,085
|
|
Three months ended March 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
Residential
|
91
|
$
|
771
|
1
|
$
|
3
|
92
|
$
|
774
|
|
Commercial and industrial
|
31
|
|
203
|
72
|
|
60
|
103
|
|
263
|
|
Electric generation plants
|
―
|
|
―
|
38
|
|
9
|
38
|
|
9
|
|
Wholesale
|
―
|
|
―
|
49
|
|
7
|
49
|
|
7
|
|
|
|
122
|
$
|
974
|
160
|
$
|
79
|
282
|
|
1,053
|
Other revenues
|
|
|
|
|
|
|
|
|
26
|
|
Balancing accounts
|
|
|
|
|
|
|
|
|
(96)
|
|
Total(1)
|
|
|
|
|
|
|
|
$
|
983
|
|
(1)
|
Includes sales to affiliates of $18 million in 2014 and $15 million in 2013.
|
§
|
an increase in the market price of natural gas purchased, as we discuss below;
|
§
|
$28 million increase primarily due to higher authorized revenue in the 2012 GRC decision and the attritions for 2013 and 2014. Due to the delay in the issuance of the 2012 GRC decision by the CPUC, SoCalGas’ authorized revenue for the three months ended March 31, 2013 was essentially unchanged from the 2011 authorized revenue; and
|
§
|
$22 million higher recovery of costs associated with CPUC-authorized refundable programs, which revenues are fully offset in operation and maintenance expenses.
|
OTHER UTILITIES
|
|||||||
NATURAL GAS AND ELECTRIC REVENUES
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|||||||
|
|
Three months ended
March 31, 2014
|
Three months ended
March 31, 2013
|
||||
|
Volumes
|
Revenue
|
Volumes
|
Revenue
|
|||
Natural Gas Sales (billion cubic feet):
|
|
|
|
|
|
|
|
Sempra Mexico — Ecogas
|
6
|
$
|
33
|
6
|
$
|
27
|
|
Sempra Natural Gas:
|
|
|
|
|
|
|
|
Mobile Gas (including transportation)
|
11
|
|
36
|
11
|
|
34
|
|
Willmut Gas
|
1
|
|
11
|
1
|
|
8
|
|
Total
|
18
|
$
|
80
|
18
|
$
|
69
|
|
|
|
|
|
|
|
|
|
Electric Sales (million kilowatt hours):
|
|
|
|
|
|
|
|
Sempra South American Utilities:
|
|
|
|
|
|
|
|
Luz del Sur
|
1,851
|
$
|
208
|
1,746
|
$
|
204
|
|
Chilquinta Energía
|
788
|
|
134
|
761
|
|
141
|
|
|
|
2,639
|
|
342
|
2,507
|
|
345
|
Other service revenues
|
|
|
12
|
|
|
15
|
|
Total
|
|
$
|
354
|
|
$
|
360
|
ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES
|
|||||
(Dollars in millions)
|
|||||
|
|
Three months ended March 31,
|
|||
|
|
2014
|
2013
|
||
Energy-related businesses revenues:
|
|
|
|
|
|
Sempra South American Utilities
|
$
|
24
|
$
|
24
|
|
Sempra Mexico
|
|
168
|
|
141
|
|
Sempra Renewables
|
|
6
|
|
21
|
|
Sempra Natural Gas
|
|
213
|
|
211
|
|
Intersegment revenues, adjustments and eliminations(1)
|
|
(101)
|
|
(81)
|
|
Total energy-related businesses revenues
|
$
|
310
|
$
|
316
|
|
Cost of natural gas, electric fuel and purchased power(2):
|
|
|
|
|
|
Sempra South American Utilities
|
$
|
3
|
$
|
―
|
|
Sempra Mexico
|
|
83
|
|
59
|
|
Sempra Renewables
|
|
―
|
|
2
|
|
Sempra Natural Gas
|
|
151
|
|
130
|
|
Adjustments and eliminations(1)
|
|
(99)
|
|
(80)
|
|
Total cost of natural gas, electric fuel and purchased power
|
$
|
138
|
$
|
111
|
|
Other cost of sales(2):
|
|
|
|
|
|
Sempra South American Utilities
|
$
|
14
|
$
|
19
|
|
Sempra Mexico
|
|
3
|
|
9
|
|
Sempra Natural Gas
|
|
23
|
|
23
|
|
Adjustments and eliminations(1)
|
|
(2)
|
|
(3)
|
|
Total other cost of sales
|
$
|
38
|
$
|
48
|
|
(1)
|
Includes eliminations of intercompany activity.
|
||||
(2)
|
Excludes depreciation and amortization, which are shown separately on the Condensed Consolidated Statements of Operations.
|
§
|
$20 million higher intercompany eliminations primarily associated with sales between Sempra Mexico and Sempra Natural Gas; and
|
§
|
$15 million lower revenues at Sempra Renewables mainly due to the deconsolidation of Mesquite Solar 1 and Copper Mountain Solar 2 in the third quarter of 2013; offset by
|
§
|
$27 million higher revenues at Sempra Mexico primarily due to higher natural gas and power prices; and
|
§
|
$2 million increase at Sempra Natural Gas in 2014 mainly from mark-to-market losses driven by changes in natural gas prices in 2013, offset by lower natural gas marketing activities in 2014 and lower revenues from its LNG cargo marketing operations, offset by the favorable impact of higher natural gas prices in 2014.
|
§
|
a $24 million increase at Sempra Mexico primarily due to higher natural gas costs; and
|
§
|
a $21 million increase at Sempra Natural Gas primarily due to higher natural gas costs; offset by
|
§
|
$19 million higher intercompany eliminations of costs primarily associated with sales between Sempra Mexico and Sempra Natural Gas.
|
§
|
$32 million lower expenses associated with CPUC-authorized refundable programs, including $20 million due to lower operation and maintenance expenses at SONGS, for which all costs incurred are fully recovered in revenue (refundable program expenses); and
|
§
|
$12 million decrease at Otay Mesa VIE.
|
§
|
$23 million lower operation and maintenance costs, including labor, contract services and administrative and support costs (non-refundable operating costs); offset by
|
§
|
$22 million higher expenses associated with CPUC-authorized refundable programs for which all costs incurred are fully recovered in revenue (refundable program expenses).
|
§
|
$9 million AFUDC related to equity associated with construction of the Sonora natural gas pipeline at Sempra Mexico; offset by
|
§
|
$5 million lower net gains on interest rate and foreign exchange instruments.
|
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
|
|||||||||||
(Dollars in millions)
|
|||||||||||
|
|
|
Three months ended March 31,
|
||||||||
|
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
Effective
|
|
|
|
|
Effective
|
|
|
|
|
Income Tax
|
|
Income
|
|
|
Income Tax
|
|
Income
|
|
|
|
|
Expense
|
|
Tax Rate
|
|
|
Expense
|
|
Tax Rate
|
|
Sempra Energy Consolidated
|
$
|
127
|
|
33
|
%
|
$
|
178
|
|
51
|
%
|
|
SDG&E
|
|
83
|
|
45
|
|
|
51
|
|
39
|
|
|
SoCalGas
|
|
38
|
|
33
|
|
|
24
|
|
34
|
|
§
|
$63 million income tax expense in 2013 resulting from a corporate reorganization in connection with the IEnova stock offerings. We discuss the stock offerings in Note 5 of the Notes to Condensed Consolidated Financial Statements herein; offset by
|
§
|
a $17 million charge to reduce certain tax regulatory assets attributed to SDG&E’s investment in SONGS that management believes may no longer be recoverable from customers in rates pursuant to the proposed settlement agreement to resolve the CPUC’s Order Instituting Investigation (OII) into the SONGS outage that we discuss in Note 9 of the Notes to Condensed Consolidated Financial Statements herein; and
|
§
|
$12 million U.S. tax on the repatriation of a portion of current year earnings from certain non-U.S. subsidiaries in Mexico and Peru.
|
MEXICAN CURRENCY IMPACT ON INCOME TAXES AND RELATED ECONOMIC HEDGING ACTIVITY
|
||||||
(Dollars in millions)
|
||||||
|
|
|
Three months ended March 31,
|
|||
|
|
|
2014
|
2013
|
||
Income tax expense on currency exchange
|
|
|
|
|
||
|
rate movement of monetary assets and liabilities
|
|
$
|
―
|
$
|
(2)
|
Translation of non-U.S. deferred income tax balances
|
|
―
|
|
(7)
|
||
Income tax expense on inflation
|
|
|
(1)
|
|
(1)
|
|
|
Total impact on income taxes
|
|
|
(1)
|
|
(10)
|
After-tax gains on Mexican peso exchange rate
|
|
|
|
|
|
|
|
instruments (included in Other Income, Net)
|
|
|
―
|
|
4
|
Net impacts on Sempra Energy Condensed
|
|
|
|
|
|
|
|
Consolidated Statements of Operations
|
|
$
|
(1)
|
$
|
(6)
|
§
|
$2 million of earnings attributable to noncontrolling interest at Otay Mesa VIE in 2014 compared to $11 million losses in 2013; and
|
§
|
$9 million increase in earnings attributable to noncontrolling interests of IEnova.
|
AVAILABLE FUNDS AT MARCH 31, 2014
|
|||||||
(Dollars in millions)
|
|||||||
|
|
Sempra Energy
|
|
|
|||
|
|
Consolidated
|
SDG&E
|
SoCalGas
|
|||
Unrestricted cash and cash equivalents(1)
|
$
|
844
|
$
|
12
|
$
|
32
|
|
Available unused credit(2)
|
|
2,760
|
|
568
|
|
658
|
|
(1)
|
Amounts at Sempra Energy Consolidated include $704 million held in non-U.S. jurisdictions that are unavailable to fund U.S. operations unless repatriated, as we discuss below.
|
||||||
(2)
|
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. SDG&E's available funds reflect commercial paper outstanding of $90 million supported by the line.
|
§
|
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)
|
||||||||
|
2014
|
2014 Change
|
2013
|
|||||
Sempra Energy Consolidated
|
$
|
904
|
$
|
69
|
8
|
%
|
$
|
835
|
SDG&E
|
|
261
|
|
(3)
|
(1)
|
|
|
264
|
SoCalGas
|
|
427
|
|
16
|
4
|
|
|
411
|
§
|
$128 million decrease in accounts receivable in 2014 compared to a $33 million increase in 2013, primarily due to a $78 million decrease at SoCalGas primarily due to lower natural gas sales and a $42 million decrease in natural gas sales at Sempra Natural Gas in 2014; and
|
§
|
$124 million increase in accounts payable in 2014 compared to a $42 million decrease in 2013, primarily due to higher average cost of natural gas purchased at SoCalGas in 2014; offset by
|
§
|
$85 million decrease in inventory in 2014 compared to a $137 million decrease in 2013, primarily due to higher net natural gas withdrawal volume at SoCalGas in 2013;
|
§
|
$11 million decrease in net overcollected regulatory balancing accounts in 2014 at SDG&E and SoCalGas (including long-term amounts included in regulatory assets) compared to a $145 million increase in 2013. Over- and undercollected regulatory balancing accounts reflect the difference between customer billings and recorded or CPUC-authorized costs. These differences are required to be balanced over time. See further discussion of changes in regulatory balances at both SDG&E and SoCalGas below; and
|
§
|
$27 million increase in income tax payments in 2014 compared to 2013.
|
§
|
$28 million increase in net undercollected regulatory balancing accounts in 2014 (including long-term amounts included in regulatory assets) compared to a $6 million increase in 2013. The higher increase in the undercollected regulatory balancing accounts was primarily due to:
|
□
|
$110 million increase in the undercollected balancing account for electric resource cost in 2014 compared to an increase of $38 million in 2013, offset by
|
□
|
$40 million due to collection of costs in 2014 related to the adoption of the 2012 GRC, and
|
□
|
$6 million decrease in the undercollected balancing account for the electric transmission access charge in 2014 compared to an increase of $13 million in 2013; and
|
§
|
$4 million decrease in accounts payable in 2014 compared to a $16 million increase in 2013; offset by
|
§
|
$26 million increase in accounts receivable in 2013.
|
§
|
$81 million increase in accounts payable in 2014 compared to a $73 million decrease in 2013. The increase in accounts payable in 2014 was primarily due to the higher average cost of natural gas purchased, and the decrease in 2013 was primarily due to lower purchase volume;
|
§
|
$45 million higher net income, adjusted for noncash items included in earnings, in 2014 compared to 2013; and
|
§
|
$78 million decrease in accounts receivable in 2014 compared to a $27 million decrease in 2013 primarily due to lower natural gas sales volumes in 2014; offset by
|
§
|
$17 million increase in net overcollected regulatory balancing accounts in 2014 (including long-term amounts included in regulatory assets) compared to $151 million increase in 2013. The increase in 2013 was primarily due to a $132 million increase in the overcollected balance in the core customer fixed costs balancing account; and
|
§
|
$24 million decrease in inventory in 2014 compared to a $117 million decrease in 2013, primarily due to higher net natural gas withdrawal volume in 2013.
|
CONTRIBUTIONS TO PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
|
||||
(Dollars in millions)
|
||||
|
Three months ended March 31, 2014
|
|||
|
|
|
Other
|
|
|
Pension
|
Postretirement
|
||
|
Benefits
|
Benefits
|
||
Sempra Energy Consolidated
|
$
|
15
|
$
|
1
|
SDG&E
|
|
1
|
|
―
|
SoCalGas
|
|
2
|
|
―
|
CASH USED IN INVESTING ACTIVITIES
|
||||||||
(Dollars in millions)
|
||||||||
|
2014
|
2014 Change
|
2013
|
|||||
Sempra Energy Consolidated
|
$
|
(770)
|
$
|
608
|
375
|
%
|
$
|
(162)
|
SDG&E
|
|
(297)
|
|
57
|
24
|
|
|
(240)
|
SoCalGas
|
|
(377)
|
|
(45)
|
(11)
|
|
|
(422)
|
§
|
$270 million increase in capital expenditures; and
|
§
|
$371 million of proceeds received in 2013 from Sempra Natural Gas’ sale of a 625-MW block of its Mesquite Power plant; offset by
|
§
|
$66 million, net of $2 million cash sold, of proceeds received in 2014 from the sale of a 50-percent equity interest in Copper Mountain Solar 3.
|
§
|
$126 million decrease in advances to Sempra Energy in 2014; offset by
|
§
|
$81 million increase in capital expenditures.
|
§
|
$2.2 billion at the California Utilities for capital projects and plant improvements ($1.1 billion at SDG&E and $1.1 billion at SoCalGas)
|
§
|
$1 billion at our other subsidiaries for capital projects in Mexico and South America, and development of natural gas and renewable generation projects
|
§
|
$610 million for improvements to SDG&E’s natural gas and electric distribution systems
|
§
|
$320 million for improvements to SDG&E’s electric transmission systems
|
§
|
$100 million at SDG&E for substation expansions (transmission)
|
§
|
$30 million for SDG&E’s electric generation plants and equipment
|
§
|
$880 million for improvements to SoCalGas’ distribution and transmission systems and storage, and for pipeline safety
|
§
|
$190 million for SoCalGas’ advanced metering infrastructure
|
§
|
$30 million for SoCalGas’ other natural gas projects
|
§
|
approximately $150 million to $200 million for capital projects in South America (approximately $100 million to $150 million in Peru and approximately $50 million in Chile)
|
§
|
approximately $300 million to $350 million for capital projects in Mexico, including approximately $300 million for the development of the Sonora Pipeline project developed solely by Sempra Mexico
|
§
|
approximately $450 million of expenditures for pipeline projects within our joint venture with Petróleos Mexicanos (or PEMEX, the Mexican state-owned oil company). We expect these expenditures within the joint venture to be funded by the joint venture’s cash flows from operations, project financing and additional contributions from its partners
|
§
|
approximately $180 million of expenditures for the Energía Sierra Juárez renewable wind project to be primarily funded by project financing
|
§
|
approximately $300 million for the development of renewable projects, including
|
§
|
approximately $100 million for investment in Copper Mountain Solar 3, a 250-MW solar project located near Boulder City, Nevada
|
§
|
approximately $100 million for investment in the California solar partnership with ConEdison Development that we discuss in Note 4 of the Notes to Condensed Consolidated Financial Statements herein
|
§
|
approximately $80 million for investment in the 75-MW Broken Bow 2 Wind project in Custer County, Nebraska
|
§
|
approximately $200 million for development of natural gas transportation and storage projects
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|||||||
(Dollars in millions)
|
|||||||
|
2014
|
2014 Change
|
2013
|
||||
Sempra Energy Consolidated
|
$
|
(193)
|
$
|
(513)
|
|
$
|
320
|
SDG&E
|
|
21
|
|
26
|
|
|
(5)
|
SoCalGas
|
|
(45)
|
|
(45)
|
|
|
―
|
§
|
$574 million net proceeds received in 2013 from the sale of noncontrolling interests at Sempra Mexico;
|
§
|
$493 million higher payments on debt, including higher payments of long-term debt of $649 million ($1.1 billion in 2014 compared to $405 million in 2013), offset by lower payments of commercial paper and other short-term debt with maturities greater than 90 days of $156 million ($84 million in 2014 compared to $240 million in 2013); and
|
§
|
$69 million decrease in short-term debt in 2014 compared to $43 million decrease in 2013; offset by
|
§
|
$580 million higher issuances of debt, including an increase in issuances of commercial paper with maturities greater than 90 days of $592 million ($792 million in 2014 compared to $200 million in 2013), offset by a decrease in issuances of long-term debt of $12 million ($396 million in 2014 compared to $408 million in 2013).
|
§
|
$250 million payment of long-term debt; and
|
§
|
$42 million payment of short-term debt; offset by
|
§
|
$248 million net proceeds from the issuance of long-term debt.
|
§
|
approves the utilities’ model for implementing PSEP;
|
§
|
approves a process, including a reasonableness review, to determine the amount that the utilities will be authorized to recover from ratepayers of interim costs incurred to implement PSEP, which are recorded in the regulatory accounts authorized by the CPUC as noted above;
|
§
|
approves balancing account treatment, subject to a reasonableness review, for incremental costs yet to be incurred to implement PSEP; and
|
§
|
establishes the criteria to determine the amounts that would not be eligible for cost recovery, including certain costs incurred or to be incurred associated with records review, the cost of pressure testing pipelines installed after 1955 for which the company has not found sufficient records of testing, and any undepreciated balances for pipelines that were replaced as a result of this program.
|
§
|
SONGS Outage and Retirement
|
§
|
Proposed Settlement Agreement to Resolve the CPUC’s Order Instituting Investigation into the SONGS Outage (SONGS OII)
|
§
|
Nuclear Regulatory Commission Proceedings
|
§
|
Nuclear Decommissioning and Funding
|
§
|
Nuclear Decommissioning Trusts
|
§
|
Lawsuit Against Mitsubishi Heavy Industries, Ltd.
|
§
|
Nuclear Insurance
|
§
|
Department of Energy Nuclear Fuel Disposal
|
§
|
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, 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.
|
NOMINAL AMOUNT AND ONE-YEAR VALUE AT RISK OF LONG-TERM DEBT(1)
|
|||||||||||||||
(Dollars in millions)
|
|||||||||||||||
|
|
Sempra Energy
|
|
|
|
|
|
|
|||||||
|
|
Consolidated
|
|
SDG&E
|
|
SoCalGas
|
|||||||||
|
|
Nominal
|
One-Year
|
|
Nominal
|
One-Year
|
|
Nominal
|
One-Year
|
||||||
|
|
Debt
|
VaR(2)
|
|
Debt
|
VaR(2)
|
|
Debt
|
VaR(2)
|
||||||
At March 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California Utilities fixed-rate
|
$
|
5,464
|
$
|
576
|
|
$
|
4,051
|
$
|
415
|
|
$
|
1,413
|
$
|
161
|
|
California Utilities variable-rate
|
|
332
|
|
16
|
|
|
332
|
|
16
|
|
|
―
|
|
―
|
|
All other, fixed-rate and variable-rate
|
|
5,450
|
|
305
|
|
|
―
|
|
―
|
|
|
―
|
|
―
|
At December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California Utilities fixed-rate
|
$
|
5,464
|
$
|
531
|
|
$
|
4,051
|
$
|
407
|
|
$
|
1,413
|
$
|
124
|
|
California Utilities variable-rate
|
|
335
|
|
15
|
|
|
335
|
|
15
|
|
|
―
|
|
―
|
|
All other, fixed-rate and variable-rate
|
|
6,211
|
|
308
|
|
|
―
|
|
―
|
|
|
―
|
|
―
|
(1)
|
Excluding commercial paper classified as long-term debt, capital lease obligations and interest rate swaps, and before reductions/increases for unamortized discount/premium.
|
||||||||||||||
(2)
|
After the effects of interest rate swaps.
|
EXHIBIT 10 -- MATERIAL CONTRACTS
|
||
Sempra Energy
|
||
10.1
|
Form of Sempra Energy 2013 Long-Term Incentive Plan Restricted Stock Unit Award.
|
|
10.2
|
Form of Sempra Energy 2013 Long-Term Incentive Plan Performance-Based Restricted Stock Unit Award – EPS Growth Performance Measure.
|
|
10.3
|
Form of Sempra Energy 2013 Long-Term Incentive Plan Performance-Based Restricted Stock Unit Award – Relative Total Shareholder Return Performance Measure.
|
|
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 Company / 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: May 2, 2014
|
By: /s/ Trevor I. Mihalik
|
Trevor I. Mihalik
Senior Vice President, 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: May 2, 2014
|
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: May 2, 2014
|
By: /s/ Robert M. Schlax
|
Robert M. Schlax
Vice President, Controller, Chief Financial Officer and Chief Accounting Officer
|
`F'Y-47*1 MF(=&L((JHF(JJN(JLV(JN^(JP&(NR ).(NT*`1!```[ ` end
Exhibit 10.1
SEMPRA ENERGY
2013 LONG TERM INCENTIVE PLAN
<YEAR> RESTRICTED STOCK UNIT AWARD
You have been granted a restricted stock unit award representing the right to receive the number of shares of Sempra Energy Common Stock set forth below, subject to the vesting conditions set forth below. The restricted stock units, and dividend equivalents with respect to the restricted stock units, under your award may not be sold or assigned and will be subject to forfeiture unless and until they vest. Shares of Common Stock will be distributed to you after the completion of the service period ending in <DATE> <YEAR>, if the restricted stock units vest under the terms and conditions of your award. The terms and conditions of your award are set forth in the attached Year <YEAR> Restricted Stock Unit Award Agreement and in the Sempra Energy 2013 Long Term Incentive Plan, which is enclosed. The summary below highlights selected terms and conditions but it is not complete and you should carefully read the attachments to fully understand the terms and conditions of your award. | |||||
| SUMMARY |
| |||
|
| ||||
Date of Award: | <DATE>, <YEAR> | ||||
Name of Recipient: | NAME | ||||
Recipients Employee Number: | Employee ID | ||||
Number of Restricted Stock Units (prior to any dividend equivalents): | # RSU | ||||
|
| ||||
Restricted Stock Units: | |||||
Your restricted stock units represent the right to receive shares of Common Stock in the future, subject to the terms and conditions of your award. Your restricted stock units are not shares of Common Stock. | |||||
Vesting/Forfeiture of Restricted Stock Units: | |||||
Your restricted stock units will vest subject to your continued employment by Sempra Energy or its Subsidiaries through the first New York Stock Exchange trading day of <YEAR>. Subject to certain exceptions set forth in the Year <YEAR> Restricted Stock Unit Award Agreement, if your employment terminates for any reason prior to the first New York Stock Exchange trading day of <YEAR>, your restricted stock units will be forfeited. | |||||
Transfer Restrictions: | |||||
Your restricted stock units may not be sold or otherwise transferred and will remain subject to forfeiture conditions until they vest. | |||||
Termination of Employment: | |||||
Subject to certain exceptions set forth in the Year <YEAR> Restricted Stock Unit Award Agreement, your restricted stock units will be forfeited if your employment terminates before such units vest. | |||||
Dividend Equivalents: | |||||
You also have been awarded dividend equivalents with respect to your restricted stock units. Your dividend equivalents represent the right to receive additional shares of Common Stock in the future, subject to the terms and conditions of your award. Your dividend equivalents will be determined based on the dividends that you would have received, had you held shares of Common Stock equal to the vested number of your restricted stock units from the date of your award to the date of the distribution of shares of Common Stock following the vesting of your restricted stock units, and assuming that the dividends were reinvested in Common Stock (and any dividends on such shares were reinvested in Common Stock). The dividends will be deemed reinvested in Common Stock in the same manner as dividends reinvested pursuant to the terms of the Sempra Dividend Reinvestment Plan. Your dividend equivalents will be subject to the same transfer restrictions and forfeiture and vesting conditions as the shares represented by your restricted stock units. | |||||
Distribution of Shares: | |||||
Shares of Common Stock will be distributed to you to the extent your restricted stock units vest. Except as provided otherwise in the Year <YEAR> Restricted Stock Unit Award Agreement, the shares will be distributed to you after the completion of the service period ending in <DATE> <YEAR>. The shares of Common Stock will include the additional shares to be distributed pursuant to your dividend equivalents. | |||||
Taxes: | |||||
Upon distribution of shares of Common Stock to you, you will be subject to income taxes on the value of the distributed shares at the time of distribution and must pay applicable withholding taxes. | |||||
By your acceptance of this award, you agree to all of the terms and conditions set forth in this Cover Page/Summary, the attached Year <YEAR> Restricted Stock Unit Award Agreement and the Sempra Energy 2013 Long Term Incentive Plan. | |||||
Recipient: |
| X | |||
|
| (Signature) | |||
Sempra Energy: |
| /s/ Debra L. Reed | |||
|
| (Signature) | |||
Title: |
| Chairman and Chief Executive Officer |
SEMPRA ENERGY
2013 LONG TERM INCENTIVE PLAN
Year <YEAR> Restricted Stock Unit Award Agreement
By your acceptance of this award, you agree
to all of the terms and conditions described above and in the 2013 Long Term Incentive Plan
Exhibit 10.2
SEMPRA ENERGY
2013 LONG TERM INCENTIVE PLAN
<YEAR> PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD
You have been granted a performance-based restricted stock unit award representing the right to receive the number of shares of Sempra Energy Common Stock set forth below, subject to the vesting conditions set forth below. The restricted stock units, and dividend equivalents with respect to the restricted stock units, under your award may not be sold or assigned. They will be subject to forfeiture unless and until they vest based upon the satisfaction of performance criteria for a performance period beginning on January 1, <YEAR> and ending in December <YEAR>. Shares of Common Stock will be distributed to you after the completion of the performance period ending on December 31, <YEAR>, if the restricted stock units vest under the terms and conditions of your award. The terms and conditions of your award are set forth in the attached Year <YEAR> Restricted Stock Unit Award Agreement and in the Sempra Energy 2013 Long Term Incentive Plan, which has been provided to you. The summary below highlights selected terms and conditions but it is not complete and you should carefully read the attachments to fully understand the terms and conditions of your award. | ||||||
| SUMMARY |
| ||||
|
| |||||
Date of Award: | <DATE>, <YEAR> | |||||
Name of Recipient: | NAME | |||||
Recipients Employee Number: | EE ID | |||||
Number of Restricted Stock Units (prior to any dividend equivalents): |
| |||||
At Target: | # RSU | |||||
At Maximum: | 200% of Target (e.g. 1,000 at Target = 2,000 at Maximum) | |||||
Award Date Fair Market Value per Share of Common Stock: | $PRICE | |||||
Restricted Stock Units: | ||||||
Your restricted stock units represent the right to receive shares of Common Stock in the future, subject to the terms and conditions of your award. Your restricted stock units are not shares of Common Stock. The target number of restricted stock units will vest (as described below), if the target Earnings Per Share Growth (as defined in the attached Year <YEAR> Restricted Stock Unit Award Agreement) is achieved. If above target Earnings Per Share Growth is achieved, you may vest in up to the maximum number of restricted stock units plus reinvested dividends as described below. | ||||||
Vesting/Forfeiture of Restricted Stock Units: | ||||||
Subject to certain exceptions set forth in the Year <YEAR> Restricted Stock Unit Award Agreement, your restricted stock units will vest only upon and only to the extent that the Compensation Committee determines and certifies that Sempra Energy has met specified Earnings Per Share Growth performance criteria for the performance period beginning on January 1, <YEAR> and ending December 31, <YEAR>. Any restricted stock units that do not vest upon the Compensation Committee's determination and certification will be forfeited. | ||||||
Transfer Restrictions: | ||||||
Your restricted stock units may not be sold or otherwise transferred and will remain subject to forfeiture conditions until they vest. | ||||||
Termination of Employment: | ||||||
Your restricted stock units also may be forfeited if your employment terminates. | ||||||
Dividend Equivalents: | ||||||
You also have been awarded dividend equivalents with respect to your restricted stock units. Your dividend equivalents represent the right to receive additional shares of Common Stock in the future, subject to the terms and conditions of your award. Your dividend equivalents will be determined based on the dividends that you would have received, had you held shares of Common Stock equal to the vested number of your restricted stock units from the date of your award to the date of the distribution of shares of Common Stock following the vesting of your restricted stock units, and assuming that the dividends were reinvested in Common Stock (and any dividends on such shares were reinvested in Common Stock). The dividends will be deemed reinvested in Common Stock in the same manner as dividends reinvested pursuant to the terms of the Sempra Dividend Reinvestment Plan. Your dividend equivalents will be subject to the same transfer restrictions and forfeiture and vesting conditions as the shares represented by your restricted stock units. | ||||||
Distribution of Shares: | ||||||
Shares of Common Stock will be distributed to you to the extent your restricted stock units vest. Except as provided otherwise in the attached Year <YEAR> Restricted Stock Unit Award Agreement, the shares will be distributed to you after the completion of the performance period ending on December 31, <YEAR> and the Compensation Committees determination and certification of Sempra Energys Earnings Per Share Growth for the performance period. The shares of Common Stock will include the additional shares to be distributed pursuant to your dividend equivalents. | ||||||
Taxes: | ||||||
Upon distribution of shares of Common Stock to you, you will be subject to income taxes on the value of the distributed shares at the time of distribution and must pay applicable withholding taxes. | ||||||
By your acceptance of this award, you agree to all of the terms and conditions set forth in this Cover Page/Summary, the attached Year <YEAR> Restricted Stock Unit Award Agreement and the Sempra Energy 2013 Long Term Incentive Plan. | ||||||
Recipient: |
| X | ||||
|
| (Signature) | ||||
Sempra Energy: |
| /s/ Debra L. Reed | ||||
|
| (Signature) | ||||
Title: |
| Chairman and Chief Executive Officer |
SEMPRA ENERGY
2013 LONG TERM INCENTIVE PLAN
Year <YEAR> Restricted Stock Unit Award Agreement
Distribution of Shares: | As described in Vesting/Forfeiture above, the Compensation Committee will determine and certify the extent to which Sempra Energy has met the performance criteria and the extent, if any, as to which your restricted stock units have then vested. You will receive the number of shares of Common Stock equal to the number of your restricted stock units that have vested. However, in no event will you receive under this award, and other awards granted to you under the 2013 Long Term Incentive Plan in the same fiscal year of Sempra Energy, more than the maximum number of shares of Common Stock permitted under the 2013 Long Term Incentive Plan. Also, you will receive the number of shares of Common Stock equal to your dividend equivalents after the Compensation Committees determination and certification. You will receive the shares as soon as reasonably practicable following the Compensation Committees determination and certification (and in no event later than March 15, <YEAR>). Once you receive the shares of Common Stock, your vested and unvested restricted stock units (and dividend equivalents) will terminate. |
Termination of Employment: | |
§ Termination: | If your employment with Sempra Energy and its Subsidiaries terminates for any reason prior to the vesting of your restricted stock units (and dividend equivalents) (other than under the circumstances set forth in the next paragraph), all of your restricted stock units (and dividend equivalents) will be forfeited. Subject to the provisions below relating to the treatment of your restricted stock units in connection with a Change in Control, the vesting of your restricted stock units does not occur until the date of the Compensation Committees determination and certification described above. If your employment terminates prior to a Change in Control, other than by Termination for cause, and you had both completed five years of continuous service with Sempra Energy and its Subsidiaries AND met any of the following conditions: 1.) your employment terminates after December 31, <YEAR> and at the date of termination you had attained age 55; or 2.) your employment terminates after November 30, <YEAR> and at the date of termination you had attained age 62; or 3.) at the date of termination you had attained age 65 and you were an officer subject to the companys mandatory retirement policy; your restricted stock units (and dividend equivalents) will not be forfeited but will continue to be subject to the transfer restrictions and vesting conditions and other terms and conditions of this Agreement. |
§ Termination for Cause: | If your employment with Sempra Energy and its Subsidiaries terminates for cause, or your employment would have been subject to termination for cause, prior to the vesting of your restricted stock units (and dividend equivalents), all of your restricted stock units (and dividend equivalents) will be cancelled. Prior to the consummation of a Change in Control, a termination for cause is (i) the willful failure by you to substantially perform your duties with the Company (other than any such failure resulting from your incapacity due to physical or mental illness), (ii) the grossly negligent performance of such obligations referenced in clause (i) of this definition, (iii) your gross insubordination; and/or (iv) your commission of one or more acts of moral turpitude that constitute a violation of applicable law (including but not limited to a felony) which have or result in an adverse effect on the Company, monetarily or otherwise, or one or more significant acts of dishonesty. For purposes of clause (i), no act, or failure to act, on your part shall be deemed willful unless done, or omitted to be done, by you not in good faith and without reasonable belief that your act, or failure to act, was in the best interests of the Company. If your restricted stock units remain outstanding following a Change in Control pursuant to a Replacement Award, a termination for cause following such Change in Control shall be determined in accordance with Section 2.8 of the 2013 Long Term Incentive Plan (which defines Cause for purposes of the plan), including reasonable notice and, if possible, a reasonable opportunity to cure as provided therein. |
§ Leaves of Absence: | Your employment does not terminate when you go on military leave, a sick leave or another bona fide leave of absence, if the leave was approved by your employer in writing. But your employment will be treated as terminating 90 days after you went on leave, unless your right to return to active work is guaranteed by law or by a contract. And your employment terminates in any event when the approved leave ends, unless you immediately return to active work. Your employer determines which leaves count for this purpose. |
Taxes: |
|
§ Withholding Taxes: | When you become subject to withholding taxes upon distribution of the shares of Common Stock or otherwise, Sempra Energy or its Subsidiary is required to withhold taxes. Unless you instruct otherwise and pay or make arrangements satisfactory to Sempra Energy to pay these taxes, upon the distribution of your shares, Sempra Energy will withhold a sufficient number of shares of common stock or restricted stock units (valued in each case at the distribution date fair market value) to cover the minimum required withholding taxes and transfer to you only the remaining balance of your shares. In the event that, following a Change in Control, your restricted stock units become eligible for a distribution upon your Retirement by reason of your combined age and service, your restricted stock units may become subject to employment tax withholding prior to the distribution of shares with respect to such units. |
§ Code Section 409A: | Your restricted stock units are subject to Sections 16.5 and 20.12 of the 2013 Long Term Incentive Plan, which set forth terms to comply with Code Section 409A. |
Recoupment (Clawback) Policy: | The Company shall require the forfeiture, recovery or reimbursement of awards or compensation under this Plan as (i) required by applicable law, or (ii) required under any policy implemented or maintained by the Company pursuant to any applicable rules or requirements of a national securities exchange or national securities association on which any securities of the Company are listed. The Company reserves the right to recoup compensation paid if it determines that the results on which the compensation was paid were not actually achieved. The Compensation Committee may, in its sole discretion, require the recovery or reimbursement of long-term incentive compensation awards from any employee whose fraudulent or intentional misconduct materially affects the operations or financial results of the Company or its Subsidiaries. |
Retention Rights: | Neither your restricted stock unit award nor this Agreement gives you any right to be retained by Sempra Energy or any of its Subsidiaries in any capacity and your employer reserves the right to terminate your employment at any time, with or without cause. The value of your award will not be included as compensation or earnings for purposes of any other benefit plan offered by Sempra Energy or any of its Subsidiaries. |
Change in Control: | In the event of a Change in Control, the following terms shall apply: § If (i) you have achieved age 55 and have completed at leave five years of continuous service with Sempra Energy and its Subsidiaries as of the date of a Change in Control and your restricted stock units have not been forfeited prior to the Change in Control, (ii) your outstanding restricted stock units as of the date of a Change in Control are not subject to a substantial risk of forfeiture within the meaning of Code Section 409A and/or (iii) your outstanding restricted stock units are not assumed or substituted with one or more Replacement Awards as contemplated in Section 16.1 of the 2013 Long Term Incentive Plan, then in each case your outstanding restricted stock units and any associated dividend equivalents will vest immediately prior to the Change in Control with the applicable performance goals deemed to have been achieved at the greater of target level as of the date of such vesting or the actual performance level had the performance period ended on the last day of the calendar year immediately preceding the date of the Change in Control. If the foregoing terms apply, immediately prior to the date of the Change in Control you will receive a number of shares of Common Stock equal to the number of your restricted stock units and dividend equivalents that have vested. · If your outstanding restricted stock awards are assumed or substituted with one or more Replacement Awards as contemplated in Section 16.1 of the 2013 Long Term Incentive Plan, then, except as provided otherwise in an individual severance agreement or employment agreement to which you are a party, the terms set forth in Sections 16.3 and 16.4 of the 2013 Long Term Incentive Plan shall apply with respect to such Replacement Award following the Change in Control. |
Further Actions: | You agree to take all actions and execute all documents appropriate to carry out the provisions of this Agreement. You shall not be deemed to have accepted this award unless you execute the Arbitration Agreement provided with your award letter. You also appoint as your attorney-in-fact each individual who at the time of so acting is the Secretary or an Assistant Secretary of Sempra Energy with full authority to effect any transfer of any shares of Common Stock distributable to you, including any transfer to pay withholding taxes, that is authorized by this Agreement. |
Applicable Law: | This Agreement will be interpreted and enforced under the laws of the State of California. |
Disputes: | Any and all disputes between you and the Company relating to or arising out of the Plan or your restricted stock unit award shall be subject to the Arbitration Agreement provided with your award letter, including, but not limited to, any disputes referenced in Section 16.4 of the Plan. |
Other Agreements: | In the event of any conflict between the terms of this Agreement and any written employment, severance or other employment-related agreement between you and Sempra Energy, the terms of this Agreement, or the terms of such other agreement, whichever are more favorable to you, shall prevail, provided that in each case a conflict shall be resolved in a manner consistent with the intent that your restricted stock units comply with Code Section 409A. In the event of a conflict between the terms of this Agreement and the 2013 Long Term Incentive Plan, the plan document shall prevail. |
By your acceptance of this award, you agree
to all of the terms and conditions described above and in the 2013 Long Term Incentive Plan
Exhibit 10.3
SEMPRA ENERGY
2013 LONG TERM INCENTIVE PLAN
<YEAR> PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD
You have been granted a performance-based restricted stock unit award representing the right to receive the number of shares of Sempra Energy Common Stock set forth below, subject to the vesting conditions set forth below. The restricted stock units, and dividend equivalents with respect to the restricted stock units, under your award may not be sold or assigned and will be subject to forfeiture unless and until they vest based upon the satisfaction of total shareholder return performance criteria for a performance period beginning on <DATE>, <YEAR> and ending in January 2018. Shares of Common Stock will be distributed to you after the completion of the performance period ending in January 2018, if the restricted stock units vest under the terms and conditions of your award. The terms and conditions of your award are set forth in the attached Year <YEAR> Restricted Stock Unit Award Agreement and in the Sempra Energy 2013 Long Term Incentive Plan, which has been provided to you. The summary below highlights selected terms and conditions but it is not complete and you should carefully read the attachments to fully understand the terms and conditions of your award. | ||||||
| SUMMARY |
| ||||
|
| |||||
Date of Award: | <DATE>, <YEAR> | |||||
Name of Recipient: | NAME | |||||
Recipients Employee Number: | EE ID | |||||
Number of Restricted Stock Units (prior to any dividend equivalents): |
| |||||
At Target: | # RSU | |||||
At Maximum: | 200% of Target (e.g. 1,000 at Target = 2,000 at Maximum) | |||||
Award Date Fair Market Value per Share of Common Stock: | <$PRICE> | |||||
Restricted Stock Units: | ||||||
Your restricted stock units represent the right to receive shares of Common Stock in the future, subject to the terms and conditions of your award. Your restricted stock units are not shares of Common Stock. The target number of restricted stock units will vest (as described below), if the target total shareholder return (a return at the 50th percentile) is achieved. If above target total shareholder return is achieved, you may vest in up to the maximum number of restricted stock units plus reinvested dividends as described below. | ||||||
Vesting/Forfeiture of Restricted Stock Units: | ||||||
Subject to certain exceptions set forth in the Year <YEAR> Restricted Stock Unit Award Agreement, your restricted stock units will vest only upon and only to the extent that the Compensation Committee determines and certifies that Sempra Energy has met specified total shareholder return performance criteria for the performance period beginning on <DATE>, <YEAR> and ending at the close of trading on the first New York Stock Exchange trading day of 2018. Any restricted stock units that do not vest upon the Compensation Committee's determination and certification will be forfeited. | ||||||
Transfer Restrictions: | ||||||
Your restricted stock units may not be sold or otherwise transferred and will remain subject to forfeiture conditions until they vest. | ||||||
Termination of Employment: | ||||||
Your restricted stock units also may be forfeited if your employment terminates. | ||||||
Dividend Equivalents: | ||||||
You also have been awarded dividend equivalents with respect to your restricted stock units. Your dividend equivalents represent the right to receive additional shares of Common Stock in the future, subject to the terms and conditions of your award. Your dividend equivalents will be determined based on the dividends that you would have received, had you held shares of Common Stock equal to the vested number of your restricted stock units from the date of your award to the date of the distribution of shares of Common Stock following the vesting of your restricted stock units, and assuming that the dividends were reinvested in Common Stock (and any dividends on such shares were reinvested in Common Stock). The dividends will be deemed reinvested in Common Stock in the same manner as dividends reinvested pursuant to the terms of the Sempra Dividend Reinvestment Plan. Your dividend equivalents will be subject to the same transfer restrictions and forfeiture and vesting conditions as the shares represented by your restricted stock units. | ||||||
Distribution of Shares: | ||||||
Shares of Common Stock will be distributed to you to the extent your restricted stock units vest. Except as provided otherwise in the attached Year <YEAR> Restricted Stock Unit Award Agreement, the shares will be distributed to you after the completion of the performance period ending in <DATE><YEAR> and the Compensation Committees determination and certification of Sempra Energys total shareholder return for the performance period. The shares of Common Stock will include the additional shares to be distributed pursuant to your dividend equivalents. | ||||||
Taxes: | ||||||
Upon distribution of shares of Common Stock to you, you will be subject to income taxes on the value of the distributed shares at the time of distribution and must pay applicable withholding taxes. | ||||||
By your acceptance of this award, you agree to all of the terms and conditions set forth in this Cover Page/Summary, the attached Year <YEAR> Restricted Stock Unit Award Agreement and the Sempra Energy 2013 Long Term Incentive Plan. | ||||||
Recipient: |
| X | ||||
|
| (Signature) | ||||
Sempra Energy: |
| /s/ Debra L. Reed | ||||
|
| (Signature) | ||||
Title: |
| Chairman and Chief Executive Officer |
SEMPRA ENERGY
2013 LONG TERM INCENTIVE PLAN
Year <YEAR> Restricted Stock Unit Award Agreement
By your acceptance of this award, you agree
to all of the terms and conditions described above and in the 2013 Long Term Incentive Plan
EXHIBIT 31.1
CERTIFICATION
I, Debra L. Reed, certify that:
1.
I have reviewed this report on Form 10-Q of Sempra Energy;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
May 2, 2014
/s/ Debra L. Reed |
Debra L. Reed |
Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION
I, Joseph A. Householder, certify that:
1.
I have reviewed this report on Form 10-Q of Sempra Energy;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
May 2, 2014
/s/ Joseph A. Householder |
Joseph A. Householder |
Chief Financial Officer |
EXHIBIT 31.3
CERTIFICATION
I, J. Walker Martin, certify that:
1.
I have reviewed this report on Form 10-Q of San Diego Gas & Electric Company;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
May 2, 2014
/s/ J. Walker Martin |
J. Walker Martin |
Chief Executive Officer |
EXHIBIT 31.4
CERTIFICATION
I, Robert M. Schlax, certify that:
1.
I have reviewed this report on Form 10-Q of San Diego Gas & Electric Company;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
May 2, 2014
/s/ Robert M. Schlax |
Robert M. Schlax |
Chief Financial Officer |
EXHIBIT 31.5
CERTIFICATION
I, Dennis V. Arriola, certify that:
1.
I have reviewed this report on Form 10-Q of Southern California Gas Company;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
May 2, 2014
/s/ Dennis V. Arriola |
Dennis V. Arriola |
Chief Executive Officer |
EXHIBIT 31.6
CERTIFICATION
I, Robert M. Schlax, certify that:
1.
I have reviewed this report on Form 10-Q of Southern California Gas Company;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
May 2, 2014
/s/ Robert M. Schlax |
Robert M. Schlax |
Chief Financial Officer |
Exhibit 32.1
Statement of Chief Executive Officer
Pursuant to 18 U.S.C. Sec 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Executive Officer of Sempra Energy (the "Company") certifies that:
(i)
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended March 31, 2014 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 2, 2014
/s/ Debra L. Reed |
Debra L. Reed |
Chief Executive Officer |
Exhibit 32.2
Statement of Chief Financial Officer
Pursuant to 18 U.S.C. Sec 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Financial Officer of Sempra Energy (the "Company") certifies that:
(i)
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended March 31, 2014 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 2, 2014
Exhibit 32.3
Statement of Chief Executive Officer
Pursuant to 18 U.S.C. Sec 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Executive Officer of San Diego Gas & Electric Company (the "Company") certifies that:
(i)
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended March 31, 2014 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 2, 2014
/s/ J. Walker Martin |
J. Walker Martin |
Chief Executive Officer |
Exhibit 32.4
Statement of Chief Financial Officer
Pursuant to 18 U.S.C. Sec 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Financial Officer of San Diego Gas & Electric Company (the "Company") certifies that:
(i)
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended March 31, 2014 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 2, 2014
/s/ Robert M. Schlax |
Robert M. Schlax |
Chief Financial Officer |
Exhibit 32.5
Statement of Chief Executive Officer
Pursuant to 18 U.S.C. Sec 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Executive Officer of Southern California Gas Company (the "Company") certifies that:
(i)
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended March 31, 2014 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 2, 2014
/s/ Dennis V. Arriola |
Dennis V. Arriola |
Chief Executive Officer |
Exhibit 32.6
Statement of Chief Financial Officer
Pursuant to 18 U.S.C. Sec 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Financial Officer of Southern California Gas Company (the "Company") certifies that:
(i)
the Quarterly Report on Form 10-Q of the Company filed with the Securities and Exchange Commission for the quarter ended March 31, 2014 (the "Quarterly Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)
the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 2, 2014
/s/ Robert M. Schlax |
Robert M. Schlax |
Chief Financial Officer |
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