XML 58 R21.htm IDEA: XBRL DOCUMENT v3.7.0.1
OTHER FINANCIAL DATA (Tables)
 3 Months Ended
Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Inventory Table The components of inventories by segment are as follows:
INVENTORY BALANCES
(Dollars in millions)
 
Natural gas
 
 
Liquefied natural gas
 
 
Materials and supplies
 
 
Total
 
March 31, 2017
 
December 31, 2016
 
 
March 31, 2017
 
December 31, 2016
 
 
March 31,
2017
 
December 31, 2016
 
 
March 31,
2017
 
December 31, 2016
SDG&E
$
—

 
$
2

 
 
$
—

 
$
—

 
 
$
82

 
$
78

 
 
$
82

 
$
80

SoCalGas(1)
—

 
11

 
 
—

 
—

 
 
43

 
47

 
 
43

 
58

Sempra South American Utilities
—

 
—

 
 
—

 
—

 
 
28

 
27

 
 
28

 
27

Sempra Mexico
—

 
—

 
 
9

 
6

 
 
2

 
1

 
 
11

 
7

Sempra Renewables
—

 
—

 
 
—

 
—

 
 
4

 
4

 
 
4

 
4

Sempra LNG & Midstream
39

 
79

 
 
3

 
3

 
 
—

 
—

 
 
42

 
82

Sempra Energy Consolidated
$
39

 
$
92

 
 
$
12

 
$
9

 
 
$
159

 
$
157

 
 
$
210

 
$
258

(1)
At March 31, 2017 and December 31, 2016, SoCalGas’ natural gas inventory for core customers is net of an inventory loss related to the Aliso Canyon natural gas leak, which we discuss in Note 11.
Schedule of Greenhouse Gas Allowances and Obligations Table The Condensed Consolidated Balance Sheets include the following amounts associated with GHG allowances and obligations.
GHG ALLOWANCES AND OBLIGATIONS
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
 
Sempra Energy
Consolidated
 
SDG&E
 
SoCalGas
 
March 31,
2017
 
December 31,
2016
 
March 31,
2017
 
December 31,
2016
 
March 31,
2017
 
December 31,
2016
Assets:
 
 
 
 
 
 
 
 
 
 
 
Other current assets
$
40

 
$
40

 
$
16

 
$
16

 
$
24

 
$
24

Sundry
307

 
295

 
184

 
182

 
119

 
109

Total assets
$
347

 
$
335

 
$
200

 
$
198

 
$
143

 
$
133

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Other current liabilities
$
40

 
$
40

 
$
16

 
$
16

 
$
24

 
$
24

Deferred credits and other
183

 
171

 
80

 
72

 
99

 
96

Total liabilities
$
223

 
$
211

 
$
96

 
$
88

 
$
123

 
$
120
Variable Interest Entity Table The Condensed Consolidated Statements of Operations of Sempra Energy and SDG&E include the following amounts associated with Otay Mesa VIE. The amounts are net of eliminations of transactions between SDG&E and Otay Mesa VIE. The captions in the table below correspond to SDG&E’s Condensed Consolidated Statements of Operations.
AMOUNTS ASSOCIATED WITH OTAY MESA VIE
 
 
 
(Dollars in millions)
 
 
 
 
Three months ended March 31,
 
2017
 
2016
Operating expenses
 
 
 
Cost of electric fuel and purchased power
$
(18
)
 
$
(17
)
Operation and maintenance
4

 
4

Depreciation and amortization
7

 
7

Total operating expenses
(7
)
 
(6
)
Operating income
7

 
6

Interest expense
(5
)
 
(5
)
Income before income taxes/Net income
2

 
1

Earnings attributable to noncontrolling interest
(2
)
 
(1
)
Earnings attributable to common shares
$
—

 
$
—

Sempra Energy’s Condensed Consolidated Statement of Operations for the three months ended March 31, 2017 includes the following amounts associated with the tax equity limited liability companies. The amounts are net of eliminations of transactions between Sempra Energy and these entities.
AMOUNTS ASSOCIATED WITH TAX EQUITY ARRANGEMENTS
 
(Dollars in millions)
 
 
 
Three months ended March 31, 2017
REVENUES
 
Energy-related businesses
$
13

EXPENSES
 
Operation and maintenance
(2
)
Depreciation and amortization
(8
)
Income before income taxes
3

Income tax expense
(2
)
Net income
1

Losses attributable to noncontrolling interests(1)
3

Earnings
$
4

 
 
 
(1)
Net income or loss attributable to the noncontrolling interests is computed using the hypothetical liquidation at book value (HLBV) method and is not based on ownership percentages.
Net Periodic Benefit Cost Table The following three tables provide the components of net periodic benefit cost:
NET PERIODIC BENEFIT COST – SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended March 31,
 
2017
 
2016
 
2017
 
2016
Service cost
$
28

 
$
28

 
$
6

 
$
5

Interest cost
37

 
40

 
9

 
11

Expected return on assets
(40
)
 
(42
)
 
(16
)
 
(17
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost
3

 
3

 
—

 
—

Actuarial loss (gain)
8

 
6

 
(1
)
 
—

Regulatory adjustment
(12
)
 
(28
)
 
2

 
2

Total net periodic benefit cost
$
24

 
$
7

 
$
—

 
$
1

NET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended March 31,
 
2017
 
2016
 
2017
 
2016
Service cost
$
8

 
$
7

 
$
1

 
$
1

Interest cost
9

 
10

 
2

 
2

Expected return on assets
(11
)
 
(12
)
 
(3
)
 
(3
)
Amortization of:

 
 
 
 
 
 
Prior service cost
—

 
—

 
1

 
1

Actuarial loss
2

 
3

 
—

 
—

Regulatory adjustment
(7
)
 
(7
)
 
(1
)
 
(1
)
Total net periodic benefit cost
$
1

 
$
1

 
$
—

 
$
—

NET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended March 31,
 
2017
 
2016
 
2017
 
2016
Service cost
$
18

 
$
17

 
$
4

 
$
4

Interest cost
24

 
25

 
7

 
8

Expected return on assets
(26
)
 
(25
)
 
(13
)
 
(14
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost (credit)
2

 
2

 
(1
)
 
(1
)
Actuarial loss
4

 
3

 
—

 
—

Regulatory adjustment
(5
)
 
(21
)
 
3

 
3

Total net periodic benefit cost
$
17

 
$
1

 
$
—

 
$
—
Contributions to Benefit Plans Table The following table shows our year-to-date contributions to pension and other postretirement benefit plans and the amounts we expect to contribute in 2017:
BENEFIT PLAN CONTRIBUTIONS
(Dollars in millions)
 
 
Sempra Energy
Consolidated
 
SDG&E
 
SoCalGas
Contributions through March 31, 2017:
 
 
 
 
 
 
Pension plans
 
$
26

 
$
2

 
$
17

Other postretirement benefit plans
 
1

 
—

 
—

Total expected contributions in 2017:
 
 
 
 
 
 
Pension plans
 
$
181

 
$
38

 
$
90

Other postretirement benefit plans
 
8

 
4

 
1
Earnings Per Share Computations Table The following table provides EPS computations for the three months ended March 31, 2017 and 2016. Basic EPS is calculated by dividing earnings attributable to common stock by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
EARNINGS PER SHARE COMPUTATIONS
 
 
 
(Dollars in millions, except per share amounts; shares in thousands)
 
 
 
 
Three months ended March 31,
 
2017
 
2016(1)
Numerator:
 
 
 
Earnings/Income attributable to common shares
$
441

 
$
353

 
 
 
 
Denominator:
 
 
 
Weighted-average common shares outstanding for basic EPS(2)
251,131

 
249,734

Dilutive effect of stock options, restricted stock awards and restricted stock units(3)
1,115

 
1,753

Weighted-average common shares outstanding for diluted EPS
252,246

 
251,487

 
 
 
 
Earnings per share:
 
 
 
Basic
$
1.76

 
$
1.41

Diluted
1.75

 
1.40

(1)
As adjusted for the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
(2)
Includes 600 and 555 average fully vested restricted stock units held in our Deferred Compensation Plan for the three months ended March 31, 2017 and 2016, respectively. These fully vested restricted stock units are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.
(3)
Due to market fluctuations of both Sempra Energy stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based restricted stock units, which we discuss in Note 8 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive restricted stock units may vary widely from period-to-period.
Capitalized Financing Costs Table Interest capitalized and AFUDC are as follows:
CAPITALIZED FINANCING COSTS
(Dollars in millions)
 
Three months ended March 31,
 
2017
 
2016
Sempra Energy Consolidated
$
82

 
$
52

SDG&E
20

 
15

SoCalGas
15

 
13
Schedule of Accumulated Other Comprehensive Income (Loss) Table The following tables present the changes in AOCI by component and amounts reclassified out of AOCI to net income, excluding amounts attributable to noncontrolling interests:
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
 
(Dollars in millions)
 
 
Foreign
currency
translation
adjustments
 
Financial
instruments
 
Pension and other
postretirement
benefits
 
Total
accumulated other
comprehensive
income (loss)
 
 
Three months ended March 31, 2017 and 2016
 
Sempra Energy Consolidated:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2016
$
(527
)
 
$
(125
)
 
$
(96
)
 
$
(748
)
 
OCI before reclassifications
46

 
(2
)
 
—

 
44

 
Amounts reclassified from AOCI
—

 
6

 
2

 
8

 
Net OCI
46

 
4

 
2

 
52

 
Balance as of March 31, 2017
$
(481
)
 
$
(121
)
 
$
(94
)
 
$
(696
)
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2015
$
(582
)
 
$
(137
)
 
$
(87
)
 
$
(806
)
 
OCI before reclassifications
68

 
(82
)
 
—

 
(14
)
 
Amounts reclassified from AOCI
—

 
(2
)
 
1

 
(1
)
 
Net OCI
68

 
(84
)
 
1

 
(15
)
 
Balance as of March 31, 2016
$
(514
)
 
$
(221
)
 
$
(86
)
 
$
(821
)
 
SDG&E:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2016 and March 31, 2017
 
 
 
 
$
(8
)
 
$
(8
)
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2015 and March 31, 2016
 
 
 
 
$
(8
)
 
$
(8
)
 
SoCalGas:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2016 and March 31, 2017
 
 
$
(13
)
 
$
(9
)
 
$
(22
)
 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2015 and March 31, 2016
 
 
$
(14
)
 
$
(5
)
 
$
(19
)
 
(1)
All amounts are net of income tax, if subject to tax, and exclude noncontrolling interests.
Reclassifications out of AOCI Table
 
 
 
 
 
 


RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
Details about accumulated other
comprehensive income (loss) components
Amounts reclassified
from accumulated other
comprehensive income (loss)
 
Affected line item on Condensed
Consolidated Statements of Operations
 
Three months ended March 31,
 
 
 
2017
 
2016
 
 
Sempra Energy Consolidated:
 
 
 
 
 
Financial instruments:
 
 
 
 
 
Interest rate and foreign exchange instruments
$
(3
)
 
$
4

 
Interest Expense
Interest rate instruments
2

 
3

 
Equity Earnings (Losses), Before Income Tax
Interest rate and foreign exchange instruments
2

 
1

 
Equity (Losses) Earnings, Net of Income Tax
Foreign exchange instruments
2

 
—

 
Revenues: Energy-Related Businesses
Commodity contracts not subject to rate recovery
9

 
(7
)
 
Revenues: Energy-Related Businesses
Total before income tax
12

 
1

 
 
 
(4
)
 
—

 
Income Tax Expense
Net of income tax
8

 
1

 
 
 
(2
)
 
(3
)
 
Earnings Attributable to Noncontrolling Interests
 
$
6

 
$
(2
)
 
 
Pension and other postretirement benefits:
 
 
 
 
 
Amortization of actuarial loss
$
3

 
$
2

 
See note (1) below
 
(1
)
 
(1
)
 
Income Tax Expense
Net of income tax
$
2

 
$
1

 
 
 
 
 
 
 
 
Total reclassifications for the period, net of tax
$
8

 
$
(1
)
 
 
SDG&E:
 
 
 
 
 
Financial instruments:
 
 
 
 
 
Interest rate instruments
$
3

 
$
3

 
Interest Expense
 
(3
)
 
(3
)
 
Earnings Attributable to Noncontrolling Interest
Total reclassifications for the period
$
—

 
$
—

 
 
(1)
Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).
Shareholders' Equity and Noncontrolling Interests Table The following tables provide reconciliations of changes in Sempra Energy’s, SDG&E’s and SoCalGas’ shareholders’ equity and noncontrolling interests for the three months ended March 31, 2017 and 2016.
SHAREHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS – SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
 
Sempra Energy
shareholders’
equity(1)
 
Non-
controlling
interests(2)
 
Total
equity(1)
Balance at December 31, 2016
$
12,951

 
$
2,290

 
$
15,241

Comprehensive income
493

 
22

 
515

Share-based compensation expense
10

 
—

 
10

Common stock dividends declared
(206
)
 
—

 
(206
)
Issuances of common stock
30

 
—

 
30

Repurchases of common stock
(14
)
 
—

 
(14
)
Distributions to noncontrolling interests
—

 
(7
)
 
(7
)
Balance at March 31, 2017
$
13,264

 
$
2,305

 
$
15,569

Balance at December 31, 2015
$
11,809

 
$
770

 
$
12,579

Cumulative-effect adjustment from change in accounting principle
107

 
—

 
107

Comprehensive income
338

 
11

 
349

Share-based compensation expense
13

 
—

 
13

Common stock dividends declared
(188
)
 
—

 
(188
)
Issuances of common stock
28

 
—

 
28

Repurchases of common stock
(54
)
 
—

 
(54
)
Distributions to noncontrolling interests
—

 
(3
)
 
(3
)
Balance at March 31, 2016
$
12,053

 
$
778

 
$
12,831

(1)
Amounts for the three months ended March 31, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
(2)
Noncontrolling interests include the preferred stock of SoCalGas and other noncontrolling interests as listed in the table below under “Other Noncontrolling Interests.”
SHAREHOLDER’S EQUITY AND NONCONTROLLING INTEREST – SDG&E
(Dollars in millions)
 
SDG&E
shareholder’s
equity(1)
 
Non-
controlling
interest
 
Total
equity(1)
Balance at December 31, 2016
$
5,641

 
$
37

 
$
5,678

Comprehensive income
155

 
5

 
160

Common stock dividends declared
(175
)
 
—

 
(175
)
Distributions to noncontrolling interest
—

 
(3
)
 
(3
)
Balance at March 31, 2017
$
5,621

 
$
39

 
$
5,660

Balance at December 31, 2015
$
5,223

 
$
53

 
$
5,276

Cumulative-effect adjustment from change in accounting principle
23

 
—

 
23

Comprehensive income (loss)
136

 
(1
)
 
135

Distributions to noncontrolling interest
—

 
(1
)
 
(1
)
Balance at March 31, 2016
$
5,382

 
$
51

 
$
5,433

(1)
Amounts for the three months ended March 31, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
SHAREHOLDERS’ EQUITY – SOCALGAS
(Dollars in millions)
 
Total
equity(1)
Balance at December 31, 2016
$
3,510

Comprehensive income
203

Balance at March 31, 2017
$
3,713

Balance at December 31, 2015
$
3,149

Cumulative-effect adjustment from change in accounting principle
15

Comprehensive income
199

Balance at March 31, 2016
$
3,363


(1)
Amounts for the three months ended March 31, 2016 reflect the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.
Ownership Interests Held By Others Table At March 31, 2017 and December 31, 2016, we reported the following noncontrolling ownership interests held by others (not including preferred shareholders) recorded in Other Noncontrolling Interests in Total Equity on Sempra Energy’s Condensed Consolidated Balance Sheets:
OTHER NONCONTROLLING INTERESTS
(Dollars in millions)
 
 
 
Percent ownership held by noncontrolling interests
 
 Equity held by
noncontrolling interests
 
March 31,
2017
 
December 31,
2016
 
March 31,
2017
 
December 31,
2016
SDG&E:
 
 
 
 
 
 
 
Otay Mesa VIE
100
%
100
%
$
39

 
$
37

Sempra South American Utilities:
 
 
 
 
 
 
 
Chilquinta Energía subsidiaries(1)
22.9 – 43.4
 
23.1 – 43.4
 
23

 
22

Luz del Sur
16.4
 
16.4
 
182

 
173

Tecsur
9.8
 
9.8
 
4

 
4

Sempra Mexico:
 
 
 
 
 
 
 
IEnova
33.6
 
33.6
 
1,531

 
1,524

Sempra Renewables:
 
 
 
 
 
 
 
Tax equity arrangement – wind(2)
NA
 
 NA
 
93

 
92

Tax equity arrangement – solar(2)
NA
 
NA
 
371

 
376

Sempra LNG & Midstream:
 
 
 
 
 
 
 
Bay Gas Storage Company, Ltd.
9.1
 
9.1
 
27

 
27

Liberty Gas Storage, LLC
23.3
 
23.3
 
14

 
14

Southern Gas Transmission Company
49.0
 
49.0
 
1

 
1

Total Sempra Energy
 
 
 
 
$
2,285

 
$
2,270

(1)
Chilquinta Energía has four subsidiaries with noncontrolling interests held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.
(2)
Net income or loss attributable to the noncontrolling interests is computed using the HLBV method and is not based on ownership percentages, as we discuss in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
Transactions with Affiliates Table Amounts due from and to unconsolidated affiliates at Sempra Energy Consolidated, SDG&E and SoCalGas are as follows:
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
 
March 31, 2017
 
December 31, 2016
Sempra Energy Consolidated:
 
 
 
Total due from various unconsolidated affiliates – current
$
24

 
$
26

 
 
 
 
Sempra South American Utilities(1):
 
 
 
Eletrans S.A. and Eletrans II S.A. – 4% Note(2)
$
82

 
$
96

Other related party receivables
1

 
1

Sempra Mexico(1):
 
 
 
Affiliate of joint venture with Ductos y Energéticos del Norte:
 
 
 
Note due November 14, 2018(3)
2

 
2

Note due November 14, 2018(3)
44

 
44

Note due November 14, 2018(3)
36

 
35

Note due November 14, 2018(3)
9

 
9

Energía Sierra Juárez – Note(4)
13

 
14

Total due from unconsolidated affiliates – noncurrent
$
187

 
$
201

 
 
 
 
Total due to various unconsolidated affiliates – current
$
(13
)
 
$
(11
)
SDG&E:
 
 
 
Sempra Energy(5)
$
—

 
$
3

Various affiliates
—

 
1

Total due from various unconsolidated affiliates – current
$
—

 
$
4

 
 
 
 
Sempra Energy
$
(28
)
 
$
—

SoCalGas
(9
)
 
(8
)
Various affiliates
(8
)
 
(7
)
Total due to various unconsolidated affiliates – current
$
(45
)
 
$
(15
)
 
 
 
 
Income taxes due from Sempra Energy(6)
$
109

 
$
159

SoCalGas:
 
 
 
Sempra Energy(7)
$
7

 
$
—

SDG&E
9

 
8

Total due from unconsolidated affiliates – current
$
16

 
$
8

 
 
 
 
Sempra Energy
$
—

 
$
(28
)
Total due to unconsolidated affiliates – current
$
—

 
$
(28
)
 
 
 
 
Income taxes due (to) from Sempra Energy(6)
$
(13
)
 
$
5

(1)
Amounts include principal balances plus accumulated interest outstanding.
(2)
U.S. dollar-denominated loan, at a fixed interest rate with no stated maturity date, to provide project financing for the construction of transmission lines at Eletrans S.A. and Eletrans II S.A. (collectively, Eletrans), which is a joint venture of Chilquinta Energía.
(3)
U.S. dollar-denominated loan, at a variable interest rate based on the 30-day LIBOR plus 450 basis points (5.48 percent at March 31, 2017), to finance the Los Ramones Norte pipeline.
(4)
U.S. dollar-denominated loan, at a variable interest rate based on the 30-day LIBOR plus 637.5 basis points (7.36 percent at March 31, 2017) with no stated maturity date, to finance the first phase of the Energía Sierra Juárez wind project, which is a joint venture of IEnova.
(5)
At December 31, 2016, net receivable included outstanding advances to Sempra Energy of $31 million at an interest rate of 0.68 percent.
(6)
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 each company having always filed a separate return.
(7)
At March 31, 2017, net receivable included outstanding advances to Sempra Energy of $35 million at an interest rate of 0.95 percent.

Revenues and cost of sales from unconsolidated affiliates are as follows:
REVENUES AND COST OF SALES FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)
 
Three months ended March 31,
 
2017
 
2016
Revenues:
 
 
 
Sempra Energy Consolidated
$
7

 
$
5

SDG&E
2

 
3

SoCalGas
18

 
17

Cost of Sales:
 
 
 
Sempra Energy Consolidated
$
14

 
$
30

SDG&E
20

 
14
Other Income and Expense Table Other Income, Net on the Condensed Consolidated Statements of Operations consists of the following:
OTHER INCOME, NET
 
 
(Dollars in millions)
 
 
 
Three months ended March 31,
 
2017
 
2016
Sempra Energy Consolidated:
 
 
 
Allowance for equity funds used during construction
$
72

 
$
27

Investment gains(1)
16

 
10

Gains on interest rate and foreign exchange instruments, net
63

 
3

Foreign currency transaction gains (losses)
10

 
(2
)
Sale of other investments
—

 
1

Electrical infrastructure relocation income(2)
—

 
1

Regulatory interest, net(3)
2

 
2

Sundry, net
6

 
7

Total
$
169

 
$
49

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

 
$
11

Regulatory interest, net(3)
2

 
2

Sundry, net
1

 
1

Total
$
18

 
$
14

SoCalGas:
 
 
 
Allowance for equity funds used during construction
$
11

 
$
10

Total
$
11

 
$
10

(1)
Represents investment gains on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are partially offset by corresponding changes in compensation expense related to the plans, recorded in Operation and Maintenance on the Condensed Consolidated Statements of Operations.
(2)
Income at Luz del Sur associated with the relocation of electrical infrastructure.
(3)
Interest on regulatory balancing accounts.
Income Tax Expense and Effective Income Tax Rates Table
INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
 
Income tax
expense
 
Effective
income tax rate
 
Income tax
expense
 
Effective
income tax rate
 
Three months ended March 31,
 
2017
 
2016(1)
Sempra Energy Consolidated
$
295

 
39
%
 
$
108

 
24
%
SDG&E
90

 
36

 
65

 
32

SoCalGas
98

 
33

 
83

 
29


(1)
Reflects the adoption of ASU 2016-09 as of January 1, 2016, as we discuss in Note 2.