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GENERAL INFORMATION AND OTHER FINANCIAL DATA (Tables)
 9 Months Ended
Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Cash and Cash Equivalents
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Condensed Consolidated Balance Sheets to the sum of such amounts reported on the Condensed Consolidated Statements of Cash Flows. We provide information about the nature of restricted cash in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
 
September 30,
December 31,
 
2019
2018
Sempra Energy Consolidated:
 
 
Cash and cash equivalents
$
106

$
102

Restricted cash, current
28

35

Restricted cash, noncurrent
3

21

Cash, cash equivalents and restricted cash in discontinued operations
360

88

Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows
$
497

$
246

SDG&E:
 

 
Cash and cash equivalents
$
24

$
8

Restricted cash, current
—

11

Restricted cash, noncurrent
—

18

Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows
$
24

$
37
Inventory Table
The following table presents the components of inventories by segment.
INVENTORY BALANCES
(Dollars in millions)
 
Natural gas
 
 
LNG
 
 
Materials and supplies
 
 
Total
 
September
30, 2019
 
December 31, 2018
 
 
September
30, 2019
 
December 31, 2018
 
 
September
 30, 2019
 
December 31, 2018
 
 
September
30, 2019
 
December 31, 2018
SDG&E
$
1

 
$
—

 
 
$
—

 
$
—

 
 
$
91

 
$
102

 
 
$
92

 
$
102

SoCalGas
87

 
92

 
 
—

 
—

 
 
47

 
42

 
 
134

 
134

Sempra Mexico
—

 
—

 
 
6

 
4

 
 
16

 
15

 
 
22

 
19

Sempra LNG
22

 
3

 
 
—

 
—

 
 
—

 
—

 
 
22

 
3

Sempra Energy Consolidated
$
110

 
$
95

 
 
$
6

 
$
4

 
 
$
154

 
$
159

 
 
$
270

 
$
258
Capitalized Financing Costs Table
The table below summarizes capitalized interest and AFUDC.
CAPITALIZED FINANCING COSTS
 
 
 
 
(Dollars in millions)
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Sempra Energy Consolidated
$
46

 
$
47

 
$
144

 
$
150

SDG&E
19

 
20

 
56

 
67

SoCalGas
13

 
10

 
35

 
39
Variable Interest Entity Table
The following table summarizes the deconsolidation:
DECONSOLIDATION OF OTAY MESA VIE
 
(Dollars in millions)
 
 
 August 23, 2019
Cash and cash equivalents
$
8

Accounts receivable, net
11

Inventories
4

Total current assets
23

Property, plant and equipment, net
272

Other noncurrent assets
27

Total assets
$
322

 
 
Accounts payable
$
10

Other
2

Total current liabilities
12

 
 
Asset retirement obligations
2

Deferred credits and other
27

Total deferred credits and other liabilities
29

 
 
Noncontrolling interest
281

Total liabilities and equity
$
322


Sempra Energy’s Condensed Consolidated Statements of Operations include the following amounts associated with the tax equity limited liability companies, net of eliminations of transactions between Sempra Energy and these entities.
AMOUNTS ASSOCIATED WITH TAX EQUITY ARRANGEMENTS(1)
 
 
(Dollars in millions)
 
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended
September 30,
 
 
2018
 
2019
 
2018
REVENUES
 
 
 
 
 
Energy-related businesses
$
28

 
$
8

 
$
77

EXPENSES
 
 
 
 
 
Operation and maintenance
(5
)
 
(2
)
 
(13
)
Depreciation and amortization
(13
)
 
(4
)
 
(36
)
Income before income taxes
10

 
2

 
28

Income tax expense
(4
)
 
—

 
(16
)
Net income
6

 
2

 
12

Losses (earnings) attributable to noncontrolling interests(2)
9

 
(1
)
 
50

Earnings attributable to common shares
$
15

 
$
1

 
$
62

(1)
Amounts for 2019 include activity until deconsolidation of the wind entities in April 2019. Amounts for 2018 include activity until deconsolidation of the solar entities in December 2018.
(2)
Net income or loss attributable to NCI is computed using the HLBV method and is not based on ownership percentages.
The Condensed Consolidated Statements of Operations of Sempra Energy and SDG&E include the following amounts associated with Otay Mesa VIE until its deconsolidation on August 23, 2019. 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 September 30,
 
Nine months ended September 30,
 
2019(1)
 
2018
 
2019(1)
 
2018
Operating expenses
 
 
 
 
 
 
 
Cost of electric fuel and purchased power
$
(17
)
 
$
(28
)
 
$
(52
)
 
$
(60
)
Operation and maintenance
2

 
3

 
10

 
11

Depreciation and amortization
8

 
8

 
23

 
23

Total operating expenses
(7
)
 
(17
)
 
(19
)
 
(26
)
Operating income
7

 
17

 
19

 
26

Interest expense
(4
)
 
(6
)
 
(12
)
 
(16
)
Income before income taxes/Net income
3

 
11

 
7

 
10

Earnings attributable to noncontrolling interest
(3
)
 
(11
)
 
(7
)
 
(10
)
Earnings attributable to common shares
$
—

 
$
—

 
$
—

 
$
—


(1)
Amounts for 2019 include activity until deconsolidation on August 23, 2019.
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 September 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
27

 
$
29

 
$
4

 
$
4

Interest cost
34

 
35

 
9

 
9

Expected return on assets
(36
)
 
(35
)
 
(17
)
 
(18
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost
3

 
3

 
—

 
—

Actuarial loss (gain)
8

 
6

 
(3
)
 
(2
)
Settlement charges
4

 
9

 
—

 
—

Special termination benefits
—

 
—

 
—

 
5

Net periodic benefit cost (credit)
40

 
47

 
(7
)
 
(2
)
Regulatory adjustments
3

 
(11
)
 
8

 
2

Total expense recognized
$
43

 
$
36

 
$
1

 
$
—

 
 
 
 
 
 
 
 
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
82

 
$
95

 
$
12

 
$
15

Interest cost
104

 
104

 
27

 
27

Expected return on assets
(108
)
 
(117
)
 
(52
)
 
(53
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost
9

 
8

 
—

 
—

Actuarial loss (gain)
29

 
25

 
(8
)
 
(4
)
Settlement charges
26

 
48

 
—

 
—

Special termination benefits
—

 
—

 
—

 
5

Net periodic benefit cost (credit)
142

 
163

 
(21
)
 
(10
)
Regulatory adjustments
(30
)
 
(91
)
 
22

 
11

Total expense recognized
$
112

 
$
72

 
$
1

 
$
1

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

 
$
7

 
$
1

 
$
1

Interest cost
9

 
9

 
1

 
2

Expected return on assets
(9
)
 
(10
)
 
(3
)
 
(3
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost
—

 
—

 
1

 
—

Actuarial loss (gain)
2

 
—

 
—

 
(1
)
Settlement charges
—

 
1

 
—

 
—

Special termination benefits
—

 
—

 
—

 
3

Net periodic benefit cost
9

 
7

 
—

 
2

Regulatory adjustments
(1
)
 
(7
)
 
—

 
(2
)
Total expense recognized
$
8

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
22

 
$
23

 
$
3

 
$
3

Interest cost
26

 
26

 
5

 
5

Expected return on assets
(29
)
 
(35
)
 
(9
)
 
(10
)
Amortization of:

 
 
 

 
 
Prior service cost
2

 
1

 
2

 
2

Actuarial loss (gain)
9

 
3

 
(1
)
 
(2
)
Settlement charges
—

 
17

 
—

 
—

Special termination benefits
—

 
—

 
—

 
3

Net periodic benefit cost
30

 
35

 
—

 
1

Regulatory adjustments
(13
)
 
(34
)
 
—

 
(1
)
Total expense recognized
$
17

 
$
1

 
$
—

 
$
—

NET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)
 
Pension benefits
 
Other postretirement benefits
 
Three months ended September 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
17

 
$
19

 
$
3

 
$
3

Interest cost
23

 
23

 
6

 
6

Expected return on assets
(24
)
 
(22
)
 
(14
)
 
(13
)
Amortization of:
 
 
 
 
 
 
 
Prior service cost (credit)
2

 
2

 
(1
)
 
(1
)
Actuarial loss (gain)
3

 
3

 
(2
)
 
(1
)
Settlement charges
—

 
2

 
—

 
—

Special termination benefits
—

 
—

 
—

 
2

Net periodic benefit cost (credit)
21

 
27

 
(8
)
 
(4
)
Regulatory adjustments
4

 
(4
)
 
8

 
4

Total expense recognized
$
25

 
$
23

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
51

 
$
62

 
$
9

 
$
11

Interest cost
68

 
68

 
20

 
20

Expected return on assets
(71
)
 
(73
)
 
(43
)
 
(41
)
Amortization of:
 
 
 
 

 
 
Prior service cost (credit)
6

 
6

 
(2
)
 
(2
)
Actuarial loss (gain)
14

 
15

 
(6
)
 
(2
)
Settlement charges
—

 
25

 
—

 
—

Special termination benefits
—

 
—

 
—

 
2

Net periodic benefit cost (credit)
68

 
103

 
(22
)
 
(12
)
Regulatory adjustments
(17
)
 
(57
)
 
22

 
12

Total expense recognized
$
51

 
$
46

 
$
—

 
$
—
Contributions to Benefit Plans Table
The following table shows our year-to-date contributions to pension and other postretirement benefit plans and the amounts we expect to contribute in 2019.
BENEFIT PLAN CONTRIBUTIONS
(Dollars in millions)
 
 
Sempra Energy
Consolidated
 
SDG&E
 
SoCalGas
Contributions through September 30, 2019:
 
 
 
 
 
 
Pension plans
 
$
130

 
$
17

 
$
51

Other postretirement benefit plans
 
6

 
—

 
1

Total expected contributions in 2019:
 
 
 
 
 
 
Pension plans
 
$
280

 
$
53

 
$
152

Other postretirement benefit plans
 
8

 
1

 
1
Earnings Per Share Computations Table
Basic EPS is calculated by dividing earnings attributable to common shares (from both continuing and discontinued operations) by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
EARNINGS (LOSSES) PER COMMON SHARE COMPUTATIONS
 
 
 
 
 
 
 
(Dollars in millions, except per share amounts; shares in thousands)
 
 
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Numerator for continuing operations:
 
 
 
 
 
 
 
Income from continuing operations, net of income tax
$
653

 
$
280

 
$
1,570

 
$
25

(Earnings) losses attributable to noncontrolling interests
(52
)
 
(16
)
 
(121
)
 
10

Mandatory convertible preferred stock dividends
(36
)
 
(36
)
 
(107
)
 
(89
)
Preferred dividends of subsidiary
—

 
—

 
(1
)
 
(1
)
Earnings (losses) from continuing operations attributable to common shares for basic EPS
565

 
228

 
1,341

 
(55
)
Add back dividends for dilutive mandatory convertible preferred stock(1)
26

 
—

 
—

 
—

Earnings (losses) from continuing operations attributable to common shares for diluted EPS
$
591

 
$
228

 
$
1,341

 
$
(55
)
 
 
 
 
 
 
 
 
Numerator for discontinued operations:
 
 
 
 
 
 
 
Income from discontinued operations, net of income tax
$
256

 
$
54

 
$
292

 
$
137

Earnings attributable to noncontrolling interests
(8
)
 
(8
)
 
(25
)
 
(22
)
Earnings from discontinued operations attributable to common shares
$
248

 
$
46

 
$
267

 
$
115

 
 
 
 
 
 
 
 
Numerator for earnings:
 
 
 
 
 
 
 
Earnings attributable to common shares for basic EPS
$
813

 
$
274

 
$
1,608

 
$
60

Add back dividends for dilutive mandatory convertible preferred stock(1)
26

 
—

 
—

 
—

Earnings attributable to common shares for diluted EPS
$
839

 
$
274

 
$
1,608

 
$
60

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Weighted-average common shares outstanding for basic EPS(2)
277,360

 
273,944

 
275,684

 
265,963

Dilutive effect of stock options and RSUs(3)(4)
1,636

 
854

 
1,381

 
—

Dilutive effect of common shares sold forward(3)
3,555

 
1,109

 
2,744

 
—

Dilutive effect of mandatory convertible preferred stock
13,238

 
—

 
—

 
—

Weighted-average common shares outstanding for diluted EPS
295,789

 
275,907

 
279,809

 
265,963

 
 
 
 
 
 
 
 
Basic EPS:
 
 
 
 
 
 
 
Earnings (losses) from continuing operations attributable to common shares
$
2.04

 
$
0.83

 
$
4.86

 
$
(0.21
)
Earnings from discontinued operations attributable to common shares
$
0.89

 
$
0.17

 
$
0.97

 
$
0.44

Earnings attributable to common shares
$
2.93

 
$
1.00

 
$
5.83

 
$
0.23

 
 
 
 
 
 
 
 
Diluted EPS:
 
 
 
 
 
 
 
Earnings (losses) from continuing operations attributable to common shares
$
2.00

 
$
0.82

 
$
4.79

 
$
(0.21
)
Earnings from discontinued operations attributable to common shares
$
0.84

 
$
0.17

 
$
0.95

 
$
0.44

Earnings attributable to common shares
$
2.84

 
$
0.99

 
$
5.74

 
$
0.23

(1) 
In the three months ended September 30, 2019, due to the dilutive effect of the series A preferred stock, the numerator used to calculate diluted EPS includes an add-back of series A preferred stock dividends declared in that quarter.
(2)
Includes 618 and 645 average fully vested RSUs held in our Deferred Compensation Plan for the three months ended September 30, 2019 and 2018, respectively, and 615 and 638 of such RSUs for the nine months ended September 30, 2019 and 2018, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.
(3) 
In the nine months ended September 30, 2018, the total weighted-average potentially dilutive stock options and RSUs of 736 and common stock shares sold forward of 945 were not included in the computation of diluted EPS since to do so would have decreased the losses from continuing operations attributable to common shares.
(4) 
Due to market fluctuations of both Sempra Energy common stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.
Schedule of Accumulated Other Comprehensive Income (Loss) Table
The following tables present the changes in AOCI by component and amounts reclassified out of AOCI to net income, excluding amounts attributable to NCI.
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
(Dollars in millions)
 
Foreign
currency
translation
adjustments
 
Financial
instruments
 
Pension
and other
postretirement
benefits
 
Total
accumulated other
comprehensive
income (loss)
 
Three months ended September 30, 2019 and 2018
Sempra Energy Consolidated(2):
 
 
 
 
 
 
 
Balance as of June 30, 2019
$
(518
)
 
$
(213
)
 
$
(117
)
 
$
(848
)
OCI before reclassifications
(91
)
 
(41
)
 
(7
)
 
(139
)
Amounts reclassified from AOCI
—

 
4

 
5

 
9

Net OCI
(91
)
 
(37
)
 
(2
)
 
(130
)
Balance as of September 30, 2019
$
(609
)
 
$
(250
)
 
$
(119
)
 
$
(978
)
 
 
 
 
 
 
 
 
Balance as of June 30, 2018
$
(482
)
 
$
(40
)
 
$
(79
)
 
$
(601
)
OCI before reclassifications
(16
)
 
19

 
(18
)
 
(15
)
Amounts reclassified from AOCI
—

 
(4
)
 
8

 
4

Net OCI
(16
)
 
15

 
(10
)
 
(11
)
Balance as of September 30, 2018
$
(498
)
 
$
(25
)
 
$
(89
)
 
$
(612
)
SDG&E:
 
 
 
 
 
 
 
Balance as of June 30, 2019 and September 30, 2019
 
 
 
 
$
(11
)
 
$
(11
)
 
 
 
 
 
 
 
 
Balance as of June 30, 2018
 
 
 
 
$
(8
)
 
$
(8
)
OCI before reclassifications
 
 
 
 
(6
)
 
(6
)
Net OCI
 
 
 
 
(6
)
 
(6
)
Balance as of September 30, 2018
 
 
 
 
$
(14
)
 
$
(14
)
SoCalGas:
 
 
 
 
 
 
 
Balance as of June 30, 2019
 
 
$
(14
)
 
$
(6
)
 
$
(20
)
Amounts reclassified from AOCI
 
 
1

 
—

 
1

Net OCI
 
 
1

 
—

 
1

Balance as of September 30, 2019
 
 
$
(13
)
 
$
(6
)
 
$
(19
)
 
 
 
 
 
 
 
 
Balance as of June 30, 2018 and September 30, 2018
 
 
$
(13
)
 
$
(7
)
 
$
(20
)
(1) 
All amounts are net of income tax, if subject to tax, and exclude NCI.
(2) 
Includes discontinued operations.
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) (CONTINUED)
(Dollars in millions)
 
Foreign
currency
translation
adjustments
 
Financial
instruments
 
Pension
and other
postretirement
benefits
 
Total
accumulated other
comprehensive
income (loss)
 
Nine months ended September 30, 2019 and 2018
Sempra Energy Consolidated(2):
 
 
 
 
 
 
 
Balance as of December 31, 2018
$
(564
)
 
$
(82
)
 
$
(118
)
 
$
(764
)
Cumulative-effect adjustment from change in accounting principle
—

 
(25
)
 
(17
)
 
(42
)
OCI before reclassifications(3)
(45
)
 
(153
)
 
(13
)
 
(211
)
Amounts reclassified from AOCI(3)
—

 
10

 
29

 
39

Net OCI
(45
)
 
(143
)
 
16

 
(172
)
Balance as of September 30, 2019
$
(609
)
 
$
(250
)
 
$
(119
)
 
$
(978
)
 
 
 
 
 
 
 
 
Balance as of December 31, 2017
$
(420
)
 
$
(122
)
 
$
(84
)
 
$
(626
)
Cumulative-effect adjustment from change in accounting principle
—

 
(3
)
 
—

 
(3
)
OCI before reclassifications
(78
)
 
104

 
(17
)
 
9

Amounts reclassified from AOCI
—

 
(4
)
 
12

 
8

Net OCI
(78
)
 
100

 
(5
)
 
17

Balance as of September 30, 2018
$
(498
)
 
$
(25
)
 
$
(89
)
 
$
(612
)
SDG&E:
 
 
 
 
 
 
 
Balance as of December 31, 2018
 
 
 
 
$
(10
)
 
$
(10
)
Cumulative-effect adjustment from change in accounting principle
 
 
 
 
(2
)
 
(2
)
Amounts reclassified from AOCI
 
 
 
 
1

 
1

Net OCI
 
 
 
 
1

 
1

Balance as of September 30, 2019
 
 
 
 
$
(11
)
 
$
(11
)
 
 
 
 
 
 
 
 
Balance as of December 31, 2017
 
 
 
 
$
(8
)
 
$
(8
)
OCI before reclassifications
 
 
 
 
(6
)
 
(6
)
Net OCI
 
 
 
 
(6
)
 
(6
)
Balance as of September 30, 2018
 
 
 
 
$
(14
)
 
$
(14
)
SoCalGas:
 
 
 
 
 
 
 
Balance as of December 31, 2018
 
 
$
(12
)
 
$
(8
)
 
$
(20
)
Cumulative-effect adjustment from change in accounting principle
 
 
(2
)
 
(2
)
 
(4
)
Amounts reclassified from AOCI(3)
 
 
1

 
4

 
5

Net OCI
 
 
1

 
4

 
5

Balance as of September 30, 2019
 
 
$
(13
)
 
$
(6
)
 
$
(19
)
 
 
 
 
 
 
 
 
Balance as of December 31, 2017
 
 
$
(13
)
 
$
(8
)
 
$
(21
)
Amounts reclassified from AOCI
 
 
—

 
1

 
1

Net OCI
 
 
—

 
1

 
1

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

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

 
$
—

 
Interest Expense
 
5

 
(11
)
 
Other (Expense) Income, Net
Interest rate and foreign exchange instruments
2

 
3

 
Equity Earnings
Total before income tax
8

 
(8
)
 
 
 
(2
)
 
4

 
Income Tax (Expense) Benefit
Net of income tax
6

 
(4
)
 
 
 
(2
)
 
—

 
Earnings Attributable to Noncontrolling Interests
 
$
4

 
$
(4
)
 
 
Pension and other postretirement benefits:
 
 
 
 
 
Amortization of actuarial loss(2)
$
3

 
$
9

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

 
1

 
Other (Expense) Income, Net
Settlement charges(2)
4

 
—

 
Other (Expense) Income, Net
Total before income tax
8

 
10

 
 
 
(3
)
 
(2
)
 
Income Tax (Expense) Benefit
Net of income tax
$
5

 
$
8

 
 
 
 
 
 
 
 
Total reclassifications for the period, net of tax
$
9

 
$
4

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

 
$
2

 
Interest Expense
 
(1
)
 
(2
)
 
Earnings Attributable to Noncontrolling Interest
Total reclassifications for the period, net of tax
$
—

 
$
—

 
 
SoCalGas:
 

 
 

 
 
Financial instruments:
 
 
 
 
 
Interest rate instruments
$
1

 
$
—

 
Interest Expense
Total reclassifications for the period, net of tax
$
1

 
$
—

 
 

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

RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
(Dollars in millions)
Details about accumulated other
comprehensive income (loss) components
Amounts reclassified
from accumulated other
comprehensive income (loss)
 
Affected line item on Condensed
Consolidated Statements of Operations
 
Nine months ended September 30,
 
 
 
2019
 
2018
 
 
Sempra Energy Consolidated:
 
 
 
 
 
Financial instruments:
 
 
 
 
 
Interest rate and foreign exchange instruments(1)
$
2

 
$
(1
)
 
Interest Expense
 
—

 
(11
)
 
Other (Expense) Income, Net
Interest rate instruments
10

 
—

 
(Loss) Gain on Sale of Assets
Interest rate and foreign exchange instruments
3

 
8

 
Equity Earnings
Foreign exchange instruments
1

 
(1
)
 
Revenues: Energy-Related Businesses
Total before income tax
16

 
(5
)
 
 
 
(3
)
 
3

 
Income Tax (Expense) Benefit
Net of income tax
13

 
(2
)
 
 
 
(3
)
 
(2
)
 
Earnings Attributable to Noncontrolling Interests
 
$
10

 
$
(4
)
 
 
Pension and other postretirement benefits:
 
 
 
 
 
Amortization of actuarial loss(2)
$
7

 
$
15

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

 
1

 
Other (Expense) Income, Net
Settlement charges(2)
26

 
—

 
Other (Expense) Income, Net
Total before income tax
35

 
16

 
 
 
(10
)
 
(4
)
 
Income Tax (Expense) Benefit
Net of income tax
$
25

 
$
12

 
 
 
 
 
 
 
 
Total reclassifications for the period, net of tax
$
35

 
$
8

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

 
$
6

 
Interest Expense
 
(3
)
 
(6
)
 
Earnings Attributable to Noncontrolling Interest
 
$
—

 
$
—

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

 
$
—

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

 
$
—

 
 
SoCalGas:
 

 
 

 
 
Financial instruments:
 
 
 
 
 
Interest rate instruments
$
1

 
$
—

 
Interest Expense
Pension and other postretirement benefits:
 

 
 

 
 
Amortization of actuarial loss(2)
$
—

 
$
1

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

 
$
1

 
 

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

 
$
100

Sempra Mexico:
 
 
 
 
 
 
 
IEnova
33.4
 
33.5
 
1,676

 
1,592

IEnova subsidiaries(1)
10.0 – 46.3
 
10.0 – 49.0
 
16

 
13

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

 
158

PXiSE Energy Solutions, LLC(3)
—
 
11.1
 
—

 
1

Sempra LNG:
 
 
 
 
 
 
 
Bay Gas
—
 
9.1
 
—

 
18

Liberty Gas Storage, LLC
24.6
 
24.6
 
(13
)
 
(12
)
ECA LNG proposed liquefaction project
16.7
 
—
 
3

 
—

Parent and other:
 
 
 
 
 
 
 
PXiSE Energy Solutions, LLC(3)
20.0
 
—
 
1

 
—

Discontinued Operations:
 
 
 
 
 
 
 
Chilquinta Energía subsidiaries(1)
19.7 – 43.4
 
19.7 – 43.4
 
23

 
23

Luz del Sur
16.4
 
16.4
 
200

 
193

Tecsur
9.8
 
9.8
 
5

 
4

Total Sempra Energy
 
 
 
 
$
1,911

 
$
2,090

(1) 
IEnova and Chilquinta Energía have subsidiaries with NCI held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.
(2) 
Net income or loss attributable to NCI is computed using the HLBV method and is not based on ownership percentages.
(3) 
In April 2019, PXiSE Energy Solutions, LLC was subsumed into Parent and other.
Transactions with Affiliates Table
We summarize amounts due from and to unconsolidated affiliates at Sempra Energy Consolidated, SDG&E and SoCalGas in the following table.
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
 
September 30,
2019
 
December 31,
2018
Sempra Energy Consolidated:
 
 
 
Total due from various unconsolidated affiliates – current
$
40

 
$
37

 
 
 
 
Sempra Mexico(1):
 
 
 
IMG – Note due March 15, 2022(2)
$
712

 
$
641

Energía Sierra Juárez – Note(3)
—

 
3

Total due from unconsolidated affiliates – noncurrent
$
712

 
$
644

 
 
 
 
Total due to various unconsolidated affiliates – current
$
(12
)
 
$
(10
)
 
 
 
 
Sempra Mexico(1):
 
 
 
Total due to unconsolidated affiliates – noncurrent – TAG – Note due December 20, 2021(4)
$
(39
)
 
$
(37
)
SDG&E:
 
 
 
Total due from unconsolidated affiliates – current – SoCalGas
$
1

 
$
—

 
 
 
 
Sempra Energy(1)(5)
$
(14
)
 
$
(43
)
SoCalGas
—

 
(6
)
Various affiliates
(12
)
 
(12
)
Total due to unconsolidated affiliates – current
$
(26
)
 
$
(61
)
 
 
 
 
Income taxes due from Sempra Energy(6)
$
5

 
$
5

SoCalGas:
 
 
 
SDG&E
$
—

 
$
6

Various affiliates
—

 
1

Total due from unconsolidated affiliates – current
$
—

 
$
7

 
 
 
 
Sempra Energy
$
(35
)
 
$
(34
)
Pacific Enterprises
(150
)
 
—

SDG&E
(1
)
 
—

Various affiliates
(1
)
 
—

Total due to unconsolidated affiliates – current
$
(187
)
 
$
(34
)
 
 
 
 
Income taxes due to Sempra Energy(6)
$
(19
)
 
$
(4
)
(1) 
Amounts include principal balances plus accumulated interest outstanding.
(2) 
Mexican peso-denominated revolving line of credit for up to 14.2 billion Mexican pesos or approximately $718 million U.S. dollar-equivalent, at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 bps (10.13 percent at September 30, 2019), to finance construction of the natural gas marine pipeline.
(3) 
U.S. dollar-denominated loan, at a variable interest rate based on the 30-day LIBOR plus 637.5 bps (8.89 percent at December 31, 2018).
(4) 
U.S. dollar-denominated loan, at a variable interest rate based on the 6-month LIBOR plus 290 bps (4.96 percent at September 30, 2019).
(5) 
At September 30, 2019, net payable includes outstanding advances to Sempra Energy of $25 million at an interest rate of 2.03 percent.
(6) 
SDG&E and SoCalGas are included in the consolidated income tax return of Sempra Energy and their respective income tax expense is computed as an amount equal to that which would result from each company having always filed a separate return.

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

 
$
17

 
$
40

 
$
49

SDG&E
2

 
1

 
5

 
4

SoCalGas
16

 
15

 
50

 
47

Cost of Sales:
 
 
 
 
 
 
 
Sempra Energy Consolidated
$
12

 
$
9

 
$
40

 
$
36

SDG&E
16

 
21

 
56

 
56

SoCalGas
2

 
—

 
6

 
—
Other Income and Expense Table
Other (Expense) Income, Net on the Condensed Consolidated Statements of Operations consisted of the following:
OTHER (EXPENSE) INCOME, NET
 
 
 
 
 
 
(Dollars in millions)
 
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Sempra Energy Consolidated:
 
 
 
 
 
 
 
Allowance for equity funds used during construction
$
25

 
$
23

 
$
69

 
$
79

Investment gains(1)
9

 
8

 
46

 
13

(Losses) gains on interest rate and foreign exchange instruments, net
(17
)
 
39

 
7

 
46

Foreign currency transaction (losses) gains, net(2)
(13
)
 
28

 
(2
)
 
16

Non-service component of net periodic benefit (cost) credit
(13
)
 
(3
)
 
(19
)
 
37

Penalties related to billing practices OII
—

 
—

 
(8
)
 
—

Interest on regulatory balancing accounts, net
4

 
1

 
9

 
2

Sundry, net
(2
)
 
—

 
1

 
(1
)
Total
$
(7
)
 
$
96

 
$
103

 
$
192

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

 
$
15

 
$
42

 
$
49

Non-service component of net periodic benefit credit
—

 
8

 
8

 
25

Interest on regulatory balancing accounts, net
4

 
2

 
10

 
4

Sundry, net
—

 
(1
)
 
—

 
(1
)
Total
$
19

 
$
24

 
$
60

 
$
77

SoCalGas:
 
 
 
 
 
 
 
Allowance for equity funds used during construction
$
9

 
$
8

 
$
25

 
$
30

Non-service component of net periodic benefit (cost) credit
(5
)
 
(1
)
 
9

 
27

Penalties related to billing practices OII
—

 
—

 
(8
)
 
—

Interest on regulatory balancing accounts, net
—

 
(1
)
 
(1
)
 
(2
)
Sundry, net
(3
)
 
(3
)
 
(7
)
 
(6
)
Total
$
1

 
$
3

 
$
18

 
$
49

(1) 
Represents investment gains on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are partially offset by corresponding changes in compensation expense related to the plans, recorded in O&M on the Condensed Consolidated Statements of Operations.
(2) 
Includes losses of $17 million and a negligible amount in the three months and nine months ended September 30, 2019, respectively, and gains of $33 million and $25 million in the three months and nine months ended September 30, 2018, respectively, from translation to U.S. dollars of a Mexican peso-denominated loan to the IMG JV, which are offset by corresponding amounts included in Equity Earnings on the Condensed Consolidated Statements of Operations.
Income Tax Expense and Effective Income Tax Rates Table
We provide our calculations of ETRs in the following table.
INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Sempra Energy Consolidated:
 
 
 
 
 
 
 
Income tax expense (benefit) from continuing operations
$
61

 
$
139

 
$
150

 
$
(221
)
 
 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes
 
 
 
 
 
 
 
 and equity earnings
$
448

 
$
345

 
$
1,235

 
$
(245
)
Equity earnings (losses), before income tax(1)
17

 
(52
)
 
24

 
(236
)
Pretax income (loss)
$
465

 
$
293

 
$
1,259

 
$
(481
)
 
 
 
 
 
 
 
 
Effective income tax rate
13
%
 
47
%
 
12
%
 
46
%
SDG&E:
 
 
 
 
 
 
 
Income tax expense
$
71

 
$
53

 
$
111

 
$
151

Income before income taxes
$
337

 
$
269

 
$
700

 
$
682

Effective income tax rate
21
%
 
20
%
 
16
%
 
22
%
SoCalGas:
 
 
 
 
 
 
 
Income tax expense (benefit)
$
35

 
$
(7
)
 
$
50

 
$
75

Income (loss) before income taxes
$
178

 
$
(21
)
 
$
488

 
$
320

Effective income tax rate
20
%
 
33
%
 
10
%
 
23
%

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