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GENERAL INFORMATION AND OTHER FINANCIAL DATA (Tables)

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on Sempra Energy’s Condensed Consolidated Balance Sheets to the sum of such amounts reported on Sempra Energy’s 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)
	March 31,		December 31,
	2021		2020
Cash and cash equivalents	$	725	$	960
Restricted cash, current	38		22
Restricted cash, noncurrent	15		3
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows	$	778	$	985

Accounts Receivable, Allowance for Credit Loss Table


TRADE AND OTHER ACCOUNTS RECEIVABLE – ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	2021		2020
Sempra Energy Consolidated:
Allowances for credit losses at January 1	$	138	$	29
Incremental allowance upon adoption of ASU 2016-13	—		1
Provisions for expected credit losses	43		6
Write-offs	(5)		(4)
Recoveries	—		1
Allowances for credit losses at March 31(1)	$	176	$	33
SDG&E:
Allowances for credit losses at January 1	$	69	$	14
Provisions for expected credit losses	15		3
Write-offs	(3)		(3)
Recoveries	—		1
Allowances for credit losses at March 31(2)	$	81	$	15
SoCalGas:
Allowances for credit losses at January 1	$	68	$	15
Provisions for expected credit losses	28		3
Write-offs	(2)		(1)
Allowances for credit losses at March 31(3)	$	94	$	17

(1) At March 31, 2021, includes $146 million in Accounts Receivable – Trade, Net and $30 million in Accounts Receivable – Other, Net.

(2) At March 31, 2021, includes $66 million in Accounts Receivable – Trade, Net and $15 million in Accounts Receivable – Other, Net.

(3) At March 31, 2021, includes $79 million in Accounts Receivable – Trade, Net and $15 million in Accounts Receivable – Other, Net.

Financing Receivable, Allowance for Credit Loss


AMOUNTS DUE FROM UNCONSOLIDATED AFFILIATES – ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	Sempra Energy Consolidated
	2021		2020
Allowances for credit losses at January 1	$	3	$	—
Allowance established upon adoption of ASU 2016-13	—		6
Provisions for expected credit losses	(2)		1
Allowances for credit losses at March 31(1)	$	1	$	7

(1) At March 31, 2021, $1 million is included in Due from Unconsolidated Affiliates – Noncurrent.

Inventory Table

The components of inventories are as follows:


INVENTORY BALANCES
(Dollars in millions)
	Natural gas				LNG				Materials and supplies				Total
	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Sempra Energy Consolidated	$	73	$	118	$	8	$	7	$	193	$	183	$	274	$	308
SDG&E	—		—		—		—		122		104		122		104
SoCalGas	23		94		—		—		58		59		81		153

Capitalized Financing Costs Table

The table below summarizes capitalized interest and AFUDC.


CAPITALIZED FINANCING COSTS
(Dollars in millions)
	Three months ended March 31,
	2021		2020
Sempra Energy Consolidated	$	59	$	48
SDG&E	30		27
SoCalGas	16		11

Schedule of Finite-Lived Intangible Assets

Other Intangible Assets included on the Sempra Energy Condensed Consolidated Balance Sheets are as follows:


OTHER INTANGIBLE ASSETS
(Dollars in millions)
	Amortization period (years)	March 31, 2021		December 31, 2020
Renewable energy transmission and consumption permits	15 to 19	$	169	$	169
O&M agreement	23	66		66
PPA	14	198		—
Other	10 to indefinite	15		15
		448		250
Less accumulated amortization:
Renewable energy transmission and consumption permits		(34)		(32)
O&M agreement		(9)		(9)

Other		(8)		(7)
		(51)		(48)
		$	397	$	202

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,
	2021		2020		2021		2020














Service cost	$	37	$	33	$	6	$	5
Interest cost	28		32		7		8
Expected return on assets	(43)		(42)		(15)		(13)
Amortization of:
Prior service cost (credit)	3		3		(1)		(1)
Actuarial loss (gain)	11		9		(2)		(3)
Settlement charges	7		5		—		—

Net periodic benefit cost (credit)	43		40		(5)		(4)
Regulatory adjustments	(29)		(28)		5		4
Total expense recognized	$	14	$	12	$	—	$	—


NET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)
	Pension benefits				Other postretirement benefits
	Three months ended March 31,
	2021		2020		2021		2020














Service cost	$	8	$	8	$	1	$	1
Interest cost	6		7		1		2
Expected return on assets	(12)		(13)		(2)		(3)
Amortization of:
Prior service cost	—		1		—		—
Actuarial loss (gain)	—		1		—		(1)


Net periodic benefit cost (credit)	2		4		—		(1)
Regulatory adjustments	(2)		(3)		—		1
Total expense recognized	$	—	$	1	$	—	$	—


NET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)
	Pension benefits				Other postretirement benefits
	Three months ended March 31,
	2021		2020		2021		2020














Service cost	$	25	$	22	$	4	$	3
Interest cost	20		22		5		6
Expected return on assets	(28)		(27)		(12)		(10)
Amortization of:
Prior service cost (credit)	2		2		(1)		—
Actuarial loss (gain)	9		6		(1)		(2)


Net periodic benefit cost (credit)	28		25		(5)		(3)
Regulatory adjustments	(27)		(25)		5		3
Total expense recognized	$	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 PER COMMON SHARE COMPUTATIONS
(Dollars in millions, except per share amounts; shares in thousands)
	Three months ended March 31,
		2021		2020
Numerator for continuing operations:
Income from continuing operations, net of income tax		$	928	$	867
Earnings attributable to noncontrolling interests		(33)		(143)
Preferred dividends		(21)		(36)

Earnings from continuing operations attributable to common shares for basic EPS		874		688
Add back dividends for dilutive mandatory convertible preferred stock(1)		10		36
Earnings from continuing operations attributable to common shares for diluted EPS		$	884	$	724

Numerator for discontinued operations:
Income from discontinued operations, net of income tax		$	—	$	80
Earnings attributable to noncontrolling interests		—		(8)
Earnings from discontinued operations attributable to common shares		$	—	$	72

Numerator for earnings:
Earnings attributable to common shares for basic EPS		$	874	$	760
Add back dividends for dilutive mandatory convertible preferred stock(1)		10		36
Earnings attributable to common shares for diluted EPS		$	884	$	796

Denominator:
Weighted-average common shares outstanding for basic EPS(2)		300,905		292,790
Dilutive effect of stock options and RSUs(3)		887		1,304

Dilutive effect of mandatory convertible preferred stock		6,666		19,831
Weighted-average common shares outstanding for diluted EPS		308,458		313,925

Basic EPS:
Earnings from continuing operations		$	2.91	$	2.35
Earnings from discontinued operations		$	—	$	0.25
Earnings		$	2.91	$	2.60

Diluted EPS:
Earnings from continuing operations		$	2.87	$	2.30
Earnings from discontinued operations		$	—	$	0.23
Earnings		$	2.87	$	2.53

(1) In the three months ended March 31, 2021 and 2020, due to the dilutive effect of mandatory convertible preferred stock, the numerator used to calculate diluted EPS includes an add-back of dividends declared on our mandatory convertible preferred stock in those quarters.

(2) Includes 460 and 542 average fully vested RSUs held in our Deferred Compensation Plan for the three months ended March 31, 2021 and 2020, 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) 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 March 31, 2021 and 2020
Sempra Energy Consolidated(2):
Balance at December 31, 2020	$	(64)	$	(331)	$	(105)	$	(500)

OCI before reclassifications	(5)		73		7		75
Amounts reclassified from AOCI	—		19		7		26
Net OCI	(5)		92		14		101
Balance at March 31, 2021	$	(69)	$	(239)	$	(91)	$	(399)

Balance at December 31, 2019	$	(607)	$	(215)	$	(117)	$	(939)

OCI before reclassifications	(138)		(154)		16		(276)
Amounts reclassified from AOCI	—		19		6		25
Net OCI	(138)		(135)		22		(251)
Balance at March 31, 2020	$	(745)	$	(350)	$	(95)	$	(1,190)
SDG&E:




Balance at December 31, 2020 and March 31, 2021					$	(10)	$	(10)





Balance at December 31, 2019 and March 31, 2020					$	(16)	$	(16)
SoCalGas:




Balance at December 31, 2020 and March 31, 2021			$	(13)	$	(18)	$	(31)




Balance at December 31, 2019 and March 31, 2020			$	(13)	$	(10)	$	(23)

(1) All amounts are net of income tax, if subject to tax, and exclude NCI.

(2) Includes discontinued operations in 2020.

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,
	2021		2020
Sempra Energy Consolidated:


Financial instruments:
Interest rate instruments	$	2	$	2	Interest Expense
Interest rate instruments	19		2		Equity Earnings
Foreign exchange instruments	1		(2)		Revenues: Energy-Related Businesses
	—		(2)		Other Income (Expense), Net

Interest rate and foreign exchange instruments	6		41		Other Income (Expense), Net
Foreign exchange instruments	1		(2)		Equity Earnings
Total before income tax	29		39
	(8)		(12)		Income Tax (Expense) Benefit
Net of income tax	21		27
	(2)		(8)		Earnings Attributable to Noncontrolling Interests
	$	19	$	19
Pension and other postretirement benefits(1):
Amortization of actuarial loss	$	2	$	2	Other Income (Expense), Net

Amortization of prior service cost	1		1		Other Income (Expense), Net
Settlement charges	7		5		Other Income (Expense), Net
Total before income tax	10		8

	(3)		(2)		Income Tax (Expense) Benefit
Net of income tax	$	7	$	6

Total reclassifications for the period, net of tax	$	26	$	25

(1) 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 about NCI held by others in subsidiaries or entities consolidated by us and 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, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Sempra Mexico:
IEnova	29.8	%	29.8	%	$	1,534	$	1,487
ICM Ventures Holdings B.V.	17.5		17.5		6		7
Sempra LNG:
ECA LNG Phase 1	29.0		29.0		48		46
Parent and other:
PXiSE Energy Solutions, LLC	20.0		20.0		1		1
Total Sempra Energy					$	1,589	$	1,541

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)
	March 31, 2021		December 31, 2020
Sempra Energy Consolidated:
Total due from various unconsolidated affiliates – current	$	26	$	20

Sempra Mexico(1):
ESJ – Note due December 31, 2022, net of negligible allowance for credit losses at December 31, 2020(2)	$	—	$	85
IMG JV – Note due March 15, 2022, net of allowance for credit losses of $1 and $3 at March 31, 2021 and December 31, 2020, respectively(3)	674		695
Total due from unconsolidated affiliates – noncurrent	$	674	$	780

Sempra Mexico – TAG Pipelines Norte, S. de. R.L. de C.V. – Note due December 20, 2021(1)(4)	$	(41)	$	(41)
Various affiliates	(1)		(4)
Total due to various unconsolidated affiliates – current	$	(42)	$	(45)

Sempra Mexico(1)(5):
TAG Pipelines Norte, S. de. R.L. de C.V.:
5.5% Note due January 9, 2024	$	(69)	$	(68)
5.5% Note due January 14, 2025	(20)		—
TAG JV – 5.74% Note due December 17, 2029	(169)		(166)
Total due to unconsolidated affiliates – noncurrent	$	(258)	$	(234)
SDG&E:




Sempra Energy	$	(44)	$	(38)
SoCalGas	(24)		(21)

Various affiliates	(11)		(5)
Total due to unconsolidated affiliates – current	$	(79)	$	(64)

Income taxes due to Sempra Energy(6)	$	(18)	$	—
SoCalGas:
SDG&E	$	24	$	21
Various affiliates	1		1
Total due from unconsolidated affiliates – current	$	25	$	22

Sempra Energy	$	(41)	$	(31)
Pacific Enterprises	(25)		—
Various affiliates	(1)		—
Total due to unconsolidated affiliates – current	$	(67)	$	(31)

Income taxes due to Sempra Energy(6)	$	(145)	$	(37)

(1) Amounts include principal balances plus accumulated interest outstanding.

(2) U.S. dollar-denominated loan at a variable interest rate based on 1-month LIBOR plus 196 bps (2.11% at December 31, 2020). At December 31, 2020, $1 million of accrued interest receivable is included in Due from Unconsolidated Affiliates – Current. In March 2021, IEnova acquired the 50% equity interest in ESJ that it did not already own and ESJ became a wholly owned, consolidated subsidiary, resulting in the elimination of this note receivable.

(3) Mexican peso-denominated revolving line of credit for up to 14.2 billion Mexican pesos or approximately $693 million U.S. dollar-equivalent at March 31, 2021, at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 bps (6.45% at March 31, 2021), to finance construction of a natural gas marine pipeline. At both March 31, 2021 and December 31, 2020, $2 million of accrued interest receivable is included in Due from Unconsolidated Affiliates – Current. At March 31, 2021, we classified this revolving line of credit as noncurrent because we expect to extend the maturity date on a long-term basis prior to its stated maturity date.

(4) U.S. dollar-denominated loan at a variable interest rate based on 6-month LIBOR plus 290 bps (3.11% at March 31, 2021).

(5) U.S. dollar-denominated loan at a fixed interest rate.

(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 income statement information from unconsolidated affiliates.


INCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	Three months ended March 31,
		2021		2020
Sempra Energy Consolidated
Revenues		$	8	$	12
Cost of sales		11		11
Interest income		15		17
Interest expense		4		3
SDG&E
Revenues		$	2	$	1
Cost of sales		28		17
SoCalGas
Revenues		$	25	$	18
Cost of sales		3		—

Other Income and Expense Table

Other income (expense), net, consists of the following:


OTHER INCOME (EXPENSE), NET
(Dollars in millions)
	Three months ended March 31,
	2021		2020
Sempra Energy Consolidated:
Allowance for equity funds used during construction	$	38	$	31
Investment gains (losses)(1)	9		(37)
Losses on interest rate and foreign exchange instruments, net	(30)		(153)
Foreign currency transaction losses, net(2)	(19)		(123)
Non-service component of net periodic benefit credit	29		26
Interest on regulatory balancing accounts, net	1		2
Sundry, net	7		—
Total	$	35	$	(254)
SDG&E:
Allowance for equity funds used during construction	$	23	$	21
Non-service component of net periodic benefit credit	9		8
Interest on regulatory balancing accounts, net	1		2
Sundry, net	2		—
Total	$	35	$	31
SoCalGas:
Allowance for equity funds used during construction	$	12	$	8
Non-service component of net periodic benefit credit	28		25
Sundry, net	(1)		(3)
Total	$	39	$	30

(1) Represents investment gains (losses) on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are 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 $23 million and $149 million in the three months ended March 31, 2021 and 2020, respectively, from translation to U.S. dollars of a Mexican peso-denominated loan to 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 March 31,
		2021			2020
Sempra Energy Consolidated:
Income tax expense (benefit) from continuing operations		$	158		$	(207)

Income from continuing operations before income taxes and equity earnings		$	768		$	397
Equity earnings (losses), before income tax(1)		135			(43)
Pretax income		$	903		$	354

Effective income tax rate		18		%	(58)		%
SDG&E:
Income tax expense		$	45		$	58
Income before income taxes		$	257		$	320
Effective income tax rate		18		%	18		%
SoCalGas:
Income tax expense		$	94		$	52
Income before income taxes		$	501		$	355
Effective income tax rate		19		%	15		%

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