PR Newswire | Feb 25, 2021 06:56AM EST

02/25 05:55 CST

Sempra Energy Delivers Strong Full-Year 2020 Financial And Operational Results- Executing $32 Billion Five-Year Capital Plan- Increasing U.S. Utilities Capital in 2021-2022 by $1.1 Billion Over Prior Capital Plan- Progressing Sempra Infrastructure Partners; Expected to Create Additional Shareholder Value- Reaffirming Full-Year 2021 EPS Guidance Range- Raising Annualized Common Stock Dividend SAN DIEGO, Feb. 25, 2021

SAN DIEGO, Feb. 25, 2021 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today announced full-year 2020 earnings of $3.76 billion, or $12.88 per diluted share, compared to full-year 2019 earnings of $2.06 billion, or $7.29 per diluted share. On an adjusted basis, the company's full-year 2020 earnings were $2.35 billion, or $8.03 per diluted share, compared to $1.91 billion, or $6.78 per diluted share, in 2019. In the fourth quarter of 2020, Sempra Energy reported earnings of $414 million, or $1.43 per diluted share, compared to $447 million, or $1.55 per diluted share, in the fourth quarter of 2019. On an adjusted basis, fourth quarter 2020 earnings were $553 million, or $1.90 per diluted share. There were no adjustments made to fourth quarter 2019 earnings.

"Our strong financial results in 2020 reflect the continued growth in our business and are a credit to our talented workforce and investments in a high-performing culture," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "As the owner of one of the largest energy networks in North America, we have set a goal of being a leader in transitioning to a lower-carbon future by enabling the delivery of cleaner energy solutions in every market we serve. We envision critical new investments in energy infrastructure playing a vital role in reaching a net-zero energy future, promoting growth across all sectors of the economy and supporting a thriving energy industry."

The reported financial results reflect certain significant items as described on an after-tax basis in the following table of GAAP earnings, reconciled to adjusted earnings, for the fourth quarter and full-year 2020 and 2019.

Three months ended Years ended

December 31, December 31,

(Dollars, except EPS, and shares, in 2020 2019 2020 2019 millions)

(Unaudited)

GAAP Earnings $ 414 $ 447 $ 3,764 $ 2,055

Gain on Sale of South - - (1,747) - American Businesses

Impacts Associated with Aliso Canyon Litigation 139 - 233 - and Regulatory Matters

Losses from Investment in RBS Sempra - - 100 - Commodities LLP

Tax Impacts from Holding the South - - - (99) American Businesses for Sale

Gain on Sale of Certain - - - (45) Renewables Assets

Adjusted Earnings^(1) $ 553 $ 447 $ 2,350 $ 1,911

GAAP Diluted Weighted-Average Common 290 289 292 282 Shares Outstanding

GAAP Earnings Per $ 1.43 $ 1.55 $ 12.88 $ Diluted Common Share 7.29

Adjusted Diluted Weighted-Average Common 290 289 306 282 Shares Outstanding^(1)

Adjusted Earnings Per $ $ Diluted Common Share^ $ 1.90 $ 1.55 8.03 6.78 (1),(2)

^ Represents a non-GAAP financial measure (GAAP represents accounting1) principles generally accepted in the United States of America). See Table A for information regarding non-GAAP financial measures.

To calculate Full-Year 2020 Adjusted Earnings-Per-Common-Share (EPS),^ preferred dividends of $104 million are added back to Adjusted Earnings2) because of the dilutive effect of Series A mandatory convertible preferred stock.

Declaring Dividends and Raising Annualized Common Stock Dividend

This week, Sempra Energy's board of directors declared a $1.10 per share quarterly dividend on the company's common stock, which is payable April 15, 2021 to common stock shareholders of record as of March 25, 2021. The declared quarterly dividend represents an increase of the company's common stock dividend to $4.40 per share, on an annualized basis, from $4.18 per share in 2020. Over the past decade, we have increased our dividend at a compound annual growth rate of approximately 9% and today's announcement demonstrates the company's continued commitment to generating value for shareholders, while also reinvesting in the future growth of the business.

Sempra Energy's board of directors also declared a quarterly dividend of $1.6875 per share on the company's 6.75% Mandatory Convertible Preferred Stock, Series B. Additionally, the board of directors declared a semi-annual dividend of $24.375 per share on Sempra Energy's 4.875% Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, Series C. The preferred stock dividends will be payable April 15, 2021 to preferred stock shareholders of record as of April 1, 2021.

Continuing Strong Growth at U.S. Utilities

In combination, San Diego Gas & Electric Co. (SDG&E), Southern California Gas Co. (SoCalGas) and Oncor Electric Delivery Company LLC (Oncor) own and operate some of the largest energy networks in the United States and are expected to play a critical role in delivering lower-carbon energy to the communities they serve, while continuing to invest in safety advancements and clean technologies to help maintain resiliency and reliability. Our U.S. Utilities platform has continued to deliver stable cash flows, improved earnings visibility, and strong organic growth. In 2020, Sempra Energy deployed record capital of approximately $7 billion which was primarily centered on safety and reliability investments at SDG&E, SoCalGas and Oncor. In 2021 to 2025, Sempra Energy's $32 billion capital plan is anchored by continued investments in the company's U.S. Utilities platform with a focus on safety, reliability and decarbonizing the energy system. Compared to Sempra Energy's prior capital plan, the company has increased U.S. Utilities capital in 2021-2022 by approximately $1.1 billion.

In Texas, Oncor has restored power and repaired damages following the unprecedented winter storm that impacted many residents in the state last week. While the severe weather has highlighted the importance of critical energy infrastructure, it also demonstrates the vital role Oncor continues to play in meeting the growing needs of Texas' economy through the execution of its 2021-2025 capital plan. In 2020, Oncor connected approximately 77,000 new premises, exceeding its connections in 2019 by about 20%, which is the highest organic growth in Oncor's history. Oncor also set a company record for new generation interconnection requests it received in 2020, driven by strong development activity in utility-scale generation, with a focus on the renewable and battery storage markets. Additionally, Oncor completed six major transmission projects in West Texas totaling approximately 260 circuit miles and approximately $300 million of investment.

Advancing Sempra Infrastructure Partners Transactions

Sempra Energy continues to make progress on a series of integrated transactions announced in December 2020, intended to simplify its energy infrastructure investments under a common platform - Sempra Infrastructure Partners. The company plans to complete the stock-for-stock exchange offer for the publicly traded shares of Infraestructura Energtica Nova, S.A.B. de C.V. (IEnova) and close the sale of a non-controlling interest in Sempra Infrastructure Partners in the second quarter of 2021. The exchange offer and sale of a non-controlling interest are advancing independently and are not contingent upon the timing of the other transaction.

"With increased scale and a strong growth pipeline, Sempra Infrastructure Partners will be well-positioned to help lead the global energy transition," said Martin. "Moreover, we expect the transaction to support an investment grade balance sheet to support the company's future growth."

By simplifying the ownership structure of Sempra LNG and IEnova under Sempra Infrastructure Partners, the company is expected to create additional value for Sempra Energy investors.

Progressing LNG Infrastructure Investments

In November 2020, ECA Liquefaction (ECA LNG), a joint venture between Sempra LNG and IEnova, reached a final investment decision (FID) for the development, construction and operation of the ECA LNG Phase 1 natural gas liquefaction-export project in Baja California, Mexico. ECA LNG Phase 1 is the only liquefied natural gas (LNG) export project in the world to reach FID in 2020. Estimated capital expenditures for ECA LNG Phase 1 are approximately $2 billion. Sempra expects to fund the project with a combination of equity contributions and debt. First LNG production from ECA LNG Phase 1 is expected in late 2024.

Additionally, an affiliate of Total SE has secured a 16.6% equity stake in ECA LNG Phase 1, while Sempra LNG and IEnova have each retained 41.7% ownership.

Building Sustainable Value

Sempra Energy's strong results are underpinned by a commitment to environmental, social and governance matters. The company's recent recognition includes:

* Fortune Magazine's "World's Most Admired Companies" for 2021; * Dow Jones Sustainability World Index, as the only North American utility sector company on the list; * Dow Jones Sustainability North American Index; * Bloomberg Gender-Equality Index for 2021; * Human Rights Campaign's "Best Place to Work for LGBTQ Equality;" * Center for Political Accountability-Zicklin Index - Trendsetter in political disclosure practices and accountability for 2020; * Chief Executive of the Year at S&P Global Platts' Global Energy Awards; * Deal of the Year at S&P Global Platts' Global Energy Awards for the divestiture of the company's South American assets; and * National Association of Corporate Directors' NXT Award for excellence in diversity and inclusion.

Earnings Guidance

As a result of Sempra Energy's continued financial execution, the company is reaffirming its full-year 2021 EPS guidance range of $7.50 to $8.10.

Non-GAAP Financial Measures

Non-GAAP financial measures include Sempra Energy's adjusted earnings, adjusted EPS and adjusted diluted weighted-average common shares outstanding. See Table A for additional information regarding these non-GAAP financial measures.

Internet Broadcast

Sempra Energy will broadcast a live discussion of its earnings results over the Internet today at 12 p.m. ET with senior management of the company. Access is available by logging onto the website at www.sempra.com. For those unable to log on to the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 2095631.

About Sempra Energy

Sempra Energy's mission is to be North America's premier energy infrastructure company. The Sempra Energy family of companies have more than 19,000 talented employees who deliver energy with purpose to over 36 million consumers. With more than $66 billion in total assets at the end of 2020, the San Diego-based company is the owner of one of the biggest energy networks in North America serving some of the largest economies in the world. The company is helping to advance the global energy transition by enabling the delivery of lower-carbon energy solutions in each market it serves, including California, Texas, Mexico and the LNG export market. Sempra Energy is consistently recognized as a leader in sustainable business practices and for its long-standing commitment to building a high-performing culture and advancing diversity and inclusion. Sempra is the only North American utility sector company included on the Dow Jones Sustainability World Index and was also named one of the "World's Most Admired Companies" for 2021 by Fortune Magazine for the fourth consecutive year.

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed in any forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.

In this press release, forward-looking statements can be identified by words such as "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "in process," "under construction," "in development," "target," "outlook," "maintain," "continue," or similar expressions, or when we discuss our guidance, priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations.

Factors, among others, that could cause actual results and events to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: California wildfires, including the risks that we may be found liable for damages regardless of fault and that we may not be able to recover costs from insurance, the wildfire fund established by California Assembly Bill 1054 or in rates from customers; decisions, investigations, regulations, issuances or revocations of permits and other authorizations, renewals of franchises, and other actions by (i) the Comisin Federal de Electricidad, California Public Utilities Commission (CPUC), U.S. Department of Energy, Public Utility Commission of Texas, and other regulatory and governmental bodies and (ii) states, counties, cities and other jurisdictions in the U.S., Mexico and other countries in which we do business; the success of business development efforts, construction projects and major acquisitions and divestitures, including risks in (i) the ability to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) the ability to realize anticipated benefits from any of these efforts if completed, and (iv) obtaining the consent of partners or other third parties; the resolution of civil and criminal litigation, regulatory inquiries, investigations and proceedings, and arbitrations, including, among others, those related to the natural gas leak at Southern California Gas Company's (SoCalGas) Aliso Canyon natural gas storage facility; the impact of the COVID-19 pandemic on our capital projects, regulatory approval processes, supply chain, liquidity and execution of operations; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow on favorable terms and meet our substantial debt service obligations; moves to reduce or eliminate reliance on natural gas and the impact of volatility of oil prices on our businesses and development projects; weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, computer system outages and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires and subject us to liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits), may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of electric power and natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid, limitations on the withdrawal of natural gas from storage facilities, and equipment failures; cybersecurity threats to the energy grid, storage and pipeline infrastructure, the information and systems used to operate our businesses, and the confidentiality of our proprietary information and the personal information of our customers and employees; expropriation of assets, failure of foreign governments and state-owned entities to honor their contracts, and property disputes; the impact at San Diego Gas & Electric Company (SDG&E) on competitive customer rates and reliability due to the growth in distributed and local power generation, including from departing retail load resulting from customers transferring to Direct Access and Community Choice Aggregation, and the risk of nonrecovery for stranded assets and contractual obligations; Oncor Electric Delivery Company LLC's (Oncor) ability to eliminate or reduce its quarterly dividends due to regulatory and governance requirements and commitments, including by actions of Oncor's independent directors or a minority member director; volatility in foreign currency exchange and interest rates and commodity prices and our ability to effectively hedge these risks; changes in tax and trade policies, laws and regulations, including tariffs and revisions to international trade agreements that may increase our costs, reduce our competitiveness, or impair our ability to resolve trade disputes; and other uncertainties, some of which may be difficult to predict and are beyond our control.

These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website,www.sec.gov, and on the company's website,www.sempra.com. Investors should not rely unduly on any forward-looking statements.

Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and Infraestructura Energtica Nova, S.A.B. de C.V. (IEnova) are not the same companies as the California utilities, SDG&E or SoCalGas, and Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.

SEMPRA ENERGY

Table A

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in millions, except per share amounts; shares in thousands)

Three months ended Years ended

December 31, December 31,

2020 2019 2020 2019

(unaudited)

REVENUES

Utilities $ 2,826 $ 2,640 $ 10,025 $ 9,448

Energy-related businesses 345 303 1,345 1,381

Total revenues 3,171 2,943 11,370 10,829

EXPENSES AND OTHER INCOME

Utilities:

Cost of natural gas (343) (350) (925) (1,139)

Cost of electric fuel and purchased (269) (259) (1,187) (1,188)power

Energy-related businesses cost of (76) (79) (276) (344)sales

Operation and maintenance (1,174) (951) (3,940) (3,466)

Aliso Canyon litigation and (180) - (307) -regulatory matters

Depreciation and amortization (424) (395) (1,666) (1,569)

Franchise fees and other taxes (146) (127) (543) (496)

Impairment losses - - (1) (43)

(Loss) gain on sale of assets (3) - (3) 63

Other income (expense), net 115 (26) (48) 77

Interest income 20 23 96 87

Interest expense (263) (280) (1,081) (1,077)

Income from continuingoperations before income taxes and 428 499 1,489 1,734equity earnings

Income tax expense (189) (165) (249) (315)

Equity earnings 193 95 1,015 580

Income from continuing operations, 432 429 2,255 1,999net of income tax

Income from discontinued - 71 1,850 363operations, net of income tax

Net income 432 500 4,105 2,362

Losses (earnings) attributable to 29 (18) (172) (164)noncontrolling interests

Preferred dividends (47) (35) (168) (142)

Preferred dividends of subsidiary - - (1) (1)

Earnings attributable to common $ 414 $ 447 $ 3,764 $ 2,055shares

Basic earnings per common share(EPS):

Earnings $ 1.43 $ 1.57 $ 12.93 $ 7.40

Weighted-average common shares 289,009 284,649 291,077 277,904outstanding

Diluted EPS:

Earnings $ 1.43 $ 1.55 $ 12.88 $ 7.29

Weighted-average common shares 290,216 288,767 292,252 282,033outstanding

SEMPRA ENERGY

Table A (Continued)

RECONCILIATION OF SEMPRA ENERGY ADJUSTED EARNINGS TO SEMPRA ENERGY GAAP EARNINGS (Unaudited)

Sempra Energy Adjusted Earnings and Adjusted EPS exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2020 and 2019 as follows:

Three months ended December 31, 2020:

* $(139) million from impacts associated with Aliso Canyon natural gas storage facility litigation and regulatory matters at Southern California Gas Company (SoCalGas)

Year ended December 31, 2020:

* $(233) million from impacts associated with Aliso Canyon natural gas storage facility litigation and regulatory matters at SoCalGas * $(100) million equity losses at RBS Sempra Commodities LLP, which represent an estimate of our obligations to settle pending tax matters and related legal costs at our equity method investment at Parent and Other * $1,747 million gain on the sale of our South American businesses

Year ended December 31, 2019:

* $45 million gain on the sale of certain Sempra Renewables assets

Associated with holding the South American businesses for sale:

* $89 million income tax benefit from outside basis differences in our South American businesses primarily related to the change in our indefinite reinvestment assertion from our decision in January 2019 to hold those businesses for sale and a change in the anticipated structure of the sale * $10 million income tax benefit to reduce a valuation allowance against certain net operating loss (NOL) carryforwards as a result of our decision to sell our South American businesses

Sempra Energy Adjusted Earnings, Weighted-Average Common Shares Outstanding - Adjusted and Adjusted EPS are non-GAAP financial measures (GAAP represents accounting principles generally accepted in the United States of America). Because of the significance and/or nature of the excluded items, management believes that these non-GAAP financial measures provide a meaningful comparison of the performance of Sempra Energy's business operations to prior and future periods. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. The table below reconciles for historical periods these non-GAAP financial measures to Sempra Energy GAAP Earnings, Weighted-Average Common Shares Outstanding - GAAP and GAAP EPS, which we consider to be the most directly comparable financial measures calculated in accordance with GAAP.

SEMPRA ENERGY

Table A (Continued)

RECONCILIATION OF ADJUSTED EARNINGS TO GAAP EARNINGS

(Dollars in millions, except per share amounts; shares in thousands)

Income tax Income tax

Pretax amount (benefit) Earnings Pretax amount expense Earnings

expense(1) (benefit)(1)

Three months ended December 31, 2020 Three months ended December 31, 2019

(unaudited)

Sempra Energy $ 414 $ 447GAAP Earnings

Excluded item:

Impactsassociated withAliso Canyon $ 180 $ (41) 139 $ - $ - -litigation andregulatorymatters

Sempra Energy $ 553 $ 447Adjusted Earnings

Diluted EPS:

Weighted-averagecommon shares 290,216 288,787outstanding,diluted - GAAP

Sempra Energy $ 1.43 $ 1.55GAAP EPS

Sempra Energy $ 1.90Adjusted EPS

Year ended December 31, 2020 Year ended December 31, 2019

Sempra Energy $ 3,764 $ 2,055GAAP Earnings

Excluded items:

Impactsassociated withAliso Canyon $ 307 $ (74) 233 $ - $ - -litigation andregulatorymatters

Losses frominvestment in RBS 100 - 100 - - -SempraCommodities LLP

Gain on sale ofSouth American (2,899) 1,152 (1,747) - - -businesses

Gain on sale ofcertain Sempra - - - (61) 16 (45)Renewables assets

Associated withholding the SouthAmericanbusinesses forsale:

Change inindefinitereinvestmentassertion ofbasis differences - - - - (89) (89)and structure ofsale ofdiscontinuedoperations

Reduction in taxvaluationallowance against - - - - (10) (10)certain NOLcarryforwards

Sempra Energy $ 2,350 $ 1,911Adjusted Earnings

Diluted EPS:

Sempra Energy $ 3,764 $ 2,055GAAP Earnings

Weighted-averagecommon shares 292,252 282,033outstanding,diluted - GAAP

Sempra Energy $ 12.88 $ 7.29GAAP EPS

Sempra Energy $ 2,350 $ 1,911Adjusted Earnings

Add backdividends for 104 -dilutive series Apreferred stock

Sempra EnergyAdjusted Earnings $ 2,454 $ 1,911for Adjusted EPS

Weighted-averagecommon shares 305,669 282,033outstanding,diluted -Adjusted^(2)

Sempra Energy $ 8.03 $ 6.78Adjusted EPS

Except for adjustments that are solely income tax and tax related to outside basis differences, income taxes on pretax amounts were primarily calculated based on applicable statutory tax rates. We did not record an income tax^(1) benefit for the equity losses from our investment in RBS Sempra Commodities LLP because, even though a portion of the liabilities may be deductible under United Kingdom tax law, it is not probable that the deduction will reduce United Kingdom taxes.

In the year ended December 31, 2020, because the assumed conversion of the^(2) series A preferred stock is dilutive for Adjusted Earnings, 13,417 series A preferred stock shares are added back to the denominator used to calculate Adjusted EPS.

SEMPRA ENERGY

Table A (Continued)

RECONCILIATION OF SEMPRA ENERGY 2020 ADJUSTED EPS GUIDANCE RANGE TO SEMPRA ENERGY 2020 GAAP EPS GUIDANCE RANGE (Unaudited)

Sempra Energy 2020 Adjusted EPS Guidance Range of $7.20 to $7.80 excludes items (after the effects of income taxes and, if applicable, noncontrolling interests) as follows:

* $(233) million from impacts associated with Aliso Canyon natural gas storage facility litigation and regulatory matters at SoCalGas * $(100) million equity losses at RBS Sempra Commodities LLP, which represent an estimate of our obligations to settle pending tax matters and related legal costs at our equity method investment at Parent and Other * $1,747 million gain on the sale of our South American businesses

Sempra Energy 2020 Adjusted EPS Guidance Range is a non-GAAP financial measure. Because of the significance and/or nature of the excluded items, management believes that this non-GAAP financial measure provides a meaningful comparison of the performance of Sempra Energy's business operations to prior and future periods. Sempra Energy 2020 Adjusted EPS Guidance Range should not be considered an alternative to Sempra Energy 2020 GAAP EPS Guidance Range. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. The table below reconciles Sempra Energy 2020 Adjusted EPS Guidance Range to Sempra Energy 2020 GAAP EPS Guidance Range, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP.

RECONCILIATION OF ADJUSTED EPS GUIDANCE RANGE TO GAAP EPS GUIDANCE RANGE

Full-Year 2020

Sempra Energy GAAP EPS Guidance Range^(1) $ 12.02 to $ 12.62

Excluded items:

Impacts associated with Aliso Canyon litigation 0.80 0.80 and regulatory matters

Losses from investment in RBS Sempra 0.34 0.34 Commodities LLP

Gain on sale of South American businesses (5.96) (5.96)

Sempra Energy Adjusted EPS Guidance Range $ 7.20 to $ 7.80

Weighted-average common shares outstanding, 293diluted (millions)^(2)

Sempra Energy's prior GAAP EPS Guidance Range for full-year 2020 has been^(1) updated to reflect additional impacts associated with the Aliso Canyon natural gas storage facility litigation and regulatory matters.

Weighted-average common shares outstanding does not include the dilutive effect of mandatory convertible preferred stock, as they are assumed to be^(2) antidilutive for full-year 2020. If such mandatory convertible preferred stock were dilutive for the full year, the 2020 GAAP EPS Guidance Range would differ from the range presented above.

SEMPRA ENERGY

Table B

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

December 31,

2020 2019

ASSETS

Current assets:

Cash and cash equivalents $ 960 $ 108

Restricted cash 22 31

Accounts receivable - trade, net 1,578 1,261

Accounts receivable - other, net 403 455

Due from unconsolidated affiliates 20 32

Income taxes receivable 113 112

Inventories 308 277

Regulatory assets 190 222

Greenhouse gas allowances 553 72

Assets held for sale in discontinued operations - 445

Other current assets 364 324

Total current assets 4,511 3,339

Other assets:

Restricted cash 3 3

Due from unconsolidated affiliates 780 742

Regulatory assets 1,822 1,930

Nuclear decommissioning trusts 1,019 1,082

Investment in Oncor Holdings 12,440 11,519

Other investments 1,388 2,103

Goodwill 1,602 1,602

Other intangible assets 202 213

Dedicated assets in support of certain benefit plans 512 488

Insurance receivable for Aliso Canyon costs 445 339

Deferred income taxes 136 155

Greenhouse gas allowances 101 470

Right-of-use assets - operating leases 543 591

Wildfire fund 363 392

Assets held for sale in discontinued operations - 3,513

Other long-term assets 753 732

Total other assets 22,109 25,874

Property, plant and equipment, net 40,003 36,452

Total assets $ 66,623 $ 65,665

SEMPRA ENERGY

Table B (Continued)

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Dollars in millions)

December 31,

2020 2019

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt $ 885 $ 3,505

Accounts payable - trade 1,359 1,234

Accounts payable - other 154 179

Due to unconsolidated affiliates 45 5

Dividends and interest payable 551 515

Accrued compensation and benefits 446 476

Regulatory liabilities 140 319

Current portion of long-term debt and finance 1,540 1,526leases

Reserve for Aliso Canyon costs 150 9

Greenhouse gas obligations 553 72

Liabilities held for sale in discontinued - 444operations

Other current liabilities 1,016 866

Total current liabilities 6,839 9,150

Long-term debt and finance leases 21,781 20,785

Deferred credits and other liabilities:

Due to unconsolidated affiliates 234 195

Pension and other postretirement benefit plan 1,059 1,067obligations, net of plan assets

Deferred income taxes 2,871 2,577

Regulatory liabilities 3,372 3,741

Reserve for Aliso Canyon costs 301 7

Asset retirement obligations 3,113 2,923

Greenhouse gas obligations - 301

Liabilities held for sale in discontinued - 1,052operations

Deferred credits and other 2,119 2,062

Total deferred credits and other liabilities 13,069 13,925

Equity:

Sempra Energy shareholders' equity 23,373 19,929

Preferred stock of subsidiary 20 20

Other noncontrolling interests 1,541 1,856

Total equity 24,934 21,805

Total liabilities and equity $ 66,623 $ 65,665

SEMPRA ENERGY

Table C

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

Years ended December 31,

2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 4,105 $ 2,362

Less: Income from discontinued operations, net of (1,850) (363)income tax

Income from continuing operations, net of income tax 2,255 1,999

Adjustments to reconcile net income to net cash 1,042 1,259provided by operating activities

Net change in other working capital components (550) (207)

Distributions from investments 651 247

Insurance receivable for Aliso Canyon costs (106) 122

Wildfire fund, current and noncurrent - (323)

Reserve for Aliso Canyon costs, noncurrent 294 -

Changes in other noncurrent assets and liabilities, 56 (399)net

Net cash provided by continuing operations 3,642 2,698

Net cash (used in) provided by discontinued (1,051) 390operations

Net cash provided by operating activities 2,591 3,088

CASH FLOWS FROM INVESTING ACTIVITIES

Expenditures for property, plant and equipment (4,676) (3,708)

Expenditures for investments and acquisitions (652) (1,797)

Proceeds from sale of assets 19 899

Distributions from investments 761 9

Purchases of nuclear decommissioning trust assets (1,439) (914)

Proceeds from sales of nuclear decommissioning trust 1,439 914assets

Advances to unconsolidated affiliates (92) (16)

Repayments of advances to unconsolidated affiliates 7 3

Intercompany activities with discontinued operations, - 8net

Other 15 21

Net cash used in continuing operations (4,618) (4,581)

Net cash provided by (used in) discontinued 5,171 (12)operations

Net cash provided by (used in) investing activities 553 (4,593)

CASH FLOWS FROM FINANCING ACTIVITIES

Common dividends paid (1,174) (993)

Preferred dividends paid (157) (142)

Issuances of preferred stock, net 891 -

Issuances of common stock, net 11 1,830

Repurchases of common stock (566) (26)

Issuances of debt (maturities greater than 90 days) 6,051 4,296

Payments on debt (maturities greater than 90 days) (5,864) (3,667)and finance leases

(Decrease) increase in short-term debt, net (1,759) 656

Advances from unconsolidated affiliates 64 155

Proceeds from sale of noncontrolling interests, net 26 5

Purchases of noncontrolling interests (248) (30)

Contributions from noncontrolling interests, net 1 98

Intercompany activities with discontinued operations, - (266)net

Other (50) (49)

Net cash (used in) provided by continuing operations (2,774) 1,867

Net cash provided by (used in) discontinued 401 (392)operations

Net cash (used in) provided by financing activities (2,373) 1,475

Effect of exchange rate changes in continuing - -operations

Effect of exchange rate changes in discontinued (3) 1operations

Effect of exchange rate changes on cash, cash (3) 1equivalents and restricted cash

Increase (decrease) in cash, cash equivalents and 768 (29)restricted cash, including discontinued operations

Cash, cash equivalents and restricted cash, including 217 246discontinued operations, January 1

Cash, cash equivalents and restricted cash, including $ 985 $ 217discontinued operations, December 31

SEMPRA ENERGY

Table D

SEGMENT EARNINGS (LOSSES) AND CAPITAL EXPENDITURES, INVESTMENTS ANDACQUISITIONS

(Dollars in millions)

Three months ended Years ended

December 31, December 31,

2020 2019 2020 2019

(unaudited)

Earnings (Losses) Attributable toCommon Shares

SDG&E $ 191 $ 185 $ 824 $ 767

SoCalGas 79 204 504 641

Sempra Texas Utilities 121 109 579 528

Sempra Mexico (43) 39 259 253

Sempra LNG 113 (19) 320 (6)

Sempra Renewables - - - 59

Parent and other (47) (132) (562) (515)

Discontinued operations - 61 1,840 328

Total $ 414 $ 447 $ 3,764 $ 2,055

Three months ended Years ended

December 31, December 31,

2020 2019 2020 2019

(unaudited)

Capital Expenditures, Investmentsand Acquisitions

SDG&E $ 619 $ 451 $ 1,942 $ 1,522

SoCalGas 498 420 1,843 1,439

Sempra Texas Utilities 423 347 648 1,685

Sempra Mexico 168 204 611 624

Sempra LNG 72 39 272 222

Sempra Renewables - - - 2

Parent and other 6 5 12 11

Total $ 1,786 $ 1,466 $ 5,328 $ 5,505

SEMPRA ENERGY

Table D (Continued)

RECONCILIATION OF CAPITAL DEPLOYED

(Dollars in millions)

Years ended December 31,

2020 2019

(unaudited)

Sempra Energy

Expenditures for property, plant and $ 4,676 $ 3,708equipment

Expenditures for investments and 652 1,797acquisitions

Total Capital Expenditures, Investments 5,328 5,505and Acquisitions (On Balance Sheet)

Exclude:

Capital contribution to Oncor forOncor's acquisition of 100% of InfraREITand Sempra's acquisition of a 50% - (1,162)

indirect interest in Sharyland

Acquisition of 1% interest in TexasTransmission Holdings Corporation (TTHC) (16) -from Hunt

Total Capital Expenditures and A 5,312 4,343Investments (On Balance Sheet)

Oncor Electric Delivery Company LLC

Capital expenditures (100%) 2,540 2,097

Total Capital Expenditures (Off Balance 2,540 2,097Sheet)

Sharyland Utilities

Capital expenditures (100%) 5 2

Total Capital Expenditures (Off Balance 5 2Sheet)

Sempra Texas Utilities - Proportionate Ownership Share ofUnconsolidated Entities

80.25% of Oncor Electric Delivery Company 2,038 1,683LLC capital expenditures

50% of Sharyland Utilities capital 3 1expenditures

Less:

Sempra Texas Utilities investments and (648) (1,685)acquisitions (On Balance Sheet)

Add Back:

Sempra Texas Utilities acquisitions 16 1,162(On Balance Sheet)^(1)

Capital Expenditures, Investments andAcquisitions - Sempra Texas Utilities 1,409 1,161(Off Balance Sheet)

Capital Expenditures - UnconsolidatedJoint Ventures at Sempra LNG and Sempra 228 446Mexico (Off Balance Sheet)^(2)

Total Capital Expenditures, Investmentsand Acquisitions of Unconsolidated B 1,637 1,607Entities (Off Balance Sheet)

Total Capital Deployed A+B $ 6,949 $ 5,950

Includes Sempra Energy's acquisition of 1% interest in TTHC from Hunt in^(1) 2020 and Sempra Energy's capital contribution to Oncor for Oncor's acquisition of 100% of InfraREIT and Sempra Energy's acquisition of a 50% indirect interest in Sharyland in 2019.

Amounts are net of capital contributions from Sempra Energy. 2020 and 2019^(2) includes $146 and $337, respectively, of capex funded by Sempra LNG's unconsolidated JV (Cameron LNG JV) and $82 and $109, respectively, funded by Sempra Mexico's unconsolidated JVs.

SEMPRA ENERGY

Table E

OTHER OPERATING STATISTICS

Three months ended Years ended or at

December 31, December 31,

2020 2019 2020 2019

(unaudited)

UTILITIES

SDG&E and SoCalGas

Gas sales (Bcf)^(1) 98 103 355 374

Transportation (Bcf)^(1) 161 149 612 573

Total deliveries (Bcf)^(1) 259 252 967 947

Total gas customer meters 6,967 6,924(thousands)

SDG&E

Electric sales (millions of 3,751 3,601 14,398 14,397kWhs)^(1)

Direct Access and CommunityChoice Aggregation (millions of 952 909 3,482 3,549kWhs)

Total deliveries (millions of 4,703 4,510 17,880 17,946kWhs)^(1)

Total electric customer 1,483 1,471meters (thousands)

Oncor^(2)

Total deliveries (millions of 30,615 30,916 131,157 133,378kWhs)

Total electric customer 3,762 3,685meters (thousands)

Ecogas

Natural gas sales (Bcf) 1 1 3 3

Natural gas customer meters 136 132(thousands)

ENERGY-RELATED BUSINESSES

Power generated and sold

Sempra Mexico

Termoel?ctrica de Mexicali 729 1,011 2,905 3,873(TdM) (millions of kWhs)

Wind and solar (millions of 420 333 1,724 1,442kWhs)^(3)

^(1) Includes intercompany sales.

Includes 100% of the electric deliveries and customer meters of Oncor^(2) Electric Delivery Company LLC (Oncor), in which we hold an indirect 80.25% interest through our investment in Oncor Electric Delivery Holdings Company LLC.

Includes 50% of the total power generated and sold at the Energ?a^(3) Sierra Ju?rez wind power generation facility, in which Sempra Energy has a 50% ownership interest.

SEMPRA ENERGY

Table F (Unaudited)

STATEMENT OF OPERATIONS DATA BY SEGMENT

(Dollars in millions)

Consolidating SempraThree months Sempra Adjustments,ended December SDG&E SoCalGas Texas Sempra LNG Total31, 2020 Mexico Parent & Utilities Other

Revenues $ 1,337 $ 1,501 $ - $ 321 $ 119 $ (107) $ 3,171

Cost of sales and (813) (1,165) - (173) (118) 81 (2,188)other expenses

Depreciation and (203) (168) - (48) (2) (3) (424)amortization

Loss on sale of - - - - - (3) (3)assets

Other income 5 (49) - 134 - 25 115(expense), net

Income (loss)before interest 326 119 - 234 (1) (7) 671and tax^(1)

Net interest (106) (39) - (24) 12 (86) (243)(expense) income

Income tax (29) (1) (1) (218) (33) 93 (189)(expense) benefit

Equity earnings - - 122 (63) 134 - 193(losses), net

Lossesattributable to - - - 28 1 - 29noncontrollinginterests

Preferred - - - - - (47) (47)dividends

Earnings (losses)attributable to $ 191 $ 79 $ 121 $ (43) $ 113 $ (47) $ 414common shares

Consolidating SempraThree months Sempra Adjustments,ended December SDG&E SoCalGas Texas Sempra LNG Total31, 2019 Mexico Parent & Utilities Other

Revenues $ 1,259 $ 1,383 $ - $ 317 $ 83 $ (99) $ 2,943

Cost of sales and (705) (847) - (153) (112) 51 (1,766)other expenses

Depreciation and (189) (153) - (47) (3) (3) (395)amortization

Other (expense) (21) (73) - 70 - (2) (26)income, net

Income (loss)before interest 344 310 - 187 (32) (53) 756and tax^(1)

Net interest (99) (36) - (10) (1) (111) (257)expense

Income tax (60) (70) - (111) 9 67 (165)(expense) benefit

Equity earnings - - 109 (19) 5 - 95(losses), net

Earningsattributable to - - - (8) - - (8)noncontrollinginterests

Preferred - - - - - (35) (35)dividends

Earnings (losses)from continuing $ 185 $ 204 $ 109 $ 39 $ (19) $ (132) 386operations

Earnings fromdiscontinued 61operations

Earningsattributable to $ 447common shares

Management believes Income (Loss) Before Interest and Tax is a useful^(1) measurement of our segments' performance because it can be used to evaluate the effectiveness of our operations exclusive of interest and income tax, neither of which is directly relevant to the efficiency of those operations.

SEMPRA ENERGY

Table F

STATEMENT OF OPERATIONS DATA BY SEGMENT

(Dollars in millions)

Consolidating SempraYear ended Sempra Sempra Adjustments,December 31, SDG&E SoCalGas Texas Sempra LNG Total2020 Mexico Renewables Parent & Utilities Other

$Revenues $ 5,313 $ 4,748 $ - $ 1,256 $ 374 $ - $ (321) 11,370

Cost of salesand other (3,139) (3,309) - (581) (384) - 234 (7,179)expenses

Depreciationand (801) (654) - (189) (9) - (13) (1,666)amortization

Loss on saleof assets - - - - - - (3) (3)

Other income(expense), net 52 (28) - (77) - - 5 (48)

Income (loss)before 1,425 757 - 409 (19) - (98) 2,474interest andtax^(1)

Net interest(expense) (411) (156) - (72) 38 - (384) (985)income

Income tax(expense) (190) (96) (1) (57) (92) - 187 (249)benefit

Equityearnings - - 580 144 391 - (100) 1,015(losses), net

(Earnings)lossesattributable - - - (165) 2 - 1 (162)tononcontrollinginterests

Preferreddividends - (1) - - - - (168) (169)

Earnings(losses) from $ 824 $ 504 $ 579 $ 259 $ 320 $ - $ (562) 1,924continuingoperations

Earnings fromdiscontinued 1,840operations

Earningsattributable $to commonshares 3,764

Consolidating SempraYear ended Sempra Sempra Adjustments,December 31, SDG&E SoCalGas Texas Sempra LNG Total2019 Mexico Renewables Parent & Utilities Other

$Revenues $ 4,925 $ 4,525 $ - $ 1,375 $ 410 $ 10 $ (416) 10,829

Cost of salesand other (2,846) (2,930) - (649) (462) (20) 274 (6,633)expenses

Depreciationand (760) (602) - (183) (10) - (14) (1,569)amortization

Impairmentlosses (6) (37) - - - - - (43)

Gain on saleof assets - - - - - 61 2 63

Other income(expense), net 39 (55) - 76 - - 17 77

Income (loss)before 1,352 901 - 619 (62) 51 (137) 2,724interest andtax^(1)

Net interest(expense) (407) (139) - (41) 26 8 (437) (990)income

Income tax(expense) (171) (120) - (227) 5 (4) 202 (315)benefit

Equityearnings - - 528 24 24 5 (1) 580(losses), net

(Earnings)lossesattributable (7) - - (122) 1 (1) - (129)tononcontrollinginterests

Preferreddividends - (1) - - - - (142) (143)

Earnings(losses) from $ 767 $ 641 $ 528 $ 253 $ (6) $ 59 $ (515) 1,727continuingoperations

Earnings fromdiscontinued 328operations

Earningsattributable $to commonshares 2,055

Management believes Income (Loss) Before Interest and Tax is a useful^(1) measurement of our segments' performance because it can be used to evaluate the effectiveness of our operations exclusive of interest and income tax, neither of which is directly relevant to the efficiency of those operations.

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SOURCE Sempra Energy