Dba Sempra · NYSE:SRE
Dba Sempra — Sempra Energy — Q4 2016 Earnings Presentation
26 slides from Dba Sempra's earnings presentation, Feb 28, 2017
Slide 1: Fourth Quarter 2016 Earnings Results
Fourth Quarter 2016 Earnings Results February 28, 2017
Slide 2: Information Regarding Forward-Looking Statements
Information Regarding Forward-Looking Statements We make statements in this report that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon assumptions with respect to
Slide 3: Table of Contents
Table of Contents Executive Summary Execution Focus Raising 2017 Earnings Guidance Fourth Quarter and Full Year 2016 Financial Results Comparison of 2016 to 2015 Proposed Tax Reform Summary Appendix 3
Slide 4: Executive Summary
Executive Summary Reporting 2016 adjusted earnings(1) of $5.05 per share • 2016 adjusted earnings(1) include a $27M, or ~$0.11 per share, net benefit related to $20M change in planned repatriation, $34M adoption of a new accounting standard related to share-based compensation, offset by ($14M) Per
Slide 5: Execution Focus: California Utilities
Execution Focus: California Utilities Proposed 2-Year Cost of Capital Extension(1) 10.2% and 10.05% authorized return on equity for SDG&E and SoCalGas, respectively, effective January 1, 2018 through December 31, 2019 Would true-up ~$36M of debt costs in 2018(2); largely included in prior earnin
Slide 6: Execution Focus: Cameron LNG
Execution Focus: Cameron LNG(1) Cameron Trains 1-3 Construction of Cameron JV Trains 1-3 is a top priority for Sempra and other Cameron JV partners Executive management from Cameron JV and Cameron’s contractor have met and had numerous discussions to review current working schedule, enhancing co
Slide 7: Raising 2017 Earnings Guidance
Raising 2017 Earnings Guidance 2017 Earnings Guidance Updated Guidance $4.85 $5.25 Previous Guidance $4.80 $5.20 Key drivers of increased 2017 earnings guidance: • Strong operational earnings at SDG&E and IEnova, and • Change in planned repatriation of current foreign earnings, partially offset by
Slide 8: Fourth Quarter and Full Year 2016 Results
Fourth Quarter and Full Year 2016 Results Three months ended Years ended December 31, December 31, (Dollars, except EPS, and shares, in millions) 2016 2015 2016 2015 (Unaudited) GAAP Earnings $ 379 $ 369 $ 1,370 $ 1,349 Gain in Connection with GdC Acquisition - - (350) - Gain on Sale of EnergySouth
Slide 9: Comparison of 2016 to 2015
Comparison of 2016 to 2015 (Dollars in millions) 2015 Adjusted Earnings (1) $ 1,298 Variances from 2016 to 2015 Change in planned repatriation (Reversal in 2016 of $20M expense in 2015) 40 Accounting for share-based compensation methodology change 34 Impairment of North-South Pipeline (13) Revaluati
Slide 10: Proposed Tax Reform
Proposed Tax Reform(1) 2020-2021 Proposed Tax Reform EPS Implications 0% (6%) - (5%) (3%) - (1%) 5% - 6% Scenario 1 Scenario 2 Scenario 3 Most Likely Assumptions Scenario 1 Scenario 2(2) Scenario 3 CA Utilities track income tax differences in memo account 20% corporate tax rate 100% expensing
Slide 11: Summary
Summary We have recently executed operationally and financially and resolved certain key challenges, setting ourselves up for a strong 2017 Reported 2016 adjusted earnings(1) of $5.05 per share Raised 2017 earnings guidance to $4.85 to $5.25 per share, up from $4.80 to $5.20 per share Increa
Slide 12: Appendix
Appendix
Slide 13: Appendix
Appendix Fourth Quarter 2016 Key Drivers Segment Earnings Non-GAAP Financial Measures 13
Slide 14: Fourth Quarter 2016 Key Drivers
Fourth Quarter 2016 Key Drivers $383M adjusted earnings(1) reported in Q4-16 compared to $367M adjusted earnings(1) in Q4-15. The increase in adjusted earnings is primarily due to: • $17M higher earnings at the California utilities, primarily due to: • $26M higher CPUC base margin, net of operatin
Slide 15: SDG&E
SDG&E Three months ended Years ended December 31, December 31, (Dollars in millions) 2016 2015 2016 2015 (Unaudited) SDG&E GAAP Earnings $ 151 $ 144 $ 570 $ 587 Tax Repairs Adjustments Related to GRC - - 31 - Adjustment to Loss on SONGS Plant Closure - (2) - (15) SDG&E Adjusted Earnings(1) $ 151 $ 1
Slide 16: SoCalGas
SoCalGas Three months ended Years ended December 31, December 31, (Dollars in millions) 2016 2015 2016 2015 (Unaudited) SoCalGas GAAP Earnings $ 151 $ 143 $ 349 $ 419 Tax Repairs Adjustments Related to GRC - - 49 - SoCalGas Adjusted Earnings(1) $ 151 $ 143 $ 398 $ 419 Q4-16 earnings higher primari
Slide 17: SoCalGas (continued)
SoCalGas (continued) 2016 adjusted earnings(1) lower primarily due to: • $16M lower earnings associated with the income tax tracking mechanism from the 2016 GRC final decision, • $16M lower favorable impact of resolution of prior years’ income tax items, • $13M lower earnings from impairment of No
Slide 18: Sempra South American Utilities
Sempra South American Utilities(1) Three months ended Years ended December 31, December 31, (Dollars in millions) 2016 2015 2016 2015 (Unaudited) Sempra South American Utilities GAAP Earnings $ 29 $ 46 $ 156 $ 175 Q4-16 earnings lower primarily due to $17M increase in deferred income tax expense r
Slide 19: Sempra Mexico
Sempra Mexico(1) Three months ended Years ended December 31, December 31, (Dollars in millions) 2016 2015 2016 2015 (Unaudited) Sempra Mexico GAAP Earnings $ 56 $ 53 $ 463 $ 213 Gain in Connection with GdC Acquisition - - (350) - Losses Related to TdM Held For Sale 4 - 95 - Sempra Mexico Adjusted Ea
Slide 20: Sempra LNG & Midstream
Sempra LNG & Midstream Three months ended Years ended December 31, December 31, (Dollars in millions) 2016 2015 2016 2015 (Unaudited) Sempra LNG & Midstream GAAP Earnings (Losses) $ (3) $ 1 $ (107) $ 44 Gain on Sale of EnergySouth - - (78) - Loss Related to REX - - 27 - Permanent Releases of Pipelin
Slide 21: Sempra Renewables
Sempra Renewables Three months ended Years ended December 31, December 31, (Dollars in millions) 2016 2015 2016 2015 (Unaudited) Sempra Renewables GAAP Earnings $ 12 $ 16 $ 55 $ 63 Q4-16 Renewables earnings lower primarily due to $5M gain on sale of Rosamond Solar in Q4-15 2016 earnings lower pr
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures Sempra Energy Adjusted Earnings and Adjusted Earnings-Per-Share (Unaudited) Exclude: In the quarter ended December 31, 2016: • $(4) million deferred income tax expense related to our decision to hold Termoeléctrica de Mexicali (TdM) for sale In the quarter ended December
Slide 23: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) San Diego Gas & Electric Company (SDG&E) Adjusted Earnings (Unaudited) Exclude: In the quarter ended December 31, 2015: • $2 million ($5 million pretax) reduction in the plant closure loss related to SONGS for the shareholder portion of a settlement agreement
Slide 24: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Sempra Mexico Adjusted Earnings (Unaudited) Exclude: In the quarter ended December 31, 2016: • $(4) million deferred income tax expense related to our decision to hold TdM for sale In the year ended December 31, 2016: • $350 million, after tax and noncontrolli
Slide 25: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Sempra Energy 2016 Adjusted Earnings-Per-Share (EPS) Guidance Range (Unaudited) Excludes: • $350 million, after tax and noncontrolling interests, noncash gain ($617 million pretax and before noncontrolling interests) from the remeasurement of our equity method
Slide 26: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) California utilities 2016 Adjusted Earnings as a Percentage of 2016 Sempra Energy Adjusted Earnings (Unaudited) is a non-GAAP financial measure, as it is based on Adjusted Earnings of SDG&E, SoCalGas and Sempra Energy, which exclude certain items from GAAP Ear