filings.toolsSempra (SRE) 10-K risk factor changes: FY2021 vs FY2020
The 2021-12-31 10-K against the 2020-12-31 one, compared heading by heading and sentence by sentence.
Item 1A358 rewritten208 added303 removed80 unchanged
All filing items3,789 rewritten2,372 added2,375 removed4,441 unchanged
Summary
counted, not written
- Item 1A lists 80 risk factor headings: 34 new, 31 reworded and 15 unchanged since FY2020. 28 headings from FY2020 no longer appear.
- Sentence by sentence, 2,372 added, 2,375 removed, 3,789 rewritten and 4,441 unchanged across 21 items that differ.
- New this year: Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
New Item 1A headings (34)
- Any impairment of our assets or investments could negatively impact us.
- Our common stock is listed on the Mexican Stock Exchange and registered with the CNBV, which subjects us to additional regulation and liability in Mexico.
- Our businesses are subject to risks arising from their infrastructure and information systems.
- failure to meet customer demand for electricity and/or natural gas, including electrical blackout, curtailments or gas outages natural gas surges into homes or other properties the release of hazardous or toxic substances into the air, water or soil, including gas leaks inadequate emergency preparedness plans and the failure to respond effectively to catastrophic events
- Implementing protocols and processes to comply with applicable government mandates related to virus exposure, testing and vaccination
- Conducting business with substantial modifications to employee travel and work locations and virtualization of certain business activities, which could result in increased employee turnover or absenteeism, decreased efficiency and productivity and other similar affects that could increase operating costs and jeopardize our ability to satisfy compliance requirements and sustain operations
- Disruption in the capital markets, which has affected and could further affect liquidity, strategic initiatives and prospects, including in some cases a slowdown of planned capital spending
- Customer-protection measures implemented by SDG&E and SoCalGas, including suspending service disconnections due to nonpayment for all customers (except for SoCalGas’ noncore customers), waiving late payment fees, offering flexible payment plans and automatically enrolling residential and small business customers with past-due balances in long-term repayment plans, which have collectively resulted in a reduction in payments from SDG&E and SoCalGas’ customers and an increase in uncollectible accounts that could become material and may not be fully recoverable
- Precautionary, preemptive and responsive actions taken by our current and prospective counterparties, customers and partners, as well as regulators and other governing bodies that affect our businesses, which have affected and could further affect our operations, results, liquidity and ability to pursue capital projects and strategic initiatives
- Severe weather, natural disasters and other similar events could materially adversely affect us.
- We seek growth opportunities in the market organically and inorganically, including through the acquisition of, or partnerships in, operating companies.
- Increasing activities and projects intended to advance new energy technologies could introduce new risks to our businesses.
- Our debt service obligations expose us to risks, and with respect to Sempra, could require additional equity securities issuances.
- expansion of natural gas liquefaction projects or other unregulated businesses in a manner inconsistent with its present level of credit quality
- Sempra’s consolidated financial measures do not improve, or it fails to meet certain financial credit metrics catastrophic wildfires caused by SDG&E, or catastrophic wildfires caused by any California electric IOUs that participate in the Wildfire Fund, which could exhaust the fund considerably earlier than expected a ratings downgrade at SDG&E, SoCalGas and/or SI Partners catastrophic wildfires caused by SDG&E or other California electric IOUs a consistent weakening of SDG&E’s financial metrics or a deterioration in the regulatory environment a ratings downgrade at Sempra
- SoCalGas’ financial measures consistently weaken, or it fails to meet certain financial credit metrics
- SoCalGas experiences increased business risk, including a deterioration in the regulatory environment, leading to weakening of its stand-alone business risk profile a ratings downgrade at Sempra
- SI Partners’ failure to meet certain financial credit metrics a deterioration in SI Partners’ business risk profile, including incremental construction risk or adverse changes in the operating environment in Mexico a ratings downgrade at Sempra
- Our businesses are facing climate change concerns and have environmental compliance costs, which could have a material adverse effect on us.
- We may be materially adversely affected by the outcome of litigation or other proceedings in which we are involved.
- Wildfires in California pose risks to Sempra California (particularly SDG&E) and Sempra.
- the potential release of radioactive material the potential harmful effects from the former operation of the facility limitations on the insurance commercially available to cover losses associated with operating and decommissioning the facility uncertainties with respect to the technological and financial aspects of decommissioning the facility
- Rates and Other Financial Matters
- Any failure by the CPUC to adequately reform SDG&E’s rate structure could have a material adverse effect on SDG&E and Sempra.
- Changes in the regulation or operation of the electric utility industry and/or the ERCOT market could materially adversely affect Oncor, which could materially adversely affect us.
- Project development activities may not be successful, projects under construction may not be completed on schedule or within budget, and completed projects may not operate at expected levels, any of which could materially adversely affect us.
- All Energy Infrastructure Projects our financial condition and cash flows and other factors that impact our ability to invest sufficient funds into the project, including for preliminary matters that may need to be accomplished before we can determine whether the project is feasible or economically attractive project assessment and design and our ability to foresee and incorporate new and developing trends and technologies in the energy industry, such as our pursuit of projects and design solutions to help enable our and our customers’ climate goals our ability to reach a final investment decision or meet other milestones, which may be influenced by external factors outside our control, including the global economy and energy and financial markets, actions by regulators, achieving necessary internal and external approvals, including, as applicable, by all project partners, and many of the other factors described in this risk factor negotiation of satisfactory EPC agreements, including any renegotiation that may be required in the event of delays in final investment decisions or other failures to meet specified deadlines progressing relationships from MOUs or similar arrangements, which are nonbinding and generally do not impose obligations on any of the parties, to execution of definitive agreements and participation in the project identification of suitable partners, customers, suppliers and other necessary counterparties, negotiation of satisfactory equity, purchase, sale, supply, transportation and other appropriate commercial agreements, and satisfaction of any conditions to effectiveness of such agreements, including reaching a final investment decision within agreed timelines timely receipt and maintenance of required governmental permits, licenses and other authorizations that do not impose material conditions and are otherwise granted under terms we find reasonable our project partners’, contractors’ and other counterparties’ willingness and financial or other ability to make their required investments or fulfill their contractual commitments on a timely basis timely, satisfactory and on-budget completion of construction, which could be negatively affected by engineering problems, work stoppages, equipment unavailability, contractor performance and a variety of other factors, many of which we discuss above under “Risks Related to All Sempra Businesses – Operational Risks” and elsewhere in this risk factor implementation of new or changes to existing laws or regulations that impact our infrastructure or the energy sector generally obtaining adequate and reasonably priced financing for the project the absence of hidden defects or inherited environmental liabilities for any project construction fast and cost-effective resolution of any litigation or unsettled property rights affecting the project geopolitical events and other uncertainties, such as the conflict in Ukraine
- Our Port Arthur, Texas project is a greenfield site and therefore is subject to disadvantages relative to brownfield sites, including increased time and costs to develop and construct the project.
- We are dependent on the equipment provided by third parties to operate Cameron LNG JV’s Phase 1 project and the failure of such equipment may adversely impact our business and performance.
- Hydraulic fracturing is subject to political, economic and other uncertainties.
- Fixed-price long-term contracts for services or commodities expose our businesses to inflationary pressures.
- Our businesses depend on the performance of counterparties, and any performance failures by these counterparties could materially adversely affect us.
- Our international businesses and operations expose us to foreign currency and inflation risks.
- Our businesses are exposed to market risks, including fluctuations in commodity prices, that could materially adversely affect us.
Removed Item 1A headings (28)
- Any impairment of our assets could negatively impact our consolidated results of operations and net worth.
- Severe weather conditions, natural disasters, pandemics, accidents, equipment failures, explosions or acts of terrorism could materially adversely affect our businesses, financial condition, results of operations, cash flows and/or prospects.
- natural gas, propane and ethane pipelines, storage and compressor facilities electric transmission, distribution and battery storage equipment power generation plants, including renewable energy and natural gas-fired generation marine and inland ethane and liquid fuels, LNG and LPG facilities, terminals and storage nuclear power facilities and nuclear fuel and nuclear waste storage facilities (through SDG&E’s minority interest in SONGS, which is currently being decommissioned)
- The substantial debt service obligations of Sempra Energy, SDG&E and SoCalGas could have a material adverse effect on our results of operations, cash flows, financial condition and/or prospects, and with respect to Sempra Energy, could require additional equity securities issuances.
- Sempra Energy’s failure to meet certain financial credit metrics investing disproportionally in unregulated or uncontracted business and the impact on business mix and financial credit metrics over time catastrophic wildfires caused by SDG&E, or catastrophic wildfires caused by any California electric IOUs that participate in the Wildfire Fund, which could exhaust the fund considerably earlier than expected a ratings downgrade at SDG&E and/or SoCalGas continuing to acquire shares under a share repurchase program
- SDG&E’s failure to meet certain financial credit metrics the CPUC does not effectively implement the more supportive prudency standard for determining wildfire liability associated with the Wildfire Legislation catastrophic wildfires caused by SDG&E, or catastrophic wildfires caused by any California electric IOUs that participate in the Wildfire Fund, which could exhaust the fund considerably earlier than expected
- SoCalGas’ failure to meet certain financial credit metrics the conclusion of the CPUC’s pending regulatory proceedings where key elements of SoCalGas’ credit profile are negatively impacted deterioration of, or uncertainty in, the political or regulatory environment for local natural gas distribution companies operating in California a ratings downgrade at Sempra Energy
- Our businesses have significant environmental compliance costs, and future environmental compliance costs could have a material adverse effect on our cash flows and/or results of operations.
- Our businesses, results of operations, financial condition and/or cash flows may be materially adversely affected by the outcome of litigation or other proceedings in which we are involved.
- The California Utilities are subject to risks arising from the operation, maintenance and upgrade of their natural gas and electricity infrastructure and information technology systems, which, if they materialize, could materially and adversely affect Sempra Energy’s and the California Utilities’ financial results.
- failure to meet customer demand for natural gas and/or electricity, curtailments, controlled or uncontrolled gas outages, or gas surges back into homes that could cause serious personal injury or loss of life a prolonged widespread electrical black-out that results in damage to the California Utilities’ equipment or damage to property owned by customers or other third parties the release of hazardous or toxic substances into the air, water or soil, including gas leaks severe weather events or natural disasters, pandemics, or attacks by third parties such as cyber-attacks, acts of terrorism, vandalism or war, the effects of which we discuss above under “Risks Related to All Sempra Energy Businesses – Operational Risks” inadequate emergency preparedness plans and the failure to respond effectively to catastrophic events that could lead to public or employee harm or extended outages
- Wildfires in California pose a significant risk to the California Utilities’ (particularly SDG&E’s) and Sempra Energy’s business, financial condition, results of operations and/or cash flows.
- the potential release of a radioactive material, including from a natural disaster, that could cause catastrophic harm to human health and the environment the potential harmful effects on the environment and human health resulting from the prior operation of nuclear facilities and the storage, handling and disposal of radioactive materials limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with operations and the decommissioning of the facility uncertainties with respect to the technological and financial aspects of decommissioning the facility
- Rates and Other Capital-Related Matters conditions of service sales of securities rates of return capital structure rates of depreciation long-term resource procurement delays by the CPUC on decisions regarding recovery the results of after-the-fact reasonableness reviews with unclear standards finalization of legislative and regulatory requirements and initiatives in an unexpected manner rejection of settlements with third parties decisions denying recovery or authorizing less than full recovery on the basis that costs were not reasonably or prudently incurred or for other reasons actual capital expenditures or operating costs exceeding the amounts approved by the CPUC
- The failure by the CPUC to adequately reform SDG&E’s rate structure, including the implementation of charges independent of consumption volume and measures to reduce NEM rate subsidies, could have a material adverse effect on SDG&E’s and Sempra Energy’s business, cash flows, financial condition, results of operations and/or prospects.
- Changes in the electric utility industry, including changes in regulation of ERCOT, could materially adversely affect Oncor’s results of operations, cash flows, financial condition and/or prospects, which could materially adversely affect us.
- Project development activities may not be successful and projects under construction may not commence operation as scheduled, be completed within budget or operate at expected levels, which could have a material adverse effect on our businesses, financial condition, cash flows, results of operations and/or prospects.
- All Energy Infrastructure Projects our ability to reach a final investment decision or otherwise make progress with respect to any project, which may be dependent on our financial condition and cash flows and may be influenced by a number of external factors outside our control, including the global economy and global energy and financial markets negotiation of satisfactory EPC agreements, including any renegotiation of total contract price and other terms that may be required in the event of delays in final investment decisions or other failures to meet specified deadlines with respect to a project if we intend to have equity partners in the project, identification of suitable partners and negotiation of satisfactory equity agreements identification of suitable customers and negotiation of satisfactory LNG offtake or other customer agreements negotiation of satisfactory supply, natural gas and LNG sales agreements or firm capacity service agreements and PPAs timely receipt of required governmental permits, licenses and other authorizations that do not impose material conditions and are otherwise granted under terms we find reasonable, as well as maintenance of these authorizations our project partners’ willingness and financial or other ability to make their required investments on a timely basis our contractors and other counterparties’ willingness and financial or other ability to fulfill their contractual commitments timely, satisfactory and on-budget completion of construction, which could be negatively affected by engineering problems, adverse weather conditions or other natural disasters, pandemics, cyber- or other attacks by third parties, work stoppages, equipment unavailability, contractor performance shortfalls and a variety of other factors, many of which we discuss above under “Risks Related to All Sempra Energy Businesses – Operational Risks” and in this risk factor below obtaining adequate and reasonably priced financing for the project the absence of hidden defects or inherited environmental liabilities for any brownfield project construction fast and cost-effective resolution of any litigation or unsettled property rights affecting a project
- Our Port Arthur, Texas project is a greenfield site, and therefore it does not have some of the advantages often associated with brownfield sites. Some of these disadvantages include increased costs and time to construct, which could materially adversely affect the development of this project.
- Domestic and international hydraulic fracturing operations are subject to political, economic and other uncertainties that could increase the costs of doing business, impose additional operating restrictions or delays, and adversely affect production of LNG and reduce or eliminate LNG export opportunities and demand.
- When our businesses enter into fixed-price long-term contracts to provide services or commodities, they are exposed to inflationary pressures such as rising commodity prices and interest rate risks.
- Our businesses depend on the performance of counterparties, including with respect to long-term supply, sales and capacity agreements, and any failure by these parties to perform could result in substantial expenses and business disruptions and exposure to commodity price risk and volatility, any of which could materially adversely affect our businesses, financial condition, cash flows, results of operations and/or prospects.
- Our businesses are exposed to market risks, including fluctuations in commodity prices, and our businesses, financial condition, results of operations, cash flows and/or prospects may be materially adversely affected by these risks.
- Our ability to complete our proposed IEnova exchange offer is subject to various conditions and other risks and uncertainties that could cause the transaction to be abandoned, delayed or restructured, which could materially adversely affect us.
- The proposed exchange offer, if completed, may not have the positive effects we anticipate, which may negatively affect the market price of our common stock, preferred stock and debt securities.
- We expect to issue shares of our common stock in the proposed exchange offer, which would dilute the voting interests and could dilute the economic interests of our current shareholders and may adversely affect the market value of our common stock and preferred stock.
- The proposed exchange offer, if completed, would subject us to additional regulation and liability in Mexico.
- Our proposed transaction related to Sempra Infrastructure Partners is subject to a number of risks and uncertainties.
Reworded Item 1A headings (31)
[removed: Sempra Energy’s][added: Sempra’s] cash flows, ability to pay dividends and ability to meet its debt obligations largely depend on the performance of its subsidiaries and entities[removed: that are]accounted for as equity method[removed: investments, such as Oncor Holdings and Cameron LNG JV.][added: investments.]- Sempra
[removed: Energy]has substantial investments in and obligations arising from businesses[removed: that]it does not control or manage or in which it shares control. - Our business could be negatively affected
[removed: as a result of][added: by] actions of activist shareholders. - The economic interest, voting rights and market value of our outstanding common and preferred stock may be adversely affected by any additional equity securities we may
[removed: issue and, with respect to our common stock, by our outstanding preferred stock.][added: issue.] - Dividend requirements associated with our preferred stock subject us to
[removed: certain]risks. - In addition to general information
[removed: risks]and cyber risks that all large corporations[removed: face (e.g. malware, general cyber- or phishing-attacks by outsiders, malicious intent by insiders and inadvertent disclosure of sensitive information),][added: face,] we face evolving cybersecurity risks associated with protecting sensitive and confidential customer and employee[removed: information, smart grid infrastructure,][added: information] and [added: energy grid,] natural gas[removed: pipeline and][added: pipeline,] storage [added: and other] infrastructure. - making it more difficult and costly for each of these
[removed: companies][added: businesses] to service, pay or refinance[removed: its][added: their] debts as they become due, particularly during adverse economic or industry conditions limiting flexibility to pursue[removed: other]strategic opportunities or react to [added: business developments or] changes in[removed: each of our businesses and]the industry sectors in which they operate requiring[removed: a substantial portion of available]cash to be used for debt service payments,[removed: including interest and potential redemptions,]thereby reducing the[removed: availability of]cash[removed: to fund working capital, capital expenditures, development projects, acquisitions, dividend payments and][added: available for] other[removed: general corporate]purposes causing lenders to require[removed: additional]materially adverse[removed: terms, conditions or covenants][added: terms] in the[removed: debt]instruments for new debt,[removed: which might include][added: such as] restrictions on uses of proceeds or other assets or limitations on[removed: the ability to incur][added: incurring] additional debt,[removed: create][added: creating] liens,[removed: pay][added: paying] dividends,[removed: redeem or repurchase][added: repurchasing] stock,[removed: make][added: making] investments or[removed: receive][added: receiving] distributions from subsidiaries or equity method investments - The availability and cost of debt or equity financing could be
[removed: adversely][added: negatively] affected by[removed: conditions in the financial markets][added: market] and economic conditions[removed: generally, as well as][added: and] other factors, and any such[removed: negative]effects could materially adversely affect us. - adverse changes to
[removed: economic and financial market conditions and]laws and[removed: regulations in][added: regulations, including] the[removed: jurisdictions][added: recent and proposed changes to the regulation of the energy market] in[removed: which we operate or do business][added: Mexico] the overall health of the energy industry volatility in [added: electricity or] natural gas[removed: or electricity]prices for[removed: Sempra Energy][added: Sempra, SDG&E] and[removed: SDG&E,][added: SoCalGas,] risks related to California wildfires [added: for Sempra, SDG&E] and [added: SoCalGas,] any[removed: failure by the State of California to adequately address the financial and operational wildfire-related risks facing California electric IOUs the]deterioration of or uncertainty in the political or regulatory environment for local natural gas distribution companies operating in California credit ratings downgrades - We are subject to
[removed: additional]risks due to uncertainty relating to the calculation of LIBOR and its scheduled discontinuance. [removed: Certain credit][added: Credit] rating agencies may downgrade our credit ratings or place those ratings on negative outlook.- We
[removed: cannot and]do not[removed: attempt to]fully hedge our assets or contract positions against changes in commodity prices, and for those contract positions that are hedged, our hedging procedures may not mitigate our risk as[removed: planned.][added: expected.] - Market performance or changes in other assumptions could require
[removed: significant]unplanned contributions to pension and other postretirement benefit plans. - Our businesses require numerous permits, licenses,
[removed: franchises,][added: franchises] and other approvals[removed: and agreements]from various[removed: federal, state, local and foreign]governmental agencies, and the failure to obtain or maintain any of them could materially adversely affect[removed: our businesses, cash flows, financial condition, results of operations and/or prospects.][added: us.] - Our businesses are subject to [added: numerous] governmental regulations and [added: complex] tax and accounting requirements and may be materially adversely affected by these regulations or requirements or any changes to them.
- Natural gas and natural gas storage have increasingly been the subject of political and public scrutiny, including a desire by some to
[removed: substantially]reduce or eliminate reliance on natural gas as an energy source. - SDG&E may incur
[removed: substantial][added: significant] costs and liabilities[removed: as a result of][added: from] its partial ownership of a nuclear facility[removed: that is]being decommissioned. [removed: The California Utilities][added: SDG&E and SoCalGas] are subject to extensive regulation by[removed: state, federal][added: federal, state] and local legislative and regulatory authorities, which may materially adversely affect[removed: us.][added: Sempra, SDG&E and SoCalGas.]- Certain ring-fencing measures, governance mechanisms and commitments limit our ability to influence the
[removed: management][added: management, operations] and policies of Oncor. - seven members of Oncor’s 13-person board of directors
[removed: will][added: must] be independent directors in all material respects under the rules of the NYSE in relation to Sempra[removed: Energy]and its[removed: subsidiaries and affiliated entities][added: affiliates] and any other[removed: direct or indirect]owners of Oncor, and also[removed: will][added: must] have no material relationship with Sempra[removed: Energy and][added: or] its[removed: subsidiaries and affiliated entities][added: affiliates] or any other[removed: direct or indirect]owners of Oncor currently or within the previous 10[removed: years. With respect to][added: years; of] the six remaining directors, two[removed: will][added: must] be designated by[removed: Sempra Energy,][added: Sempra,] two[removed: will][added: must] be designated by Oncor’s minority owner, TTI, and two[removed: will][added: must] be current or former Oncor officers - Oncor will not pay
[removed: any]dividends or other distributions (except for contractual tax payments) if a majority of its independent directors or any of the directors appointed by TTI determines that it is in the best[removed: interests][added: interest] of Oncor to retain such amounts to meet expected future requirements - Oncor will not pay dividends or other distributions (except for contractual tax payments) if that payment would cause its debt-to-equity ratio to exceed the debt-to-equity ratio approved by the PUCT if Oncor’s senior secured debt credit rating by any of the
[removed: three major rating agencies][added: Rating Agencies] falls below BBB (or Baa2 for Moody’s), Oncor will suspend dividends and other distributions (except for contractual tax payments), unless otherwise allowed by the PUCT there must be[removed: maintained]certain “separateness measures”[removed: that][added: maintained to] reinforce the legal and financial separation of Oncor from[removed: Sempra Energy,][added: Sempra,] including a requirement that dealings between Oncor and Sempra[removed: Energy]or[removed: Sempra Energy’s][added: Sempra’s] affiliates (other than Oncor Holdings and its subsidiaries) must be on an arm’s-length basis, limitations on affiliate transactions and a prohibition on pledging Oncor assets or stock for any entity other than Oncor a majority of Oncor’s independent directors and the directors designated by TTI that are present and voting[removed: (of which][added: (with] at least one[removed: must][added: required to] be present and voting) must approve any annual or multi-year budget if the aggregate amount of capital expenditures or O&M in such budget is more than a 10% increase or decrease from the corresponding amounts[removed: of such expenditures]in the budget for the preceding fiscal year or multi-year period, as applicable - Sempra
[removed: Energy will][added: must] continue to hold indirectly at least 51% of the ownership interests in Oncor Holdings and Oncor until at least March 9, 2023, unless otherwise[removed: specifically]authorized by the PUCT - Oncor’s operations are
[removed: capital intensive][added: capital-intensive,] and it could have liquidity needs that necessitate additional[removed: investments in Oncor.][added: investments.] - Sempra
[removed: Energy]could incur substantial tax liabilities if EFH’s 2016 spin-off of Vistra from EFH is deemed to be taxable. - The proposed expansion of the Cameron LNG JV facility (Phase 2) is subject to certain restrictions and conditions under the
[removed: project]financing agreements for Phase 1 of the[removed: project, including, among others, timing restrictions unless appropriate prior consent is obtained from the]project[removed: lenders,]and requires unanimous consent of all JV partners, including with respect to the equity investment obligations of each partner.[removed: There is no assurance that][added: We may not be able to satisfy] these conditions and[removed: requirements can be satisfied,][added: requirements,] in which case our ability to develop the Phase 2 project would be jeopardized. - We may not be able to enter into, maintain, extend or replace
[removed: expiring]long-term[removed: supply and][added: supply,] sales[removed: agreements]or[removed: long-term firm]capacity[removed: agreements for our projects.][added: agreements.] - deliver the natural
[removed: gas and][added: gas, LNG,] electricity and LPG we sell to[removed: wholesale markets][added: customers] or[removed: that we]use for our natural gas liquefaction export facilities supply natural gas to our gas storage and electric generation facilities provide retail energy services to customers - Our international businesses and operations expose us to [added: increased] legal, [added: regulatory,] tax, economic,
[removed: geopolitical, management oversight, foreign currency][added: geopolitical] and[removed: inflation][added: management oversight] risks and challenges. [removed: changes in foreign laws and regulations, including]tax,[removed: trade and][added: trade,] environmental[removed: laws]and[removed: regulations, and U.S.][added: other foreign] laws and regulations[removed: that are related to foreign operations or doing business internationally,][added: and compliance with them,] including[removed: U.S. trade][added: legal limitations on ownership in some foreign countries] and[removed: related policies as we discuss below][added: inadequate or inconsistent enforcement of regulations] actions by local regulatory bodies, including setting[removed: of]rates and tariffs that may be earned by [added: or charged to] our businesses adverse changes in [added: social, political,] economic or market[removed: conditions, limitations on ownership in foreign countries and inadequate enforcement of regulations risks related to currency exchange and convertibility, including vulnerability to appreciation and depreciation][added: conditions or the stability] of foreign[removed: currencies against the U.S. dollar, as we discuss below permitting and regulatory compliance][added: governments] adverse rulings by foreign courts or[removed: tribunals,][added: tribunals;] challenges to or difficulty[removed: obtaining][added: obtaining, maintaining and complying with] permits or[removed: approvals,][added: approvals;] difficulty enforcing contractual and property[removed: rights,][added: rights;] differing legal standards for lawsuits or other[removed: proceedings,][added: proceedings;] and unsettled property rights and titles in Mexico[removed: energy policy reform, including that which may result in adverse changes to and/or difficulty enforcing existing contracts or challenges completing and operating our renewable energy facilities in Mexico, as we discuss below]expropriation or theft of assets[removed: adverse changes in the stability of the governments or the economies in the countries in which we operate or do business violence, criminality, or social or political instability compliance]with[removed: the U.S. Foreign Corrupt Practices Act and similar laws with]respect to our non-utility international business activities, changes in the priorities and budgets of international customers, which may be driven by many of the factors listed above, among others- U.S. [added: and Mexican Laws and] Foreign Policy, including Trade and Related Matters
A heading is new when no FY2020 heading matches it after ignoring case and punctuation, and reworded when it shares at least 60 percent of its words with one that went away. All current risk factor headings.
Sentences by item
23 items, with every count and a link to each item that changed
Underlined words on a shaded ground are new in FY2021; struck-through words were in FY2020. Sentences that are wholly new or wholly gone are labelled rather than marked.
Item 1A. RISK FACTORS
358 rewritten, 208 added, 303 removed, 80 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
*When evaluating our company and its subsidiaries and any investment in our or their securities, you should [removed: consider] carefully [added: consider] the following risk factors and all other information contained in this report and [removed: in] the other documents we file with the SEC, including [removed: in] documents we file subsequent to this report.
[removed: These risk factors] [added: If any of these risks occurs, our results of operations, financial condition, cash flows and/or prospects] could [added: be] materially adversely [removed: affect] [added: affected,] our actual results [removed: and cause such results to] [added: could] differ materially from those expressed in any forward-looking statements made by us or on our [removed: behalf.][added: behalf, and the trading price of our securities and those of our subsidiaries could decline.]
We [removed: may] also [added: may] be materially harmed by risks and uncertainties not currently known to us or that we currently [removed: deem to be] [added: consider] immaterial.
[removed: If] [added: The occurrence of] any of these risks [removed: occurs,] [added: could materially adversely affect] our [removed: businesses, cash flows,] results of operations, financial [removed: condition] [added: condition, cash flows] and/or [removed: prospects could be materially adversely affected, and the trading prices of our securities and those of our subsidiaries could substantially decline.][added: prospects.]
These risk factors [added: are not prioritized in order of importance or materiality, and they] should be read in conjunction with the other information [removed: concerning our company set forth] in [removed: or attached as an exhibit to] this report, [removed: including, among other things,] [added: including] the information set forth in the Consolidated Financial Statements and in “Part II – Item 7.
[removed: Risks Related to Sempra Energy][added: RISKS RELATED TO SEMPRA]
[removed: Sempra Energy’s] [added: Sempra’s] cash flows, ability to pay dividends and ability to meet its debt obligations largely depend on the performance of its subsidiaries and entities [removed: that are] accounted for as equity method [removed: investments, such as Oncor Holdings and Cameron LNG JV.][added: investments.]
We are a holding company and substantially all our assets are owned by our subsidiaries or entities we do not control, [removed: which include] [added: including] equity method [removed: investments such as Oncor Holdings and Cameron LNG JV.][added: investments.]
Our ability to pay dividends and [removed: to] meet our debt and other obligations largely depends on cash flows from our subsidiaries and equity method [removed: investments.][added: investments, which in turn depend on their ability to execute their business strategies and generate cash flows in excess of their own expenditures, common and preferred dividends (if any) and debt and other obligations.]
In addition, [removed: the] entities accounted for as equity method investments, which we do not control, and our subsidiaries are all separate and distinct legal entities that are not obligated to pay dividends or make loans or distributions to us and could be precluded from [removed: paying any such dividends or making any such loans or distributions under certain circumstances, including, among other things, as a result of] [added: doing so by] legislation, regulation, court order or contractual [removed: restrictions or] [added: restrictions,] in times of financial [removed: distress.][added: distress or in other circumstances.]
The inability to access capital from our subsidiaries and entities accounted for as equity method investments could have a material adverse effect on our [removed: cash flows,] [added: results of operations,] financial [removed: condition] [added: condition, cash flows] and/or prospects.
[removed: Sempra Energy’s] [added: Sempra’s] rights to the assets of its subsidiaries and equity method investments are structurally subordinated to the claims of [removed: that] [added: each] entity’s [removed: creditors, including] trade [added: and other] creditors.
In addition, [removed: to the extent] [added: if] Sempra [removed: Energy] is a creditor of any such entity, its rights as a creditor would be effectively subordinated to any security interest in the [added: entity’s] assets [removed: of that entity] and any indebtedness of the entity senior to that held by [removed: Sempra Energy.][added: Sempra.]
Sempra [removed: Energy] has substantial investments in and obligations arising from businesses [removed: that] it does not control or manage or in which it shares control.
In some cases, we engage in [removed: other] arrangements with or for these [removed: entities] [added: businesses] that could expose us to risks in addition to our [removed: investment.][added: investment, including guarantees, indemnities and loans.]
We discuss [removed: the guarantees in Note 6, indemnities in Note 16, and affiliate loans] [added: this dispute] in Note [removed: 1] [added: 16] of the Notes to Consolidated Financial Statements.
[removed: Where] [added: When] we share control [added: of a business] with other [removed: equity] owners, any disagreements among the owners [removed: of these businesses with respect to material issues, including] [added: about] strategy, financial, [removed: operational or] [added: operational,] transactional [removed: matters,] [added: or other important matters] could [removed: have a material adverse effect on] [added: hinder] the [removed: ability of that] business [removed: to move] [added: from moving] forward with key initiatives or [removed: projects or take] [added: taking] other [removed: actions,] [added: actions] and could [removed: also] negatively affect the [removed: long-term] relationships among the [removed: business] owners and the [removed: ability] [added: efficient functioning] of the [removed: entity to function efficiently and effectively.][added: business.]
Any such circumstance could materially adversely affect our [removed: business,] [added: results of operations,] financial condition, cash [removed: flows, result of operations] [added: flows] and/or prospects.
We discuss [removed: our] [added: these] investments further in Notes 5, 6 and 16 of the Notes to Consolidated Financial Statements.
Our business could be negatively affected [removed: as a result of] [added: by] actions of activist shareholders.
Activist shareholders [removed: may, from time to time,] [added: may] engage in proxy solicitations, advance shareholder [removed: proposals,] [added: proposals] or otherwise attempt to effect changes [removed: and] [added: in or] assert influence on our board of directors and management.
In taking these steps, activist shareholders could seek to acquire [removed: significant amounts of] our capital stock, which [added: in high volumes] could threaten our ability to use some or all [added: of] our NOL carryforwards if [removed: any such attempt were to result] [added: it results] in our corporation undergoing an “ownership change” under applicable tax rules.
[removed: the case of a] [added: Responding to activist shareholders could require us to incur legal and advisory fees,] proxy [removed: contest)] [added: solicitation expenses] and administrative and associated costs and require [removed: significant] time and attention by our board of directors and management, diverting their attention from the pursuit of our business [removed: strategy.][added: strategies.]
Any perceived uncertainties [removed: as to] [added: about] our future direction [removed: and] [added: or] control, our ability to execute [removed: on] our [removed: strategy,] [added: strategies,] or the composition of our board of directors or [removed: senior] management team arising from [removed: a proxy contest or increased ownership] [added: activist shareholder attention] or other [removed: interest in our company from activist shareholders] [added: action] could lead to [removed: the] [added: a] perception of [added: instability or] a change in the direction of our [removed: business or instability,] [added: business,] which could be exploited by our competitors and/or other activist shareholders, result in the loss of business opportunities, and make it more difficult to pursue our strategic initiatives or attract and retain qualified personnel and business partners, any of which could have a material adverse effect on our [removed: business, operating] results [added: of operations, financial condition, cash flows] and/or prospects.
Further, any such actions could cause [removed: significant] fluctuations in the trading prices of our common stock, preferred stock and debt securities based on temporary or speculative market perceptions or other [removed: factors that may not reflect the underlying fundamentals and prospects of our business.][added: factors.]
Any impairment of our assets [added: or investments] could negatively impact [removed: our consolidated results of operations and net worth.][added: us.]
Any such reduction in the fair value of our assets [added: or investments] could result in an impairment loss that could materially adversely affect our results of operations for the period in which [removed: such] [added: the] charge is recorded.
MD&A – Critical Accounting [removed: Policies and] Estimates” and in Note 1 of the Notes to Consolidated Financial Statements.
The economic interest, voting rights and market value of our outstanding common and preferred stock may be adversely affected by any additional equity securities we may [removed: issue and, with respect to our common stock, by our outstanding preferred stock.][added: issue.]
We may seek to raise capital by issuing additional [removed: shares of common] [added: equity] or [removed: preferred stock, which, together with the conversion of the series B preferred stock into our common stock,] [added: convertible debt securities, which] may materially dilute the voting rights and economic interests of holders of our outstanding common and preferred stock and materially adversely affect the trading price of our common and preferred stock.
Dividend requirements associated with our preferred stock subject us to [removed: certain] risks.
Any failure to pay scheduled dividends on our [added: series C] preferred stock when due would have a material adverse impact on the market price of our preferred stock, our common stock and our debt securities and would prohibit us, under the terms of [removed: our] [added: the] preferred stock, from paying cash dividends on or repurchasing shares of our common stock (subject to limited exceptions) until [removed: such time as] we have paid all accumulated and unpaid dividends on the preferred stock.
[removed: The] [added: Additionally, the] terms of the series [removed: B preferred stock and series] C preferred stock generally provide that if dividends on any shares of the preferred stock have not been declared and paid or have been declared but not paid for [removed: six or more quarterly dividend periods for the series B preferred stock and] three or more semi-annual dividend [removed: periods for the series C preferred stock,] [added: periods,] whether or not [removed: for consecutive dividend periods,] [added: consecutive,] the holders of the preferred [removed: stock, voting together as a single class, will] [added: stock would] be entitled to elect [removed: a total of] two additional members to our board of directors, subject to certain terms and limitations.
[removed: Risks Related to All Sempra Energy Businesses][added: RISKS RELATED TO ALL SEMPRA BUSINESSES]
The COVID-19 pandemic [removed: is] [added: has been] materially impacting communities, supply [removed: chains] [added: chains, economies] and markets around the [removed: world.][added: world since March 2020.]
[removed: If these or other similar measures were] [added: ▪Conducting business with substantial modifications] to [removed: increase or continue for an extended period, we] [added: employee travel and work locations and virtualization of certain business activities, which] could [removed: experience] [added: result in increased] employee [added: turnover or] absenteeism, decreased efficiency and productivity [removed: by our workforce] and other similar [removed: impacts] [added: affects] that could [added: increase operating costs and] jeopardize our ability to [removed: sustain operations and] satisfy compliance requirements and [removed: could result in higher operating costs.][added: sustain operations]
[removed: These actions have resulted] [added: The occurrence of any of these events could result] in a reduction in [removed: payments received from] our [removed: customers and an increase in uncollectible accounts, which could become material,] [added: expected recovery] and [removed: any inability or delay in recovering all or a substantial portion of these costs could] have a material adverse effect on [removed: the cash flows, financial condition] [added: SDG&E’s] and [added: Sempra’s] results of [removed: operations for Sempra Energy, SDG&E and SoCalGas.][added: operations, financial condition, cash flows and/or prospects.]
We will continue to actively monitor the effects of the COVID-19 pandemic and may take further actions that alter our [removed: business operations as may be required by federal, state or local authorities, or that we determine are in the best interests of our employees, customers, partners and suppliers.]
However, we cannot at this time predict the extent to which the COVID-19 pandemic [removed: will] [added: may] further impact our [removed: liquidity, financial condition, results of operations and prospects.][added: businesses.]
[removed: Severe weather conditions, natural disasters, pandemics, accidents, equipment failures, explosions or acts of terrorism] [added: Any such outcome] could materially adversely affect our [removed: businesses, financial condition,] results of operations, [added: financial condition,] cash flows and/or [removed: prospects.][added: prospects.]
Sempra may elect to make capital contributions to its subsidiaries.
Unlike a loan, there is no obligation for a subsidiary to repay a capital contribution to its parent, which cannot be accessed by the parent and becomes structurally subordinated to claims by creditors of the applicable subsidiary.
We have and make investments in businesses we do not control or manage or in which we share control, including as a result of sales of a portion of our ownership interest in some of our businesses.
For businesses we do not control, we are subject to the decisions of others, which may not always be in our interest and could negatively affect us.
In addition, irrespective of whether or not we control these businesses, we could be responsible for liabilities or losses related to the businesses or elect to make capital contributions to these businesses during times of financial distress that could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
We could experience a reduction in the fair value of our assets, including our long-lived assets, intangible assets or goodwill, and/or our investments that we account for under the equity method upon the occurrence of many of the risks discussed in these risk factors and elsewhere in this report, including any closure of the Aliso Canyon natural gas storage facility without adequate cost recovery, any inability to operate our existing facilities or develop new projects in Mexico due to proposed changes to existing laws or regulations or other circumstances affecting the energy sector or our assets in that country, and more generally any loss of permits or approvals that requires us to adjust or cease certain operations and any investment in capital projects that do not receive required approvals or are changed, abandoned or otherwise not completed.
At February 18, 2022, we have 315,653,893 shares of our common stock and 900,000 shares of our non-convertible series C preferred stock outstanding.
Our common stock is listed on the Mexican Stock Exchange and registered with the CNBV, which subjects us to additional regulation and liability in Mexico.
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
securities laws and regulations; and seek criminal liability for certain actions conducted or with effects in Mexico.
Our businesses are subject to risks arising from their infrastructure and information systems.
▪failure to meet customer demand for electricity and/or natural gas, including electrical blackout, curtailments or gas outages
▪natural gas surges into homes or other properties
However, Sempra and some or all its businesses have been and could continue to be impacted by this pandemic or any future pandemic in a number of ways, including:
▪Implementing protocols and processes to comply with applicable government mandates related to virus exposure, testing and vaccination
▪Disruption in the capital markets, which has affected and could further affect liquidity, strategic initiatives and prospects, including in some cases a slowdown of planned capital spending
▪Customer-protection measures implemented by SDG&E and SoCalGas, including suspending service disconnections due to nonpayment for all customers (except for SoCalGas’ noncore customers), waiving late payment fees, offering flexible payment plans and automatically enrolling residential and small business customers with past-due balances in long-term repayment plans, which have collectively resulted in a reduction in payments from SDG&E and SoCalGas’ customers and an increase in uncollectible accounts that could become material and may not be fully recoverable
▪Precautionary, preemptive and responsive actions taken by our current and prospective counterparties, customers and partners, as well as regulators and other governing bodies that affect our businesses, which have affected and could further affect our operations, results, liquidity and ability to pursue capital projects and strategic initiatives
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
business operations as may be required by federal, state or local authorities, or that we determine are necessary for the safety of our employees, customers, partners and suppliers and, generally, the communities we serve.
Severe weather, natural disasters and other similar events could materially adversely affect us.
Our facilities and infrastructure, including projects in development and under construction, may be damaged by severe weather, natural disasters, accidents, explosions or acts of terrorism, war or criminality.
Such incidents could result in business and project development disruptions, power outages, property damage, injuries and loss of life for which we could be liable and could cause secondary incidents that also may have these or other negative effects, such as fires; leaks of natural gas, natural gas odorant, propane, ethane, other GHG emissions or radioactive material; spills or other damage to natural resources; or other nuisances to affected communities.
Any of these occurrences could decrease revenues and earnings and/or increase costs, including maintenance costs or restoration expenses, amounts associated with claims against us, and regulatory fines, penalties and disallowances.
Insurance coverage for these costs may increase or become prohibitively expensive, be disputed by insurers, or become unavailable for certain of these risks or at sufficient levels, and any insurance proceeds may be insufficient to cover our losses or liabilities due to limitations, exclusions, high deductibles, failure to comply with procedural requirements or other factors.
We seek growth opportunities in the market organically and inorganically, including through the acquisition of, or partnerships in, operating companies.
We diligently analyze the financial viability of each acquisition, partnership and JV we pursue.
However, our diligence may prove to be insufficient, and there could be difficulties in integrating acquired assets to our standards or in a timely manner or latent unforeseen defects.
In addition, we may not realize all of the anticipated benefits from future acquisitions, partnerships or JVs such as increased earnings, cost savings, or revenue enhancements, for various reasons, including difficulties integrating operations and personnel, higher and unexpected acquisition and operating costs, unknown liabilities, and fluctuations in markets.
Increasing activities and projects intended to advance new energy technologies could introduce new risks to our businesses.
We may periodically undertake or become involved in research and development projects and other activities designed to develop new technologies in the energy space, including those related to hydrogen, energy storage, carbon sequestration, grid modernization and others.
These activities and projects can involve significant employee time, as well as substantial capital resources that may not be recoverable in rates or, with respect to our non-regulated utility businesses, may not be able to be passed through to customers.
In addition, the timing to complete these activities and projects is inherently uncertain and may require significantly more time and funding than we initially anticipate.
Moreover, many of these technologies are in the early stage of development, and the applicable activities and projects may not be completed or the applicable technologies may not prove economically and technically feasible.
If any of these circumstances occurs, we may not recover or receive an adequate or any return on our investment and other resources invested in these activities and our results of operations, financial condition, cash flows and/or prospects could be materially adversely affected.
Any such labor disruption or negotiated wage or benefit increases, whether due to
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
In particular, cyber- and other attacks targeting utility systems and other energy infrastructures, as well as the impacts of these attacks on companies and their communities, are increasing in sophistication, magnitude and frequency and may further increase in the event of geopolitical events and other uncertainties, such as the conflict in Ukraine.
Although we invest in risk management and information security measures for the protection of our systems and information, these measures could be insufficient or otherwise fail.
Cash flows from our subsidiaries and equity method investments depend on their ability to successfully execute their business strategies and generate cash flows in excess of their own expenditures, common and preferred dividends (if any), and debt and other obligations.
We have and make investments in entities that we do not control or manage or in which we share control, which include Sempra Energy’s direct or indirect interest in Oncor, Cameron LNG JV and RBS Sempra Commodities; SDG&E’s interest in SONGS; and IEnova’s indirect interest in the Sur de Texas-Tuxpan natural gas marine pipeline in Mexico, among others.
For example, Sempra Energy has provided guarantees in support of financing agreements related to Cameron LNG JV, Sempra Energy is subject to certain indemnities with respect to RBS Sempra Commodities, and Sempra Mexico has provided loans to JVs in which it has investments.
With respect to ventures and other businesses over which we do not exercise control, we could be responsible for significant liabilities or losses related to these businesses, such as our investment in RBS Sempra Commodities where we recorded $100 million in equity losses representing our estimated obligations to settle outstanding tax matters and related legal costs, and where we could be subject to further losses upon final resolution of these matters.
In addition to other risks inherent in these businesses, if their management were to fail to perform adequately, the other investors in the businesses were unable or otherwise failed to perform their obligations to provide capital and credit support for these businesses, business decisions were made with which we do not agree or other factors were to result in liabilities or losses at these entities, it could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.
Responding to activist shareholders would require us to incur significant legal and advisory fees, proxy solicitation expenses (in
We could experience a reduction in the fair value of our assets, including our long-lived assets, intangible assets or goodwill, upon the occurrence of many of the risks discussed in these risk factors.
At February 25, 2021, we have 6,650,000 shares of preferred stock outstanding, 5,750,000 of which constitute our series B preferred stock and are scheduled to convert into shares of our common stock on July 15, 2021, and the remaining 900,000 of which constitute our series C preferred stock and are not convertible.
We also issued 13,781,025 shares of our common stock on January 15, 2021 upon the mandatory conversion of our former series A preferred stock in accordance with the terms of those securities.
Any future cash dividends we pay on our series B preferred stock and series C preferred stock will depend on, among other things, our financial condition, capital requirements and results of operations, the ability of our subsidiaries and equity method investees to distribute cash to us, and other factors that our board of directors may consider relevant.
The U.S. economy is experiencing a significant slowdown and claims for unemployment have substantially increased.
However, we are conducting business with substantial modifications to employee travel, employee work locations, and virtualization or cancellation of certain business activities, among other modifications.
We also have observed other companies, including our current and prospective counterparties, customers and partners, as well as many governments, including our regulators and other governing bodies that affect our businesses, taking precautionary, preemptive and responsive actions to address the effects of the COVID-19 pandemic, and they may take further actions that alter their normal operations.
These actions by third parties could materially impact our operations, results, liquidity and ability to pursue capital projects and strategic initiatives.
For example, the CPUC has required that all energy companies under its jurisdiction take action to implement several emergency customer protection measures to support California customers.
The measures currently apply to all residential and small business customers affected by the COVID-19 pandemic and include suspending service disconnections due to nonpayment, waiving late payment fees, and offering flexible payment plans to customers experiencing difficulty paying their electric or gas bills.
As an additional example, we reached a final investment decision with respect to ECA LNG Phase 1 in November 2020, the timing of which was delayed in part by the COVID-19 pandemic.
If this or other projects under development are further delayed due to continuing or worsening conditions caused by the COVID-19 pandemic or other related factors, the performance and prospects of our LNG export business could be materially adversely affected.
Although Sempra Energy, SDG&E and SoCalGas are not currently constrained in their ability to borrow money at reasonable rates, these circumstances could change if the COVID-19 pandemic worsens or continues for an extended period and adversely affects conditions in the capital markets, which could have a material negative effect on our liquidity, results of operations, strategic initiatives and prospects.
The COVID-19 pandemic could result in an increased slowdown of certain of our capital spending if conditions deteriorate or fail to improve in the near term, which could have a material adverse effect on Sempra Energy’s, SDG&E’s and SoCalGas’ results of operations and prospects.
Like other capital intensive businesses, our facilities and infrastructure may be damaged by severe weather conditions and natural disasters such as fires, earthquakes, tornadoes, hurricanes, other storms, tsunamis, heat waves, rising sea levels, floods, mudslides, drought, solar events and electromagnetic events; pandemics; accidents; equipment failures; explosions; or acts of terrorism, vandalism, war or criminality.
The facilities and infrastructure that we own or in which we have interests that may be subject to such incidents include, among others:
▪natural gas, propane and ethane pipelines, storage and compressor facilities
▪electric transmission, distribution and battery storage equipment
▪power generation plants, including renewable energy and natural gas-fired generation
▪marine and inland ethane and liquid fuels, LNG and LPG facilities, terminals and storage
▪nuclear power facilities and nuclear fuel and nuclear waste storage facilities (through SDG&E’s minority interest in SONGS, which is currently being decommissioned)
Such incidents could result in severe business disruptions; prolonged power outages; property damage, injuries or loss of life for which our businesses could be liable; significant decreases in revenues and earnings; and/or other significant additional costs to us, including as a result of higher maintenance costs or restoration expenses, amounts to compensate third parties, and regulatory
fines, penalties and disallowances.
Depending on the nature and location of the facilities and infrastructure affected, any such incident also could cause catastrophic fires; natural gas, natural gas odorant, propane or ethane leaks; releases of other GHG emissions; radioactive releases; explosions, spills or other significant damage to natural resources or property belonging to third parties; or personal injuries, health impacts or fatalities, or could present a nuisance to impacted communities.
Any of these consequences could lead to significant claims against us.
We discuss how the application of this doctrine in California imposes strict liability on an electric utility whose equipment is determined to be a cause of a fire (meaning the utility may be found liable regardless of fault) below under “Risks Related to the California Utilities – Operational Risks.” Insurance coverage may significantly increase in cost or become prohibitively expensive, may be disputed by the insurers, or may become unavailable for certain of these risks or at sufficient levels, and any insurance proceeds we receive may be insufficient to cover our losses or liabilities due to the existence of limitations, exclusions, high deductibles, failure to comply with procedural requirements, and other factors, which could materially adversely affect our businesses, financial condition, results of operations, cash flows and/or prospects, as well as the trading prices of our common stock, preferred stock and debt securities.
Our collective bargaining agreements are generally negotiated on a company-by-company basis.
In particular, various private and public entities have noted that cyber- and other attacks targeting utility systems and other energy infrastructures are increasing in sophistication, magnitude, and frequency.
Addressing cyber risks is the subject of significant ongoing activities across Sempra Energy’s businesses, including investing in risk management and information security measures for the protection of our systems and information.
Despite our efforts, our businesses are not fully insulated from cyber-attacks or system disruptions.
In addition, we often rely on third-party vendors to deploy new business
Further, as seen with recent cyber-attacks around the world, the goal of a cyber-attack may be primarily to inflict large-scale harm on a company and the places where it operates.
Any such cyber-attack could cause widespread destruction of or disruption to our operating, financial and administrative systems that could materially adversely affect our business operations and the integrity of the power grid, our pipelines and distribution and storage infrastructure or one of our related facilities, negatively impact our ability to produce accurate and timely financial statements or comply with ongoing disclosure obligations or other regulatory requirements, and/or release confidential information about our company and our customers, employees and other constituents, any of which could lead to sanctions or negatively affect the general perception of our business in the financial markets and which could have a material adverse effect on our businesses, cash flows, financial condition, results of operations and/or prospects.
Sempra Energy is committed to maintaining or improving its current credit ratings.
An excerpt. Shown here: 40 of 358 rewritten, 40 of 208 added and 40 of 303 removed. The counts are complete. For every sentence, read Item 1A. RISK FACTORS in the FY2021 filing and the FY2020 filing.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
443 rewritten, 466 added, 496 removed, 472 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
In 2018, we set out to simplify [removed: Sempra Energy’s] [added: Sempra’s] business model and sharpen our focus on our mission to be North America’s premier energy infrastructure company.
Our [removed: 2020] [added: 2021] operational and financial results reflect our focus on executing this strategy:
Our [added: former] South American businesses and certain activities associated with those businesses are presented as discontinued [removed: operations for all periods presented.][added: operations.]
▪Overall results of operations of [removed: Sempra Energy Consolidated;][added: Sempra;]
OVERALL RESULTS OF OPERATIONS OF [removed: SEMPRA ENERGY CONSOLIDATED][added: SEMPRA]
Our earnings and diluted EPS were impacted by variances discussed [added: below] in “Segment [removed: Results” below.][added: Results.”]
This section presents earnings (losses) by Sempra [removed: Energy] segment, as well as Parent and other and discontinued operations, and a related discussion of the changes in segment earnings (losses).
| SEMPRA [removed: ENERGY] EARNINGS (LOSSES) BY SEGMENT | | | | | | | | | | | | | | | | | |
| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |
| SDG&E | | | $ | [removed: 824] [added: 819] | | | | | $ | [removed: 767] [added: 824] | | | | | $ | [removed: 669] [added: 767] | |
| SoCalGas | | | [removed: 504] [added: (427)] | | | | | | [removed: 641] [added: 504] | | | | | | [removed: 400] [added: 641] | | |
| Sempra Texas Utilities | | | [removed: 579] [added: 616] | | | | | | [removed: 528] [added: 579] | | | | | | [removed: 371] [added: 528] | | |
| Sempra Renewables | | | — | | | | | | [removed: 59] [added: —] | | | | | | [removed: 328] [added: 59] | | |
| Parent and other(1) | | | [removed: (562)] [added: (436)] | | | | | | [removed: (515)] [added: (563)] | | | | | | [removed: (620)] [added: (515)] | | |
| Discontinued operations | | | [removed: 1,840] [added: —] | | | | | | [removed: 328] [added: 1,840] | | | | | | [removed: 156] [added: 328] | | |
| Earnings attributable to common shares | | | $ | [removed: 3,764] [added: 1,254] | | | | | $ | [removed: 2,055] [added: 3,764] | | | | | $ | [removed: 924] [added: 2,055] | |
▪$62 million [added: decrease] due to the release of a regulatory liability in 2020 related to 2016-2018 forecasting differences that are not subject to tracking in the income tax expense memorandum account, which we discuss in Note 4 of the Notes to Consolidated Financial Statements;
▪$52 million higher electric transmission margin, including an increase in authorized ROE and the following [added: favorable] impacts [added: in 2020] from the March 2020 FERC-approved TO5 settlement:
◦$9 million [removed: favorable impact] from the retroactive application of the final TO5 settlement for 2019;
▪$44 million [removed: expected] [added: charge in 2020 for amounts] to be refunded to customers and a fine related to the Energy Efficiency Program inquiry, which we discuss in Note 4 of the Notes to Consolidated Financial Statements; [added: and]
The increase in earnings of [removed: $98] [added: $333] million [removed: (15%)] in [removed: 2019] [added: 2020] compared to [removed: 2018] [added: 2019] was primarily due to:
[removed: ▪$71] [added: ▪$29] million higher CPUC base operating [removed: margin authorized for 2019,] [added: margin,] net of operating expenses;
[removed: ▪$64 million due to the release] [added: | Release] of a regulatory liability in 2020 related to 2016-2018 income tax expense forecasting [removed: differences;][added: differences | | | | | | 175 | | | | | | 86 | | | | | | 89 | | |]
[removed: ▪$29] [added: ▪$21] million higher CPUC base operating [removed: margin authorized for 2020,] [added: margin,] net of operating [removed: expenses;][added: expenses.]
[removed: ▪$21] [added: In 2019, SoCalGas recognized a $29] million impairment [removed: of] [added: loss related to] non-utility native gas [removed: assets in 2019;][added: assets.]
The increase in [removed: earnings] [added: losses] of [removed: $241] [added: $48] million [added: (9%)] in [removed: 2019] [added: 2020] compared to [removed: 2018] [added: 2019] was primarily due to:
[removed: ▪$216] [added: ▪$31] million higher CPUC base operating [removed: margin authorized for 2019,] [added: margin,] net of operating [removed: expenses;][added: expenses and favorable resolution of regulatory matters in 2020.]
[removed: ▪$14 million higher] [added: ▪higher] income tax benefits [added: in 2020] from flow-through items; offset by
[removed: ▪$18] [added: ▪$76] million higher net interest [removed: expense; and][added: expense primarily due to:]
[removed: ▪$8] [added: ▪$5] million [added: reversal of] penalties in [removed: 2019] [added: 2021] related to the SoCalGas billing practices [removed: OII.][added: OII; offset by]
The increase in earnings of [removed: $157] [added: $37] million [removed: (42%)] [added: (6%)] in [removed: 2019] [added: 2021] compared to [removed: 2018] [added: 2020 was] primarily [removed: represented] [added: due to] higher equity earnings from Oncor [removed: Holdings, which we acquired in March 2018,] [added: Holdings] driven by [removed: the impact of Oncor’s acquisition of InfraREIT in May 2019 and higher] [added: increased] revenues [removed: due to] [added: from] rate updates to reflect increases in invested [removed: transmission capital,] [added: capital and customer growth,] offset by [removed: higher] [added: increased] operating [removed: costs.][added: costs and expenses attributable to invested capital.]
[removed: Sempra Mexico][added: | Sempra: | | | | | | | | | | | | | | | | | |]
Because Ecogas, our natural gas distribution utility in Mexico, uses the local currency as its functional currency, its revenues and expenses are translated into U.S. dollars at average exchange rates for the period for consolidation in [removed: Sempra Energy’s] [added: Sempra’s] results of operations.
The increase in earnings of [removed: $6] [added: $102] million [removed: (2%)] [added: (18%)] in [removed: 2020] [added: 2021] compared to [removed: 2019] [added: 2020] was primarily due to:
[removed: ▪$69] [added: ▪$58] million [removed: favorable] [added: unfavorable] impact from foreign currency and inflation effects, net of foreign currency derivatives effects, comprised [removed: of:][added: of a $47 million unfavorable impact in 2021 compared to an $11 million favorable impact in 2020.]
[removed: ◦in 2020, $51] [added: ▪$28] million [removed: favorable] [added: decrease mainly from] foreign currency and inflation [removed: effects, offset by a $39 million loss from foreign currency derivatives,] [added: effects] and [added: associated derivatives; offset by]
[removed: ◦in 2019, $86] [added: ▪$68] million [removed: unfavorable] [added: favorable impact from] foreign currency and inflation effects, [removed: offset by a $29 million gain from] [added: net of] foreign currency [removed: derivatives; and][added: derivatives effects, comprised of an $11 million favorable impact in 2020 compared to a $57 million unfavorable impact in 2019;]
[removed: ▪$165] [added: ▪$163] million earnings attributable to NCI [removed: at IEnova] in 2020 compared to [removed: $122] [added: $121] million [removed: earnings] in 2019;
[removed: ▪$22] [added: ▪$59] million [removed: higher] [added: lower] net interest expense;
The [removed: increase] [added: decrease] in earnings of [removed: $16] [added: $5] million [removed: (7%)] [added: (1%)] in [removed: 2019] [added: 2021] compared to [removed: 2018] [added: 2020] was primarily due to:
▪We completed the consolidation of our non-utility, energy infrastructure assets in North America under SI Partners
▪We completed the sale of a 20% NCI in SI Partners to KKR
▪We entered into an agreement to sell an additional 10% NCI in SI Partners to ADIA
▪We invested $5.6 billion in capital expenditures and investments
In the fourth quarter of 2021, we formed Sempra Infrastructure, a new segment that includes the operating companies of our subsidiary, SI Partners, as well as a holding company and certain services companies.
Sempra Infrastructure develops, builds, operates and invests in energy infrastructure to help enable the energy transition in North American markets and globally.
We completed the sales of these businesses in the second quarter of 2020.
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| OVERALL RESULTS OF OPERATIONS OF SEMPRA | | | | | | | | |
| *(Dollars, except per share amounts; shares in millions)* | | | | | | | | |
| Sempra Infrastructure | | | 682 | | | | | | 580 | | | | | | 247 | | |
▪$10 million lower electric transmission margin, including the following favorable impacts in 2020 from the March 2020 FERC-approved TO5 settlement proceeding:
◦$9 million from the retroactive application of the final TO5 settlement for 2019; and
▪$6 million higher income tax expense primarily from flow-through items, net of associated regulatory revenues; offset by
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
◦$18 million to conclude a rate base matter, and
▪$44 million charge in 2020 for amounts to be refunded to customers and a fine related to the Energy Efficiency Program inquiry;
▪$915 million increase in charges related to civil litigation and regulatory matters pertaining to the Leak comprised of $1,148 million in 2021 compared to $233 million in 2020; and
▪$64 million decrease due to the release of a regulatory liability in 2020 related to 2016-2018 forecasting differences that are not subject to tracking in the income tax expense memorandum account; offset by
▪$23 million higher income tax benefits from flow-through items; and
▪$233 million from impacts in 2020 related to civil litigation and regulatory matters pertaining to the Leak;
▪$64 million increase due to the release of a regulatory liability in 2020 related to 2016-2018 forecasting differences that are not subject to tracking in the income tax expense memorandum account;
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
▪$133 million higher equity earnings from Cameron LNG JV primarily due to the three-train liquefaction project achieving full commercial operations in August 2020;
▪$55 million higher earnings from asset and supply optimization primarily driven by changes in natural gas prices and higher volumes;
▪$23 million primarily due to the start of commercial operations of the Veracruz terminal in the first quarter of 2021;
▪$20 million favorable U.S. tax impact from converting SI Partners from a corporation to a partnership in October 2021;
▪$147 million earnings attributable to NCI in 2021 compared to $163 million in 2020, including a decrease of $87 million from the increase in our ownership interest in IEnova, offset by an increase of $98 million from the sale of a 20% NCI in SI Partners to KKR, which we discuss in Note 1 of the Notes to Consolidated Financial Statements; and
▪$13 million selling profit on a sales-type lease relating to the commencement of a rail facility lease at the Veracruz terminal in the third quarter of 2021; offset by
◦$37 million in charges associated with hedge termination costs and a write-off of unamortized debt issuance costs from the early redemptions of debt in October 2021, which we discuss in Note 7 of the Notes to Consolidated Financial Statements,
◦$19 million higher interest expense from IEnova’s issuance of senior unsecured notes in September 2020, and
◦$8 million lower net interest income from lower intercompany balances with Parent and other; and
Earnings of $59 million in 2019 included a $45 million gain on such sale.
▪$105 million lower preferred dividends as a result of $124 million lower dividends due to the mandatory conversion of all series A preferred stock and series B preferred stock in January 2021 and July 2021, respectively, offset by $19 million higher dividends due to the issuance of series C preferred stock in June 2020;
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
▪$26 million gain on the sale of PXiSE in December 2021, which we discuss in Note 5 of the Notes to Consolidated Financial Statements; and
▪$14 million lower operating costs retained at Parent and other; offset by
▪We completed the sales of our South American businesses
▪We achieved full commercial operations at Cameron LNG JV Phase 1
▪We reached a final investment decision for ECA LNG Phase 1
▪We executed well on our planned capital expenditures
In 2020 compared to 2019, our earnings increased by $1,709 million to $3,764 million and our diluted EPS increased by $5.59 to $12.88.
In 2019 compared to 2018, our earnings increased by $1,131 million to $2,055 million and our diluted EPS increased by $3.87 to $7.29.
The change in diluted EPS for 2020 and 2019 included decreases of $(0.46) and $(0.33), respectively, attributable to an increase in weighted-average common shares outstanding.
| Sempra Mexico | | | 259 | | | | | | 253 | | | | | | 237 | | |
| Sempra LNG | | | 320 | | | | | | (6) | | | | | | (617) | | |
▪$31 million income tax benefit from the release of a regulatory liability established in connection with 2017 tax reform for excess deferred income tax balances that the CPUC directed to be allocated to shareholders in a January 2019 decision; and
▪$11 million higher margin from electric transmission operations, net of a FERC formulaic rate adjustment benefit in 2018; offset by
▪$10 million amortization of the Wildfire Fund asset.
▪$233 million from impacts associated with Aliso Canyon natural gas storage facility litigation and regulatory matters;
▪$38 million income tax benefit from the impact of the January 2019 CPUC decision allocating certain excess deferred income tax balances to shareholders;
▪$22 million from impacts associated with Aliso Canyon natural gas storage facility litigation in 2018; and
▪$18 million primarily due to the start of commercial operations of the Sur de Texas-Tuxpan marine pipeline at IMG JV in the third quarter of 2019;
▪$16 million lower income tax expense in 2019 primarily from a two-year tax abatement that expired in 2020; and
▪$122 million earnings attributable to NCI at IEnova in 2019 compared to $132 million earnings in 2018; offset by
◦in 2019, $88 million unfavorable foreign currency and inflation effects, offset by a $29 million gain from foreign currency derivatives, *offset by*
◦in 2018, $43 million unfavorable foreign currency and inflation effects, offset by a $1 million gain from foreign currency derivatives.
▪$665 million net impairment of certain non-utility natural gas storage assets in the southeast U.S. in 2018, including $801 million impairment in the second quarter of 2018, offset by a $136 million reduction to the impairment in the fourth quarter of 2018;
▪$17 million higher equity earnings from Cameron LNG JV, including:
◦$36 million increase primarily due to Train 1 commencing commercial operation under its tolling agreements in August 2019, *offset by*
◦$19 million decrease due to the write-off of unamortized debt issuance costs and associated fees related to Cameron LNG JV’s debt refinancing; and
▪$9 million unfavorable adjustment in 2018 to TCJA provisional amounts recorded in 2017 related to the remeasurement of deferred income taxes; offset by
▪$36 million losses attributable to NCI in 2018 related to the net impairment discussed above; and
▪$28 million higher liquefaction project development costs and operating costs.
▪$367 million gain on the sale of all Sempra Renewables’ operating solar assets, solar and battery storage development projects and its 50% interest in a wind power generation facility in December 2018; and
▪$145 million other-than-temporary impairment of certain U.S. wind equity method investments in 2018; and
The increase in losses of $47 million (9%) in 2020 compared to 2019 was primarily due to:
▪$18 million higher income tax benefit primarily due to:
The decrease in losses of $105 million (17%) in 2019 compared to 2018 was primarily due to:
▪$65 million impairment of the RBS Sempra Commodities equity method investment in 2018;
▪$32 million income tax expense in 2018 to adjust provisional amounts recorded in 2017 related to the TCJA; and
▪$10 million income tax benefit in 2019 to reduce a valuation allowance against certain NOL carryforwards as a result of our decision to sell our South American businesses; offset by
▪$17 million increase in preferred dividends primarily from the issuance of series B preferred stock in July 2018;
▪$11 million increase primarily related to settlement charges from our nonqualified pension plan; and
Discontinued Operations
The increase in earnings of $172 million in 2019 compared to 2018 was primarily due to:
▪$91 million higher earnings from South American operations mainly from higher rates, lower cost of purchased power at Peru, and including $38 million lower depreciation expense due to assets classified as held for sale;
An excerpt. Shown here: 40 of 443 rewritten, 40 of 466 added and 40 of 496 removed. The counts are complete. For every sentence, read Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS in the FY2021 filing and the FY2020 filing.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
32 rewritten, 6 added, 6 removed, 43 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
Sempra [removed: Energy] has policies governing its market risk management and trading activities.
[removed: Sempra Energy] [added: Sempra, SDG&E, SoCalGas] and [removed: the California Utilities] [added: Sempra Infrastructure] maintain separate risk management committees, organizations and processes [removed: for the California Utilities and for all non-CPUC regulated affiliates] to provide oversight of these [removed: activities.][added: activities for their respective businesses.]
[removed: The California Utilities] [added: SDG&E and SoCalGas] use power and natural gas derivatives to manage electric and natural gas price risk associated with servicing load requirements.
The following discussion of these primary market-risk exposures as of December 31, [removed: 2020] [added: 2021] includes a discussion of how these exposures are managed.
Sempra [removed: Mexico and Sempra LNG are] [added: Infrastructure is] generally exposed to commodity price risk indirectly through [removed: their] [added: its] LNG, natural gas pipelines and storage, and power-generating assets.
[removed: These segments] [added: This segment] may utilize commodity transactions in an effort to optimize these assets.
A hypothetical 10% unfavorable change in commodity prices would [removed: not] have resulted in a [removed: material] change in the fair value of our commodity-based [added: natural gas and electricity] derivatives [removed: for these segments] [added: of $3 million and $4 million] at December 31, [removed: 2020 or 2019.][added: 2021 and 2020, respectively.]
[removed: The California Utilities’] [added: In addition, their] market-risk exposure is limited due to CPUC-authorized rate recovery of the costs of commodity purchases, interstate and intrastate transportation, and storage activity.
However, SoCalGas may, at times, be exposed to market risk as a result of [removed: incentive mechanisms that reward] [added: the GCIM, which rewards] or [removed: penalize] [added: penalizes] the utility for commodity costs below or above certain [removed: benchmarks for SoCalGas’ GCIM.][added: benchmarks.]
[removed: The California Utilities] [added: SDG&E and SoCalGas separately] manage [removed: their] risk within the parameters of their market risk management [removed: framework.][added: frameworks.]
| NOMINAL AMOUNT OF DEBT(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]
| *(Dollars in millions)* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]
| | | | December 31, [removed: 2020] [added: 2021] | | | | | | | | | | | | | | | [added: December 31, 2020] | | | [added: | | | | | | | | | | | |] December 31, 2019 | | | | | | | | | | | | | | |
| | | | Sempra [removed: Energy Consolidated] | | | | | | SDG&E | | | | | | SoCalGas | | | [added: Sempra] | | | [added: | | | SDG&E | | | | | | SoCalGas | | |] Sempra [removed: Energy Consolidated] | | | | | | SDG&E | | | | | | SoCalGas | | |
| Short-term: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]
| [added: Sempra] California [removed: Utilities] | | | $ | [removed: 113] [added: 1,161] | | | | | $ | [removed: —] [added: 776] | | | | | $ | [added: 385 | | $ |] 113 | | | | | $ | [added: — | | | | | $ | 113 | | $ |] 710 | | | | | $ | 80 | | | | | $ | 630 | |
| Other | | | [removed: 772] [added: 2,310] | | | | | | — | | | | | | — | | | [added: 772] | | | [added: | | | — | | | | | | — | | |] 2,798 | | | | | | — | | | | | | — | | |
| Long-term: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]
| [added: Sempra] California [removed: Utilities] fixed-rate | | | $ | [removed: 10,512] [added: 10,876] | | | | | $ | [removed: 6,053] [added: 6,417] | | | | | $ | 4,459 | | [added: $] | [added: 10,512] | | [added: | | |] $ | [added: 6,053 | | | | | $ | 4,459 | | $ |] 8,949 | | | | | $ | 5,140 | | | | | $ | 3,809 | |
| [added: Sempra] California [removed: Utilities] variable-rate | | | [removed: 500] [added: 300] | | | | | | [removed: 200] [added: —] | | | | | | 300 | | | [added: 500] | | | [added: | | | 200 | | | | | | 300 | | |] — | | | | | | — | | | | | | — | | |
| Other fixed-rate | | | [removed: 11,204] [added: 8,591] | | | | | | — | | | | | | — | | | [added: 11,204] | | | [added: | | | — | | | | | | — | | |] 11,561 | | | | | | — | | | | | | — | | |
| Other variable-rate | | | [removed: 51] [added: 341] | | | | | | — | | | | | | — | | | [added: 51] | | | [added: | | | — | | | | | | — | | |] 746 | | | | | | — | | | | | | — | | |
Earnings are affected by changes in interest rates on short-term debt and [removed: variable-rate long-term debt.]
If weighted-average interest rates on short-term debt outstanding at December 31, [removed: 2020] [added: 2021] increased or decreased by 10%, the change in earnings over the 12-month period ending December 31, [removed: 2021] [added: 2022] would be [removed: negligible.][added: approximately $1 million.]
If interest rates increased or decreased by 10% on all variable-rate long-term debt at December 31, [removed: 2020,] [added: 2021,] after considering the effects of interest rate swaps, the change in earnings over the 12-month period ending December 31, [removed: 2021] [added: 2022] would be [removed: negligible.][added: approximately $1 million.]
However, we expect the effects of these fluctuations, as they relate to [removed: the California Utilities,] [added: Sempra California,] to be [removed: recovered] [added: reflected] in future rates.
| Translation of [removed: 2020] [added: 2021] earnings to U.S. dollars(2) | | | $ | [removed: (2)] [added: (3)] | |
| Transactional exposure(3) | | | [removed: 115] [added: 148] | | |
| Translation of net assets of foreign subsidiaries and investment in foreign entities(4) | | | [removed: (17)] [added: (18)] | | |
*(3)* *Amount primarily represents the effects of currency exchange rate movement from December 31, [removed: 2020] [added: 2021] on monetary assets and liabilities and translation of non-U.S. deferred income tax balances at our Mexican subsidiaries.*
*(4)* *Amount represents the effects of currency exchange rate movement from December 31, [removed: 2020] [added: 2021] that would be recorded to OCI at the end of the reporting period.*
Based on a net monetary liability position of [removed: $4.4] [added: $4.8] billion, including those related to our investments in JVs, at December 31, [removed: 2020,] [added: 2021,] the hypothetical effect of a 10% increase in the Mexican inflation rate is [added: approximately $111 million lower earnings as a result of higher income tax expense for our consolidated subsidiaries, as well as lower equity earnings for our JVs.]
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
The one-day VaR for SDG&E and SoCalGas’ commodity positions were $5 million and $1 million, respectively, at December 31, 2021 and $3 million and negligible, respectively, at December 31, 2020.
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[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
variable-rate long-term debt.
If commodity prices were to rise too rapidly, it is likely that volumes would decline.
This decline would increase the per-unit fixed costs, which could lead to further volume declines.
As of and for the year ended December 31, 2020, the total VaR of the California Utilities’ natural gas and electric positions was not material, and SDG&E’s power procurement activities were in compliance with the procurement plans filed with and approved by the CPUC.
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approximately $90 million lower earnings as a result of higher income tax expense for our consolidated subsidiaries, as well as lower equity earnings for our JVs.
Item 1. BUSINESS
239 rewritten, 133 added, 106 removed, 323 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
Sempra [removed: Energy] was formed in 1998 through a business combination of Enova and PE, the holding companies of our regulated public utilities in California: SDG&E, which began operations in 1881, and SoCalGas, which began operations in 1867.
We have [removed: had] a strong and growing presence in Mexico through [removed: IEnova.][added: a diverse portfolio of energy infrastructure projects and assets serving Mexico’s growing energy needs.]
Our energy infrastructure footprint [added: also] includes our 50.2% interest in Cameron LNG JV, which is a natural gas liquefaction export facility operating in Louisiana, and construction and development of LNG projects and assets on the Gulf Coast and Pacific Coast of North America.
We are primarily focused on transmission and distribution [removed: investments] [added: investments,] among other [removed: areas] [added: areas,] that we believe are capable of producing stable cash flows and [removed: improved] earnings visibility, with the goal of delivering safe and reliable energy to our customers and increasing shareholder value.
SDG&E is a regulated public utility that provides electric services to a population of, at December 31, [removed: 2020,] [added: 2021,] approximately [removed: 3.7] [added: 3.6] million and natural gas services to approximately [removed: 3.4] [added: 3.3] million of that population, covering a 4,100 square mile service territory in Southern California that encompasses San Diego County and an adjacent portion of Orange County.
SDG&E’s assets at December 31, [removed: 2020] [added: 2021] covered the following territory:
[removed: ][added: ]
These electric facilities are primarily in the San Diego, Imperial and Orange counties of California, and in Arizona and Nevada and consisted of [removed: 2,129] [added: 2,148] miles of transmission lines, [removed: 23,926] [added: 23,829] miles of distribution lines and [removed: 183] [added: 160] substations at December 31, [removed: 2020.][added: 2021.]
[removed: Periodically,] [added: Occasionally,] various areas of the service territory require expansion to accommodate customer growth and maintain reliability and safety.
Electric Resources. To meet customer demand, SDG&E supplies power from its own electric generation facilities and procures power on a long-term basis from other suppliers for resale through CPUC-approved purchased-power contracts or through purchases on [removed: a] [added: the] spot [removed: basis.][added: market.]
SDG&E’s supply at December 31, [removed: 2020] [added: 2021] was as follows:
| Owned generation facilities, natural gas(2) | | | | | | 1,204 | | | [removed: 23] [added: 24] | | % |
| Other | | | 2022 and thereafter | | | [removed: 203] [added: 168] | | | [removed: 4] [added: 3] | | |
| Total | | | | | | [removed: 5,156] [added: 5,145] | | | 100 | | % |
*(1)* *Excludes approximately [removed: 107.5] [added: 128] MW of [removed: battery] [added: energy] storage owned and approximately [removed: 174] [added: 164] MW of [removed: battery] [added: energy] storage contracted.*
| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2020] [added: 2021] | | | [removed: 2019] [added: 2020] | | | [removed: 2018] [added: 2019] | | |
| Industrial | | | [removed: 370] [added: 683] | | | | | | [removed: 1,842] [added: 1,398] | | | [removed: 2,044] [added: 1,842] | | | [removed: 2,169] [added: 2,044] | | |
| Street and highway lighting | | | [removed: 2,090] [added: 3,487] | | | | | | [removed: 77] [added: 115] | | | [removed: 76] [added: 77] | | | [removed: 81] [added: 76] | | |
| CCA and DA | | | [removed: 12,480] [added: 137,098] | | | | | | [removed: 3,482] [added: 5,916] | | | [removed: 3,549] [added: 3,482] | | | [removed: 3,628] [added: 3,549] | | |
At December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018,] [added: 2019,] the residential and commercial rooftop solar capacity in SDG&E’s territory totaled [removed: 1,423] [added: 1,620] MW, [removed: 1,233] [added: 1,423] MW and [removed: 1,023] [added: 1,233] MW, respectively.
[added: California’s energy policy supports] increased electrification, particularly electrification of vehicles, which could result in significant increases in sales volumes in the coming years.
Competition. SDG&E faces competition to serve its customer load from the growth in distributed and local power generation, including [removed: rooftop] solar [removed: installations and battery storage, and the corresponding decrease in demand for power from departing retail load from customers transferring to load serving entities other than SDG&E.][added: installations.]
[removed: While SDG&E currently provides procurement service for the majority of its customer load,] [added: However, some] customers [removed: do have the ability to] [added: can] receive procurement service from a [removed: load serving] [added: load-serving] entity other than SDG&E through programs such as [removed: DA] [added: CCA] and [removed: CCA.][added: DA.]
[removed: DA is currently limited by a cap based on gigawatt hours and] CCA is only available if the customer’s local jurisdiction (city) offers such a [removed: program.][added: program and DA is currently limited by a cap based on gigawatt hours.]
[removed: When customers are served by another load serving entity, SDG&E no longer procures electricity for this departing load and] [added: Accordingly,] the associated costs of the utility’s procured resources could then be borne by SDG&E’s remaining bundled procurement customers.
[removed: To help achieve the goal of ratepayer indifference (whether or not customers are served by DA or CCA), the CPUC revised] [added: SDG&E implemented] the [removed: Power Charge Indifference Adjustment] framework [added: on January 1, 2019,] by adopting several refinements designed to [added: more] equitably share [added: energy procurement] costs among customers served by SDG&E and customers served by [removed: DA] [added: CCA] and [removed: CCA, which SDG&E implemented on January 1, 2019.][added: DA.]
We describe SDG&E’s natural gas utility operations below in [removed: “California Utilities’] [added: “Sempra California’s] Natural Gas Utility Operations.”
SoCalGas is a regulated public utility that owns and operates a natural gas distribution, transmission and storage system that supplies natural gas to a population of, at December 31, [removed: 2020,] [added: 2021,] approximately 22 million, covering a 24,000 square mile service territory that encompasses Southern California and portions of central California (excluding San Diego County, the City of Long Beach and the desert area of San Bernardino County).
SoCalGas’ assets at December 31, [removed: 2020] [added: 2021] covered the following territory:
[removed: ][added: ]
We describe SoCalGas’ natural gas utility operations below in [removed: “California Utilities’] [added: “Sempra California’s] Natural Gas Utility Operations.”
[removed: California Utilities’ Natural] [added: Sempra California’s Natural] Gas Utility Operations
At December 31, [removed: 2020,] [added: 2021,] SoCalGas’ natural gas facilities included [removed: 3,059] [added: 3,047] miles of transmission and storage pipelines, [removed: 51,367] [added: 51,724] miles of distribution pipelines, [removed: 48,492] [added: 48,549] miles of service pipelines and nine transmission compressor stations, and SDG&E’s natural gas facilities consisted of [removed: 178] [added: 176] miles of transmission pipelines, [removed: 8,971] [added: 9,058] miles of distribution pipelines, [removed: 6,615] [added: 6,686] miles of service pipelines and one compressor station.
SoCalGas purchases natural gas under short-term and long-term contracts for [removed: the California Utilities’] [added: SDG&E’s and SoCalGas’] core customers.
SoCalGas purchases natural gas from various sources, including from Canada, the U.S. Rockies and the southwestern regions of the U.S. Purchases of natural gas are primarily priced based on published monthly [removed: bid-week] [added: bid week] indices.
To support the delivery of natural gas supplies to its distribution system and to meet the [removed: seasonal and annual] needs of customers, SoCalGas has firm interstate pipeline capacity contracts that require the payment of fixed reservation charges to reserve firm transportation rights.
Energy companies, primarily El Paso Natural Gas Company, Transwestern Pipeline Company and Kern River Gas Transmission Company, provide transportation services into SoCalGas’ intrastate transmission system for supplies purchased by [removed: SoCalGas from outside of California and its transportation customers.][added: SoCalGas.]
SoCalGas owns four natural gas storage facilities with a combined working gas capacity of 137 Bcf and [removed: over 150] [added: 135] injection, withdrawal and observation wells that provide natural gas storage services for core, noncore and non-end-use customers.
SoCalGas [removed: offers] [added: uses] the remaining storage capacity for [removed: sale] [added: load balancing services for all customers and, if available,] to others, including SDG&E for its non-core customer requirements.
[added: |] SoCalGas [added: | | | 8,178 | | | | | | 53 | | % | | | | — | | % |]
In the fourth quarter of 2021, we formed Sempra Infrastructure, a new segment that includes the operating companies of our subsidiary, SI Partners, as well as a holding company and certain services companies.
Through an internal reorganization, we consolidated the assets of our LNG business (previously included in our Sempra LNG segment) and our ownership of IEnova (previously included in our Sempra Mexico segment) under Sempra Global (previously included in Parent and other), which was renamed SI Partners.
This reorganization simplifies Sempra’s ownership and management of its non-utility, energy infrastructure assets in North America by consolidating them under a single platform.
As a result, the Sempra LNG and Sempra Mexico segments no longer exist.
Our historical segment disclosures have been restated to conform with the current presentation, so that all segment discussions reflect the revised segment information of our four separate reportable segments.
▪Sempra Infrastructure
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Solar | | | 2030 to 2042 | | | 1,350 | | | 26 | | |
| Residential | | | 1,282,331 | | | | | | 5,657 | | | 6,606 | | | 5,982 | | |
| Commercial | | | 72,216 | | | | | | 4,128 | | | 5,873 | | | 6,295 | | |
| | | | 1,358,717 | | | | | | 11,298 | | | 14,398 | | | 14,397 | | |
| Total | | | 1,495,815 | | | | | | 17,214 | | | 17,880 | | | 17,946 | | |
SDG&E currently provides procurement service for most of its customer load.
In such cases, SDG&E no longer procures energy for this departing load.
Accordingly, SDG&E’s CCA and DA customers receive primarily transportation and distribution services from SDG&E.
A number of jurisdictions in SDG&E’s territory, including the City and County of San Diego and 14 other
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
municipalities, have implemented, are implementing or are considering implementing CCA.
Based on our current expectations, SDG&E could procure energy for less than half of its current customer load by December 31, 2022.
SDG&E’s historical energy procurement may exceed the needs of its bundled customers as customers elect CCA and DA service.
To help achieve the goal of ratepayer indifference (whether or not customers’ energy is procured by SDG&E or by CCA or DA), the CPUC revised the Power Charge Indifference Adjustment framework.
In addition, the electric industry is undergoing rapid technological change, and third-party energy storage alternatives and other technologies may increasingly compete with SDG&E’s traditional transmission and distribution infrastructure in delivering electricity to consumers.
However, SDG&E does not earn any return on commodity sales.
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
SoCalGas’ and SDG&E’s gas transmission pipelines interconnect with four major interstate pipeline systems: El Paso Natural Gas, Transwestern Pipeline, Kern River Pipeline Company, and Mojave Pipeline Company, allowing customers to bring gas supplies into the SoCalGas gas transmission pipeline system from the various out-of-state gas producing basins.
Additionally, an interconnection with PG&E’s intrastate gas transmission pipeline system allows gas to flow into SoCalGas’ gas transmission pipeline system.
SoCalGas’ gas transmission pipeline system also has an interconnect with a Mexican gas pipeline company at Otay Mesa on the California/Mexico border that allows gas to not only flow south from the gas producing basins in the southwestern U.S., but to also flow north into SoCalGas’ gas transmission pipeline system from LNG-sourced supplies in Mexico.
There are also several in-state gas interconnections allowing for delivery of California-produced gas, including a number of direct connections from renewable natural gas producers.
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Residential | | | 874,460 | | | | | | | | | | | | | | |
| Commercial | | | 29,060 | | | | | | | | | | | | | | |
| Total | | | 906,150 | | | | | | 84 | | | 83 | | | 71 | | |
| Residential | | | 5,823,610 | | | | | | | | | | | | | | |
| Industrial | | | 24,660 | | | | | | | | | | | | | | |
| Total | | | 6,096,870 | | | | | | 882 | | | 884 | | | 876 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
In addition, the electric industry is undergoing rapid technological change, and third-party distributed energy resources and other technologies may increasingly compete with Oncor’s traditional transmission and distribution infrastructure in delivering electricity to consumers.
IEnova has a diverse portfolio of energy infrastructure projects and assets serving Mexico’s growing energy needs.
▪Sempra Mexico
▪Sempra LNG
| Solar | | | 2030 to 2041 | | | 1,326 | | | 26 | | |
| Residential | | | 1,317,080 | | | | | | 6,606 | | | 5,982 | | | 6,336 | | |
| Commercial | | | 151,210 | | | | | | 5,873 | | | 6,295 | | | 6,539 | | |
| | | | 1,470,750 | | | | | | 14,398 | | | 14,397 | | | 15,125 | | |
| Total | | | 1,483,230 | | | | | | 17,880 | | | 17,946 | | | 18,753 | | |
California’s energy policy supports
Several local jurisdictions, including the City and County of San Diego and other municipalities, have implemented, are implementing or are considering implementing CCA, which could result in SDG&E providing procurement service for less than half of its current customer load as early as December 31, 2021.
| Residential | | | 869,520 | | | | | | | | | | | | | | |
| Commercial | | | 28,690 | | | | | | | | | | | | | | |
| Total | | | 901,080 | | | | | | 83 | | | 71 | | | 68 | | |
| Residential | | | 5,792,600 | | | | | | | | | | | | | | |
| Industrial | | | 24,880 | | | | | | | | | | | | | | |
| Total | | | 6,066,240 | | | | | | 884 | | | 876 | | | 850 | | |
California, and general economic conditions can also result in significant shifts in market price, which may in turn impact demand.
Cash provided by operating activities during the winter months generally increases, when customer demand is higher.
We discuss these acquisitions in Note 5 of the Notes to Consolidated Financial Statements.
See Note 6 of the Notes to Consolidated Financial Statements for information about our equity method investment in Oncor Holdings.
Customers and Demand. Oncor operates the largest transmission and distribution system in Texas.
Sempra Mexico
IEnova develops, owns and operates, or holds interests in, energy infrastructure in Mexico in three key energy markets: gas, power and storage.
IEnova’s gas business includes pipeline services for natural gas and ethane and associated or stand-alone compression assets, as well as its natural gas marketing business and natural gas distribution business.
In its power business, IEnova operates a natural-gas-fired combined-cycle power plant and wind and solar power generation facilities, and is constructing and developing additional wind and solar power generation facilities.
IEnova’s storage business includes refined products storage, its LPG storage and pipeline systems, and its ECA Regas Facility.
Currently, IEnova is constructing and developing marine and land terminals for the receipt, storage and delivery of liquid fuels.
Sempra Energy beneficially owned 70.2% of IEnova at December 31, 2020, with the remaining shares held by NCI and traded on the Mexican Stock Exchange under the symbol IENOVA.
The CNBV regulates the shares, which are registered with the Mexican National Securities Registry (Registro Nacional de Valores) maintained by the CNBV.
On December 2, 2020, we announced a non-binding offer to acquire all outstanding publicly held shares of IEnova in exchange for shares of our common stock at a rate of 0.0313 shares of our common stock for each one IEnova ordinary share, which exchange ratio remains subject to approval by the Sempra Energy board of directors and, if successful, would increase Sempra Energy’s ownership interest in IEnova to 100% assuming that all IEnova public shareholders tender their shares.
On December 1, 2020, we filed an application with the CNBV and on January 12, 2021, we filed a registration statement with the SEC, in each case in connection with the exchange offer.
As part of the exchange offer, Sempra Energy intends to list its common stock on the Mexican Stock Exchange.
We expect to complete this transaction in the second quarter of 2021, subject to authorization by the SEC, CNBV and Mexican Stock Exchange and other closing conditions.
The proposed exchange offer is subject to a number of risks that are discussed in “Part I – Item 1A.
At December 31, 2020, Sempra Mexico’s assets covered the following territory:
*Gas Business*
If these affiliates fail to perform and Ecogas is unable to obtain supplies of natural gas from alternate sources, Ecogas could lose customers and sales volume and could also be exposed to commodity price risk and volatility.
Natural Gas Marketing. IEnova’s natural gas marketing business, IEnova Marketing, S. de R.L. de C.V. (IEnova Marketing), purchases LNG for storage and regasification at the ECA Regas Facility and sells natural gas to affiliates and third-party customers.
This business also purchases natural gas from Sempra Energy affiliates in order to sell it to IEnova customers in Baja California, including the CFE, which purchases such natural gas to power its plants in Rosarito, Baja California, and IEnova’s TdM combined-cycle power plant.
IEnova Marketing also supplies natural gas purchased from Sempra Energy affiliates to third-party industrial customers in Mexicali, Chihuahua, Torreón and Durango.
An excerpt. Shown here: 40 of 239 rewritten, 40 of 133 added and 40 of 106 removed. The counts are complete. For every sentence, read Item 1. BUSINESS in the FY2021 filing and the FY2020 filing.
Item 3. LEGAL PROCEEDINGS
0 rewritten, 1 added, 1 removed, 2 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
MD&A.”
MD&A – Capital Resources and Liquidity.”
Cover and table of contents
105 rewritten, 42 added, 39 removed, 317 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
| | | | For the fiscal year ended | | | | | | | | | | | | | | | | | | December 31, [removed: 2020] [added: 2021] | | | | | | | | | | | | | | | | | |
| Commission File No. | | | Exact Name of Registrants as Specified in their Charters, Address and Telephone Number | | | | | | | | | [removed: | | |] State of Incorporation | | | I.R.S. Employer Identification Nos. | | |
| 1-14201 | | | SEMPRA ENERGY | | | [removed: | | | ] [added: ] | | | | | | California | | | 33-0732627 | | |
| | | | 488 8th Avenue | | | | | | | | | | | | | | | [removed: | | |]
| | | | San Diego, California 92101 | | | | | | | | | | | | | | | [removed: | | |]
| | | | (619) 696-2000 | | | | | | | | | | | | | | | [removed: | | |]
| 1-03779 | | | SAN DIEGO GAS & ELECTRIC COMPANY | | | [removed: | | | ] [added: ] | | | | | | California | | | 95-1184800 | | |
| | | | 8326 Century Park Court | | | | | | | | | | | | | | | [removed: | | |]
| | | | San Diego, California 92123 | | | | | | | | | | | | | | | [removed: | | |]
| | | | (619) 696-2000 | | | | | | | | | | | | | | | [removed: | | |]
| 1-01402 | | | SOUTHERN CALIFORNIA GAS COMPANY | | | [removed: | | | ] [added: ] | | | | | | California | | | 95-1240705 | | |
| | | | 555 West Fifth Street | | | | | | | | | | | | | | | [removed: | | |]
| | | | Los Angeles, California 90013 | | | | | | | | | | | | | | | [removed: | | |]
| | | | (213) 244-1200 | | | | | | | | | | | | | | | [removed: | | |]
| Aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, [removed: 2020:] [added: 2021:] | | | | | |
| Sempra Energy | | | [removed: $34.3] [added: $41.7] billion (based on the price at which the common equity was last sold as of the last business day of the most recently completed second fiscal quarter) | | |
| Common Stock outstanding, without par value, as of February [removed: 22, 2021:] [added: 18, 2022:] | | |
| Portions of the Sempra Energy proxy statement to be filed for its May [removed: 2021] [added: 2022] annual meeting of shareholders are incorporated by reference into Part III of this annual report on Form 10-K. | | |
| Portions of the Southern California Gas Company information statement to be filed for its June [removed: 2021] [added: 2022] annual meeting of shareholders are incorporated by reference into Part III of this annual report on Form 10-K. | | |
| [Information Regarding Forward-Looking [removed: Statements](#i8d1c6a88620e4a3eacbd769d9e163f74_13)] [added: Statements](#i3e7fc04dfedd4ab59c15c1161795fc7d_13)] | | | | | | [removed: [9](#i8d1c6a88620e4a3eacbd769d9e163f74_13)] [added: [9](#i3e7fc04dfedd4ab59c15c1161795fc7d_13)] | | |
| [Summary of Risk [removed: Factors](#i8d1c6a88620e4a3eacbd769d9e163f74_5132)] [added: Factors](#i3e7fc04dfedd4ab59c15c1161795fc7d_16)] | | | | | | [removed: [10](#i8d1c6a88620e4a3eacbd769d9e163f74_5132)] [added: [10](#i3e7fc04dfedd4ab59c15c1161795fc7d_16)] | | |
| Item 1. | | | [removed: [Business](#i8d1c6a88620e4a3eacbd769d9e163f74_19)] [added: [Business](#i3e7fc04dfedd4ab59c15c1161795fc7d_22)] | | | [removed: [12](#i8d1c6a88620e4a3eacbd769d9e163f74_19)] [added: [12](#i3e7fc04dfedd4ab59c15c1161795fc7d_22)] | | |
| Item 1A. | | | [Risk [removed: Factors](#i8d1c6a88620e4a3eacbd769d9e163f74_61)] [added: Factors](#i3e7fc04dfedd4ab59c15c1161795fc7d_67)] | | | [removed: [34](#i8d1c6a88620e4a3eacbd769d9e163f74_61)] [added: [34](#i3e7fc04dfedd4ab59c15c1161795fc7d_67)] | | |
| Item 1B. | | | [Unresolved Staff [removed: Comments](#i8d1c6a88620e4a3eacbd769d9e163f74_64)] [added: Comments](#i3e7fc04dfedd4ab59c15c1161795fc7d_70)] | | | [removed: [64](#i8d1c6a88620e4a3eacbd769d9e163f74_64)] [added: [58](#i3e7fc04dfedd4ab59c15c1161795fc7d_70)] | | |
| Item 2. | | | [removed: [Properties](#i8d1c6a88620e4a3eacbd769d9e163f74_67)] [added: [Properties](#i3e7fc04dfedd4ab59c15c1161795fc7d_73)] | | | [removed: [64](#i8d1c6a88620e4a3eacbd769d9e163f74_67)] [added: [58](#i3e7fc04dfedd4ab59c15c1161795fc7d_73)] | | |
| Item 3. | | | [Legal [removed: Proceedings](#i8d1c6a88620e4a3eacbd769d9e163f74_70)] [added: Proceedings](#i3e7fc04dfedd4ab59c15c1161795fc7d_76)] | | | [removed: [64](#i8d1c6a88620e4a3eacbd769d9e163f74_70)] [added: [58](#i3e7fc04dfedd4ab59c15c1161795fc7d_76)] | | |
| Item 4. | | | [Mine Safety [removed: Disclosures](#i8d1c6a88620e4a3eacbd769d9e163f74_73)] [added: Disclosures](#i3e7fc04dfedd4ab59c15c1161795fc7d_79)] | | | [removed: [64](#i8d1c6a88620e4a3eacbd769d9e163f74_73)] [added: [58](#i3e7fc04dfedd4ab59c15c1161795fc7d_79)] | | |
| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i8d1c6a88620e4a3eacbd769d9e163f74_79)] [added: Securities](#i3e7fc04dfedd4ab59c15c1161795fc7d_85)] | | | [removed: [65](#i8d1c6a88620e4a3eacbd769d9e163f74_79)] [added: [59](#i3e7fc04dfedd4ab59c15c1161795fc7d_85)] | | |
| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i8d1c6a88620e4a3eacbd769d9e163f74_85)] [added: Operations](#i3e7fc04dfedd4ab59c15c1161795fc7d_91)] | | | [removed: [69](#i8d1c6a88620e4a3eacbd769d9e163f74_85)] [added: [60](#i3e7fc04dfedd4ab59c15c1161795fc7d_91)] | | |
| | | | [Results of [removed: Operations](#i8d1c6a88620e4a3eacbd769d9e163f74_91)] [added: Operations](#i3e7fc04dfedd4ab59c15c1161795fc7d_97)] | | | [removed: [69](#i8d1c6a88620e4a3eacbd769d9e163f74_91)] [added: [60](#i3e7fc04dfedd4ab59c15c1161795fc7d_97)] | | |
| | | | [Capital Resources and [removed: Liquidity](#i8d1c6a88620e4a3eacbd769d9e163f74_130)] [added: Liquidity](#i3e7fc04dfedd4ab59c15c1161795fc7d_142)] | | | [removed: [84](#i8d1c6a88620e4a3eacbd769d9e163f74_130)] [added: [75](#i3e7fc04dfedd4ab59c15c1161795fc7d_142)] | | |
| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i8d1c6a88620e4a3eacbd769d9e163f74_187)] [added: Risk](#i3e7fc04dfedd4ab59c15c1161795fc7d_208)] | | | [removed: [110](#i8d1c6a88620e4a3eacbd769d9e163f74_187)] [added: [99](#i3e7fc04dfedd4ab59c15c1161795fc7d_208)] | | |
| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i8d1c6a88620e4a3eacbd769d9e163f74_190)] [added: Data](#i3e7fc04dfedd4ab59c15c1161795fc7d_211)] | | | [removed: [113](#i8d1c6a88620e4a3eacbd769d9e163f74_190)] [added: [101](#i3e7fc04dfedd4ab59c15c1161795fc7d_211)] | | |
| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i8d1c6a88620e4a3eacbd769d9e163f74_193)] [added: Disclosure](#i3e7fc04dfedd4ab59c15c1161795fc7d_214)] | | | [removed: [113](#i8d1c6a88620e4a3eacbd769d9e163f74_193)] [added: [101](#i3e7fc04dfedd4ab59c15c1161795fc7d_214)] | | |
| Item 9A. | | | [Controls and [removed: Procedures](#i8d1c6a88620e4a3eacbd769d9e163f74_196)] [added: Procedures](#i3e7fc04dfedd4ab59c15c1161795fc7d_217)] | | | [removed: [113](#i8d1c6a88620e4a3eacbd769d9e163f74_196)] [added: [102](#i3e7fc04dfedd4ab59c15c1161795fc7d_217)] | | |
| Item 9B. | | | [Other [removed: Information](#i8d1c6a88620e4a3eacbd769d9e163f74_217)] [added: Information](#i3e7fc04dfedd4ab59c15c1161795fc7d_238)] | | | [removed: [118](#i8d1c6a88620e4a3eacbd769d9e163f74_217)] [added: [106](#i3e7fc04dfedd4ab59c15c1161795fc7d_238)] | | |
| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i8d1c6a88620e4a3eacbd769d9e163f74_223)] [added: Governance](#i3e7fc04dfedd4ab59c15c1161795fc7d_244)] | | | [removed: [118](#i8d1c6a88620e4a3eacbd769d9e163f74_223)] [added: [106](#i3e7fc04dfedd4ab59c15c1161795fc7d_244)] | | |
| Item 11. | | | [Executive [removed: Compensation](#i8d1c6a88620e4a3eacbd769d9e163f74_226)] [added: Compensation](#i3e7fc04dfedd4ab59c15c1161795fc7d_247)] | | | [removed: [118](#i8d1c6a88620e4a3eacbd769d9e163f74_226)] [added: [106](#i3e7fc04dfedd4ab59c15c1161795fc7d_247)] | | |
| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i8d1c6a88620e4a3eacbd769d9e163f74_229)] [added: Matters](#i3e7fc04dfedd4ab59c15c1161795fc7d_250)] | | | [removed: [118](#i8d1c6a88620e4a3eacbd769d9e163f74_229)] [added: [106](#i3e7fc04dfedd4ab59c15c1161795fc7d_250)] | | |
| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i8d1c6a88620e4a3eacbd769d9e163f74_232)] [added: Independence](#i3e7fc04dfedd4ab59c15c1161795fc7d_253)] | | | [removed: [119](#i8d1c6a88620e4a3eacbd769d9e163f74_232)] [added: [107](#i3e7fc04dfedd4ab59c15c1161795fc7d_253)] | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Sempra Energy | | | 315,653,893 shares | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| [Glossary](#i3e7fc04dfedd4ab59c15c1161795fc7d_10) | | | | | | [5](#i3e7fc04dfedd4ab59c15c1161795fc7d_10) | | |
| Item 6. | | | [(Reserved)](#i3e7fc04dfedd4ab59c15c1161795fc7d_4444) | | | [60](#i3e7fc04dfedd4ab59c15c1161795fc7d_4444) | | |
| | | | [Overview](#i3e7fc04dfedd4ab59c15c1161795fc7d_94) | | | [60](#i3e7fc04dfedd4ab59c15c1161795fc7d_94) | | |
| | | | [Critical Accounting](#i3e7fc04dfedd4ab59c15c1161795fc7d_205) [Estimates](#i3e7fc04dfedd4ab59c15c1161795fc7d_205) | | | [95](#i3e7fc04dfedd4ab59c15c1161795fc7d_205) | | |
| Item 9C. | | | [Disclosure](#i3e7fc04dfedd4ab59c15c1161795fc7d_4396) [Regarding Foreign Jurisdictions that Prevent Inspections](#i3e7fc04dfedd4ab59c15c1161795fc7d_4396) | | | [106](#i3e7fc04dfedd4ab59c15c1161795fc7d_4396) | | |
| | | | | | | | | |
| [Signatures](#i3e7fc04dfedd4ab59c15c1161795fc7d_277) | | | | | | [120](#i3e7fc04dfedd4ab59c15c1161795fc7d_277) | | |
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[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| ADIA | | | Black Silverback ZC 2022 LP (assignee of Black River B 2017 Inc.), a wholly owned affiliate of Abu Dhabi Investment Authority | | |
| ASEA | | | Agencia de Seguridad, Energía y Ambiente (Mexico’s National Agency for Industrial Safety and Environmental Protection) | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| KKR | | | KKR Pinnacle Investor L.P. (as successor-in-interest to KKR Pinnacle Aggregator L.P.), an affiliate of Kohlberg Kravis Roberts & Co. L.P. | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| OEIS | | | Office of Energy Infrastructure Safety | | |
| PXiSE | | | PXiSE Energy Solutions, LLC | | |
| S&P | | | S&P Global Ratings, a division of S&P Global Inc. | | |
| SDSRA | | | Senior Debt Service Reserve Account | | |
| Sempra | | | Sempra Energy doing business as Sempra, together with its consolidated entities unless otherwise stated or indicated by the context | | |
| Sempra Global | | | Sempra Global, which was renamed Sempra Infrastructure Partners, LP on September 30, 2021 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
▪changes to laws, including proposed changes to the Mexican constitution that could materially limit access to the electric generation market and changes to Mexico’s trade rules that could materially limit our ability to import, export, transport and store hydrocarbons
▪the impact of energy and climate policies, legislation and rulemaking, as well as related goals set, and actions taken, by companies in our industry, including actions to reduce or eliminate reliance on natural gas generally and any deterioration of or increased uncertainty in the political or regulatory environment for California natural gas distribution companies and the risk of nonrecovery for stranded assets
▪the pace of the development and adoption of new technologies in the energy sector, including those designed to support governmental and private party energy and climate goals, and our ability to timely and economically incorporate them into our business
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
business, all of which may become more pronounced in the event of geopolitical events and other uncertainties, such as the conflict in Ukraine
Risk Factors” in this report.
▪Severe weather, natural disasters and other similar events could materially adversely affect us
▪Our businesses are facing climate change concerns and have environmental compliance costs, which could have a material adverse effect on us
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
Risks Related to Sempra Texas Utilities
Risks Related to Sempra Infrastructure
▪We may not be able to enter into, maintain, extend or replace long-term supply, sales or capacity agreements
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| 6.75% Mandatory Convertible Preferred Stock, Series B, $100 liquidation preference | | | SREPRB | | | New York Stock Exchange | | |
| | | | | | |
| Sempra Energy | | | 302,591,374 shares | | |
| [Glossary](#i8d1c6a88620e4a3eacbd769d9e163f74_10) | | | | | | [5](#i8d1c6a88620e4a3eacbd769d9e163f74_10) | | |
| Item 6. | | | [Selected](#i8d1c6a88620e4a3eacbd769d9e163f74_82) [F](#i8d1c6a88620e4a3eacbd769d9e163f74_82)[inancial Data](#i8d1c6a88620e4a3eacbd769d9e163f74_82) | | | [65](#i8d1c6a88620e4a3eacbd769d9e163f74_82) | | |
| | | | [Overview](#i8d1c6a88620e4a3eacbd769d9e163f74_88) | | | [69](#i8d1c6a88620e4a3eacbd769d9e163f74_88) | | |
| | | | [Critical Accounting Policies and Estimates](#i8d1c6a88620e4a3eacbd769d9e163f74_184) | | | [106](#i8d1c6a88620e4a3eacbd769d9e163f74_184) | | |
| [Signatures](#i8d1c6a88620e4a3eacbd769d9e163f74_256) | | | | | | [134](#i8d1c6a88620e4a3eacbd769d9e163f74_256) | | |
| 2019 GRC FD | | | final decision in the California Utilities’ 2019 General Rate Case | | |
| Cal PA | | | California Public Advocates Office | | |
| COFECE | | | Comisión Federal de Competencia Económica (Mexico’s Competition Commission) | | |
| EMA | | | energy management agreement | | |
| LA Storage | | | LA Storage, LLC | | |
| PSEP | | | Pipeline Safety Enhancement Plan | | |
| S&P | | | Standard & Poor’s | | |
| SCAQMD | | | South Coast Air Quality Management District | | |
| SDTS | | | Sharyland Distribution & Transmission Services, L.L.C. (a subsidiary of InfraREIT) | | |
| SONGS OII | | | CPUC’s Order Instituting Investigation into the SONGS Outage | | |
| STIH | | | Sempra Texas Intermediate Holding Company LLC | | |
| TC Energy | | | TC Energy Corporation (formerly known as TransCanada Corporation) | | |
| TTHC | | | Texas Transmission Holdings Corporation | | |
| TURN | | | The Utility Reform Network | | |
| USMCA | | | United States-Mexico-Canada Agreement | | |
▪moves to reduce or eliminate reliance on natural gas and the impact of volatility of oil prices on our businesses and development projects
▪Severe weather conditions, natural disasters, pandemics, accidents, equipment failures, explosions or acts of terrorism could materially adversely affect us.
▪The California Utilities are subject to extensive regulation by state, federal and local legislative and regulatory authorities, which may materially adversely affect us.
Risks Related to Our Interest in Oncor
Risks Related to Our Businesses Other Than the California Utilities and Our Interest in Oncor
▪Our businesses depend on the performance of counterparties, including with respect to long-term supply, sales and capacity agreements, and any failure by these parties to perform could result in substantial expenses and business disruptions and exposure to commodity price risk and volatility, any of which could materially adversely affect us.
Risks Related to Our Proposed IEnova Exchange Offer and Our Proposed Transaction Related to Sempra Infrastructure Partners
▪Our ability to complete our proposed IEnova exchange offer is subject to various conditions and other risks and uncertainties that could cause the transaction to be abandoned, delayed or restructured, which could materially adversely affect us.
▪We expect to issue shares of our common stock in the proposed exchange offer, which would dilute the voting interests and could dilute the economic interests of our current shareholders and may adversely affect the market value of our common stock and preferred stock.
▪The proposed exchange offer, if completed, would subject us to additional regulation and liability in Mexico.
▪Our proposed transaction related to Sempra Infrastructure Partners is subject to a number of risks and uncertainties.
An excerpt. Shown here: 40 of 105 rewritten, 40 of 42 added and all 39 removed. The counts are complete. For every sentence, read Cover and table of contents in the FY2021 filing and the FY2020 filing.
Item 2. PROPERTIES
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We own or lease land, warehouses, offices, operating and maintenance centers, [removed: shops,] [added: shops and] service facilities [removed: and equipment] necessary to conduct our businesses.
Item 4. MINE SAFETY DISCLOSURES
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[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Sempra [removed: Energy] Common Stock
Our common stock is traded on the NYSE under the [removed: ticker] [added: trading] symbol [removed: SRE.][added: SRE and the Mexican Stock Exchange under the trading symbol SRE.MX.]
At February [removed: 22, 2021,] [added: 18, 2022,] there were approximately [removed: 23,345] [added: 22,180] record holders of our common stock.
Information concerning dividend declarations for SoCalGas and SDG&E is included in “Part II – Item 7.
MD&A – Capital Resources and Liquidity – Sources and Uses of Cash – Dividends.”
The following table sets forth information about our common stock repurchase activity for the three months ended December 31, 2021:
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| PURCHASES OF EQUITY SECURITIES | | | | | | | | | | | | | | |
| *(Dollars in millions, except per share amounts)* | | | | | | | | | | | | | | |
| | | | Total number of shares purchased(1) | | | Average price paid per share(1)(2) | | | Total number of shares purchased as part of publicly announced plans or programs(1) | | | Maximum dollar value of shares that may yet be purchased under the plans or programs | | |
| November 1, 2021 - November 30, 2021 | | | 1,525,000 | | | $ | 123.91 | | 1,525,000 | | | $ | 1,811 | |
| December 1, 2021 - December 31, 2021 | | | 897,758 | | | $ | 123.69 | | 897,758 | | | $ | 1,700 | |
| Total | | | 2,422,758 | | | $ | 123.83 | | 2,422,758 | | | $ | 1,700 | |
*(1)* *All share purchases were made through open market repurchases.*
*(2)* *The price per share reflects the weighted-average price paid per share during the applicable period, and excludes amounts paid for broker fees, commissions and other similar costs.*
In addition on January 11, 2022, we entered into an ASR program under which we prepaid $200 million to repurchase shares of our common stock in a share forward transaction.
A total of 1,472,756 shares were purchased under this program, which was determined by dividing the $200 million purchase price by the arithmetic average of the volume-weighted average trading prices of shares of our common stock during the valuation period of January 12, 2022 through February 11, 2022, minus a fixed discount.
The ASR program was completed on February 11, 2022.
As of February 25, 2022, a maximum of $1.5 billion and no more than 21,104,486 shares may yet be purchased under the repurchase authorization that was publicly announced on August 5, 2020.
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
Information concerning dividend declarations for SoCalGas and SDG&E is included in their Statements of Changes in Shareholders’ Equity and Statements of Changes in Equity, respectively, set forth in the consolidated financial statements.
No shares have been repurchased under this authorization.
Item 6. (RESERVED)
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Not applicable.
FIVE-YEAR SUMMARIES
The following tables present selected financial data of Sempra Energy, SDG&E and SoCalGas for the five years ended December 31, 2020.
The data is derived from the audited consolidated financial statements of each company.
You should read this information in conjunction with “Part II – Item 7.
MD&A” and the consolidated financial statements and notes contained in this annual report on Form 10-K.
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| FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA *–* SEMPRA ENERGY CONSOLIDATED | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| *(In millions, except per share amounts)* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | At December 31 or for the years then ended | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |
| Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Utilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Natural gas | | | $ | 5,411 | | | | | $ | 5,185 | | | | | $ | 4,540 | | | | | $ | 4,361 | | | | | $ | 4,050 | |
| Electric | | | 4,614 | | | | | | 4,263 | | | | | | 3,999 | | | | | | 3,929 | | | | | | 3,748 | | |
| Energy-related businesses | | | 1,345 | | | | | | 1,381 | | | | | | 1,563 | | | | | | 1,350 | | | | | | 829 | | |
| Total revenues | | | $ | 11,370 | | | | | $ | 10,829 | | | | | $ | 10,102 | | | | | $ | 9,640 | | | | | $ | 8,627 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income from continuing operations, net of income tax | | | $ | 2,255 | | | | | $ | 1,999 | | | | | $ | 938 | | | | | $ | 382 | | | | | $ | 1,292 | |
| Income (loss) from discontinued operations, net of income tax | | | 1,850 | | | | | | 363 | | | | | | 188 | | | | | | (31) | | | | | | 227 | | |
| Net income | | | 4,105 | | | | | | 2,362 | | | | | | 1,126 | | | | | | 351 | | | | | | 1,519 | | |
| Earnings attributable to noncontrolling interests | | | (172) | | | | | | (164) | | | | | | (76) | | | | | | (94) | | | | | | (148) | | |
| Preferred dividends | | | (168) | | | | | | (142) | | | | | | (125) | | | | | | — | | | | | | — | | |
| Preferred dividends of subsidiary | | | (1) | | | | | | (1) | | | | | | (1) | | | | | | (1) | | | | | | (1) | | |
| Earnings attributable to common shares | | | $ | 3,764 | | | | | $ | 2,055 | | | | | $ | 924 | | | | | $ | 256 | | | | | $ | 1,370 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic EPS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings from continuing operations | | | $ | 6.61 | | | | | $ | 6.22 | | | | | $ | 2.86 | | | | | $ | 1.25 | | | | | $ | 4.66 | |
| Earnings (losses) from discontinued operations | | | $ | 6.32 | | | | | $ | 1.18 | | | | | $ | 0.59 | | | | | $ | (0.23) | | | | | $ | 0.82 | |
| Earnings | | | $ | 12.93 | | | | | $ | 7.40 | | | | | $ | 3.45 | | | | | $ | 1.02 | | | | | $ | 5.48 | |
| Diluted EPS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings from continuing operations | | | $ | 6.58 | | | | | $ | 6.13 | | | | | $ | 2.84 | | | | | $ | 1.24 | | | | | $ | 4.65 | |
| Earnings (losses) from discontinued operations | | | $ | 6.30 | | | | | $ | 1.16 | | | | | $ | 0.58 | | | | | $ | (0.23) | | | | | $ | 0.81 | |
| Earnings | | | $ | 12.88 | | | | | $ | 7.29 | | | | | $ | 3.42 | | | | | $ | 1.01 | | | | | $ | 5.46 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dividends declared per common share | | | $ | 4.18 | | | | | $ | 3.87 | | | | | $ | 3.58 | | | | | $ | 3.29 | | | | | $ | 3.02 | |
| Effective income tax rate | | | 14 | | % | | | | 18 | | % | | | | (10) | | % | | | | 73 | | % | | | | 22 | | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted-average rate base: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SDG&E | | | $ | 11,109 | | | | | $ | 10,467 | | | | | $ | 9,619 | | | | | $ | 8,549 | | | | | $ | 8,019 | |
An excerpt. Shown here: all 0 rewritten, all 1 added and 40 of 111 removed. The counts are complete. For every sentence, read Item 6. (RESERVED) in the FY2021 filing and the FY2020 filing.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
Item 9A. CONTROLS AND PROCEDURES
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[removed: Sempra Energy,] [added: Sempra,] SDG&E, SoCalGas
[removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas maintain disclosure controls and procedures designed to ensure that information required to be disclosed in their respective reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and is accumulated and communicated to the management of each company, including each respective principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of the principal executive officers and principal financial officers of [removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas, each such company’s management evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of December 31, [removed: 2020,] [added: 2021,] the end of the period covered by this report.
Based on these evaluations, the principal executive officers and principal financial officers of [removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas concluded that their respective company’s disclosure controls and procedures were effective at the reasonable assurance level as of such date.
[removed: Sempra Energy,] [added: Sempra,] SDG&E, SoCalGas
The respective management of [removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f).
Under the supervision and with the participation of the principal executive officers and principal financial officers of [removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas, each such company’s management evaluated the effectiveness of its internal control over financial reporting based on the framework in *Internal Control* – *Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on these evaluations, each company’s management concluded that its internal control over financial reporting was effective as of December 31, [removed: 2020.][added: 2021.]
Deloitte & Touche LLP audited the effectiveness of each company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] as stated in their reports, which are included in this annual report on Form 10-K.
[removed: There] [added: Other than these post-implementation activities in connection with SDG&E’s new customer information system, there] have been no changes in [removed: any such company’s] [added: Sempra’s, SDG&E’s or SoCalGas’] internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially [removed: affect,] [added: affect any] such company’s internal control over financial reporting.
We have audited the internal control over financial reporting of Sempra Energy and subsidiaries [removed: (“Sempra Energy”)] [added: (“Sempra”)] as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control [removed: *–*] [added: —] Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
In our opinion, Sempra [removed: Energy] maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control [removed: –] [added: —] Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements as of and for the year ended December 31, [removed: 2020] [added: 2021] of Sempra [removed: Energy] and our report dated February 25, [removed: 2021] [added: 2022] expressed an unqualified opinion on those financial statements.
[removed: Sempra Energy’s] [added: Sempra’s] management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on [removed: Sempra Energy’s] [added: Sempra’s] internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Sempra [removed: Energy] in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We have audited the internal control over financial reporting of San Diego Gas & Electric Company (“SDG&E”) as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in [removed: *Internal] [added: Internal] Control [removed: –] [added: —] Integrated Framework [removed: (2013)*] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
In our opinion, SDG&E maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in [removed: *Internal] [added: Internal] Control [removed: –] [added: —] Integrated Framework [removed: (2013)*] [added: (2013)] issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements as of and for the year ended December 31, [removed: 2020] [added: 2021] of SDG&E and our report dated February 25, [removed: 2021] [added: 2022] expressed an unqualified opinion on those financial statements.
We have audited the internal control over financial reporting of Southern California Gas Company (“SoCalGas”) as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
In our opinion, SoCalGas maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the financial statements as of and for the year ended December 31, [removed: 2020] [added: 2021] of SoCalGas and our report dated February 25, [removed: 2021] [added: 2022] expressed an unqualified opinion on those financial statements.
In April 2021, SDG&E implemented a new customer information system to replace its legacy system.
The system has been designed and implemented to provide customers an enhanced digital experience and enhance the overall system of internal control over financial reporting through further automation and integration of business processes, including revenue.
In connection with the implementation, SDG&E performed pre-implementation planning, design and testing of internal controls that became effective in the second quarter of 2021.
In the fourth quarter of 2021, SDG&E completed its post-implementation monitoring and process modifications in order to maintain an effective control framework.
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
February 25, 2022
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
February 25, 2022
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
February 25, 2022
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
February 25, 2021
February 25, 2021
February 25, 2021
Item 9B. OTHER INFORMATION
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PART III.
Because SDG&E meets the conditions of General Instructions I(1)(a) and (b) of Form 10-K and is therefore filing this report with a reduced disclosure format as permitted by General Instruction I(2), the information required by Part III – Items 10, 11, 12 and 13 below is not required for SDG&E.
We have, however, provided the information required by Part III – Item 10 with respect to SDG&E’s executive officers in “Part I – Item 1.
Business – Other Matters – Information About Our Executive Officers.”
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
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Read the full itemFY2021 item · filed February 25, 2022
Not applicable.
PART III.
Because SDG&E meets the conditions of General Instructions I(1)(a) and (b) of Form 10-K and is therefore filing this report with a reduced disclosure format as permitted by General Instruction I(2), the information required by Part III – Items 10, 11, 12 and 13 below is not required for SDG&E.
We have, however, voluntarily provided the information required by Item 401 of SEC Regulation S-K, as required by Part III – Item 10 with respect to SDG&E’s executive officers in “Part I – Item 1.
Business – Other Matters – Information About Our Executive Officers.”
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
2 rewritten, 0 added, 1 removed, 1 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
We provide the information required by [removed: Part III –] Item [removed: 10] [added: 401 of SEC Regulation S-K, as required by this item,] with respect to executive officers [removed: for Sempra Energy (other than information required by Item 405] of [removed: SEC Regulation S-K)] [added: Sempra] and SoCalGas in “Part I – Item 1.
Business – Other Matters – Information About Our Executive Officers.” [removed: For Sempra Energy, all] [added: All] other information required by [removed: Part III – Item 10] [added: this item] is incorporated by reference from “Corporate [removed: Governance,” “Share Ownership”] [added: Governance”] and “Proposal 1: Election of Directors” in the proxy statement to be filed for [removed: its] [added: the] May [removed: 2021] [added: 2022] annual meeting of [removed: shareholders.][added: shareholders for Sempra and from the information statement to be filed for the June 2022 annual meeting of shareholders for SoCalGas.]
For SoCalGas, all other information required by Part III – Item 10 is incorporated by reference from its information statement to be filed for its June 2021 annual meeting of shareholders.
Item 11. EXECUTIVE COMPENSATION
1 rewritten, 0 added, 0 removed, 1 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
The information required by [removed: Part III – Item 11] [added: this item] is incorporated by reference from [removed: “Corporate Governance” and] “Executive Compensation,” including “Compensation Discussion and Analysis,” “Compensation and Talent Committee Report” and “Compensation [removed: Tables”] [added: Tables,”] in the proxy statement to be filed for the May [removed: 2021] [added: 2022] annual meeting of shareholders for Sempra [removed: Energy] and from the information statement to be filed for the June [removed: 2021] [added: 2022] annual meeting of shareholders for SoCalGas.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
8 rewritten, 2 added, 1 removed, 13 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
Sempra [removed: Energy] has LTIPs that permit the grant of a wide variety of equity and equity-based incentive awards to directors, officers and key employees.
At December 31, [removed: 2020,] [added: 2021,] outstanding awards consisted of stock options and RSUs held by [removed: 460] [added: 425] employees.
The following table sets forth information regarding our equity compensation plans at December 31, [removed: 2020.][added: 2021.]
| 2013 LTIP | | | [removed: 1,087,964] [added: 568,935] | | | | | | $ | 106.76 | | | | | — | | |
*(1)* *The 2013 LTIP consists of [removed: 243,177] [added: 192,506] options to purchase shares of our common stock, all of which were granted at an exercise price equal to 100% of the grant date fair market value of the shares subject to the option, [removed: 658,574] [added: 334,492] performance-based RSUs and [removed: 186,213] [added: 41,937] service-based RSUs.
The 2019 LTIP consists of [removed: 122,218] [added: 344,838] options to purchase shares of our common stock, all of which were granted at an exercise price equal to 100% of the grant date fair market value of the shares subject to the option, [removed: 235,387] [added: 536,285] performance-based RSUs and [removed: 157,364] [added: 235,363] service-based RSUs.
*(2)* *Represents the weighted-average exercise price of the [removed: 243,177] [added: 192,506] and [removed: 122,218] [added: 344,838] outstanding options to purchase shares of our common stock under the 2013 LTIP and the 2019 LTIP, respectively.*
The [removed: security ownership] information required by [removed: Part III –] Item [removed: 12] [added: 403 of SEC Regulation S-K, as required by this item,] is incorporated by reference from “Share Ownership” in the proxy statement to be filed for the May [removed: 2021] [added: 2022] annual meeting of shareholders for Sempra [removed: Energy] and from the information statement to be filed for the June [removed: 2021] [added: 2022] annual meeting of shareholders for SoCalGas.
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| 2019 LTIP | | | 1,116,486 | | | | | | $ | 132.77 | | | | | 5,986,241 | | |
| 2019 LTIP | | | 514,969 | | | | | | $ | 149.12 | | | | | 6,927,284 | | |
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
1 rewritten, 1 added, 0 removed, 1 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
The information required by [removed: Part III – Item 13] [added: this item] is incorporated by reference from “Corporate Governance” in the proxy statement to be filed for the May [removed: 2021] [added: 2022] annual meeting of shareholders for Sempra [removed: Energy] and from the information statement to be filed for the June [removed: 2021] [added: 2022] annual meeting of shareholders for SoCalGas.
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
11 rewritten, 13 added, 1 removed, 36 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
Information regarding principal accountant fees and services is presented below for [removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas.
The following table shows the fees paid to Deloitte & Touche LLP, the independent registered public accounting firm for [removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas, for services provided for [added: 2021,] 2020 and 2019.
| | | | Sempra [removed: Energy Consolidated] | | | | | | | | | | | | | | | SDG&E | | | | | | | | | | | | | | | SoCalGas | | | | | | | | |
[removed: *(1)* *Other] [added: Other] audit-related services in 2020 primarily relate to statutory audits, agreed upon procedures and permitted internal control advisory [removed: services.][added: services.*]
[removed: Other] [added: *(1)* *Other] audit-related services in [added: 2021 and] 2019 primarily relate to statutory audits and agreed upon [removed: procedures.*][added: procedures.]
*(2)* *Tax fees in [added: 2021 and] 2020 relate to tax consulting and compliance services.
The Audit Committee of [removed: Sempra Energy’s] [added: Sempra’s] board of directors is directly responsible for the appointment, compensation, retention and oversight, including the oversight of the audit fee negotiations, of the independent registered public accounting firm for Sempra [removed: Energy] and its subsidiaries, including SDG&E and SoCalGas.
As a matter of good corporate governance, each of the [removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas boards of directors reviewed the performance of Deloitte & Touche LLP and appointed them as the independent registered public accounting firm for each of [removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas, respectively.
[removed: Sempra Energy’s] [added: Sempra’s] board of directors has determined that each member of its Audit Committee is an independent director and is financially literate, and that Mr. Jack T.
Except where pre-approval is not required by SEC rules, [removed: Sempra Energy’s] [added: Sempra’s] Audit Committee pre-approves all audit, audit-related and permissible non-audit services provided by Deloitte & Touche LLP for Sempra [removed: Energy] and its subsidiaries, including all services provided by Deloitte & Touche LLP for [removed: Sempra Energy,] [added: Sempra,] SDG&E and SoCalGas in [added: 2021,] 2020 and 2019.
The committee’s pre-approval policies and procedures provide for the general pre-approval of specific types of services and give detailed guidance to [added: management as to the services that are eligible for general pre-approval, and they require specific pre-approval of all other permitted services.]
| 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated financial statements, internal controls audits and subsidiary audits | | | $ | 10,166 | | | | | | | | | | | | | | $ | 2,753 | | | | | | | | | | | | | | $ | 3,486 | | | | | | | |
| Regulatory filings and related services | | | 807 | | | | | | | | | | | | | | | 60 | | | | | | | | | | | | | | | — | | | | | | | | |
| Total audit fees | | | 10,973 | | | | | | 81 | | % | | | | | | | 2,813 | | | | | | 87 | | % | | | | | | | 3,486 | | | | | | 91 | | % |
| Employee benefit plan audits | | | 520 | | | | | | | | | | | | | | | 184 | | | | | | | | | | | | | | | 309 | | | | | | | | |
| Other audit-related services(1) | | | 1,840 | | | | | | | | | | | | | | | 119 | | | | | | | | | | | | | | | — | | | | | | | | |
| Total audit-related fees | | | 2,360 | | | | | | 17 | | | | | | | | | 303 | | | | | | 9 | | | | | | | | | 309 | | | | | | 8 | | |
| Tax fees(2) | | | 272 | | | | | | 2 | | | | | | | | | 113 | | | | | | 4 | | | | | | | | | 33 | | | | | | 1 | | |
| All other fees(3) | | | 13 | | | | | | — | | | | | | | | | — | | | | | | — | | | | | | | | | 8 | | | | | | — | | |
| Total fees | | | $ | 13,618 | | | | | 100 | | % | | | | | | | $ | 3,229 | | | | | 100 | | % | | | | | | | $ | 3,836 | | | | | 100 | | % |
| Audit fees: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Audit-related fees: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
management as to the services that are eligible for general pre-approval, and they require specific pre-approval of all other permitted services.
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
121 rewritten, 15 added, 38 removed, 362 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
| 2.1 | | | | | | [Purchase and Sale Agreement, dated as of September [removed: 20, 2018,] [added: 27, 2019,] by and between Sempra [removed: Solar Portfolio Holdings, LLC] [added: International Holdings N.V.] and [removed: CED Southwest Holdings, Inc.](http://www.sec.gov/Archives/edgar/data/1032208/000008652118000072/ex2psa20180920.htm)] [added: China Yangtze Power International (Hongkong) Co., Limited.](http://www.sec.gov/Archives/edgar/data/1032208/000103220819000026/ex21psa20190927.htm)] | | | | | | 8-K | | | [removed: 2] [added: 2.1] | | | [removed: 09/20/18] [added: 09/30/19] | | |
| [removed: 2.2] [added: 2.3] | | | | | | [Purchase and Sale Agreement, dated as of [removed: September 27,] [added: October 12,] 2019, by and between Sempra [added: Energy] International Holdings N.V. and [removed: China Yangtze Power] [added: State Grid] International [removed: (Hongkong) Co., Limited.](http://www.sec.gov/Archives/edgar/data/1032208/000103220819000026/ex21psa20190927.htm)] [added: Development Limited.](http://www.sec.gov/Archives/edgar/data/1032208/000103220819000029/ex21psa20191012.htm)] | | | | | | 8-K | | | 2.1 | | | [removed: 09/30/19] [added: 10/15/19] | | |
| [removed: 2.3] [added: 2.2] | | | | | | [Letter of Undertaking, dated as of September 27, 2019, by and between Sempra Energy International Holdings N.V., China Three Gorges Corporation and Ching Three Gorges Construction Management Co., Ltd.](http://www.sec.gov/Archives/edgar/data/1032208/000103220819000026/ex22letterofundertakin.htm) | | | | | | 8-K | | | 2.2 | | | 09/30/19 | | |
| 3.2 | | | | | | [Bylaws of Sempra Energy (as amended [removed: through](http://www.sec.gov/Archives/edgar/data/1032208/000103220820000014/exhibit31.htm) [April] [added: through April] 14, [removed: 2020](http://www.sec.gov/Archives/edgar/data/1032208/000103220820000014/exhibit31.htm)[).](http://www.sec.gov/Archives/edgar/data/1032208/000103220820000014/exhibit31.htm)] [added: 2020).](http://www.sec.gov/Archives/edgar/data/1032208/000103220820000014/exhibit31.htm)] | | | | | | 8-K | | | 3.1 | | | 04/14/20 | | |
| Certain instruments defining the rights of holders of long-term debt instruments are not required to be filed or incorporated by reference herein pursuant to Item 601(b)(4)(iii)(A) of [added: SEC] Regulation S-K. Each registrant agrees to furnish a copy of such instruments to the SEC upon request. | | | | | | | | | | | | | | | | | | | | |
| 4.2 | | | | | | [Description of [removed: Securities.](https://www.sec.gov/Archives/edgar/data/1032208/000103220821000007/sempra-123120xex42.htm)] [added: Securities.](https://www.sec.gov/Archives/edgar/data/1032208/000103220822000007/sempra-123121xex42.htm)] | | | X | | | | | | | | | | | |
| 4.8 | | | | | | [Officers’ Certificate of Sempra Energy, including the form of its [removed: 2.875%] [added: 3.250%] Note due [removed: 2022.](http://www.sec.gov/Archives/edgar/data/1032208/000119312512401409/d415114dex41.htm)] [added: 2027.](http://www.sec.gov/Archives/edgar/data/1032208/000119312517199348/d409145dex41.htm)] | | | | | | 8-K | | | 4.1 | | | [removed: 09/24/12] [added: 06/09/17] | | |
| [removed: 4.9] [added: 4.11] | | | | | | [Officers’ Certificate of Sempra Energy, including the form of its [removed: 4.05%] [added: 5.750% Junior Subordinated] Note due [removed: 2023.](http://www.sec.gov/Archives/edgar/data/1032208/000119312513450815/d633267dex41.htm)] [added: 2079.](http://www.sec.gov/Archives/edgar/data/1032208/000119312519182590/d771903dex41.htm)] | | | | | | 8-K | | | 4.1 | | | [removed: 11/22/13] [added: 06/26/19] | | |
| [removed: 4.10] [added: 4.12] | | | | | | [removed: [Officers’] [added: [Officer’s] Certificate of Sempra Energy, including the form of its [removed: 3.55%] [added: 4.125% Fixed-to-Fixed Reset Rate Junior Subordinated] Note due [removed: 2024.](http://www.sec.gov/Archives/edgar/data/1032208/000119312514235814/d743279dex41.htm)] [added: 2052.](http://www.sec.gov/Archives/edgar/data/1032208/000119312521335133/d256570dex41.htm)] | | | | | | 8-K | | | 4.1 | | | [removed: 06/13/14] [added: 11/19/21] | | |
| [removed: 4.11] [added: 4.9] | | | | | | [Officers’ Certificate of Sempra Energy, including the [removed: form] [added: forms] of its [removed: 3.75%] [added: 2.900%] Note due [removed: 2025.](http://www.sec.gov/Archives/edgar/data/1032208/000119312515379213/d37895dex41.htm)] [added: 2023, 3.400% Note due 2028, 3.800% Note due 2038, and 4.000% Note due 2048.](http://www.sec.gov/Archives/edgar/data/1032208/000119312518010090/d475138dex41.htm)] | | | | | | 8-K | | | 4.1 | | | [removed: 11/17/15] [added: 01/12/18] | | |
| [removed: 4.13] [added: 4.60] | | | | | | [Officers’ Certificate of [removed: Sempra Energy,] [added: Southern California Gas Company,] including the form of its Floating Rate Note due [removed: 2021.](http://www.sec.gov/Archives/edgar/data/1032208/000119312517309509/d454654dex41.htm)] [added: 2023.](http://www.sec.gov/Archives/edgar/data/92108/000119312520250187/d104680dex42.htm)] | | | | | | 8-K | | | [removed: 4.1] [added: 4.2] | | | [removed: 10/13/17] [added: 09/21/20] | | |
| [removed: 4.15] [added: 4.10] | | | | | | [Subordinated Indenture, dated as of June 26, 2019, between Sempra Energy and U.S. Bank National Association, as trustee.](http://www.sec.gov/Archives/edgar/data/1032208/000119312519182590/d771903dex42.htm) | | | | | | 8-K | | | 4.2 | | | 06/26/19 | | |
| [removed: 4.17] [added: 4.13] | | | | | | [Description of preferences of Preferred Stock, Preference Stock and Series Preferred Stock (Southern California Gas Company Restated Articles of Incorporation) (included as Exhibit 3.8 above).](http://www.sec.gov/Archives/edgar/data/92108/0000912057-97-010558.txt) | | | | | | 10-K | | | 3.01 | | | 03/28/97 | | |
| [removed: 4.18] [added: 4.14] | | | | | | [Description of Securities.](http://www.sec.gov/Archives/edgar/data/86521/000103220820000006/sempra-123119xex49.htm) | | | | | | 10-K | | | 4.9 | | | 02/27/20 | | |
| [removed: 4.19] [added: 4.15] | | | | | | Mortgage and Deed of Trust dated July 1, 1940. | | | | | | 2-4769 | | | B-3 | | | (1) | | |
| [removed: 4.20] [added: 4.16] | | | | | | Second Supplemental Indenture dated as of March 1, 1948. | | | | | | 2-7418 | | | B-5B | | | (1) | | |
| [removed: 4.21] [added: 4.17] | | | | | | Ninth Supplemental Indenture dated as of August 1, 1968. | | | | | | 333-52150 | | | 4.5 | | | (1) | | |
| [removed: 4.22] [added: 4.18] | | | | | | Tenth Supplemental Indenture dated as of December 1, 1968. | | | | | | 2-36042 | | | 2-K | | | (1) | | |
| [removed: 4.23] [added: 4.19] | | | | | | Sixteenth Supplemental Indenture dated August 28, 1975. | | | | | | 33-34017 | | | 4.2 | | | (1) | | |
| [removed: 4.24] [added: 4.20] | | | | | | [Fiftieth Supplemental Indenture, dated as of May 19, 2005.](http://www.sec.gov/Archives/edgar/data/86521/000119312505111235/dex41.htm) | | | | | | 8-K | | | 4.1 | | | 05/19/05 | | |
| [removed: 4.25] [added: 4.21] | | | | | | [Fifty-Second Supplemental Indenture, dated as of June 8, 2006.](http://www.sec.gov/Archives/edgar/data/86521/000119312506126759/dex41.htm) | | | | | | 8-K | | | 4.1 | | | 06/08/06 | | |
| [removed: 4.26] [added: 4.22] | | | | | | [Fifty-Fourth Supplemental Indenture, dated as of September 20, 2007.](http://www.sec.gov/Archives/edgar/data/86521/000119312507204488/dex41.htm) | | | | | | 8-K | | | 4.1 | | | 09/20/07 | | |
| [removed: 4.27] [added: 4.23] | | | | | | [Fifty-Fifth Supplemental Indenture, dated as of May 14, 2009.](http://www.sec.gov/Archives/edgar/data/86521/000119312509113071/dex41.htm) | | | | | | 8-K | | | 4.1 | | | 05/15/09 | | |
| [removed: 4.28] [added: 4.24] | | | | | | [Fifty-Sixth Supplemental Indenture, dated as of May 13, 2010.](http://www.sec.gov/Archives/edgar/data/86521/000119312510119036/dex41.htm) | | | | | | 8-K | | | 4.1 | | | 05/13/10 | | |
| [removed: 4.29] [added: 4.25] | | | | | | [Fifty-Seventh Supplemental Indenture, dated as of August 26, 2010.](http://www.sec.gov/Archives/edgar/data/86521/000119312510198329/dex41.htm) | | | | | | 8-K | | | 4.1 | | | 08/26/10 | | |
| [removed: 4.30] [added: 4.26] | | | | | | [Fifty-Eighth Supplemental Indenture, dated as of August 18, 2011.](http://www.sec.gov/Archives/edgar/data/86521/000119312511226367/dex41.htm) | | | | | | 8-K | | | 4.1 | | | 08/18/11 | | |
| [removed: 4.31] [added: 4.27] | | | | | | [Sixtieth Supplemental Indenture, dated as of November 17, 2011.](http://www.sec.gov/Archives/edgar/data/86521/000119312511315670/d257813dex41.htm) | | | | | | 8-K | | | 4.1 | | | 11/17/11 | | |
| [removed: 4.32] [added: 4.28] | | | | | | [Sixty-First Supplemental Indenture, dated as of March 22, 2012.](http://www.sec.gov/Archives/edgar/data/86521/000119312512129195/d322058dex41.htm) | | | | | | 8-K | | | 4.1 | | | 03/23/12 | | |
| [removed: 4.33] [added: 4.29] | | | | | | [Sixty-Second Supplemental Indenture, dated as of September 9, 2013.](http://www.sec.gov/Archives/edgar/data/86521/000119312513360733/d594300dex41.htm) | | | | | | 8-K | | | 4.1 | | | 09/09/13 | | |
| [removed: 4.34] [added: 4.30] | | | | | | [Sixty-Fourth Supplemental Indenture, dated as of March 12, 2015.](http://www.sec.gov/Archives/edgar/data/86521/000119312515088998/d887630dex42.htm) | | | | | | 8-K | | | 4.2 | | | 03/12/15 | | |
| [removed: 4.35] [added: 4.31] | | | | | | [Sixty-Fifth Supplemental Indenture, dated as of May 19, 2016.](http://www.sec.gov/Archives/edgar/data/86521/000119312516595822/d150815dex41.htm) | | | | | | 8-K | | | 4.1 | | | 05/19/16 | | |
| [removed: 4.36] [added: 4.32] | | | | | | [Sixty-Sixth Supplemental Indenture, dated as of June 8, 2017.](http://www.sec.gov/Archives/edgar/data/86521/000119312517198206/d407343dex41.htm) | | | | | | 8-K | | | 4.1 | | | 06/08/17 | | |
| [removed: 4.37] [added: 4.33] | | | | | | [Sixty-Seventh Supplemental Indenture, dated as of May 17, 2018.](http://www.sec.gov/Archives/edgar/data/86521/000119312518166587/d582987dex41.htm) | | | | | | 8-K | | | 4.1 | | | 05/17/18 | | |
| [removed: 4.38] [added: 4.34] | | | | | | [Sixty-Eighth Supplemental Indenture, dated as of May 31, 2019.](http://www.sec.gov/Archives/edgar/data/86521/000119312519162851/d755278dex41.htm) | | | | | | 8-K | | | 4.1 | | | 05/31/19 | | |
| [removed: 4.39] [added: 4.35] | | | | | | [Sixty-Ninth Supplemental Indenture, dated as of April 7, 2020.](http://www.sec.gov/Archives/edgar/data/86521/000119312520100478/d910624dex41.htm) | | | | | | 8-K | | | 4.1 | | | 04/07/20 | | |
| [removed: 4.40] [added: 4.36] | | | | | | [Seventieth Supplemental Indenture, dated as of September 28, 2020.](http://www.sec.gov/Archives/edgar/data/86521/000119312520256463/d76863dex41.htm) | | | | | | 8-K | | | 4.1 | | | 09/28/20 | | |
| [removed: 4.41] [added: 4.38] | | | | | | First Mortgage Indenture of Southern California Gas Company to American Trust Company dated October 1, 1940. | | | | | | 2-4504 | | | B-4 | | | (1) | | |
| [removed: 4.42] [added: 4.39] | | | | | | Supplemental Indenture of Southern California Gas Company to American Trust Company dated as of August 1, 1955. | | | | | | 2-11997 | | | 4.07 | | | (1) | | |
| [removed: 4.43] [added: 4.40] | | | | | | [Supplemental Indenture of Southern California Gas Company to American Trust Company dated as of December 1, 1956.](http://www.sec.gov/Archives/edgar/data/1032208/000008652107000014/supplindenture120156.htm) | | | | | | 10-K | | | 4.09 | | | 02/23/07 | | |
| [removed: 4.44] [added: 4.41] | | | | | | [Supplemental Indenture of Southern California Gas Company to Wells Fargo Bank dated as of June 1, 1965.](http://www.sec.gov/Archives/edgar/data/1032208/000008652107000014/supplindenture060165.htm) | | | | | | 10-K | | | 4.10 | | | 02/23/07 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| 4.37 | | | | | | [Seventy-First Supplemental Indenture, dated as of August 13, 2021.](http://www.sec.gov/Archives/edgar/data/86521/000119312521246046/d211827dex41.htm) | | | | | | 8-K | | | 4.1 | | | 08/13/21 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| 10.5 | | | | | | [Master Agreement to Resolve JCCP No. 4861 Private Party Claims, effective September 26, 2021, by and among Sempra Energy, Southern California Gas Company, and the plaintiff’s law firms listed on the signature pages thereto.](http://www.sec.gov/Archives/edgar/data/92108/000103220821000037/ex101srescgsettlementagree.htm) | | | | | | 8-K | | | 10.1 | | | 09/27/21 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
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[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | Incorporated by Reference | | | | | | | | |
| Exhibit Number | | | | | | Exhibit Description | | | Filed or Furnished Herewith | | | Form or Registration Statement No. | | | Exhibit or Appendix | | | Filing Date | | |
| 2.4 | | | | | | [Purchase and Sale Agreement, dated as of October 12, 2019, by and between Sempra Energy International Holdings N.V. and State Grid International Development Limited.](http://www.sec.gov/Archives/edgar/data/1032208/000103220819000029/ex21psa20191012.htm) | | | | | | 8-K | | | 2.1 | | | 10/15/19 | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| EXHIBIT INDEX (CONTINUED) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Incorporated by Reference | | | | | | | | |
| Exhibit Number | | | | | | Exhibit Description | | | Filed or Furnished Herewith | | | Form or Registration Statement No. | | | Exhibit or Appendix | | | Filing Date | | |
| EXHIBIT INDEX (CONTINUED) | | | | | | | | | | | | | | | | | | | | |
| 4.12 | | | | | | [Officers’ Certificate of Sempra Energy, including the form of its 3.250% Note due 2027.](http://www.sec.gov/Archives/edgar/data/1032208/000119312517199348/d409145dex41.htm) | | | | | | 8-K | | | 4.1 | | | 06/09/17 | | |
| 4.14 | | | | | | [Officers’ Certificate of Sempra Energy, including the forms of its 2.900% Note due 2023, 3.400% Note due 2028, 3.800% Note due 2038, and 4.000% Note due 2048.](http://www.sec.gov/Archives/edgar/data/1032208/000119312518010090/d475138dex41.htm) | | | | | | 8-K | | | 4.1 | | | 01/12/18 | | |
| 4.16 | | | | | | [Officers’ Certificate of Sempra Energy, including the form of its 5.750% Junior Subordinated Note due 2079.](http://www.sec.gov/Archives/edgar/data/1032208/000119312519182590/d771903dex41.htm) | | | | | | 8-K | | | 4.1 | | | 06/26/19 | | |
| 4.63 | | | | | | [Officers’ Certificate of Southern California Gas Company, including the form of its Floating Rate Note due 2023.](http://www.sec.gov/Archives/edgar/data/92108/000119312520250187/d104680dex42.htm) | | | | | | 8-K | | | 4.2 | | | 09/21/20 | | |
| 10.2* | | | | | | [Engineering, Procurement and Construction Contract, dated as of February 28, 2020, between Port Arthur LNG, LLC and PALNG Common Facilities Company, LLC (but only for the limited purpose set forth therein), and Bechtel Oil, Gas and Chemicals, Inc.](http://www.sec.gov/Archives/edgar/data/86521/000103220820000022/sempra-33120xex101.htm) | | | | | | 10-Q | | | 10.1 | | | 05/04/20 | | |
| 10.45 | | | | | | [Sempra Energy Executive Incentive Plan effective January 1, 2003.](http://www.sec.gov/Archives/edgar/data/1032208/000008652103000005/aaincentiveplan.txt) | | | | | | 10-K | | | 10.09 | | | 02/26/03 | | |
| 10.46 | | | | | | [Form of 2017 and 2018 Sempra Energy Non-Employee Directors’ Initial Restricted Stock Unit Award.](http://www.sec.gov/Archives/edgar/data/86521/000008652118000019/sempra-123117xex1050.htm) | | | | | | 10-K | | | 10.50 | | | 02/27/18 | | |
| 10.65 | | | | | | [Severance Pay Agreement between Sempra Energy and Mia DeMontigny, date June 15, 2019.](http://www.sec.gov/Archives/edgar/data/86521/000103220819000016/sempra-630x19ex106.htm) | | | | | | 10-Q | | | 10.6 | | | 08/02/19 | | |
| 10.66 | | | | | | [Severance Pay Agreement between Sempra Energy and David J. Barrett, dated January 12, 2019.](http://www.sec.gov/Archives/edgar/data/86521/000008652119000014/sempra-123118xex1077.htm) | | | | | | 10-K | | | 10.77 | | | 02/26/19 | | |
| Nuclear | | | | | | | | | | | | | | | | | | | | |
| 10.68 | | | | | | Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated June 29, 1992. | | | | | | 10-K | | | 10.7 | | | (1) | | |
| 10.69 | | | | | | [Amendment No. 1 to the Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated September 30, 1994 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/0000086521-95-000003.txt) | | | | | | 10-K | | | 10.56 | | | 02/28/95 | | |
| 10.70 | | | | | | [Second Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated December 29, 1994 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/0000086521-95-000003.txt) | | | | | | 10-K | | | 10.57 | | | 02/28/95 | | |
| 10.71 | | | | | | [Third Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated March 1, 1996 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/0000940170-97-000008.txt) | | | | | | 10-K | | | 10.59 | | | 03/19/97 | | |
| 10.72 | | | | | | [Fourth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated December 23, 1996 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/0000940170-97-000008.txt) | | | | | | 10-K | | | 10.60 | | | 03/19/97 | | |
| 10.73 | | | | | | [Fifth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated December 26, 1997 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652100000004/0000086521-00-000004.txt) | | | | | | 10-K | | | 10.26 | | | 03/29/00 | | |
| 10.74 | | | | | | [Sixth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated October 1, 1999 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652100000004/0000086521-00-000004.txt) | | | | | | 10-K | | | 10.27 | | | 03/29/00 | | |
| 10.75 | | | | | | [Seventh Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated December 24, 2003 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/1032208/000008652104000004/qualnuclearamend7.htm) | | | | | | 10-K | | | 10.42 | | | 02/25/04 | | |
| 10.76 | | | | | | [Eighth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated October 12, 2011 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652112000010/ex1070.htm) | | | | | | 10-K | | | 10.70 | | | 02/28/12 | | |
| 10.77 | | | | | | [Ninth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated January 9, 2014 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652114000011/ex1083.htm) | | | | | | 10-K | | | 10.83 | | | 02/27/14 | | |
| 10.78 | | | | | | [Tenth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated August 27, 2014 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652114000054/ex101.htm) | | | | | | 10-Q | | | 10.1 | | | 11/04/14 | | |
| 10.79 | | | | | | [Eleventh Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated August 27, 2014 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652114000054/ex102.htm) | | | | | | 10-Q | | | 10.2 | | | 11/04/14 | | |
| 10.80 | | | | | | [Twelfth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated August 27, 2014 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652114000054/ex103.htm) | | | | | | 10-Q | | | 10.3 | | | 11/04/14 | | |
| 10.81 | | | | | | [Thirteenth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated January 1, 2015 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652116000091/ex1078.htm) | | | | | | 10-K | | | 10.78 | | | 02/26/16 | | |
(1) Exhibit is not available on the SEC’s website as it was filed in paper and predates EDGAR
| 10.82 | | | | | | [Fourteenth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated February 18, 2016 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652116000145/sempra-93016xex101.htm) | | | | | | 10-Q | | | 10.1 | | | 11/02/16 | | |
| 10.83 | | | | | | [Fifteenth Amendment to the San Diego Gas & Electric Company Nuclear Facilities Qualified CPUC Decommissioning Master Trust Agreement for San Onofre Nuclear Generating Station dated August 31, 2016 (see Exhibit 10.68 above).](http://www.sec.gov/Archives/edgar/data/86521/000008652116000145/sempra-93016xex102.htm) | | | | | | 10-Q | | | 10.2 | | | 11/02/16 | | |
| 10.84 | | | | | | U. S. Department of Energy contract for disposal of spent nuclear fuel and/or high-level radioactive waste, entered into between the DOE and Southern California Edison Company, as agent for SDG&E and others; Contract DE-CR01-83NE44418, dated June 10, 1983. | | | | | | 10-K | | | 10N | | | (1) | | |
(1) Exhibit is not available on the SEC’s website as it was filed in paper and predates EDGAR
An excerpt. Shown here: 40 of 121 rewritten, all 15 added and all 38 removed. The counts are complete. For every sentence, read Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES in the FY2021 filing and the FY2020 filing.
Item 16. FORM 10-K SUMMARY
2,442 rewritten, 1,448 added, 1,263 removed, 2,721 unchanged
Read the full itemFY2021 item · filed February 25, 2022FY2020 item · filed February 25, 2021
| | | | Date: February 25, [removed: 2021] [added: 2022] | | |
| Principal Executive Officer: J. Walker Martin Chief Executive Officer and President | | | /s/ J. Walker Martin | | | February 25, [removed: 2021] [added: 2022] | | |
| Principal Financial Officer: Trevor I. Mihalik Executive Vice President and Chief Financial Officer | | | /s/ Trevor I. Mihalik | | | February 25, [removed: 2021] [added: 2022] | | |
| Principal Accounting Officer: Peter R. Wall Senior Vice President, Controller and Chief Accounting Officer | | | /s/ Peter R. Wall | | | February 25, [removed: 2021] [added: 2022] | | |
| J. Walker Martin, Chairman | | | /s/ J. Walker Martin | | | February 25, [removed: 2021] [added: 2022] | | |
| Alan L. Boeckmann, Director | | | /s/ Alan L. Boeckmann | | | February 25, [removed: 2021] [added: 2022] | | |
| Andrés Conesa, Director | | | /s/ Andrés Conesa | | | February 25, [removed: 2021] [added: 2022] | | |
| Maria Contreras-Sweet, Director | | | /s/ Maria Contreras-Sweet | | | February 25, [removed: 2021] [added: 2022] | | |
| Pablo A. Ferrero, Director | | | /s/ Pablo A. Ferrero | | | February 25, [removed: 2021] [added: 2022] | | |
| William D. Jones, Director | | | /s/ William D. Jones | | | February 25, [removed: 2021] [added: 2022] | | |
| Bethany J. Mayer, Director | | | /s/ Bethany J. Mayer | | | February 25, [removed: 2021] [added: 2022] | | |
| Michael N. Mears, Director | | | /s/ Michael N. Mears | | | February 25, [removed: 2021] [added: 2022] | | |
| Jack T. Taylor, Director | | | /s/ Jack T. Taylor | | | February 25, [removed: 2021] [added: 2022] | | |
| Cynthia L. Walker, Director | | | /s/ Cynthia L. Walker | | | February 25, [removed: 2021] [added: 2022] | | |
| Cynthia J. Warner, Director | | | /s/ Cynthia J. Warner | | | February 25, [removed: 2021] [added: 2022] | | |
| James C. Yardley, Director | | | /s/ James C. Yardley | | | February 25, [removed: 2021] [added: 2022] | | |
| | | | Date: February 25, [removed: 2021] [added: 2022] | | |
| Principal Executive Officer: Caroline A. Winn Chief Executive Officer | | | /s/ Caroline A. Winn | | | February 25, [removed: 2021] [added: 2022] | | |
| Principal Financial Officer: Bruce A. Folkmann President and Chief Financial Officer | | | /s/ Bruce A. Folkmann | | | February 25, [removed: 2021] [added: 2022] | | |
| Principal Accounting Officer: Valerie A. Bille Vice President, Controller and Chief Accounting Officer | | | /s/ Valerie A. Bille | | | February 25, [removed: 2021] [added: 2022] | | |
| Kevin C. Sagara, Non-Executive Chairman | | | /s/ Kevin C. Sagara | | | February 25, [removed: 2021] [added: 2022] | | |
| Robert J. Borthwick, Director | | | /s/ Robert J. Borthwick | | | February 25, [removed: 2021] [added: 2022] | | |
| Erbin B. Keith, Director | | | /s/ Erbin B. Keith | | | February 25, [removed: 2021] [added: 2022] | | |
| Caroline A. Winn, Director | | | /s/ Caroline A. Winn | | | February 25, [removed: 2021] [added: 2022] | | |
| | | | Date: February 25, [removed: 2021] [added: 2022] | | |
| Principal Executive Officer: Scott D. Drury Chief Executive Officer | | | /s/ Scott D. Drury | | | February 25, [removed: 2021] [added: 2022] | | |
| Principal Financial and Accounting Officer: Mia L. DeMontigny [removed: Vice President, Controller,] Chief Financial [removed: Officer] [added: Officer, Controller] and Chief Accounting Officer | | | /s/ Mia L. DeMontigny | | | February 25, [removed: 2021] [added: 2022] | | |
| Kevin C. Sagara, Non-Executive Chairman | | | /s/ Kevin C. Sagara | | | February 25, [removed: 2021] [added: 2022] | | |
| Scott D. Drury, Director | | | /s/ Scott D. Drury | | | February 25, [removed: 2021] [added: 2022] | | |
| Lisa Larroque Alexander, Director | | | /s/ Lisa Larroque Alexander | | | February 25, [removed: 2021] [added: 2022] | | |
| SEMPRA ENERGY | | | | | | | | | | | | [added: | | | | | |]
| [Reports of Independent Registered Public Accounting [removed: Firm](#i8d1c6a88620e4a3eacbd769d9e163f74_262)] [added: Firm](#i3e7fc04dfedd4ab59c15c1161795fc7d_283) (PCAOB ID 34)] | | | | | | | | | [removed: [F-2](#i8d1c6a88620e4a3eacbd769d9e163f74_262)] [added: [F-2](#i3e7fc04dfedd4ab59c15c1161795fc7d_283)] | | |
| Consolidated Financial Statements: | | | [removed: Sempra Energy] [added: Sempra] | | | San Diego Gas & Electric Company | | | Southern California Gas Company | | |
| Consolidated Statements of Operations for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [F-10](#i8d1c6a88620e4a3eacbd769d9e163f74_277)] [added: [F-8](#i3e7fc04dfedd4ab59c15c1161795fc7d_298)] | | | [removed: [F](#i8d1c6a88620e4a3eacbd769d9e163f74_298)[\-18](#i8d1c6a88620e4a3eacbd769d9e163f74_298)] [added: [F-16](#i3e7fc04dfedd4ab59c15c1161795fc7d_313)] | | | [removed: [F](#i8d1c6a88620e4a3eacbd769d9e163f74_319)[\-24](#i8d1c6a88620e4a3eacbd769d9e163f74_319)] [added: [F-22](#i3e7fc04dfedd4ab59c15c1161795fc7d_328)] | | |
| Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [F-](#i8d1c6a88620e4a3eacbd769d9e163f74_280)[11](#i8d1c6a88620e4a3eacbd769d9e163f74_280)] [added: [F-9](#i3e7fc04dfedd4ab59c15c1161795fc7d_301)] | | | [removed: [F-19](#i8d1c6a88620e4a3eacbd769d9e163f74_301)] [added: [F-17](#i3e7fc04dfedd4ab59c15c1161795fc7d_316)] | | | [removed: [F-25](#i8d1c6a88620e4a3eacbd769d9e163f74_322)] [added: [F-23](#i3e7fc04dfedd4ab59c15c1161795fc7d_331)] | | |
| Consolidated Balance Sheets at December 31, [added: 2021,] 2020 and 2019 | | | [removed: [F-](#i8d1c6a88620e4a3eacbd769d9e163f74_283)[12](#i8d1c6a88620e4a3eacbd769d9e163f74_283)] [added: [F-10](#i3e7fc04dfedd4ab59c15c1161795fc7d_304)] | | | [removed: [F-](#i8d1c6a88620e4a3eacbd769d9e163f74_304)[20](#i8d1c6a88620e4a3eacbd769d9e163f74_304)] [added: [F-18](#i3e7fc04dfedd4ab59c15c1161795fc7d_319)] | | | [removed: [F-26](#i8d1c6a88620e4a3eacbd769d9e163f74_325)] [added: [F-24](#i3e7fc04dfedd4ab59c15c1161795fc7d_334)] | | |
| Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [F-](#i8d1c6a88620e4a3eacbd769d9e163f74_289)[14](#i8d1c6a88620e4a3eacbd769d9e163f74_289)] [added: [F-12](#i3e7fc04dfedd4ab59c15c1161795fc7d_307)] | | | [removed: [F-](#i8d1c6a88620e4a3eacbd769d9e163f74_310)[22](#i8d1c6a88620e4a3eacbd769d9e163f74_310)] [added: [F-20](#i3e7fc04dfedd4ab59c15c1161795fc7d_322)] | | | [removed: [F-28](#i8d1c6a88620e4a3eacbd769d9e163f74_331)] [added: [F-26](#i3e7fc04dfedd4ab59c15c1161795fc7d_337)] | | |
| Consolidated Statements of Changes in Equity for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [F-16](#i8d1c6a88620e4a3eacbd769d9e163f74_292)] [added: [F-14](#i3e7fc04dfedd4ab59c15c1161795fc7d_310)] | | | [removed: [F-](#i8d1c6a88620e4a3eacbd769d9e163f74_313)[23](#i8d1c6a88620e4a3eacbd769d9e163f74_313)] [added: [F-21](#i3e7fc04dfedd4ab59c15c1161795fc7d_325)] | | | N/A | | |
| Statements of Changes in Shareholders’ Equity for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | N/A | | | N/A | | | [removed: [F-29](#i8d1c6a88620e4a3eacbd769d9e163f74_334)] [added: [F-27](#i3e7fc04dfedd4ab59c15c1161795fc7d_340)] | | |
| [Notes to Consolidated Financial [removed: Statements](#i8d1c6a88620e4a3eacbd769d9e163f74_340)] [added: Statements](#i3e7fc04dfedd4ab59c15c1161795fc7d_343)] | | | | | | | | | | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Karen L. Sedgwick, Director | | | /s/ Karen L. Sedgwick | | | February 25, 2022 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| [Note 3. Revenues](#i3e7fc04dfedd4ab59c15c1161795fc7d_424) | | | | | | | | | [F-54](#i3e7fc04dfedd4ab59c15c1161795fc7d_424) | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
February 25, 2022
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
February 25, 2022
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
February 25, 2022
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Natural gas | | | | | | $ | 6,333 | | | | | $ | 5,411 | | | | | $ | 5,185 | |
| Electric | | | | | | 4,658 | | | | | | 4,614 | | | | | | 4,263 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Net income | | | $ | 1,417 | | | | | $ | (99) | | | | | $ | 1,318 | | | | | $ | 145 | | | | | $ | 1,463 | |
| Comprehensive income | | | 1,630 | | | | | | (152) | | | | | | 1,478 | | | | | | 156 | | | | | | 1,634 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Prepaid expenses | | | 260 | | | | | | 215 | | | | | | 161 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Other | | | 167 | | | | | | 139 | | | | | | 58 | | |
| Accounts receivable | | | (599) | | | | | | (328) | | | | | | (97) | | |
| Disbursement for note receivable | | | (305) | | | | | | — | | | | | | — | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Increase in Cameron LNG JV investment for guarantee | | | 22 | | | | | | — | | | | | | — | | |
| Repayment of advances from unconsolidated affiliate in lieu of distribution | | | 45 | | | | | | — | | | | | | — | | |
| Derecognized PP&E for net investment in sales-type lease | | | 44 | | | | | | — | | | | | | — | | |
| Accrued purchase price adjustment for sale of NCI | | | 13 | | | | | | — | | | | | | — | | |
| Issuance of common stock in exchange for NCI and related AOCI | | | 1,373 | | | | | | — | | | | | | — | | |
| Conversion of mandatory convertible preferred stock | | | 2,258 | | | | | | — | | | | | | — | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Balance at December 31, 2020 | | | 3,147 | | | | | | 7,053 | | | | | | 13,673 | | | | | | (500) | | | | | | 23,373 | | | | | | 1,561 | | | | | | 24,934 | | |
[Table of C](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)[ontents](#i3e7fc04dfedd4ab59c15c1161795fc7d_7)
| Net income | | | | | | | | | | | | | | | 1,318 | | | | | | | | | | | | 1,318 | | | | | | 145 | | | | | | 1,463 | | |
| Purchases | | | | | | | | | 1,459 | | | | | | | | | | | | (44) | | | | | | 1,415 | | | | | | (1,567) | | | | | | (152) | | |
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| Kathleen L. Brown, Director | | | /s/ Kathleen L. Brown | | | February 25, 2021 | | |
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| Trevor I. Mihalik, Director | | | /s/ Trevor I. Mihalik | | | February 25, 2021 | | |
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| Trevor I. Mihalik, Director | | | /s/ Trevor I. Mihalik | | | February 25, 2021 | | |
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| [Note 3. Revenues](#i8d1c6a88620e4a3eacbd769d9e163f74_439) | | | | | | | | | [F-56](#i8d1c6a88620e4a3eacbd769d9e163f74_439) | | |
| [Note 18. Quarterly Financial Data (Unaudited)](#i8d1c6a88620e4a3eacbd769d9e163f74_565) | | | | | | | | | [F-154](#i8d1c6a88620e4a3eacbd769d9e163f74_565) | | |
Additionally, Sempra Energy is named in various lawsuits related to the gas leak and the liabilities could be material.
Sempra Energy’s accrual for civil litigation matters associated with the gas leak, inclusive of estimated legal costs, is included within its $451 million Reserve for Aliso Canyon Costs as of December 31, 2020.
Also, we identified the contingency accrual related to the civil litigation as a critical audit matter due to the management judgments required in assessing the probability and reasonable estimation of the potential liability related to the civil litigation.
Our audit procedures related to civil litigation matters included the following, among others:
▪We tested the effectiveness of management’s internal controls over (1) Sempra Energy’s determination of whether a loss was probable and reasonably estimable and (2) the financial statement disclosures related to the gas leak.
▪We evaluated management’s judgments related to (1) whether a loss was probable and reasonably estimable and (2) whether additional losses are reasonably possible by inquiring of management and legal counsel of Sempra Energy regarding the amounts of probable and reasonably estimable losses.
▪We read a settlement offer and external information for any evidence that might contradict management’s assertions.
An excerpt. Shown here: 40 of 2,442 rewritten, 40 of 1,448 added and 40 of 1,263 removed. The counts are complete. For every sentence, read Item 16. FORM 10-K SUMMARY in the FY2021 filing and the FY2020 filing.