v3.2.0.727

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Jun. 30, 2015

Derivative Financial Instruments (Tables) [Abstract]

Commodity Derivative Volumes Table

NET ENERGY DERIVATIVE VOLUMES
Segment and Commodity			June 30, 2015	December 31, 2014
California Utilities:
SDG&E:
Natural gas			57 million MMBtu	55 million MMBtu	(1)
Electricity			1 million MWh	―	(2)
Congestion revenue rights			23 million MWh	27 million MWh
SoCalGas - natural gas			―	1 million MMBtu
Energy-Related Businesses:
Sempra Natural Gas - natural gas			29 million MMBtu	29 million MMBtu
(1)	Million British thermal units
(2)	Megawatt hours

Notional Amounts of Interest Rate Derivatives Table

INTEREST RATE DERIVATIVES
(Dollars in millions)
		June 30, 2015			December 31, 2014
		Notional debt		Maturities	Notional debt		Maturities
Sempra Energy Consolidated:
Cash flow hedges(1)		$	392	2015-2028	$	399	2015-2028
Fair value hedges			300	2016		300	2016
SDG&E:
Cash flow hedge(1)			320	2015-2019		325	2015-2019
(1)	Includes Otay Mesa VIE. All of SDG&E’s interest rate derivatives relate to Otay Mesa VIE.

Derivative Instruments on the Condensed Consolidated Balance Sheets Table

DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
		June 30, 2015
									Deferred
									credits
			Current				Current		and other
			assets:				liabilities:		liabilities:
			Fixed-price		Investments		Fixed-price		Fixed-price
			contracts		and other		contracts		contracts
			and other		assets:		and other		and other
			derivatives(1)		Sundry		derivatives(2)		derivatives
Sempra Energy Consolidated:
Derivatives designated as hedging instruments:
Interest rate and foreign exchange instruments(3)		$	9	$	2	$	(17)	$	(129)
Commodity contracts not subject to rate recovery			1		―		―		―
Derivatives not designated as hedging instruments:
Interest rate and foreign exchange instruments			8		24		(6)		(20)
Commodity contracts not subject to rate recovery			78		24		(76)		(16)
Associated offsetting commodity contracts			(69)		(15)		69		15
Associated offsetting cash collateral			―		―		5		1
Commodity contracts subject to rate recovery			15		75		(37)		(64)
Associated offsetting commodity contracts			(1)		(1)		1		1
Associated offsetting cash collateral			―		―		21		21
Net amounts presented on the balance sheet			41		109		(40)		(191)
Additional cash collateral for commodity contracts
not subject to rate recovery			17		―		―		―
Additional cash collateral for commodity contracts
subject to rate recovery			27		―		―		―
Total(4)		$	85	$	109	$	(40)	$	(191)
SDG&E:
Derivatives designated as hedging instruments:
Interest rate instruments(3)		$	―	$	―	$	(15)	$	(28)
Derivatives not designated as hedging instruments:
Commodity contracts not subject to rate recovery			―		―		(1)		―
Associated offsetting cash collateral			―		―		1		―
Commodity contracts subject to rate recovery			14		75		(37)		(64)
Associated offsetting commodity contracts			(1)		(1)		1		1
Associated offsetting cash collateral			―		―		21		21
Net amounts presented on the balance sheet			13		74		(30)		(70)
Additional cash collateral for commodity contracts
not subject to rate recovery			1		―		―		―
Additional cash collateral for commodity contracts
subject to rate recovery			26		―		―		―
Total(4)		$	40	$	74	$	(30)	$	(70)
SoCalGas:
Derivatives not designated as hedging instruments:
Commodity contracts not subject to rate recovery		$	―	$	―	$	(1)	$	―
Associated offsetting cash collateral			―		―		1		―
Commodity contracts subject to rate recovery			1		―		―		―
Net amounts presented on the balance sheet			1		―		―		―
Additional cash collateral for commodity contracts
not subject to rate recovery			2		―		―		―
Additional cash collateral for commodity contracts
subject to rate recovery			1		―		―		―
Total		$	4	$	―	$	―	$	―
(1)	Included in Current Assets: Other for SoCalGas.
(2)	Included in Current Liabilities: Other for SoCalGas.
(3)	Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE.
(4)	Normal purchase contracts previously measured at fair value are excluded.

DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
		December 31, 2014
									Deferred
									credits
			Current				Current		and other
			assets:				liabilities:		liabilities:
			Fixed-price		Investments		Fixed-price		Fixed-price
			contracts		and other		contracts		contracts
			and other		assets:		and other		and other
			derivatives(1)		Sundry		derivatives(2)		derivatives
Sempra Energy Consolidated:
Derivatives designated as hedging instruments:
Interest rate and foreign exchange instruments(3)		$	10	$	3	$	(17)	$	(109)
Commodity contracts not subject to rate recovery			25		―		―		―
Derivatives not designated as hedging instruments:
Interest rate instruments			8		27		(7)		(22)
Commodity contracts not subject to rate recovery			143		32		(135)		(29)
Associated offsetting commodity contracts			(129)		(27)		129		27
Associated offsetting cash collateral			(11)		―		―		―
Commodity contracts subject to rate recovery			36		76		(36)		(20)
Associated offsetting commodity contracts			(3)		(1)		3		1
Associated offsetting cash collateral			―		―		23		13
Net amounts presented on the balance sheet			79		110		(40)		(139)
Additional cash collateral for commodity contracts
subject to rate recovery			14		―		―		―
Total(4)		$	93	$	110	$	(40)	$	(139)
SDG&E:
Derivatives designated as hedging instruments:
Interest rate instruments(3)		$	―	$	―	$	(16)	$	(31)
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery			32		76		(32)		(20)
Associated offsetting commodity contracts			―		(1)		―		1
Associated offsetting cash collateral			―		―		23		13
Net amounts presented on the balance sheet			32		75		(25)		(37)
Additional cash collateral for commodity contracts
subject to rate recovery			12		―		―		―
Total(4)		$	44	$	75	$	(25)	$	(37)
SoCalGas:
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery		$	4	$	―	$	(4)	$	―
Associated offsetting commodity contracts			(3)		―		3		―
Net amounts presented on the balance sheet			1		―		(1)		―
Additional cash collateral for commodity contracts
subject to rate recovery			2		―		―		―
Total		$	3	$	―	$	(1)	$	―
(1)	Included in Current Assets: Other for SoCalGas.
(2)	Included in Current Liabilities: Other for SoCalGas.
(3)	Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE.
(4)	Normal purchase contracts previously measured at fair value are excluded.

Fair Value Hedge Impact on the Condensed Consolidated Statements of Operations Table

FAIR VALUE HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions)
			Gain (loss) on derivatives recognized in earnings
			Three months ended June 30,				Six months ended June 30,
		Location	2015		2014		2015		2014
Sempra Energy Consolidated:
Interest rate instruments		Interest Expense	$	2	$	2	$	4	$	5
Interest rate instruments		Other Income, Net		(3)		5		(2)		1
Total(1)			$	(1)	$	7	$	2	$	6
(1)	There was no hedge ineffectiveness on these swaps in the three months or six months ended June 30, 2015, respectively, and $7 million and $9 million in the three months and six months ended June 30, 2014, respectively. All other changes in the fair value of the interest rate swap agreements are exactly offset by changes in the fair value of the underlying long-term debt and are recorded in Other Income, Net.

Cash Flow Hedge Impact on the Condensed Consolidated Statements of Operations Table

CASH FLOW HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions)
		Pretax gain (loss) recognized						Pretax gain (loss) reclassified from
		in OCI (effective portion)						AOCI into earnings (effective portion)
		Three months ended June 30,						Three months ended June 30,
		2015		2014			Location	2015		2014
Sempra Energy Consolidated:
Interest rate and foreign
exchange instruments(1)		$	6	$	(7)		Interest Expense	$	(3)	$	(6)
							Equity Earnings,
Interest rate instruments			89		(15)		Before Income Tax		(3)		(2)
Commodity contracts not subject							Revenues: Energy-Related
to rate recovery			1		―		Businesses		―		―
Total(2)		$	96	$	(22)			$	(6)	$	(8)
SDG&E:
Interest rate instruments(1)(2)		$	―	$	(3)		Interest Expense	$	(3)	$	(2)
		Six months ended June 30,						Six months ended June 30,
		2015		2014			Location	2015		2014
Sempra Energy Consolidated:
Interest rate and foreign
exchange instruments(1)		$	(12)	$	(10)		Interest Expense	$	(9)	$	(9)
							Gain on Sale of Equity Interest
Interest rate instruments			―		(2)		and Assets		―		(2)
							Equity Earnings,
Interest rate instruments			11		(30)		Before Income Tax		(6)		(5)
Commodity contracts not subject							Revenues: Energy-Related
to rate recovery			―		(6)		Businesses		7		(10)
Total(2)		$	(1)	$	(48)			$	(8)	$	(26)
SDG&E:
Interest rate instruments(1)(2)		$	(5)	$	(6)		Interest Expense	$	(6)	$	(5)
(1)	Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
(2)	There was a negligible amount of ineffectiveness related to these hedges in 2015 and 2014.

Undesignated Derivative Impact on the Condensed Consolidated Statements of Operations Table

UNDESIGNATED DERIVATIVE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions)
			Gain (loss) on derivatives recognized in earnings
			Three months endedJune 30,				Six months ended June 30,
		Location	2015		2014		2015		2014
Sempra Energy Consolidated:
Interest rate and foreign exchange
instruments		Other Income, Net	$	(3)	$	4	$	(3)	$	7
Foreign exchange instruments		Equity Earnings,
		Net of Income Tax		―		―		(1)		(2)
Commodity contracts not subject		Revenues: Energy-Related
to rate recovery		Businesses		9		4		12		(1)
Commodity contracts not subject		Cost of Natural Gas, Electric Fuel
to rate recovery		and Purchased Power		―		1		―		2
Commodity contracts not subject
to rate recovery		Operation and Maintenance		1		―		1		―
Commodity contracts subject		Cost of Electric Fuel
to rate recovery		and Purchased Power		(53)		8		(73)		20
Commodity contracts subject
to rate recovery		Cost of Natural Gas		―		(1)		1		1
Total			$	(46)	$	16	$	(63)	$	27
SDG&E:
Commodity contracts subject		Cost of Electric Fuel
to rate recovery		and Purchased Power	$	(53)	$	8	$	(73)	$	20
SoCalGas:
Commodity contracts not subject
to rate recovery		Operation and Maintenance	$	1	$	―	$	1	$	―
Commodity contracts subject
to rate recovery		Cost of Natural Gas		―		(1)		1		1
Total			$	1	$	(1)	$	2	$	1

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-Publisher FASB



-Name Accounting Standards Codification



-Topic 815



-SubTopic 10



-Section 50



-Paragraph 4C



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