Good day and welcome to the Sempra Energy Third Quarter Earnings Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the presentation over to Mr. Rick Vaccari. Please go ahead, sir.

Good morning and welcome to Sempra Energy's third quarter financial presentation. A live webcast of this teleconference and slide presentation is available on our website under the Investor section. With me in San Diego are several members of our management team: Debbie Reed, Chairman and Chief Executive Officer; Mark Snell, President; Joe Householder, Chief Financial Officer; Martha Wyrsch, General Counsel; Trevor Mihalik, Chief Accounting Officer; Dennis Arriola, Chief Executive Officer of SoCalGas; Jeff Martin, Chief Executive Officer of SDG&E; and Octávio Simões, President of Sempra LNG. Before starting, I would like to remind everyone that we will be discussing forward-looking statements on this call within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. The factors that could cause our actual results to differ materially are discussed in the company's most recent 10-K and 10-Q. It's important to note that all of the earnings per share amounts in our presentation are shown on a diluted basis that we'll be discussing certain non-GAAP financial measures. Please refer to the presentation slides that accompany this call and to Table A in our third quarter 2016 earnings press release for a reconciliation to GAAP measures. I'd also like to indicate that the forward-looking statements contained in this presentation speak only as of today, November 2, 2016, and the company does not assume any obligation to update or revise any of these forward-looking statements in the future. With that, please turn to slide 4, and let me hand the call over to Debbie.

Thanks, Rick. During the third quarter, our strong operating and financial performance continued across the company. Our third quarter financial results keep us on track to achieve our 2016 adjusted earnings guidance of $4.60 per share to $5 per share. I would like to start off with an update on Cameron LNG. Last week, Cameron JV's EPC contractor gave indication that the project is facing delays. Cameron JV and the partners are assessing the information. Any delay would likely cause 2018 and 2019 Cameron earnings to be lower than anticipated, but those earnings would be made up over time. Most importantly, our NPV should be substantially maintained as the tariff adjusts as a result of the delay. I will go into further details in a moment. Moving on to other important elements of our base plan, I'm pleased to say that since our Analyst Conference in July, our team has been successfully executing on our projects. At IEnova, we have closed the approximately $1.1 billion acquisition of PEMEX's interest in the joint venture and issued $1.6 billion of follow-on equity. At the California utilities, we continue to make progress on our $12 billion five-year capital plan. Most recently, the CPUC has approved the Sycamore-Peñasquitos electric transmission project at SDG&E. We've also made progress on securing development opportunities that can enhance our value propositions. At IEnova, we plan on adding approximately 400 megawatts of new renewable projects. At SDG&E, we received CPUC approval to own and operate 37.5 megawatts of energy storage that we expect to be placed into service in the first quarter of 2017. Now, please turn to slide 5. Let me start with an update on Cameron Trains 1 through 3. Last week, Cameron JV received indication from its EPC contractor, that the in-service date for each train…

Thanks, Debbie. Earlier this morning, we reported third quarter earnings of $622 million, or $2.46 per share. On an adjusted basis, we reported third quarter earnings of $259 million, or $1.02 per share, compared to third quarter adjusted earnings in 2015 of $248 million, or $0.99 per share. This quarter, we have three adjustments to GAAP earnings. First, as Debbie mentioned, we completed the acquisition of PEMEX's interest in the GdC joint venture and recorded a gain of $350 million, which represents the step up in value of our previously existing ownership interest. Second, U.S. Gas & Power closed the sale of its southeast utilities and recorded a gain of $78 million. And finally, as part of the TdM sales process, additional market information became available this quarter that required us to reconsider its current book value. As a result, we recorded a net $65 million non-cash charge at Sempra Mexico. All three of these items are excluded from third quarter 2016 adjusted earnings and our 2016 adjusted guidance. I'd like to point out that this quarter, we adopted a new accounting standard on stock-based compensation, resulting in a benefit of $34 million retroactive to January 1, 2016, which is reflected in the results for the nine months that had no impact on third quarter results. Please turn to slide 9, and I will discuss the key factors impacting our quarterly earnings. Quarter-over-quarter, adjusted earnings were impacted by the following items. At the California utilities, we had $21 million of higher earnings, primarily due to higher CPUC base margin, net of operating expenses. Sempra International had $13 million of lower earnings, including a $4 million unfavorable impact from foreign currency transactional effects, and inflation in the current year, compared to a $16 million favorable impact in 2015 as a result…

Thank you. We will take our first question from Julien Dumoulin-Smith with UBS.

Hi. Good morning.

Hi, Julien.

Hey. So, quick question, following up on the LNG piece first. Can you elaborate a little bit of what the impact is to 2020? Just – if you suggest that the NPV remains the same, does that mean the tariff is actually adjusting up the NPV for you? And so, what does that mean for EPS? And then secondly, can you elaborate a little bit on the nature of the delay?

Yeah. Let me try to just give a little more color around the situation. We received notice last week of this, and what they indicated when they gave us notice was just the in-service dates that they anticipated were the three trains that I went over in the prepared remarks that that will be Train 1, mid-2018; Train 2, the end of 2018; and Train 3, mid-2019. They didn't give us any indication officially of the cause of the delay, but on their call, they indicated that there has been rain at the site and at their fabrication facility that's located near Baton Rouge. And apparently, they have some flooding, particularly at their fabrication facility. In terms of 2020, we're not going to revise any guidance for 2020 at this point. Obviously, we have a lot going on between this and potential of the Peruvian pipeline. And so, we're not going to do any update to guidance. But we try to give you an indication as kind of the economics of the three trains – of all three trains that are operating. And what this delay would be, because we had said previously we expected all three trains to be in service by the end of 2018. So, I think with what we've given you, you could kind of calculate what you would anticipate. In terms of the NPV, and this is very important, the way the tariff works is that the IRR was established that when we signed the contract for the project. And at the end of construction of the first train, then all of the assumptions are trued up, what the capital costs are and then what the amount is of the toll in order to maintain the IRR that was agreed upon. And so, that will occur. And then, so we will collect those dollars to achieve the same NPV on the project as we would have, had it gone in service on the originally planned day. And the toll actually goes up in future years as the way that it's calculated. But this will cause a delay in 2018 and 2019 earnings, as I stated in my comments. I hope that was clear, Julien. Was that helpful?

Absolutely. Thank you. And then just quickly, if you can actually, on the Peru piece. I know you don't want to comment too much, but what is the nature of the, I think, "significant issues" that you're resolving?

Well, that mean, there's commercial issues that are in the final stages of resolution. And then, we will have a number of conditions precedent if we can reach conclusion of the commercial issues in order to be sure that we have done the kind of diligence we want on the assets. And so, I would not at all say that this is near a done deal, but we're working on it. There's still meetings going on. And so, we're hopeful but we're also cautious.

Absolutely. Thank you very much.

Thank you.

And we will go next to Greg Gordon with Evercore ISI.

Thanks. Just to clarify your answer to Julien on the IRR, so it doesn't sound like it would have a material accretive impact on any one given year, given that you probably – one presumption would be that you just have an increase in the levelized toll over the course of the life of the contract in order to get back to your IRR. Is that a fair way to think about it?

That's a fair way to think about it. And then when you calculate the NPV with the delay or without the delay, it ends up being basically the same number, close to the same number. And so, that's exactly what happened. So, it increase earnings in future years as a result of a delay. And the same thing happens if there's an increase in project costs then the toll gets adjusted.

Okay. At what point would you be in a position to start to get liquidated damages? Are you implying that a six-month delay does not tip you into that zone in the contract, but a further delay would?

Liquidated damages would apply depending on what the source of the delay is. And that's one of the things that is going to be a subject for discussion. As I said, we just got this notice last week. And the partners have not had the opportunity to sit down with CB&I and Chiyoda, and really understand what is the source of the delays, what can be done to mitigate some of those delays. None of those discussions have occurred since this notice came last week. Those will be occurring in the next several weeks. I will say many of us visited the site last week. Construction is progressing and that there's a lot of work that's been done on the site, but until we really sit down and understand what's driving some of the schedule changes, it's too early to speculate what the liquidated damages would be. But the contractor does have delay liquidated damages as part of their contract. And those go against capital cost for the project in reducing capital cost, so that's the way it works.

Got you. What was your peso exposure before and what is it now?

I'm going to have Joe address that in terms of the change with the – I think you're talking about looking at the change now with the acquisition of the...

In other words, before the deal, what was your exposure to a given change in the exchange rate and what is it now?

Yeah. Hi, Greg. So, what we wanted to do here is make sure that everybody had the visibility into the fact that we have monetary assets and liabilities and we have deferred taxes. And because the tax system calculates all of our taxes in pesos, these dollar-denominated items, when they're converted to pesos, obviously, can move. And so, we see some impact of that. Over the last number of years, it's generally been a pretty close push between what was happening if the currencies are all moving in the same direction, what's happening in Chile, Peru and Mexico kind of offset each other. What we've wanted to explain is because we have more deferred taxes now, because we're acquiring the other half of this joint venture, our exposure to peso-dollar movement will move on that deferred tax liability and some of our monetary assets and liabilities. It's hard to predict because, obviously, we would have to forecast what the effect of the dollar-peso movement would be over the course of the year. Last year, we actually had a positive, a significant positive benefit to earnings because of this. Just to remind everybody, we do hedge our current tax liabilities. So, if there's a cash impact, then we hedge that to make sure we don't have a cash impact, but we don't hedge the deferred tax liabilities because it's just an accounting item that moves up and down and that would be costly to do. So, I can't give you a precise number. What we wanted to give you some visibility into is, we've been saying for the past five years or so, that we have a natural hedge between Chile, Peru and Mexico when the currencies are moving in the same direction against the dollar. Now, it'll be a little bit more tilted to Mexico. It can move up and it can move down and it will. And so, there'll be a little bit more exposure, but again, it's a non-cash exposure.

Got you. Final question. Can you give us what the earnings impact is of the renewable energy projects on page 6 that you won are relative to the base case that you gave out at Analyst Day?

No. We don't – I mean, we don't give project-by-project earnings. What we'll do is when we give you our updates on the February call for 2017, and then we give you our update at the Analyst Conference for 2018, we'll give you that information as part of our adjusted projection. So, we don't do them by projects. But they're the same. What I would say is, our renewable projects are all like high single-digit returns and that, this is about 400 megawatts in total of the adds that will come in over the next three years or so.

When you say returns, you're meaning return on equity, IRR? How should – something like that?

Yeah. Non-levered IRR. Yeah.

Okay. Thank you.

Thank you.

We will go next to Chris Turnure with JPMorgan.

Good morning. Sticking with Cameron Trains 1 through 3 for a second. I just wanted to understand maybe some context with other larger projects that you guys have done in the past and any issues that you might have had there? When you see something like this kind of get announced by the contractor this early in the process and taking the consideration that you have built in kind of time and cost contingencies into the overall package so far, where do we shake out here, is this the contractor being especially conservative and maybe there's a chance down the road that they get back on schedule or is this kind of a sign of something even worse to come? And then just a point of clarification as well on the kind of NPV staying whole, are you guys being made whole for that if the contractor is not responsible then just I guess, mathematically, it would be the counter-parties that are absorbing all of that potential risk, if that's correct?

Okay. Let me try to address – I think there were multiple questions in there, so let me try to address those. If you look at the delay notice, like I said, we just got it last week. We have not had the opportunity to sit down with the contractor and discuss, we'll be doing that within the next week or so. What I will say, though, is that the project is about 57% complete in total. And all the materials are on site for the construction. We were there last week. All of the cooling units were on Train 1. I mean, there's been a lot of construction progress and so it's not like early – not really early on, I would say, in the progress of the project. And it's the contractors' responsibility when they feel that there is a potential for a delay to give us those notifications and that's what they did just last week. As I said, all we know is that on their call, they said that there was rain at the site and at their fabrication facility that caused some flooding. We don't know what the actual cause of the delay is, until we get in and have a chance to have them explain to us what they're looking at, and then look at what the potential is to mitigate some of those. It's really hard for us to assess the likelihood of it getting better through those discussions, but we'll be making every effort to have that occur. I'm not sure if I answered all of your questions with that. I think there was one other thing that I might have missed, but...

About the NPV...

NPV.

...if it's not the contractor, does it go to a customer?

Yeah. And it does go through the toll to the customers. And that was the agreement that was established, that all of the LDs (28:08) would go against the capital cost which would also reduce the toll to the customer. So, to the extent there's a delay that's caused by the contractor, the customers benefit from that in a reduced toll, because it reduces capital cost, but to the extent that there's a delay and that that increases the toll. And that's the way we designed it. Everyone was full knowledge. I mean, part of the thing that's actually very good is that when we did our contract, we really tried to mitigate the risk for Sempra in terms of the long-term value of this project. And so, we set it up to where we were not the ones that bore the risk for these things. And that the NPV of the project remain the same and that the contractor has responsibility for delay. And the contractor has a lump sum turnkey contract. The only way that they can increase cost is by change orders. So, that was the design of the project, to really mitigate the risk long-term to our shareholders. And I think it's showing that it's pretty effective in doing that in the long-term, while it may affect some of the shorter term.

I think it's important, too, to have perspective about over four-year construction project starting when we took up ID (29:25) in 2014 and going through now. And this is moving from their information to us, a fairly small amount in terms of that, but we wanted you to all understand what the impact could be to some of the earnings numbers that we've given you, because even though it's a small percentage on the construction timeline, we wanted everybody to see the visibility to that.

Okay. Thanks for that extra clarity there. That's helpful to hear. And then just on the Peruvian project, I understand that you can't give us much in the way of detail around the negotiations right now or kind of maybe the timing of that specifically. But were you to be successful, would this require Sempra level equity and what would that mean in terms of the current plan to end the repatriation of cash at the end of, I think, 2018?

All I can tell you on that is, those are all things we're looking at right now and looking what the alternatives are. And that, until we know if we have the project and we know what it would cost and we know what the cash flows are going to be on it, it's really difficult to give any speculation. I'm not going to speculate on that. When we update our numbers, you'll see some of that. And we will – if we get the project, then our numbers will be updated when we do the call on the Analyst Conference.

Okay. And that was something where previously when you were negotiating for that a couple of years ago, you hadn't given any numbers out at that time either?

Yeah. And, no, we haven't given any numbers. We don't give numbers if we don't – until we know we have something, until we know how we're going to finance it, and that we have some confidence in the numbers. So...

Okay. That's clear. Thanks, guys.

Thanks.

We will go next to Stephen Byrd with Morgan Stanley. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Hi. Good morning.

Good morning, Stephen. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Most of my questions have been hit on. I just wanted to discuss Aliso Canyon. You've given an updated insurance range. I wondered if you could just talk at a high level as to what caused the adjustment to that range. And then, sort of related, when you look at all the claims, how are you generally feeling in terms of ability of your insurance to cover those claims?

Yeah. We're still feeling good about our insurance ability to cover the claims. And when we looked at – we looked at our reserve on an ongoing basis, based upon new knowledge of cost. One of the key things that caused our estimate to go up is the work that's being done on the root cause analysis and the fact that the third parties that are doing work on that are expecting a delay. And with the expectation of a delay in getting the outcome there, we would expect the cost to be slightly higher. And so, we took that into account. And then the other thing is, we're going through now recovery with our insurance on all the relocation expense, and validating all of the claims, so we have full insurance recoverability. And that – and going through that, that has taken a lot more detail type of work to get the claims ready, and so we included some of the costs associated with that. Those were the two drivers for the change in cost. I will say, these costs will be updated over time though, as we get into litigation, as we get into – knowing what legal costs we're incurring and knowing what litigation claims, any settlements that have been reflected with parties on any of the potential claims, fines or penalties, or other claims. As an example on this reserve, we did reach a settlement with the LA County DA, District Attorney, on the criminal charges and reached a settlement on that. And so, once we could quantify that, then that goes into the reserve number that we give you. So, those are the kinds of things that would continue to flow through in updates of that reserve. We've also spent, though, time looking at our insurance. And looking at what the types of claims we have, the types of claims that have been filed and what the insurance coverage is and being able to refine that a bit. And so, we're able to give you kind of a better estimate of what the range of insurance we believe is available. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Great. That's all I have. Thank you.

We will go next to Faisel Khan with Citigroup.

Hi, Faisel.

Hi. Good morning. I just want to understand with the delay in Trains 1 through 3, does that affect the marketing at all of Train 4?

Not directly, but I think indirectly in that, in order to go forward with Train 4, we need a few things. We need our partner consent. And as I said, we're working with one of the partners to try to get their consent. They've decided to not put equity in. And so, we're trying to look at how we would structure to move forward without them contributing equity, and have been having numerous ongoing discussions and communications with them about trying to resolve that. The other thing is, we need lenders' consent to move forward with Train 4. And the lenders are going to want to see that we've made reasonable progress on Trains 1 through 3, before giving that. So, that would be how I would see it having some impact, but it's not a direct impact.

Okay. Got it. And then, on the renewable projects in Mexico. I'm just trying to understand at a high-level, just trying to understand the potential growth in the renewables business within Mexico. Is the transmission system within the country well-developed enough to sort of handle all this wind and some of these solar projects coming online? I'm just trying to understand if these megawatts make it to market or are we getting too far ahead of ourselves before the transmission's developed?

Actually, that was one of the things that we looked at very carefully when we looked at – the one we acquired is already in operation. So, the transmission is there. And the two projects that we bid on, the solar projects that we won, we looked very carefully at what the transmission was, and we were very selective on what we bid based upon that. But there's great opportunity in transmission in Mexico. They're expecting two bids to be out within the next – in 2017 that would each be about $1.2 billion for transmission upgrades to their system. And that's a great opportunity for IEnova to participate in those bids. I think you will see a lot more. As you've seen in other markets where renewables start getting integrated, I think you will see a lot more investment in electric transmission occurring in Mexico. But, in the near-term, they've already announced those two bids.

Okay. Got you. And then you guys' decision to participate in the equity offering, the amount that you guys decided to take down the equity offering, was there some calculus behind that in terms of how you came to that amount?

I'm going to ask Joe to talk about that, because there was some – a lot of thought about where want it to be and where we want to position ourselves for now. But I'm going to ask Joe to address that.

Thanks, Debbie. Hi, Faisel. Yeah. We said last year when we announced the deal for the PEMEX JV that we would basically take two years of the dividend flows from IEnova to us, hold those in our Mexican holding company and reinvest that. And we said it would probably be in the $300 million to $350 million range. And Mark and I spend a lot of time with Carlos talking about how much we should take. We got a lot of advice from our IEnova investors of how you guys should maybe not do it, we want to own more. So, definitely there was a lot of demand for this equity which was great. The roadshow was very similar to the IPO. We got a lot of orders every day and it was a really amazing roadshow with the investors. At the end of the day, we wanted to make sure, because we really love these assets and this business that we maintained a strong ownership interest in it. And so, we kind of went to the max, because we were actually issuing more equity than we originally put on the table when we started the roadshow and upside to that amount. So, we did about the top end of what we said we were going to do.

Okay. Got it. And then just on Aliso, I mean, is it possible – can the in-service date or the return of the service of the storage facility, can that be before the root cause analysis is done or do we have to wait for that to get done? I'm just trying to understand if there's – if that can actually happen before there's a resolution.

Yes. It can happen before the root cause analysis is done. Let me have Dennis kind of walk you through what the process is that DOGGR and the CPUC will use over the next month or so. As we did make our filing yesterday to put the field back in service and for DOGGR and CPUC to do the certification that's required. So, Dennis, do you want to kind of walk...

Sure. Hi, Faisel. Yeah. When the new law SB 380 was put in place, it was put in – it was established independently of when the root cause analysis was going to be completed. There are basically two different tracks there that we've complied with everything that's required under – we believe, under SB 380 and that's why we made the filing yesterday. So, the process now is that DOGGR and the Public Utilities Commission are going to be reviewing all of the data and the information that we submitted. They're required under the law to hold a public hearing, which they have to give 15-day notice to. And we expect that sometime soon, they'll establish the date for that and they'll go through the process. But as Debbie mentioned, they are independent tracks all together, the root cause analysis, as well as the satisfaction of the comprehensive safety review that's laid out in SB 380.

Okay. Okay. That makes sense. I just want to wish Mark well in his retirement in case I didn't get a chance...

Thanks, Faisel.

...to talk to him before the next quarterly call.

Yeah. Okay.

We will go next to Steve Fleishman with Wolfe Research.

Hi, Steve.

Yeah. Hi. Hi, Debbie. I know you don't have specifics on why the six-month delay, but could you maybe just – is there a way you can make us more comfortable that six months doesn't turn into 12 months or 18 months? Could you talk about that or less, but why should we be worried about it being more?

Yeah. I mean, I think that if you look at where construction is now, a lot of the major pieces of construction have been done. And some of the issues that were the most critical that have more time sensitivity dealt with all the foundational work, and that's all been done. So, I mean, I think when you see the progress, and some of you will see the progress when you visit the facility, you'll get a sense that the work is moving forward, it's up to the contractor to give us their best estimates of the timeframe, and it's probably not in their interest to give us something that they don't feel like they're going to be able to meet. And so, at this point in time, we feel all we had is their estimate and that we have to have some credibility. I think our view is that there are some things that might be done that could actually shorten some of the timeframes. But we don't know what the issues are that were driving the delays. And so, that's one of the things that we need to spend some time on. And so, I'd love to give you comfort, but until we get through some of those discussions with the contractor, I don't think it's a thing that I should be doing. I think we need to go through those discussions, have those discussions, understand the delay, look at the mitigation plans to the extent possible to try to reduce delays, and then come up with what we really all feel is the correct information. And we did not want to not tell you about this, because we got this notification. We all know it also puts us in a difficult position because we feel that we can work some of this, but we haven't had the time to do that yet. And we will, and by the time we talk to you again, we will have that information.

Okay.

I don't know, Octávio, do you want to add anything to that? Octávio Simões - Sempra LNG Corp: No.

Okay.

And just one other clarification on Cameron is the – are weather conditions and flooding and things like that something that would be kind of like a force majeure on a timing or no?

Not just weather conditions, no. There are certain provisions of the contract that are very well-defined as what constitutes the force majeure. And just having rain and bad weather would not be a force majeure.

Okay. Great. Switching gears just to detail clarifications. The $34 million of stock-based comp change, is that pre-tax or after-tax? And would you still be in your range for this year if that did not happen?

Let's have Trevor talk about it.

Yeah, Steve, this is Trevor. That's a tax item, so it's really an after-tax adjustment.

Okay. And then would you still be in your range this year if that had not happened?

Yes.

Yes. Yes, we would.

Okay. And then just on the PEMEX currency volatility, should we assume that it's still kind of goes the same way as in the past, i.e., if the peso weakens, it tends to be a benefit; and if the peso strengthens, it tends to be a hurt, or is that also unpredictable?

Steve, this is Joe. Yeah. I would say generally that is correct. Because it measures deferred taxes and monetary assets and liabilities, it could swing around if we had cash positions or debt positions and the deferred taxes, of course, over time will move. So, I think, directionally, you have it right, it should be in the same direction.

Okay. Thank you.

Yes.

We will go next to Michael Lapides with Goldman Sachs. Michael Lapides - Goldman Sachs & Co.: Hey, guys. Couple of questions. First of all, your thoughts on U.S. renewable opportunities for Sempra. Just curious in terms of whether you still see significant opportunities at all or none for either contracted wind or contracted solar growth for U.S. Gas & Power?

We see some great opportunities for growth in renewables. And we're working on several projects where we've secured kind of the rights and the contracts and that are in early stages of development. We have the ability to expand the Mesquite side. We have the ability to expand the Broken Bow Wind side. And so, we think that with all of the RPS standards that are coming across the country that there are some good growth opportunities for renewables. I will say that the returns on renewables have gone down over time. And so, what we look at is, we really have good projects that have decent returns on them, because otherwise we can invest our capital. And so, we always look at the allocation of our capital to the projects to give us the highest returns. And since we're not – renewable is just one of the things we do. We're not going to just go after building megawatts. We're going to go after building megawatts that give us good return on our capital. Michael Lapides - Goldman Sachs & Co.: Got it. Thank you, Debbie. One other question back to the U.S. utilities and sorry if I'm staying a little U.S. centric here. What's not in the CapEx guidance that you laid out at the Analyst Day this summer, but that could provide upside to U.S. utility rate base growth? I'm thinking things like Otay Mesa, which I don't think was in that guidance. But what else is kind of in there that when I think about the next three years to five years could lead to higher rate base than what you laid out in July?

Well, you actually named one. So, let me turn it to Jeff, and he can talk about SDG&E, and then Dennis can talk about SoCalGas, because there are a number of things that we're working on right now including the potential of a DC transmission line. So, Jeff?

Good morning, Michael. We laid out at our Analyst Conference some of these green box items, which were not in the plan that could provide some additional upside. Now, just to give you a brief update, I mean one of the things I think we've done relatively successful is you've got to be able to manage both your GRC capital and the capital for projects which are proved outside the GRC. So, just recently, we've had, just to be sure, we've had $1 billion of incremental projects approved, that's not incremental to the plan, but that's outside the GRC. That's the Cleveland National Forest Project, Sycamore-PQ as well as the batteries which were discussed earlier on the call. So, we're making great progress there for our 2016, 2017 and 2018 capital plan, it was roughly $3.5 billion, $3.25 billion of that has already been approved and it's going forward. So, that really gives us a lot of confidence in terms of the certainty of our future capital plan. In terms of things which are not in the plan, Debbie touched on the DC line, this is the Southwest Power link which originates in Arizona. We think there's an opportunity as we think about providing more reliability particularly into the LA Basin of giving access to more renewables and more power from that Palo Verde, generating center in Arizona back into California, that's one project of about $1 billion. Secondly, we think there's an increased opportunity for batteries. At San Diego Gas & Electric by the end of Q1, we will have just over 50 megawatts of utility-owned batteries. And we think there's an incremental 200 megawatt opportunity. That's really associated with this new bill which was passed this year, which is AB 2868, which called for 500 megawatts of new batteries to be installed, split one-third between the three industrial and utilities. Otay Mesa you referenced, which is a 600 megawatt combined cycle plant in the heart of our load center, that is subject to a put-call arrangement with Calpine. And as you may recall, I think correctly from our last Analyst Conference that was not included in our five-year plan. And then the last thing I'd mention is electric vehicles. I mean, with the passage of SB 32, we're now required to drive our greenhouse gas emissions footprint in California 40% below 1990 over the next 14 years, and almost 50% of that has to come from the transportation sector. In fact, that's close to 53% or 54% in our service territories. So, big picture on this greenhouse gas issue, Michael, is you've only got about 10% of the greenhouse gas emissions coming from electric generation that sits inside the State of California. Maybe another 8% to 10% outside the state. There's no question, if the state is serious about meeting its goals, we have to have a revolution around the transportation sector. And I think almost in every scenario, the California utilities will play big in that space.

Hey, Michael, this is Dennis Arriola. Let me just touch on three things real quick. One is, we expect that going forward, there's going to be new national or state rules or regulations on storage. And I think that that's an opportunity as we continue to enhance the overall infrastructure and the safety of all of our facilities. That's number one. The second, and we've touched on this a little bit but we're seeing more momentum here in the state, is focusing on using natural gas for heavy duty transportation, so the fueling infrastructure around that. And then thirdly, focusing on the gathering and cleaning of renewable natural gas from landfills and dairies and things. So, we're not going to give out dollar amounts for those yet, but I think those are three areas that we definitely see opportunity and upside for our gas companies here in California. Michael Lapides - Goldman Sachs & Co.: Got it. Thank you, guys. Much appreciated. Mark, congrats, and look forward to seeing you out fly fishing at some point.

Thanks, Michael.

And we will go next to Paul Patterson with Glenrock Associates.

Good morning.

Hi, Paul.

Just want to follow-up on the LNG just a little bit more. The joint venture contractors, can you just review the credit support and what you have with respect to their ability to – just their financial wherewithal to, their guarantees and what have you for the project?

Sure. I'm going to have – I can give a high level, but I'm going to have Joe or Mark address more details. We do have performance assurances with CB&I and Chiyoda; they have a joint and several guarantee from each of the parties and a letter of credit as a backstop. So, we have that. And I don't know if you guys want to add anything more to that. Okay.

We have – there's very strong credit support.

Okay. I just wanted to review that. And then the – I mean, is it unusual for them to sort of call up and say, we've got a problem, but not tell you what the cause of the problem is?

What they have to do is they have to lay out the detailed schedule of everything that they expect to happen like with the construction and the new detailed schedule. And we just go that, I think it was Friday of last week. And so, that's how they begin the discussion on this is that they lay out a new detailed schedule, and then the discussion comes around that new detailed schedule. So, as I said, we just got that Friday, I think it was of last week. And then, that will begin the discussions. So, I mean, that's kind of the process. They are the ones responsible for giving official notification. And that was the process that they followed.

Okay. And then, the Train 4, the partner who dropped out, can you tell us a little bit more about which partner that is and why they dropped out?

No. But...

Okay.

...I can just tell you why they've indicated that they don't want to do it. It's a company that's changed their strategy, and is really focused on some downstream more now and more clean green energy. And so, they are looking not to invest major portions of their capital in LNG, and that's what they indicated to us. It was a strategy change.

Okay. And then, the accounting change, the $34 million stock compensation, what triggered that? What was the reason why that happened? And is there any impact past this year for 2017 or beyond?

Yeah. This is Trevor. That was as a result of an accounting standard update which was 2016-09 that we implemented and we early adopted this year. So, historically, what you've done is you've taken that tax benefit and it's gone straight to APIC or accumulated – or paid-in capital. Now, it's trying to simplify the accounting associated with that, and so you take that tax benefit and you push it through the P&L. So going forward, we'll treat it the same way.

Meaning going forward, will – I'm sorry to be slow, but what that does mean in terms of...

Yeah. There'll be earnings going forward...

Yes.

...of similar amount. It won't always be the same, because it will depend on what restricted stock and other stock is vesting. Many other utilities have also adopted it this year.

Okay. So, that should be good for earnings going forward. Am I right?

That's right.

Okay. And then maybe in a similar amount.

Well, assuming – it could go...

Yeah, it can go either way.

Yeah, I don't want to give an – yeah, inference that you can add $34 million a year. That's not the way it works. So, why don't you discuss how it works.

Yeah. The way it works is – when the original grant is issued, that stock-based compensation is an expense. And you take that tax benefit. If it vests at a higher amount and the stock price increases, then there's more of a tax deduction in those future years. And so, historically, the stock price has been rising. And the grants have been vesting at the multiplier, meaning that there is a higher tax benefit in future years. That tax benefit has historically gone through adjusted trading (55:20) capital. And now, the accounting standard says, put it through the P&L. So, going forward, we anticipate, assuming that the stock price continues to rise, and that the multiplier effect is in place, like it has been in the past years, we would get a similar type benefit. If it doesn't, if the stock price were to go down and it still vests, it could actually have a decrement to earnings in the future, but that's just how it can go both ways.

What if there was no change in the stock price?

Then there would be – then you would not have that tax benefit when those stocks vest because you take that tax benefit when you issue the grant over those periods.

Okay. Great. Thanks so much for the clarification. And congratulations to Mark.

Thank you.

We will go next to Andy Levi with Avon Capital.

Hi. Good morning still.

Hi, Andy.

On the letter of credit that you mentioned, how large is the letter of credit?

You're talking about the Cameron letter of credit?

That's correct. How big is it?

I don't know offhand. I don't remember offhand.

Yeah. We'll have to get back to you.

Yeah. I don't remember offhand. We'll get it to you.

Is it hundreds of millions or $100 million or...

No, no. We'll get back to you.

We'll get the information.

I don't want to give you a bad number.

We'll get the information.

That's fine. And what triggers it?

It would be a default.

Non-performance.

Non-performance, yeah.

It's non-performance. Okay. And then, are there any, like, surety insurers like surety bonds or anything like that or nothing like that?

No. No. This is – keep in mind this is a very, very large project. There's really not that much bonding capacity in the market.

And one very large credit-worthy counterparties on the other side and a big joint venture.

Yeah. Well, yeah. And keep in mind the – you're talking just about the contractor here.

Yeah.

These are very large credit-worthy companies, and so it would be unusual to have that kind of a bonding capacity and a project that size.

Yeah. I want to stress, as I said, that between CB&I and Chiyoda is a joint and several guarantee.

Right.

So, they basically assume each other's responsibility, so...

And I don't – but I also think too there's no indication that they're not performing. But they have an obligation under the contract to tell us if they think there's going to be a delay. They've notified us of that, and we'll work through it to see if we can mitigate it. But they're not saying that they can't finish the job.

And I know that you haven't spoken to them, but it's just based on your comments, it seems that the delay seems to be around the flooding, right, and all the rain that you had down there, is that correct? Is that kind of your plan?

All we can say on that is that what they think, didn't give us any official notification and the information that they sent to us. So, when we listen to their earnings call, on the earnings call, they said that there was rain at the site and the site of their fabrication facility that's located near Baton Rouge that caused some flooding, and that they expected some delays in construction. That's what they said on their call. You can listen to their call and get the precise language. I'm just kind of reiterating what they've said. But we don't have any official notification. And we will be meeting with them soon. It's something where all the partners have to sit down with them together. So, it's not something that you can do instantly because this is a joint venture. And so, it will be our self and our three partners sitting down with CB&I and Chiyoda. And I think it's scheduled within the next week or two for that meeting to occur. To really go through, as I said, they give us this massive package that has a detailed schedule that they produced on the construction. And someone asked me, what gives you some assurances, well, part of the whole effort is to go through that detailed schedule that they gave us and to ensure that everything has been given consideration. And that's the process they need to go through.

Okay. The last question I have and I apologize if I'm not as familiar. I'm very familiar with CB&I. But Chiyoda, how are they – I guess what they're a separate company unrelated to CB&I or they're a subsidiary that does this type of work with them or what's the relationship?

It is a huge multinational company that's not at all private CB&I other than through this joint venture. It's a Japanese-owned construction company. I don't know what their market cap is or but it's, yeah.

I get it. Yeah. I'm not that smart. Okay. Thank you very much.

Thanks.

Okay. Thanks again for joining us today. We look forward to seeing many of you at EEI in the next few weeks. And if you have any follow-up questions, please feel free to contact the IR team and have a really nice day.

That does conclude today's conference. Thank you, everyone, for your participation.