SRE - Earnings call 4 2023

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Operator

Good day, and welcome to Sempra's Fourth Quarter Earnings Call. Today's conference is being recorded.

At this time, I'd like to turn it over to Glen Donovan. Please go ahead.

Glen Donovan

Good morning, and welcome to Sempra's Fourth Quarter 2023 Earnings Call. this under slide section. our of on are webcast website our Events live teleconference presentation and available The and Presentations

have President and our including Controller of Chief Financial Sedgwick, several with Mihalik, and President, We today, Executive Sempra Trevor Executive Wall, Chief us Vice Bird, Executive management President and Jeff of Group Executive and Executive President, Chief Chief Justin Senior Officer; team Officer Peter Vice Infrastructure; Chairman Oncor; Officer; Officer; Officer and Karen Chief of Executive Martin, Sempra other members Allen California; our Nye, team. of Accounting senior and Vice President members management

Securities may forward-looking statements that those materially starting, be company's a that meaning statements any discussing Litigation like filed basis differ and in in projected our non-GAAP of in shown today. measures. forward-looking differ this presentation diluted make a Private discussed slides could common the results Reform Actual XXXX. materially cause remind Before actual Act I'd from results to with everyone on refer factors The we'll our within be we the GAAP to for presentation that recent of discussing amounts Please per Earnings the call financial we'll certain share are reconciliation the SEC. to are the most measures. accompany to XX-K

August. in XX-K quarter the our share that ended and form year of the announced for our a the December Please review X-for-X to in share per call stock and all of you amounts note in second dividend distributed XXXX. encourage that also reflect we We common XXX% split XX, the

XX, obligation the this note forward-looking any the update I'd in not only today, or also company any important to in future. mention it's of and forward-looking to these contained statements like presentation assume XXXX, does to speak revise of that the statements that February

to With Slide hand the over call me please that, let Jeff. X, and

Jeffery Martin

today. joining thank all and you Glen, you, for us Thank

months, more and of we feedback providing several the and by followed accomplishments and I'll last recent save corporate each will call of leaders XXXX research your the community the with ways our from with likewise their close out information deployment. platforms In presentation more to will investors questions. executives. time will feedback, be and our end informative. at business be expected more the financial to spent business plan. take our Over today's summarizing summarize business time also our start off a QX on model strategy our response make who be review today results soliciting to new We'll Karen to we'll by to accomplishments XXXX sure outline full and of year today's and capital capital your

model. safer, looking we're connect and and disciplined At more investments modernize are company a and markets reliable cleaner to performance in simplifying economic in their communities networks Sempra, business our focused growing Now turning to was 'XX. and year and credit a of operating corporate strong our our and in strategy for making large to measures energy to that energy. financial It on our large success

Over us and customers of strategy scale the business X to the benefit our this allowed significant years, into shareholders. has last for build

of speaks are capital plan in in than record capital and Trevor, third that size really of more Justin our to and Allen later scope increased excited of announce transmission in will quarter but markets company opportunities detail go regulated presentation. we overall distribution operate company. allocated our growth robust a the magnitude in plan that November, our the front to of and to into and call the today's new billion XX% on XX% investments. $XX previewed we I'm our by more to As has with

the end high delivered morning, we're We results. exceeding This year to our guidance continued range the and providing X% $X.XX. our full seeing of to our of year EPS also $X.XX growth to Based of rate the Turning financial to full range EPS prior midpoint platforms, growth EPS to our X% growth $X.XX X XXXX XXXX to EPS we're affirming the guidance of guidance announcing adjusted upon projected range. guidance represents which $X.XX, narrow across support we're $X.XX approximately T&D XXXX from growth of long-term X%. our

to we're $X.XX Board to next our of Please Directors increasing turn consecutive XXth pleased the announce approved to for the slide. per Finally, the also dividend share. year

billion. For last over our Sempra rates. our has energy prioritized supplying has has interest the disruptions those over making years, the strong networks allowed and significant and in grow just inflation, $XX strategy markets years, California adjusted earnings in share. investments XXXX this per due higher and performance consistently to the XXXX Also, the United rate to of with in States several adjusted at financial several earnings past Texas, record backdrop, delivered this investment Against base to higher and end and us experienced economic in uncertainty record

X of with is Looking growth. it new capital long-term plan. an future unique out our forward, that of provides rolling earnings was successful our in visibility mitigating it's equity important offering needs Also, primary November our of note expanded to plan that last to benefits the associated equity the strength

work triggered. California, where advances the we mechanism jurisdictions On front, ability and highlighting capital key made cost with constructive the the to the our several of stakeholders. nature effectively regulatory of operate we've In

result, ROEs SoCalGas last increased month. their As authorized and a SDG&E

certain portion pending We intervenors constructively. with cases, view also rate our a proposed of which we reached for settlement a

Also, Also support several investments on that benefit of and review distribution positive financing began transmission at of the Turning construction. pieces state's passed in new to continued customers Phase Texas. Port growth and and X, the Oncor last economy. we LNG its Infrastructure, that rate successfully declared legislation were Arthur secured important completed Sempra spring, FID base

steady development projects. our to continue make We progress on

and a time our continue develop pause the infrastructure on of sector, impacted the these export non-FTE to commercial projects, While we'll on the in. in reasonable critical confident value has permits we're assets

further his to this Please in slide. section. the address turn topic will Justin next

our Sempra is Through which owners. driving economic economies, critical emerging come infrastructure and is to for global to returns will of from building GDP the while resources. than financial XXXX, incremental support much new growth more need to providing population double, designed energy expected attractive

gas intensity. molecules transition renewables, we Going critical energy energy will believe forward, future we and in an be natural as carbon to cleaner strongly meeting with rising lower demand

replace domestic for third exports lower renewables to record Please As during an set carbon example, all generation. and by and the the empower emissions LNG several gas production as as a fuel burning cleaner while demand record turn slide. still United States past year, over a natural next gas decades consecutive strong fueled XXXX coal the achieving natural

North the American we estimates with trillion As sector modernize to in slide. are trillion $XX the our IEA $X energy next over focused spent XXXX, to T&D through be energy that investments. on turn grids, expected Please the

disciplined turn assets the we T&D As we recurring chain. flows our energy high-quality value, been utilities in made investments Please that and disciplined next long-term portion producing on the we've with view maintaining of is past, with in toward believe inflation. slide. In contracted the higher grow the to segment, cash generally regulated from the outlined focus we've value the what lower risk

adjusted years. As our top annually since period, to allowed or range our amongst to you this EPS meet capital allocation slide. our has see us XX% strategy, at successfully with Over peers. last has exceed same guidance decile Please next for can approximately combined time which XXXX, here, X compounded EPS disciplined our the turn is the

financial rates our into of business customers and this different Improving included significant that's short, our build to delivered geopolitical for It's unrest. the performance. rising peer and Please total disciplined that supply strategy pandemic, global levels has across our returns benefit are shortages, of by cycles that noteworthy high well scale execution has have corporate In our our next group. slide. we've inflation, turn our shareholder market allowed a been at also demonstrated us chain consistency above that and to shareholders, accomplished the interest consistently

to capital out plan in to our our North expected economic investment clear to T&D a own Before attractive regulation. capital some X%. America's sets to key that long-term highlights. our disciplined and excited supports platforms We and allocation Texas, of like Trevor, reiterate from the call of markets constructive benefit launch a growth I California most EPS growth X-year located this billion. for future exercised $XX We I'd also new high-quality growth are approach our of and map X% road believe We to rate hand

management In there's team, growing us. our ahead of accomplishments our excitement opportunities conclusion, that a we're and recent franchise. are proud of lot about strength Across business the of the our of

turn to at Sempra, will please updates the you where business walk Trevor slide California. through next Now the

Trevor Mihalik

Thanks, Jeff.

billion $X.X and for These XXXX benefiting financial of me results safety, Let rate XX% focused were year $X.XX investments, XXXX. increased by the over full wildfire at Earnings base billion, from start the California. capital by mitigation. investments highlighting reliability Sempra

regulatory to year, had rate capital and compact, forward-looking We And cases, capital the supports established of several have this long including California's emphasized regulatory our access fund. attracting conviction the positive and that we mechanism wildfire an reinforced outcomes to cost state. constructive

decision increase fall, last by October, And anticipate XX and points. we certain approval, O&M while and we of XXXX. And authorized SoCalGas reached ROE progress. our January GRC was on capital SDG&E cost capital mentioned, CPUC CPUC proposed by at for these receiving triggered to This the and the of with settlements Jeff As requests case rate basis approved intervenors. In in important our subject our quarter. encouraged the mechanism a portions increasing are we're effective settlements X, that

will January a once rates As finalized, XXXX. X, be to reminder, retroactive

to recent We're and in competitive of in bid ] the for electric addition the mitigation consecutive recognition their West leadership transmission extremely Best industry April. Imperial business. for has Songs in an also in XXth update reliability expect their proud CAISO, our technology. awarded the projects the transmission modeling SDG&E to was Separately, for recently year of line and for the late recognized [ again electric awarded by the advanced north predictive Valley of wildfire SDG&E

by infrastructure largest and are partners, manufacturing the in This plays commission's supporting strategic develop electrify of nation's of the capacity, Angeles the receive The recently role California. SoCalGas the turn next And electricity pivotal hydrogen over help of both and This hard a to funding demonstrates in natural the gas one slide. and was play critical DOE energy cleaner the CPUC is importance regional SoCalGas' Canyon and recognition their is helping of lower because authorized role important ARCHES, one expected also hubs sector XX%. storage to Please Los which affordability molecules emissions. reliability increased Aliso hub. to finally, and is to a of to selected

top the key market, in the National that jobs states XX% operate job Sempra We nearly to created California trends turn is also U.S. past of Now among are of let's largest California. nearly over years. million some X the at X growth supporting representing for with X the growth, G.

and also CPUC well over are of California Earlier source state state energy. the any clean sustainable on in rate the new solar aligned storage. month, XX the gigawatts energy with commitments vehicles penetration the remains electric energy further by including We home also made to highest promotes to the of XX and renewables, economy XXXX, of power construction of that building largest mandating gigawatts this of based the policy of country.

are to in in increase now coming that San XXX,XXX is over there and expected years. the County, Just number EVs, Diego significantly

often and County accompanied become noteworthy battery rooftop also these to state our is cost the It reliably installed expected San customers with solar increase. are having the integrate on storage our to XX% Diego solutions more is effective, of need battery These systems. technologies by as a leads systems network that

The over sector Angeles. generates Los annual manufacturing GDP. $XX billion to Turning in

content Please significant direction is are California's to ensure our investment energy state heat takeaway RNG policy reliable increasingly be need slide. will The reliability going. here the and is aligned and help hydrogen the key you investment for rate molecules, to the high economic turn is affordability. the case safe strategy the require growth and its that customers goals, that next ambitious affordable, and closely critical pair important filings public with with and When for For operations. clean T&D

energy T&D is renewables serve to transition. necessary modernizing the growing the infrastructure more Sempra needs clean California's energy of molecules California and facilitating customers to integrate while

set As customers. and a play shows, central utilities in to growing connecting this cleaner sources energy a role our of diverse slide of new

our on We continue focus cost to lowest strong average. the We maintaining line state a with the with to safety structure. have the relative efficient an prioritize national are in currently reliability in and bills peers and

to on Please We turn possible always the service the will is top priority. customer a focused be while providing best slide. next ensuring affordability

over announcing We're X-year billion capital our to Turning $XX of plan. investments.

natural hardening network, On make system, infrastructure supporting infrastructure EV reliable support and the storage, to in pursuing On delivery our we the battery are electric emissions event renewable side, safe carbon risks. of system continue reduce infrastructure against incorporating integrating we modernize that gas and energy investments, cleaner will energy, our investments the and molecules. gas

rate to fortunate XXXX investments deliver at base an Sempra in opportunity approximate the prospects feel regulatory growth constructive a about We're to the with XXXX. CAGR We excited expect show to have our market safe a we energy these from And and X% California. reliable environment. at

Please to discuss will Alan accomplishments next Texas. the turn slide, where in Oncor's

E. Nye

history. most T&D complete Oncor Oncor base bills Trevor. XX% prior XXXX the to deploying achieve our review resilient legislative by was investments Oncor and the many demonstrates at prior over constructive Texas to for PUCT session our XXth that legislative also the deemed a more the Texas state. rate reliable outcomes. by base smarter, were XXXX, session productive grid approved. of marked and We and historically were But during closely $X.X safer, all where the rate as and legislature industry in this of emerge strong electric in supporting power performance capital the you, recent Several a growth successful and more pleased sessions delivered one worked the commitment financial has particular, prudent with continued to passed to outcome, Thank Texas stakeholders state's were year. billion growing in constructive. across incredibly with

distribution filings to lag tracker Oncor's cost regulatory critical a allowed First, recovery twice investments. increased reducing our legislature year the on

passed rules The to legislature approved which expenditures. last more for XXXX, HB systems Additionally, utilities make month. their PUCT the implement HB and expedited provides and encourages to recovery XXXX resilient, O&M finalized capital

SRP The months system plan if months. would within X approved, We to or and has allowed several by our the year-end. the expect resiliency to file expect to next SRP, first implementation we PUCT review begin

of forward be our associated recovered with DCRF in should tracker types SRP We and subsequent Regulatory in-service at approved reduce the and implementation filings. will time O&M plan a capital recovery gets will lag improving regulatory will weather storms, under the that this of offset the expenditures. lag offset will to be to rates the Similarly, of improve SRP capital our accrues for that improve of a Distribution DCRF. that that our system, of the of our normally in mechanism SRP through by Use expenditures. the the our new harden experience, recovery O&M between recovered expense these be asset as asset regulatory resiliency normally part look system a be and DCRF. against regulatory the extreme be by approved and using will the same time, and while next generally of wildfire customers' approved the included risk

increasing In of miles while XXXX, number by over XX also the over From we T&D new through an XX,XXX. or X,XXX lines operational very lines, a execute approximately X rebuilt alone, Texas or West upgraded built, perspective, miles high months. Oncor upgraded level. well premises last at serve we T&D rebuilt In continue to built, performed of The the substations. XXX switching Texas and and demand record grid peaks we of

reliability X% by year. XXXX score, ] Oncor's approximately to [ in compared our measured performance improved nonstorm SADI the previous as by

requests, interconnection and and for XXXX, XX% retail transmission requests new we company in active in increased queue. set year-over-year. Active the generation interconnection records requests Finally, transmission interconnection

interconnection New the slide. year-over-year. XX% Please to increased requests next turn

country's in Texas. diverse continues to the These by see The population growth driven to row. the continued a robust both during commercial is X% a the to EV nation turn and strong at in Texas and by for slide. and dynamic continue quarter. than that interconnection requests growth registrations we Please Miracle economic increase penetration are at quarter in of well. the some demonstrated grow had including with Texas area to areas, to the the the a the of of moving metro period, Metroplex Faster fastest-growing a next fifth continues Texas cities. GDP businesses Over any Oncor serves fastest-growing XX X and approximately vehicle as growth. perspective, Texas the the growing continues recent California in as the pace, scale to largest electric major From sheer DFW XX-month is only industrial state. whole in see XX% third a metro out second

hundreds new be Oncor has commercial potential often megawatts computing electric growth just loads of and potential including robust service the support representing megawatts territory, also projects have that to seen new for significant and electric These that projects. intelligence than development the continues in thousands our are load industrial to X of larger artificial customers, commercial of project. center hyperscale generative for represent Data sites traditional across services.

the within gas demand in reliability A published increase in at from month plan X.X Texas to total Similarly, to its and pace. fourfold meet Oncor by our update the West growth and requirements XX ERCOT to of expanding West electrification oil Texas expected at earlier as customers. general industry Basin impressive as support of this well Permian gas gigawatts gigawatts. is an continues could oil that This years, the and XX electrification. these will projects be production system forefront current

new continues to to growth as annually. X% still continue total Finally, the at expand these Oncor Energy population we expect approximately organically from opportunities of Each premise system. to relocations, developments both creates expand and the

through positioning Please in slide. We to ourselves hiring, and the these continuing chain to market. next ERCOT serve planning to the forward our supply looking system customers demands procurement are meet to and turn

announced we intention growth increase capital plan. this and discussed call, QX to Sempra's our On our

maintenance a to to plan grow SRP of projected system of customer be The previous the this through pleased the are increase plan $XX.X Oncor's I needs billion. that This billion X-year of upcoming amount is of that announce majority that $XX.X does in for capital plan expenditures growth, to We to filing although capital continue our our steadily vast is is expect serve capital which over plan XX% include capital XXXX X-year well. not request to we earlier. mentioned the XXXX

that the expect first review and this will to plan in file subject and We PUCT be half of spin approval. to year, proposed the

to Oncor's XX% an rate updated to annual XXXX plan, XXXX. from anticipate grow base today's rate of average we With at

mechanisms historically, enhanced closer base While growth arising session our legislative long-term base rate The earnings -- the rate earnings our due rate rate our fell growth to below recovery from regulatory to our rate. lag. growth growth should move of

I'll the to to update Please turn to you next slide where call the turn Sempra Justin on Infrastructure.

Justin Bird

Allen. in excited also billion makes opportunities investors the Sempra Sempra X Oncor's project Infrastructure Port are along Arthur in Sempra construction about Thanks, Infrastructure, the from differentiates Texas. advancing among strategy on in capital others in space. X certainly all and projects, LNG We're approximately our the which investment, Phase on us Texas. This is $XX plan, the largest time budget. advancing the state. we're And on of At with

dual We goal the move with power to and and coast export transmission and infrastructure all portfolio border, cleaner the across strategy, network of molecules have more LNG our partners. customers delivering power a energy a electrons robust renewable to cleaner

project specifically model. equity attainable earnings we results, its the X $XXX is noteworthy Financially, positive adjusted and FID declaring XXXX XXXX, ECA progress COD. approaches strong and like We've was also Sempra XXXX XXXX Phase our call in executed through it contributions. success, indication major required XXXX's I'd momentum debt business level and summer were as our out to to Arthur at of LNG maintain I Port LNG another Infrastructure's million. to achieved secured Phase ability a relative we several well all milestones on

American are North Coast export one We Pacific to to bring the first projects excited market. of

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to on On project EPC and discussions assessing continuing to conduct it's our ensure We're Cameron Phase on Phase LNG X, to closely while take we continue the Arthur cost-effective overall focused Port Port stage, evaluating Bechtel X, at X work development X working additional other time build best partners those At potential EPC offtake growth value Phase equity pipeline, and Phase opportunities. plan. Cameron some this with at our Phase advancing X help And ownership a efforts volume engineering. to additional and Cameron customers. we for feel with priorities remain we've been and commercial LNG the on potentially and to analysis value and value the engineering want Bechtel of improve but contractors. to the Arthur

Port ] a to At assessment staff in I received we this impact FERC no our And environmental significant wind would September. this and wind result II, progress located of amendment. existing Phase Louisiana that market. that finding with continue on [ interconnect Wind. California ESJ Cimarron earlier the an toward adverse FERC make Connector issued Arthur XXX-megawatt is month, want directly mention Arthur Port as an approval FID LNG projects we to Recall, the ESJ also near pipeline X a project

I from a we hub hydrogen development. pursue participating billion is $X.X Finally, that receive expected are to to to High in funding project, highlight DOE wanted Velocity called

more with customers. We engaged e-natural Please a Japanese of entrepreneurial actively cleaner as secure as slide. COX renewable these are on turn innovative collaboration to demonstrate using to seek group produce and opportunities like hydrogen culture energy Sempra and Projects provide inputs. gas next for also Infrastructure's the we to utilities a

continues oil, macro providing On energy natural trends and sustainable energy fuels today. gas role can Sempra Sempra like sustainability, head particularly a less effectively to solutions demand in replace to alternative Global carbon cleaner impacting increase. Infrastructure plays coal critical LNG, and Turning Infrastructure. sources to

GDP economies more of broader sources and global In and sources by improve as overall relative to efforts that associated cleaner grow provide life. particular, also intensive develops America. Sempra renewables a global because modernize market energy economies. quality in drives LNG demand, developing advancing to energy an North decarbonization contribute tend that XX% consumption infrastructure they is of approximately Infrastructure of There be and as XXXX. This additional associated their tailwind fact, growth increases energy to with in share estimate emerging industry will

impact is the where Recently, reevaluate economies. for energy announced key question need incremental final that and export energy non-FDA sourced. the key be to DOE dense, driver energy reliable is ingredient affordable is will granting security, permits production The the a a on impact The building pause to macro advanced on granting public on domestic portfolio. energy costs permits is our and even these we initiatives which interest. consider regulatory role impact the important started factors is climate would designed and LNG's environmental minimize reduce across several our emissions to help have climate before whether development, work the to LNG why energy

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to and that not the that global GDP this interests proposition We than reason despite hurt lasting be production. time. policy can't emissions visibility on increasing plan. natural prospective energy exports LNG buyers below unfortunately decreased coal carbon-intensive fuels, for believe of on to coal XXXX current compelling progress growth reiterate limiting would existing because including could impact LNG carbon natural or by XX% rely outcome climate is ultimate would more delay speculate the gas in potential provide. We policy forced double our A but gas fuel United that earnings value the environmental major and The has capital oil. States levels and more replacing a of our we'd any So like

the each the to We administration. remain LNG normal Please slide. one. we advance navigate as Further, as resume turn after carefully appropriately all to permitting enthusiastic to merits ability have our next conditions that been about evaluated as will well variables relevant optimistic our as ever landscape projects of regulatory by are the the

key the brownfield supplier Pacific this competitive a greenfield construction we highlight located On advantage is in Coast. strengthen and opportunities. to projects These our that it The and slide, development Asia some strategically compelling beauty both highly under Gulf expansion as of projects unlocks Europe.

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is have steel. ] milestone steel. and X, well. At LNG We've segment also begun initiated [ developing of And These the Phase the to facility. Sempra targeting comprehensive energy structural customers Hub Sempra this completion to projects. securing we At and procurement we for Arthur X, Phase around year. reiterate, progress the globe. of assets Mexicali key Infrastructure's are completion Port Arthur salt playing Port storage dome in needs of demonstrate at next the XX% natural structural to be to in energy to targeting the decarbonization the are a LNG larger GRO the will role gas To Meanwhile, expansion, later and engineering construction across Sempra a Energy at Infrastructure Louisiana contribute expertise efforts Infrastructure continues contributing storage, next will platforms ECA construction Please the and turn construction slide.

and of an this showcases are of some we our projects, slide pursuits. out, enviable further portfolio Looking more significant developing

initial a Please Cameron assets, these turn projects slide. by possible to greenfield For full the investment development number note of Arthur. are brownfield Port I a our please and also list refer to of the would opportunities made investments that at next appendix.

capital energy. pipeline investment conclude, opportunities secure in on we have the number only project billion storage have FID. expansion deployment ] the LNG providing X, ECA long-term which construction And projects Arthur slotted $X.X this Louisiana [ for as and To includes GRO customers Phase Energy X are we closed as on a reached with Phase Hub anchored reminder, cleaner allocations a the XXXX development. as Port and of positive our progresses COD, Major

Now Karen, through financial who turn slide, me please take turn the and to the will us update. it next over let to

Karen Sedgwick

Thank compares fourth you, $XXX XXXX a our on share. $XXX share. [ earnings Justin. I'm $X.XX quarter earnings XXXX million compares $XXX fourth earnings million of reports Full earnings plan. of share. or or to $X.XX per you were quarter earnings share. GAAP XXXX XXXX excited GAAP million and $X.XX $X.XX share. per our $X.XX ] year-end today, per $X.XX quarter financial to basis, or On details or share GAAP per non-GAAP per fourth fourth XXXX This billion share. to our quarter to This $XXX This of give more Sempra GAAP or million Earlier compares XXXX were $X.XX $X.XX earnings or billion, per year of results

Please XXXX improved [ This previous up growth On or results adjusted $X.XX strength year per our year's and ] performs full an XXXX. or $X.XX for growth to of year sets billion our demonstrate compares This billion were ] slide. share. earnings $X.XX X the per the Full to $X.XXX next turn share. combined adjusted basis, of in XXXX us [ earnings

lack Sempra, CPUC-based electric adjusted the operating of XXXX earnings California, summarize offset and the higher by partially year expenses. of capital attributable and regulatory margin earnings net $XX had trackers Texas, and had impacted during by income expense, $XX higher XXXX of that in offset higher by higher $XX be I'd will net and to awards. and transmission I we the million to variance were increased offset $X At period Now case. filed interest regulatory rate At million year. million Sempra partially by invested that of higher same of can't for benefits, full last capital, compared tax equity interest we the XXXX earnings of million note operating interest

million interest, At capitalized Sempra interests. partially had higher of earnings Infrastructure, attributable $XX by offset optimization, higher of tariffs, partially transportation offset by increased higher asset lower lower million to given offset Cameron supply higher expense taxes, earnings equity interest from $XX million LNG. by of we noncontrolling $XX

accounting project progress XX%, is purposes. ownership interest thus capitalizing our approximately while Arthur, the the Port based consolidate For on stake projects construction. we in

capitalized offset of higher versus the advances, depreciation previous and gains, the interest Sempra Ultimately, million plant impact into expense higher $XX lower income net years. partially by tax interest operations. were As moves commercial seeing higher to be At after as of back Parent, Turn amortized construction you're investment there slide. next capitalized will costs these higher the benefits.

Turning to new investments.

announcing the serve XX% our plan over This Jeff company regulated capital ROE $XX company's as to XX.X%. record About average over a our roughly billion, XX% allocated the weighted utilities, will previous is marked of have together the noted ultimately Sempra for impressive we're plan investment capital utilities. planned represents half coming of plan increase X earlier, with As and of investment an over approximately the years. which foundation billion a the at California's $XX.X growth for

next the ability Texas, help to and proportionate ] should rates are actual primarily under recent Sempra $XX.X the At regulatory Infrastructure's with and development includes billion where authorized projects its Please lag to associated between of infrastructure. our LNG slide. their CapEx, construction return. of and planned lessen $X.X Sempra Oncor improve billion share associated legislative One's [ The help reduce turn gap remaining

this and key some I sources to the With of like would illustrate uses. plan, capital record

As the you our risk plan. investment November capital XXXX equity needs in to with know, the and to support Sempra future financing raised mitigate associated

we and the a regulatory position authorized a internal financial our reliable financing and are needs. strong of in cash debt our will flows majority anticipate operating provide vast As result,

all sheet maintain balance slide. to to to business, long continue delivering XX% reinvestment We next returns Please XX% those attractive turn Sempra are will which the lines, flexibility. a ratio, of we'll Along payout dividend the over shareholder target providing growing plenty of total term. a strength,

Moving to utilities. the

trajectory and by earnings to California base underpinned rate long-term is X% respectively, XX%, XXXX. and is XXXX expected strong grow rate Our Texas growth. from base at to

growth benefit through and the rate. growth. X% and just Our EPS XXXX, split a and base anticipate Texas, from where annual our jurisdictions basis, macroeconomic growth to is long-term this we us turn over to confidence X% gives evenly constructive approximately projected Please California between regulatory rate added X% On in we next strong combined slide.

guidance of to from we're estimates $X.XX Also, a year, guidance. now with we've midpoint the a EPS EPS strength XXXX to higher projecting is guidance than range our X% guidance projected the $X.XX XXXX and our of share announcing about This ranging per $X.XX. equates results, for $X.XX. earned XXXX narrowed earnings are Given to XXXX

a break let's embedded figures. down these Now in few the assumptions of

already Sempra, includes this California, At the capital cost trigger. of

an As and proceeding to that for the safe, to and reliable rate case to GRC, for outcomes us allows achieve of we're assuming the sustainable continue interveners deliver our to constructively work continue through that energy CPUC customers. historical the in are outcome decisions, the with and range

prior said timing And into XXXX took and financial XXXX. XXXX. expect the We between through DCRF. second filing call, projects, of in PUCT the Oncor's to system to Subject minimal resiliency effect apply to differences plan we'd due Turning construction to the will approval, Texas. impact guidance in

rights highlight. new environment. At of and project the Sempra development And commodity conservative from secured advance XXXX, gas curve gas. as forward, to select received Infrastructure, attractive results with allowed tariffs our well Mexico the lower This benefit to impact on we we this things an XXXX us nature to in the to connecting there optimize this moderate period, we in are better XXXX Due expect ECA would price of the benefited a forward COD. few for go we of pipeline. natural process, particularly on cumulative during pipeline but

expected costs I, we better Phase added magnitude And in that with And full year in construction, currently expected XXXX summer have to under now online plan. of XXXX. have come certain operations large noncapitalized ECA with 'XX, have our been projects of to now the visibility LNG we the

count. the increase of regarding finally, our main the offering. driver is share recent The equity And

million shares As X of green of over November XXXX. we've in settled discussed, immediately the shoe just

XXXX. this shares million, share assuming for interior which settlement, XXX approximately Over year, occur plans drawdown $X the increase count in slide. course now of those our average reflects of shares. the by shares we're equity-based our will will to dividend we which the of second weighted diluted About year, million outstanding assume program reinvestment next XXXX forward and increasing the half Please the turn the to reflects

addition in our responsive to we've from In investors. our to this an be many more X-year added new effort input to slide plan,

investments form and or current It developing could many tracking part that Here, of of plan. future totals these turn outside of opportunities we're categories Please it our shows campaign. next of capital over fall billion, that our the $XX various slide. the to

note executives from is in to this front today, but by other of heard the it our investment opportunities excited that we're us. You've important

as our economies. and located platforms North operators time, same. utility largest ensure investment Moreover, ] for We the priorities top largely our reliable, key significant and benefit [ from and America in TV owners Over safe, customers. that utilities of resilient sustainable the regulation are remain energy constructive support our increasingly help

the regulated and growth utilities for gives achieving energy will record service, plan in to long-term We in provide infrastructure improve prudent and X%. capital power will balance $XX invest earnings on in our be our compelling T&D a our sheet shareholders. primary returns focused base, increasing customer projected X% to rate foundation growth confidence of us billion rate high-quality maintain our to A EPS

us. joining for you thank We

with returns. about company. the on had continue with to And March. of risk-adjusted team those month, over as IR and be the with road opportunity we're you of had out hope haven't connect build chance I'll premier delivering continue to a I've in the you meet last I to to We to the energy opportunity meet North And ever our enthusiastic many yet. America's infrastructure as attractive

open some like now I'd that, questions. call of to your for the With

Operator

This concludes remarks. prepared the

the questions. open will come line from Constantine Instructions]. first question your And Lednev now from take our will Guggenheim Partners. [Operator to We

Konstantin Lednev

Congrats on a great quarter.

XXXX pointing the 'XX would in there's [ 'XX, X ]. some issues GRC How first you the earnings into planning California, especially around framing X% settlement process? partial be that's visibility on are currently around the growth to the process The in assumptions,

Jeffery Martin

I here's is the would Constantine, to we way always framed and it rate that think support focus with on our directly is are about customers. investments we aligned making the case way policy Yes, public our

of outcomes. prior to assumptions been assumptions, the at take from look terms We've CPUC. potential we to time make range And then reasonable cases. we at of the a tend In through

last at process, of and all is Our fall, that constructively. we're But assumptions California where with we've for we you X/X at the settled in of that's Company is about view in terms regulatory we're challenge time. prepared case about a share did which for this to point, the intervenors just of And and SDG&E. Gas the the Southern great quite make case certain probably rate

and second the year. decision forward final the So of to the quarter in second we're looking a a decision proposed in half

Konstantin Lednev

outcome? meters that that does you're imply And [ the Or of is your settlements the into account that Okay. into any planning taking still ]?

Jeffery Martin

wouldn't think an of the I our with alignment for just assumptions. impact policy and the the some it the how No, settlement I about think about around initiatives itself the about meeting is public we're way think intervenors state. thinking we

Konstantin Lednev

the benchmark are capital at X, increase, X-year assumptions to the shifting a thoughts maybe do to yesterday Phase then reply book And pointing Perfect. comments Okay. you but the how and clearly on on and process cost your just especially sustained yields posted total of CPUC, end?

Jeffery Martin

Yes.

Here's the think way I it. would about

to Trevor like Now see also would add something. if we'll

was year, now with had our to that in guidance benefit indicated when to raising capital we included the us to mechanism know, guidance. ] recall, issue midpoint immediate the has had EPS we fairly December, Constantine And this actually little as clear, and cost you'll EPS community trigger it of it our first addressed which narrow the expected to we And bit last confidence of this last As XXXX our a think range. for decision that guidance was [ allowed the the have year. more of you

the rate fact attract be regulatory forward-looking a continues unique returns constructive the of that needed, people think the terms on jurisdiction. And strong cost I finally, are would Broadly, for quite But the more actually addressing that's capital market to accounts like equity we of Reasonable understand to starting point capital? you in event capital mechanism cost more anything to very and framework. climate-related always value add of have Trevor, a that I cases California It's here. risk. for and to to conditions.

Trevor Mihalik

And division's this. here covered on think really clear just in shape pretty are I letter the good Yes, I Jeff. would No, we that think on was I disposition largely it. think this. add I you energy

So shape. feel in we're again, we good

Konstantin Lednev

of ROE in embedded reinvestment of or kind quick have X outcome. that O&M any Just follow-up, kind Do within you embedded funding plan? system

Jeffery Martin

please? your Help question me understand again,

Konstantin Lednev

ROE you from reinvestment outcome. into 'XX? embedding any kind that tailwinds the from of O&M with tailwind Are going Just in

Jeffery Martin

assumptions set And case our when in we the I it The would when current and by of we all is. our the of we put rate is a reasonable together, upon that's think about be impacted XXXX take was and how plan think had so 'XX plan of forecast. to cases, case, would based the part outcome about which embedded way the rate 'XX, prior

Operator

our next Nick from question Campanella will from Barclays. And come

Nicholas Campanella

well. Thanks hope is for doing everyone today. everything I

cetera? that. to file you increased I this SRP. fund needs It CapEx, a is But just just your other how et biased describing higher CapEx would So you're guess side again are of half going sounds Probably kind debt, like second capital and equity on yet of the how event. you

Jeffery Martin

QX shared in between you'll that month, roughly future of that ongoing our XX, recall uses needs. through to sources of kind up last our $X.X support start, capital expectation financing call and would XX%. And same billion Slide year, and and Yes. goes fall's we the that issuance by that DRIP. reminding we will Nick Nick, sized equity our picks I our our and everyone equity offering on the up XX% last go plan

us support net the for shape. to any additional point, your takeaway need without with we're to new comfortably our in Together great cash and a program very operating think key debt, is our I capital in equity. the flows for we're position

Nicholas Campanella

equity current of top there I an on I'm Right. but if plan, a Sorry about some that. Is included you just And without is that there of in -- on this additional SRP incremental guess, forward? top CapEx CapEx about of funding CapEx, we think, think just raise need and Should that? be not again, sorry, just I here? doing going as how to the capacity, to equity then raise filing kind

Jeffery Martin

our we our margin a sure needs we were of did we accomplish When fall, what last to made terms in with financing that that equity around future growth. sized trying we

billion we've There's growth additional it funding beyond the So the we other capability get $XX challenge is out an slide that of shows provided billion there. you into $XX The without look have raising opportunities. when at you equity. additional

the the So think we've it's is the $X ones plan roughly which news great are capital billion plan, record got We've got But capital capital the just larger pipe. ] SRP. our I to down and equity a is a last than [ that to not current error market of coming our take fully capitalization, had and thoughtful plan our fall of stock off additional we overhang were sure margin make fund growth. we that with

Nicholas Campanella

then XXXX -- to just kind I of Very that. point rate you the sense strength Are versus and that if kind Absolutely just a I for when you there's I'm just step-up because the of And like ECA. appreciate the to And in to a trying turning clear. of drivers guess any that terms comes isolate 'XX what of guidance. for appreciate other 'XX? earnings of to there Sempra can a run get online COD just 'XX assuming Infrastructure midyear versus there? of ECA kind are is normalized

Jeffery Martin

your add you But to. you're can going rate. would half is I just ] you XXXX, I best a focus Yes. going year you to about expenses like development see on what if X things [ XXXX. and mention way to would for bit use I will Karen, I higher not give Cap convention to run And in little that's a the think and forward

Karen Sedgwick

The add the that you revenues just our commissioning completion SPA associated with contributions pipeline. contracts. financial include would substantial facility the ramped volumes would after from projections as GRO and the I expect, the incremental Yes.

on Pacific the demand. bringing exciting that infrastructure and really global first temporary an phase business coast with model Coast serve opportunity the facility differentiates of energy dual will So LNG a is

Operator

Morgan from Stanley. comes question next Our from David Arcaro

David Arcaro

for? on extended how wonder curious on process frame any way Cameron. I elaborate could if you you've long little maybe bit if I'm there's you bracket that the engineering a value could time

Jeffery Martin

asking ahead do go just David, if is if I you Yes. be what if the moment, helpful the trying Arthur. could, how to value then thought brief update Cameron a additional to And and construction both we're would, ECA things, you've around development question you he's got here, a X Port might on back the Justin at opportunity. about, specifically and come talk create

Justin Bird

to Train remain Arthur the of in X we're Phase XXXX Phase ECA Port on Thank X And XXXX. Yes. [ for Train X, projects both ECA We're Jeff. seeing for XXXX X X, excited construction, that for Arthur share you, track in Port and Phase summer COD and ].

to projects. Moving along development the

risk-adjusted which commitment about reverse always return build recall for that say deliver and always shareholders. And we'll it. to when model, the when as that contracted I'll forward those is that Dreams our talk move long-term our they and the You'll part support come, of I Field superior a of flows same only along have with risk right cost strong structure I projects lines, we our cash returns.

to of electric LNG your the And LNG lowest we world. And low-cost shifted a carbon the for going drives, Arthur have be sequestration. will of question tariff green in that have one most Cameron significant ] that heart demand believe Port permits of commercial on X, assets, So we'll Phase technologically brownfield to hand. we're seeing one the facilities particularly [ those have emission as we've the in we're on and working advanced profiles

some still make streams FID. X talked to about an we're As to but I've we always have and recall, towards that working you it's fully work be done. permitted, The continue work progress,

with to for long the costs, path focused critical Cameron project. the efforts maximum partners lead value for current our reservation equipment. example, to procurement So and or respect exploring ensuring of And optimizing are we're on

Cameron FID next the an taking on anticipating as are of year. X We first half as early

the So that's first half XXXX. of

Shifting We the permit. offtake potential non-FTA for having EPC to optimize X And we're DOE an awaiting construction our that Phase permit our on export are discussions and lenders. now Port marketing equity FERC Bechtel Arthur. with agreement financing schedule. received and efforts in the efficiencies can September to We're with continuing work with continuing last

these we our projects. Vista opportunities and stages excitement Pacific these Peka around We ] LNG the other of development, of also early and but Both have Coast in clear [ opportunities, see Pacifico. are

reminder, to positive plan FID. of upside in planning our mention projects in not to the earnings. plan as have included yet none They're are and just we these future received So represents a

Jeffery Martin

take So with items on securing that lead half FID additional additional to David, just long project this that time and we're that focusing of year. next in I trying engineering, value conclude on would

David Arcaro

comprehensive. very it there hand leave Yes, over. Perfect. I'll it and

Operator

you. Thank

next Our Davenport from Goldman from Carly question Sachs. will come

Carly Davenport

plan X%. as to X% increase, rate Maybe think the just growth base X-year start, earnings that curious, to planning rate we just over long-term growth the relative reiterated XX%, by period? given But of increasing to should how magnitude capital you about current the about think the the range we the that

Jeffery Martin

is period, the that billion Well, $XX plan is billion. What both the view year across of over of that of of base we're which is is platforms that rate it's XX% XX%, billion than little be you planning At note half in rate have our X that over capital our of the And we the the bit part which of of focus indicated, a approximately really will growth the we as we $XX as interesting those Texas, stronger strongest the ago. it of increase that there's $X a over asked prior utilities that base. end really forecasted and really plan story. captures the growth an seeing will

messaging we think to to rate for X% that around X% a most tend the been we several years growth now. is important have But thing

of key in the of companies over perform that to basis. X% XX% ability those confidence plan have is number. this have that. that one of or things able you deliver to go-forward over we at X think on X% per XX, last earnings takeaway think the type or years share we're of one that's visibility I to or this a in the back XX, And additional if go X confidence Slide the I years range X% XX you that in discussed long periods us few lot our at to to from before, I But of XX time. have or growth forecasting causes a Sempra certainly is and look

I end that will think that prior I've your don't you've of in research, if range. the often we noted I as outperform be high disappointed indicated

Carly Davenport

And a That's super on just helpful. follow-up then Texas. maybe

opportunities I different could planning you've you X% seen been think the for conservative Texas? growth what based you annual Do slides the recently just think in growth. a mentioned premise you've in be that that on and

Jeffery Martin

has on Texas, having our of and Yes. that's I is Texas, there's related growth bills And in is another growth over mentioned to think, up. where broadly, the the in of diversity talk could that's half through Allen, States planning just unique. story maybe us the and to up and Texas, growth all the in more transmission system that which showed I the from majority system. growth you of the transmission. The in increase is premise projects lowest is wouldn't But don't think It's also just all that CapEx the allocated of the team I rate the the quite that amount I -- jurisdictions. about it's not side, important the transmission the point, it's of came United the fits it because state the growth it, in premise walk to the different mind gets payers kind showing socialized across not state Carly's story is Allen where on Carly, distribution transmission. reason Allen's

E. Nye

seeing what continue record-breaking strong question remarks, we're Jeff. across very my really to as great Thanks, system. system. as And Jeff we given our sure. And Yes, our opening said and on see Carly, said I growth really in

up interconnection, large mentioned new year-over-year. set Total records XX% year, from a of strong, in connecting of a new active year-end interconnections premise year-over-year. perspective, points is transmission XX% transmission customers, growth I for very voltage. 'XX. last XX,XXX increase in points As remarks, very my opening We were interconnection transmission and

interconnections New retail And it up and year-over-year. XX% generation. always are down we break then into

XX%, pause Retail here but I the to XX%. is on up want

of to growth that's numbers [ the our the kind the point, the of we the 'XX the and about So from only diversity but Jeff's 'XX. is X.X But something customers. XXX to at go not ] of end at end significant magnitude

the we requests have, so XX in megawatts And XXX X,XXX interconnection individually between of megawatts XXX those point in presently retail these numbers size. are of of and retail

we We have and about XXX are about actually XXX piece, gig. have that XXX between are between and a X.X that and XX XX megawatts

increase but the also So strong what in we're very growth the just seeing numerically, of numbers, of long -- very is the the size customers.

we're a Texas to part X peak XX% increasing we that interconnection above transmission XX generation circuits Far stand or prior strong year's increased Loops West -- with XX%. -- us be rather about West a loops the the almost XX% about the The On Culberson West used increase very serve peak of continues talking we Texas that story for weather by year-over-year. XX.X% to the peak. state. of under that was always saw year-over-year. just an see side, Texas, The zone And

really, incredibly strong across on X.X. system, appendix. yes, really growth breakdown breakdown our CapEx, So It's of our of of Slide XX the

made in a capital about a further. is ] tech. $X.X [ ago, maintenance point little in $X.X expansion, distribution a billion and about got down Jeff which moment then about in billion it transmission in We've break expansion, about XX.X $X.X billion to Just

benefits the on the low-cost in it's is helps growth in is we fact a to think capital. through state the as little pure is I just want growth here everyone XX% transmission And And capital us about X-year stay as of of to Jeff's over state. be, of this allows is About trackers. really XX%, actually then One, which therefore, capital to which conclude. across to the among specifically, And all Jeff's talking both to us over state. obviously heavy which to XX% where well this transmission the little things all subject XX% point, X plan recovery CapEx this providers we're point our a the emphasis

Operator

time for have will question it more and Citi. from now X be Levine from We Ryan

Ryan Levine

further Two a questions. weeks. an prepared out expect Or One update late in outcome our the the of expect remarks project range you're there's potential that could coming -- in Should scenarios update on pursuing. mentioned, there? transmission. should as we for just In an play the as April that we

Jeffery Martin

Ryan. Thank respond. Trevor that let for I'll you question,

Trevor Mihalik

outcome. we'll Yes, XXX late get and a happen going in Sure, there's think get to Jeff. a decision negotiations selected for who's I Ryan. on final then to for April, days

next expect say would months. over the I something X So

Ryan Levine

Okay. applications. And then on new LNG, appreciate the clarification around the non-FTA extension permit or

In how typically pause around historical permit line FTA a applications potentially terms accelerate long of time there's on line And for that is of there is takes? allocation the extensions extensions, as issues. resource for new the time

Jeffery Martin

No.

have there's I for the the a And line say that. standard time projects for past. process would used We different in extension not

we've made I those Justin a was through I think to the series permitting through filings. of with Port the pleased think process very his of Phase is concurrently worked rather new of made see whole DOE just that viable Arthur the pursuing we've milestones Ryan, the But for Phase it this think And have for points X. separate that X was calls. milestones to process. project. Arthur extensions we just for We wait development have confirm we one ultimate filing We The discussion were commercially we're attractive process that that than a Port in I for a think pending. it's

the it's for actually So ends be delay remains for milestones completed, whether project where line to consistent it seen. being other up the time with a

Operator

like additional conference At Martin turn question-and-answer concludes session. I'd time, the for this any closing remarks. Jeff to That back today's to

Jeffery Martin

this competing I several even thank and conferences briefly joining everyone know us wanted there for morning. calls I to today. are

any to time So our the there please we us. items, out this IR appreciate join If everyone and call. any concludes our with team Thank are follow-up again, questions. reach making you to

Operator

you participation. your Thank for

now may disconnect. You

Sempra (SRE) 27 Feb 242023 Q4 Earnings call transcript