Dba Sempra · NYSE:SRE
Dba Sempra — Q1 2023 Earnings Presentation
35 slides from Dba Sempra's earnings presentation, May 4, 2023
Slide 1: First Quarter 2023 Earnings Results
First Quarter 2023 Earnings Results May 4, 2023
Slide 2: Information Regarding Forward-looking Statements
Information Regarding Forward-looking Statements This presentation contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks
Slide 3: Table of Contents
Table of Contents • Executive Summary • Capital Plan • Business Updates • Financial Results • Closing Remarks | 3
Slide 4: Executive Summary
Executive Summary Sempra has a significant portfolio of opportunities in attractive markets that provide enhanced visibility into the company’s future growth • Declared positive FID at Port Arthur LNG Phase 11 • Completed base rate review at Oncor, subsequently announced 5-year capital plan of $19B2
Slide 5: 5-Year Capital Plan $40B
5-Year Capital Plan Strong double-digit increase in expected capital investments improves visibility to future growth across all three business platforms 2023 – 2027 SEMPRA CALIFORNIA • Focused on safety + reliability investments in new infrastructure to promote clean energy SEMPRA TEXAS $21.4B $15.
Slide 6: Significant Projected Rate Base Growth
Significant Projected Rate Base Growth 1 ($ in billions) $69.3 $64.5 $59.7 $55.4 $50.4 $45.3 $49.1 $45.7 $42.2 $39.2 $36.0 $32.6 $17.5 $18.8 $20.2 $14.4 $16.2 $12.7 2022A 2023E 2024E 2025E 2026E 2027E Electric Gas Capital spending on the modernization of our regulated utilities in CA and TX extends
Slide 7: Sempra California
Sempra California BUSINESS UPDATES CAPITAL PLAN1 $21.4B • California submitted its hydrogen hub $4.4 $4.6 application to DOE $4.3 $2.5 $4.1 $4.0 $2.3 $2.4 $2.2 $2.2 • SDGE filed its fixed charge rate reform proposal consistent with California law • SDGE applied for federal funding to $2.1 $2.1 advan
Slide 8: Sempra Texas | Oncor
Sempra Texas | Oncor BUSINESS UPDATES CAPITAL PLAN1 $19.0B • Announced capital plan of $19.0B1 $4.3 • Received final order in base rate review $3.8 $3.9 setting 9.7% ROE + 42.5% equity layer2 $3.6 $3.4 • First quarter of 2023: ▪ Received 83 new transmission interconnection requests ▪ Built or harden
Slide 9: Sempra Infrastructure
Sempra Infrastructure BUSINESS UPDATES1 CAPITAL PLAN2 (Only includes FID projects) $3.6B • Port Arthur LNG Phase 1 achieved FID $1.3 and is under construction • ECA LNG Phase 1 construction progressing and has reached 6 million $0.8 work hours without lost-time incident $0.7 $0.5 • FERC approved Cam
Slide 10: Port Arthur LNG Phase 1
Port Arthur LNG Phase 1 A world-class energy infrastructure project with top-tier partners + customers HIGHLIGHTS • Strategic partners ConocoPhillips + KKR ✓ 100% of current contractable capacity secured with long-duration contracts and high-quality counterparties • Closed $6.8B project-level, non-r
Slide 11: Q1-2023 Financial Results
Q1-2023 Financial Results Three months ended March 31, (Dollars and shares in millions, except EPS) 2023 2022 (Unaudited) GAAP Earnings $ 969 $ 612 Impact associated with Aliso Canyon litigation – 66 Equity losses from a write-off of rate base disallowances resulting from the PUCT's final order in O
Slide 12: Q1-2023 Adjusted Earnings Drivers
Q1-2023 Adjusted Earnings Drivers $924M ($32M) $14M ($35M) $36M $922M ($56M) $71M Higher Net Higher Base Return on Lower Equity Interest Operating Investment Earnings from Higher NCI2 Higher Expense + Margin + for Certain Higher Transportation Lower Regulatory Benefit Depreciation Earnings + Income
Slide 13: Investment Highlights
Investment Highlights • Top-tier T+D utility platforms in some of HIGHLIGHTS 1 North America’s most attractive markets • California + Texas represent #1 and #2 economic markets in the U.S.3 • Robust capital investments + projected • Serving the largest utility customer 2 9% rate base growth through
Slide 14: Closing Remarks
Closing Remarks • Declared positive FID at Port Arthur LNG Phase 11 • Completed base rate review at Oncor, subsequently announced 5-year capital plan of $19B2 • Announcing new 5-year capital plan of $40B at Sempra3 • Reporting Q1-2023 adjusted EPS of $2.92 compared to Q1-2022 adjusted EPS of $2.914
Slide 15: Appendix I
Appendix | @ SEMPRA | 15
Slide 16: 2-Year Earnings Projections
2-Year Earnings Projections 1 Adjusted Adjusted Guidance Guidance 2022 2023 2024 (Dollars and shares in millions, except EPS amounts) Low – High Low – High Sempra California $1,713 $1,695 – $1,790 $1,850 – $1,990 Sempra Texas 736 685 – 745 725 – 785 Sempra Infrastructure 810 625 – 685 625 – 685 Pare
Slide 17: Utilities Projected Rate Base Growth
Utilities Projected Rate Base Growth 1 ($ in billions) 8% 8% 10% CAGR CAGR CAGR $33.2 $20.4 $21.0 $15.7 $13.8 $10.5 2022A 2027E 2022A 2027E 2022A 2027E 1. California rate base figures represent 13-month weighted-average projections, excluding CWIP. The resolution of the 2024 GRC could cause actual r
Slide 18: 2023 Plan Assumptions
2023 Plan Assumptions CPUC | 9.95% 1 2023 Authorized ROE 9.80% 9.70% FERC | 10.60% 2023 Attrition Year 3.97% 3.70% N/A Authorized 1 52.00% 52.00% 42.50% Equity Layer File next rate case by 2027 2024 – 2027 GRC proposed 2024 – 2027 GRC proposed Up to two TCOS filed Regulatory Timing decision expected
Slide 19: Sempra Infrastructure Growth Pipeline
Sempra Infrastructure Growth Pipeline 1 LNG + NET-ZERO SOLUTIONS2 Commentary Status 3 ECA LNG Phase 1 • COD expected summer 2025 Construction (~3 Mtpa) Port Arthur LNG Phase 13 • Targeted Train 1 COD 2027, Train 2 COD 2028 Construction (~13 Mtpa) Cameron LNG Phase 2 Train 1 – 3 Debottlenecking • Tar
Slide 20: Credit Ratings
Credit Ratings 1 Business S&P Fitch Moody’s BBB+ BBB+ Baa2 Sempra stable outlook stable outlook stable outlook SDGE BBB+ BBB+ A3 stable outlook stable outlook stable outlook SoCalGas A A A2 stable outlook stable outlook stable outlook Oncor A BBB+ Baa1 stable outlook stable outlook stable outlook SI
Slide 21: Appendix II Business Unit Earnings
Appendix II Business Unit Earnings | 21
Slide 22: Sempra California | SDGE
Sempra California | SDGE Three months ended March 31, (Unaudited, dollars in millions) 2023 2022 SDGE GAAP Earnings $ 258 $ 234 Q1-2023 earnings are higher than Q1-2022 earnings primarily due to: • $16 million higher CPUC base operating margin, net of operating expenses and $6 million from lower aut
Slide 23: Sempra California | SoCalGas
Sempra California | SoCalGas Three months ended March 31, (Unaudited, dollars in millions) 2023 2022 SoCalGas GAAP Earnings $ 360 $ 334 Impact associated with Aliso Canyon litigation – 66 SoCalGas Adjusted Earnings1 $ 360 $ 400 Q1-2023 earnings are lower than Q1-2022 adjusted earnings primarily due
Slide 24: Sempra Texas Utilities
Sempra Texas Utilities Three months ended March 31, (Unaudited, dollars in millions) 2023 2022 Sempra Texas Utilities GAAP Earnings $ 83 $ 162 Equity losses from a write-off of rate base disallowances resulting from the PUCT's final order in Oncor's comprehensive base rate review 44 – Sempra Texas U
Slide 25: Sempra Infrastructure
Sempra Infrastructure Three months ended March 31, (Unaudited, dollars in millions) 2023 2022 Sempra Infrastructure GAAP Earnings $ 315 $ 95 Impact from foreign currency and inflation on our monetary positions in Mexico 109 75 Net unrealized (gains) losses on derivatives (217) 51 Net unrealized loss
Slide 26: Parent & Other
Parent & Other Three months ended March 31, (Unaudited, dollars in millions) 2023 2022 Parent & Other GAAP Losses $ (47) $ (213) Deferred income tax expense associated with the change in our indefinite reinvestment assertion related to the sale of NCI to ADIA – 120 Parent & Other Adjusted Losses1 $
Slide 27: Appendix III Non-GAAP Financial Measures
Appendix III Non-GAAP Financial Measures | 27
Slide 28: Adjusted Earnings and Adjusted EPS (Unaudited)
Adjusted Earnings and Adjusted EPS (Unaudited) Sempra Adjusted Earnings and Adjusted EPS exclude items (after the effects of income taxes and, if applicable, noncontrolling interests (NCI)) in 2023 and 2022 as follows: Three months ended March 31, 2023: ▪ $(44) million equity losses from investment
Slide 29: Adjusted Earnings and Adjusted EPS (Unaudited)
Adjusted Earnings and Adjusted EPS (Unaudited) Income tax Non- Income tax Non- Pretax expense controlling Pretax (benefit) controlling amount (benefit)1 interests Earnings amount expense1 interests Earnings (Dollars in millions, except EPS amounts; shares in thousands) Three months ended March 31, 2
Slide 30: Adjusted Earnings (Losses) by Business Units (Unaudited)
Adjusted Earnings (Losses) by Business Units 1 (Unaudited) Three months ended March 31, 2023 Sempra (Dollars in millions) Sempra Texas Sempra Parent & Total SDGE SoCalGas California Utilities Infrastructure Other Sempra GAAP Earnings (Losses) $ 258 $ 360 $ 618 $ 83 $ 315 $ (47) $ 969 Equity losses f
Slide 31: 2023 Adjusted EPS Guidance Range (Unaudited)
2023 Adjusted EPS Guidance Range (Unaudited) Sempra 2023 Adjusted EPS Guidance Range of $8.60 to $9.20 excludes items (after the effects of income taxes and, if applicable, NCI) as follows: ▪ $(44) million equity losses from investment in Oncor Holdings related to a write-off of rate base disallowan
Slide 32: Adjusted Earnings (Losses) by Business Units (Unaudited)
Adjusted Earnings (Losses) by Business Units 1 (Unaudited) Sempra Adjusted Earnings excludes items (after the effects of income taxes and, if applicable, NCI) in 2022 as follows: Year ended December 31, 2022: ▪ $(199) million impact associated with Aliso Canyon natural gas storage facility litigatio
Slide 33: Appendix IV Glossary
Appendix IV Glossary | 33
Slide 34: Defined Terms
Defined Terms ADIA Black Silverback ZC 2022 LP (assignee of Black River B 2017 Inc.), a wholly owned affiliate of Abu Dhabi Investment Authority APCI Air Products and Chemicals, Inc. Bcf/d billion cubic feet per day CAGR compound annual growth rate CAISO California Independent System Operator Camero
Slide 35: Defined Terms Continued
Defined Terms Continued HOA heads of agreement IMG Infraestructura Marina del Golfo INEOS INEOS Energy Trading Ltd. JV joint venture KKR Denali KKR Denali Holdco LLC, an affiliate of Kohlberg Kravis Roberts & Co. L.P. LNG liquefied natural gas Mitsubishi Mitsubishi Corporation Mitsui Mitsui & Co. MO