Dba Sempra · NYSE:SRE
Dba Sempra — Q3 2022 Earnings Presentation
30 slides from Dba Sempra's earnings presentation, Nov 3, 2022
Slide 1: Third Quarter 2022 Earnings Results
Third Quarter 2022 Earnings Results November 3, 2022
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 • Business Updates • Financial Results • Closing Remarks 3
Slide 4: Executive Summary
EXECUTIVE SUMMARY Disciplined execution across our three growth platforms in some of North America’s most attractive energy markets Focusing on safety, Expecting to complete Oncor Targeting Port Arthur LNG innovation, and improved base rate review end of Phase 1 FID in Q1-2023 grid resiliency Q1-202
Slide 5: Recent Legislation Strengthens Investment Thesis
RECENT LEGISLATION STRENGTHENS INVESTMENT THESIS As the owner of one of North America's largest T+D networks, we envision positive tailwinds from the IRA and other recent federal legislation 1 • SDG&E | Battery storage, EVs, V2G + clean transportation ELECTRIFY • Texas | Incremental renewables requi
Slide 6: Business Updates
BUSINESS UPDATES • SDG&E 2022 Cost of Capital pending today’s vote at CPUC • SDG&E + SoCalGas 2023-25 Cost of Capital FD expected end of 2022 • SDG&E + SoCalGas filed hydrogen blending applications with CPUC • SoCalGas recorded $101M after-tax charge related to Aliso Canyon settlements resolving lit
Slide 7: Spotlight | Port Arthur LNG Phase 1
1 SPOTLIGHT | PORT ARTHUR LNG PHASE 1 Executing on key workstreams to reach targeted FID in Q1-2023 2 PORT ARTHUR LNG PHASE 1 Value Proposition • Phase 1 permitted with FERC Order + DOE Export permits • Targeting high-quality recurring cash flows from long-term contracts • Robust customer interest i
Slide 8: Spotlight | Port Arthur LNG Phase 1 + 2
1 SPOTLIGHT | PORT ARTHUR LNG PHASE 1 + 2 Approximately 12 Mtpa of HOAs and significant ongoing 2 discussions with potential customers for Port Arthur LNG MARKETING UPDATE Active discussions Phase 1 with potential customers + Phase 2 • Targeting FID Q1-2023 other allocated volumes • 100% of required
Slide 9: Q3-2022 Financial Results
Q3-2022 FINANCIAL RESULTS Taking into consideration two minority interest sales in SI Partners, strong year-to-date financial results demonstrate the strength of Sempra’s three growth business platforms 1. See Appendix for information regarding non-GAAP financial measures and descriptions of adjustm
Slide 10: Q3-2022 Adjusted Earnings Drivers
Q3-2022 ADJUSTED EARNINGS DRIVERS $50M ($74M) $79M $22M $622M PARENT & OTHER $545M Q3-20211 Flow-Through Tax Higher Higher NCI Net of Lower Parent Q3-20221 Items + Increased Consumption + Higher Operating Losses1 CPUC Base Customer Growth Results1 Operating Margin + Increased Net of Operating Invest
Slide 11: Closing Remarks
CLOSING REMARKS Key Accomplishments ✓ Strong financial performance ✓ Raised FY-2022 adjusted EPS guidance range 1 ✓ Port Arthur LNG Phase 1 | Executed final EPC contract + FID expected Q1-2023 FINANCIAL HIGHLIGHTS • Reporting Q3-2022 adjusted EPS of $1.97 + YTD-2022 adjusted EPS of $6.871 • Raising
Slide 12: Appendix I
APPENDIX | (&) SEMPRA
Slide 13: Sempra California Regulatory Summary
SEMPRA CALIFORNIA REGULATORY SUMMARY 2024 GRC1 SDG&E SoCalGas Revenue Request $3.0B $4.4B Attrition (2025 – 2027)2 8% – 11% 6% – 8% Effective Period 2024 – 2027 2024 – 2027 Cost of service (excludes commodity, energy efficiency, and certain balanced programs); Rate Review does not include certain ca
Slide 14: Sempra Texas | Oncor Base Rate Review Summary
SEMPRA TEXAS | ONCOR 1 BASE RATE REVIEW SUMMARY Oncor Equity Layer / ROE2 Requested 45% / 10.3% (Authorized 42.5% / 9.8%) Test Year 2021 (historical)3 4 Effective Period Estimated 2023-2026 Rate Review Cost of capital, cost of service (O&M), prudency review for new assets in service Key Dates Final
Slide 15: Sempra Infrastructure Growth Pipeline
SEMPRA INFRASTRUCTURE 1 GROWTH PIPELINE LNG + NET-ZERO SOLUTIONS2 Commentary Status ECA LNG Phase 13 • COD expected middle of 2025 Construction (~3 Mtpa) Cameron LNG Phase 2 Train 1 – 3 Debottlenecking • Targeting online in stages prior to Cameron LNG Train 4 Development (~1 Mtpa) Train 4 • Progress
Slide 16: Q3 Sustainability Highlights
Q3 SUSTAINABILITY HIGHLIGHTS • SDG&E unveiled region’s first V2G • Improved Oncor’s Sustainalytics • Announced HOA with AVANGRID project to support bi-directional ESG Rating reflecting low ESG risk1 for potential development of U.S. energy flow green hydrogen + ammonia projects2 • Oncor deployed 500
Slide 17: Appendix II: Business Unit Earnings
APPENDIX II Business Unit Earnings 17
Slide 18: Sempra California | SDG&E
SEMPRA CALIFORNIA | SDG&E Q3-2022 earnings are higher than Q3-2021 earnings primarily due to: • $32M lower income tax expense primarily from flow-through items, net of lower associated regulatory revenues, • $18M higher income tax benefit from the resolution of prior year income tax items, and • $18
Slide 19: Sempra California | SoCalGas
SEMPRA CALIFORNIA | SOCALGAS Q3-2022 adjusted earnings are higher than Q3-2021 adjusted earnings primarily due to: • $18M higher CPUC base operating margin, net of operating expenses, partially offset by • $6M in higher net interest expense primarily due to higher debt balances 1. See Appendix for i
Slide 20: Sempra Texas Utilities
SEMPRA TEXAS UTILITIES Q3-2022 earnings are higher than Q3-2021 earnings primarily due to higher equity earnings from Oncor driven by: • Higher revenues from customer consumption attributable to weather + customer growth + rate updates to reflect increases in invested capital, and • Higher revenues
Slide 21: Sempra Infrastructure
SEMPRA INFRASTRUCTURE Q3-2022 adjusted earnings are lower than Q3-2021 adjusted earnings primarily due to: • $83M higher earnings attributable to NCI consisting of $91M increase as result of a decrease in our ownership interest in SI Partners offset by an increase in our ownership interest in IEnova
Slide 22: Parent & Other
PARENT & OTHER Q3-2022 losses are lower than Q3-2021 adjusted losses primarily due to: • $12M income tax expense in 2021 from changes to valuation allowance against certain tax credit carryforwards, • $9M higher income tax benefit from interim period application of annual forecasted consolidated ETR
Slide 23: Appendix III: Non-GAAP Financial Measures
APPENDIX III Non-GAAP Financial Measures 23
Slide 24: 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, NCI) in 2022 and 2021 as follows: In the three months ended September 30, 2022: • $(101)M from impacts associated with Aliso Canyon natural ga
Slide 25: Adjusted Earnings and Adjusted EPS (Unaudited)
ADJUSTED EARNINGS AND ADJUSTED EPS (UNAUDITED) Income tax Non- Income tax Non- Pretax (benefit) controlling Pretax (benefit) controlling (Losses) 1 1 amount expense interests Earnings amount expense interests earnings (Dollars in millions, except per share amounts; shares in thousands) Three months
Slide 26: Adjusted Earnings (Losses) by Business Units (Unaudited)
ADJUSTED EARNINGS (LOSSES) BY BUSINESS UNITS (UNAUDITED) 1 26
Slide 27: 2022 Adjusted EPS Guidance Range (Unaudited)
2022 ADJUSTED EPS GUIDANCE RANGE (UNAUDITED) Sempra 2022 Adjusted EPS Guidance Range of $8.70 to $9.00 excludes items (after the effects of income taxes and, if applicable, noncontrolling interests) as follows: • $(199)M from impacts associated with Aliso Canyon natural gas storage facility litigati
Slide 28: Appendix IV: Glossary
APPENDIX IV Glossary (&) SEMPRA
Slide 29: 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 Bechtel Bechtel Energy Inc. (formerly known as Bechtel Oil, Gas and Chemicals, Inc.) Cameron TotalEnergies SE, Mitsui, and a joint venture between Mitsubis
Slide 30: Defined Terms Continued
DEFINED TERMS CONTINUED JV joint venture LNG liquefied natural gas Mitsubishi Mitsubishi Corporation Mitsui Mitsui & Co. MOU memorandum of understanding Mtpa million tonnes per annum MW megawatt NCI noncontrolling interest O&M operations and maintenance expense PGNiG Polish Oil & Gas Company PPA pow