Sempra Reports 2023 Financial and Business Results

SAN DIEGO, Feb. 27, 2024

"Strong business performance in 2023 reflects continued improvements in our corporate strategy and consistency in execution," said Jeffrey W. Martin, chairman and CEO of Sempra. "At Sempra, our goal is to give investors exposure to attractive growth in the energy infrastructure sector with the support of a growing dividend and a management team committed to providing superior, long-term total returns."

The company also reported fourth-quarter 2023 GAAP earnings of $737 million or $1.16 per diluted share, compared to fourth-quarter 2022 GAAP earnings of $438 million or $0.69 per diluted share. On an adjusted basis, the company's fourth-quarter 2023 earnings were $719 million or $1.13 per diluted share, compared to $743 million or $1.17 per diluted share in fourth-quarter 2022.

The reported financial results reflect certain significant items as described on an after-tax basis in the following table of GAAP earnings, reconciled to adjusted earnings, for the fourth quarter and full-year 2023 and 2022.

	(Dollars and shares in millions, except EPS)	Three months ended ARIVA.DE Börsen-Geflüster Kurse Sempra Energy 77,07 $ +0,05% December 31,				Years ended December 31,
		2023		2022		2023		2022
	GAAP Earnings	$     737		$     438		$ 3,030		$ 2,094
	Impact associated with Aliso Canyon litigation and regulatory matters	—		—		—		199
	Equity losses from write-off of rate base disallowances resulting from Public Utility     Commission of Texas' final order in Oncor Electric Delivery Company LLC's     comprehensive base rate review	—		—		44		—
	Impact from foreign currency and inflation on monetary positions in Mexico	69		75		235		164
	Net unrealized (gains) losses on commodity derivatives	(47)		247		(366)		355
	Net unrealized (gains) losses on contingent interest rate swap related to initial phase of     the Port Arthur LNG liquefaction project	—		(17)		17		(17)
	Deferred income tax expense associated with change in indefinite reinvestment assertion     related to sale of noncontrolling interest to Abu Dhabi Investment Authority	—		—		—		120
	Earnings from investment in RBS Sempra Commodities LLP	(40)		—		(40)		—
	Adjusted Earnings(1)	$     719		$     743		$ 2,920		$ 2,915
	Diluted Weighted-Average Common Shares Outstanding	634		632		633		633
	GAAP EPS	$   1.16		$   0.69		$   4.79		$   3.31
	Adjusted EPS(1)	$   1.13		$   1.17		$   4.61		$   4.61
	1)  See Table A for information regarding non-GAAP financial measures and descriptions of adjustments.

Capital Plan Growth

Across North America, the growing need to connect people to safer, more reliable and cleaner energy is driving significant investment opportunities in the transmission and distribution portion of the energy value chain. In response to this opportunity, Sempra is forecasting a company-record five-year capital plan of approximately $48 billion, representing a 20% increase from the previous capital plan. Over 90% of these investments are focused on Sempra California and Sempra Texas.

"Strong projected growth in Sempra's core markets is driving a substantial increase in our five-year capital plan," said Karen Sedgwick, executive vice president and chief financial officer of Sempra. "Expanding our capital campaign also supports our confidence in our ability to deliver sustainable, long-term value for our owners."

Progress at Sempra's Three Growth Platforms

Sempra's three growth platforms – Sempra California, Sempra Texas and Sempra Infrastructure – deliver energy to nearly 40 million consumers across some of the world's most significant economic markets, including California, Texas, Mexico and global energy markets.

Sempra California

Serving roughly 25 million consumers, Sempra California is a dual-utility platform focused on connecting people to safer, more reliable and cleaner energy. In 2023, $4.6 billion was invested in capital projects, including installing 200 megawatts of new utility-owned battery storage and microgrids to help enhance grid reliability and strengthen community resilience. 

In California, our regulated utilities continue to earn recognition for both sustainability and innovation. In the fourth quarter of 2023, the [H2] Innovation Experience was named to Fast Company's list of the Next Big Things in Tech. Sempra California's electric network was recognized by PA Consulting for Outstanding Grid Sustainability and for Outstanding Reliability Performance, a reliability distinction it has earned for 18 years in a row.

Additionally, progress continues with the general rate cases before the California Public Utilities Commission including proposed partial settlements reached with certain intervenors. A proposed decision is scheduled for the second quarter of 2024.

Sempra Texas

Broad economic growth is driving new investment opportunities at Sempra Texas. In 2023, roughly $3.8 billion of capital was invested by Oncor Electric Delivery Company LLC (Oncor) to support the growing needs of its customers, resulting in approximately 12% rate base growth since year-end 2022.

Nearly $1.6 billion of transmission projects were placed into service by Oncor in 2023, including placement of over 40 major substations and over 30 major switching stations and approximately 390 circuit miles of new or upgraded high-voltage transmission lines. Additionally, in 2023, Oncor saw a 25% increase in active generation and retail transmission interconnection requests as compared to 2022. Of the approximately 480 active generation point of interconnection requests in the queue at the end of 2023, 46% were solar, 42% were storage, 9% were wind and 3% were natural gas.

Several constructive legislative and regulatory outcomes were achieved in 2023 that are expected to support critical new infrastructure investments in the Texas market, while also improving the timeliness of capital recovery.

Sempra Infrastructure 

Sempra Infrastructure delivered strong financial and operational performance in 2023, a testament to its effectiveness as a high-growth, lower-carbon business focused on delivering cleaner and more secure energy to customers around the world.

Cameron LNG Phase 1 continues to be highly efficient, delivering excess production and achieving over 700 cargoes loaded since production began. As the company looks to expand its liquefied natural gas (LNG) portfolio, significant progress continues at Energía Costa Azul (ECA) LNG Phase 1 and Port Arthur LNG Phase 1. ECA LNG Phase 1 remains on track for commercial operations in summer 2025. 

In 2023, Sempra Infrastructure made a positive Final Investment Decision on Port Arthur LNG Phase 1 and project-level financing was secured. Sempra also closed the sales of indirect non-controlling interests in the project to ConocoPhillips and KKR.

In addition, Sempra Infrastructure continues to advance development efforts for its various LNG, hydrogen and carbon capture projects in response to continued global demand for cleaner fuels to support the decarbonization of the power sector and improve energy security.

Earnings Guidance

Sempra is narrowing its full-year 2024 earnings-per-common share (EPS) guidance range to $4.60 to $4.90 and announcing a full-year 2025 EPS guidance range of $4.90 to $5.25, which represents a 7% year-over-year increase from the midpoint of the full-year 2024 EPS guidance range. The company is also affirming its projected long-term EPS growth rate of approximately 6% to 8%.

Common and Preferred Dividends

Sempra's board of directors declared a $0.62 per share quarterly dividend on the company's common stock, which is payable April 15, 2024, to common stock shareholders of record at the close of business on March 21, 2024. The declared quarterly dividend represents an increase of the company's common stock dividend to $2.48 per share, on an annualized basis, from $2.38 per share in 2023.

Additionally, Sempra's board of directors declared a semi-annual dividend of $24.375 per share on the company's 4.875% Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, Series C. The preferred stock dividends will be payable April 15, 2024, to preferred stock shareholders of record at the close of business on April 1, 2024.

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