Sempra Reports 3Q:21 Earnings

(Sempra, 5.Nov.2021) — Sempra (NYSE: SRE) (BMV: SRE) announced third-quarter 2021 losses of $648mn, or $2.03 per diluted share, compared to third-quarter 2020 earnings of $351 million, or $1.21 per diluted share. Sempra’s third-quarter 2021 results included a $1.1bn after-tax charge associated with civil litigation related to the 2015 Aliso Canyon natural gas storage facility leak. On an adjusted basis, the company’s third-quarter 2021 earnings were $545 million, or $1.70 per diluted share, compared to $432mn, or $1.49 per diluted share, in the third quarter of 2020.

“At this point in the year, we are excited to see strong growth across all three of our business platforms,” said Trevor Mihalik, executive vice president and chief financial officer of Sempra. “This is a product of our strategic focus on investing in some of the most attractive energy markets in North America, and it sets us up well for strong financial and operating performance through the end of the year and into 2022.”

Sempra’s earnings for the first nine months of 2021 were $650mn, or $2.09 per diluted share, compared with earnings of $3.35bn, or $11.43 per diluted share, in the first nine months of 2020. Adjusted earnings for the first nine months of 2021 were $1.949bn, or $6.27 per diluted share, compared to $1.674bn, or $5.70 per diluted share, in the first nine months of 2020.

The reported financial results reflect certain significant items as described on an after-tax basis in the following table of GAAP (generally accepted accounting principles in the United States of America) earnings, reconciled to adjusted earnings, for the third quarter and first nine months of 2021 and 2020.

FINANCIAL NOTES:

1) Q3-2020 and YTD-2020 Adjusted Earnings and Adjusted Earnings per Common Share (EPS) have been updated to exclude this item to conform to current year presentation.

2) Represents a non-GAAP financial measure. See Table A for information regarding non-GAAP financial measures and descriptions of adjustments.

3) To calculate YTD-2020 Adjusted EPS, preferred dividends of $78M are added back to Adjusted Earnings because of the dilutive effect of Series A mandatory convertible preferred stock.

Advancing Key Strategic Priorities at Sempra California

Southern California Gas Co. (SoCalGas) recently announced agreements expected to resolve substantially all material civil litigation against SoCalGas and Sempra related to the 2015 Aliso Canyon natural gas storage facility leak. The net, after-tax cash outflows for SoCalGas are expected to ultimately be up to approximately $895mn, after taking into consideration the remaining insurance receivable and other adjustments.

SoCalGas also recently issued a new economy-wide technical analysis, which underscores the essential role that clean fuels like hydrogen and renewable natural gas (RNG) are expected to play in reaching carbon neutrality. The analysis highlights that a clean fuels network made, in part, by leveraging existing gas infrastructure to deliver clean fuels and to manage carbon could allow California to achieve its net-zero goals more affordably and more effectively than other alternatives.

Continuing Strong Growth at Sempra Texas

In Texas, Oncor Electric Delivery Company LLC has announced its updated, five-year projected capital plan for 2022-2026 of $15bn, a record high for the company. Additionally, Oncor now projects its rate base to grow to nearly $28bn by 2026, which reflects a compound annual growth rate of about 8% over the five-year period. Oncor’s robust projected capital plan and rate base figures are expected to support the economic development seen throughout its service territory, forecasted generation additions, strong premise growth, and critical investments in grid resiliency, safety and reliability.

Investing in the Energy Transition at Sempra Infrastructure

Last month, Sempra completed the sale of a non-controlling, 20% interest in Sempra Infrastructure to KKR for a purchase price of $3.37bn, subject to post-closing adjustments. Proceeds from the sale are expected to be used to, among other things, help fund growth across Sempra’s capital program, which is centered on its U.S. utilities, and further strengthen its balance sheet.

Also, Sempra completed its follow-on cash tender offer to acquire the remaining publicly owned shares of Infraestructura Energética Nova S.A.B. de C.V. (IEnova) that were not obtained in the previously completed exchange offer, and IEnova’s shares have been delisted from the Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A.B. de C.V.).

With the consolidation of Sempra’s liquefied natural gas (LNG) business and its ownership of IEnova under Sempra Infrastructure, the newly formed business platform is expected to generate increased shareholder value over the long-term by investing in the energy systems of the future.

Earnings Guidance

Sempra is updating its full-year 2021 GAAP EPS guidance range, including items expected to be reflected in our fourth quarter results, to $3.01 to $3.61, and the company is continuing to guide to the upper end of the range for its full-year 2021 adjusted EPS guidance of $7.75 to $8.35. Sempra is also reaffirming its full-year 2022 EPS guidance range of $8.10 to $8.70.

Non-GAAP Financial Measures

Non-GAAP financial measures include Sempra’s adjusted earnings, adjusted EPS and adjusted EPS guidance range. See Table A for additional information regarding these non-GAAP financial measures.

Internet Broadcast

Sempra will broadcast a live discussion of its earnings results over the Internet today at 12pm ET with senior management of the company. Access is available by logging onto the website at www.sempra.com. For those unable to log on to the live webcast, the teleconference will be available on replay a few hours after its conclusion by dialing (888) 203-1112 and entering passcode 9127369.

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