Sempra Q3 FY2025 earnings call

• Positioned the portfolio to capitalize on secular trends like electrification, AI, and safe/reliable energy, updating strategy to focus on lower risk/higher value transmission/distribution, Texas as key market, and capital allocation to U.S. utilities.
• Reported third quarter 2025 adjusted EPS of $1.11, affirming full-year 2025 adjusted EPS guidance range $4.30 to $4.70 and 2026 range $4.80 to $5.30.
• 2025 value creation initiatives: $13 billion capital investment goal with nearly $9 billion deployed; sold 45% stake in Sempra Infrastructure Partners for $10 billion, ongoing Ecogas sales process; improving community safety and operational excellence.
• California updates: SB 254 strengthened financial safeguards for electric utilities; tracking regulatory matters like Track 2 of GRC, T06 proceeding, cost of capital proceeding.
• Sempra Infrastructure: Port Arthur LNG Phase 1 making headway, FID at Port Arthur Phase 2, ECA LNG Phase 1 near completion, Cimarron Wind near COD.
• Sempra Texas: Oncor base rate review progress, strong growth in core markets, anticipation of substantial increase in 2026-2030 capital plan.

Sempra California had $76 million primarily from higher income tax benefits, partially offset by higher net interest expense, and $47 million from higher CPUC-based operating margin net of operating expenses, partially offset by lower cost of capital. Sempra Texas had $45 million of higher equity earnings from higher invested capital, Oncor system resiliency plan, and unified tracker mechanism, partially offset by higher operating and interest expenses. Sempra Infrastructure had $26 million primarily from higher asset optimization, partially offset by lower transportation results, lower tax benefits, etc. The parent had a $32 million decrease primarily due to higher net interest expense, lower investment gains, partially offset by higher income tax benefits from OB3.

• Affirmed full-year 2025 adjusted EPS guidance range $4.30 to $4.70 and 2026 range $4.80 to $5.30.
• Oncor's roll forward capital plan expected to increase by at least 30% over current $36 billion base.
• Sempra Infrastructure Partners transaction is a positive catalyst, expected to be accretive to EPS and credit, and deconsolidate SI's debt from GAAP financials.

• Regulatory uncertainties in California regarding Track 2 of GRC, T06 proceeding, and cost of capital proceeding.
• Uncertainty around ERCOT's view on interim FEAs in Texas.
• Potential challenges in supply chain execution for Oncor's large capital plan.

Q: Nick Campanella from Barclays asked about balance sheet capacity and equity with the SIP transaction.

A: Jeffery Martin and Karen Sedgwick discussed balance sheet strength, SI transaction benefits, and equity position.

Q: Jude Jordan from Wells Fargo asked about SIP transaction leakage and Oncor's 30% CapEx increase.

A: Jeffery Martin and E. Nye talked about SIP accretion, Oncor's capital plan details.

Q: David Arcaro from Morgan Stanley inquired about Oncor's load growth pipeline and maximum new load connection.

A: Jeffery Martin and E. Nye discussed load growth, interim FEA process, and collateral related to load connections.

Q: Carly Davenport from Goldman Sachs asked about transmission expansion equipment and supply chain execution.

A: Jeffery Martin and E. Nye spoke about supply chain efforts, Midlothian facility, and vendor commitments.

Q: Sophie Karp from KBCM asked about deemphasizing California in capital plans.

A: Jeffery Martin responded on California's importance as a complement to Texas in terms of balance sheet and credit quality.

Q: Julien Dumoulin-Smith from Jefferies LLC asked about Oncor's ROE, equity needs, and puts/takes on growth.

A: Jeffery Martin addressed ROE improvement, capital recycling, and growth catalysts including Oncor's capital plan and Sempra Infrastructure projects.