Sempra Q4 FY2025 earnings call

1. Introduced five value creation initiatives in 2025: prioritize utility investments with improved returns, highlight value in LNG franchise, simplify business and reduce portfolio risk, execute Fit for 2025, and elevate community safety and operational excellence. 2. Encore successfully reached a comprehensive settlement in base rate review, expected final order in first half of 2026. 3. Semper Infrastructure's Port Arthur LNG Phase 1 on schedule for COD end of 2027. 4. In California, engaged in efforts to improve public policy to support SB 254 follow-on legislative efforts. 5. Announced 2026 - 2030 capital plan of $65 billion, 17% increase from last year, with 95% targeted for utility investments, driven by SEMPRA Texas growth, especially Permian Basin Reliability Plan, and ENCOR's transmission focus. 6. Projected rate base to increase from $57 billion in 2025 to $97 billion in 2030, 11% five-year CAGR, with Semper Texas rate base growing at 18% CAGR and California growing more modestly. 7. Eliminated need for new common equity issuances to fund base capital plan due to operational cash flows and expected transaction proceeds. 8. Committed to maintaining strong balance sheet and investment grade credit ratings, pending SI Partners transaction key driver. 9. Affirmed 2026 adjusted EPS guidance range $4.80 - $5.30, introduced 2027 range $5.10 - $5.70, and 2030 outlook $6.70 - $7.50.

Fourth quarter 2025 GAAP earnings were $352 million or 54 cents per share, compared to $665 million or $1.04 per share in 2024. Full year 2025 GAAP earnings were $1,796,000,000 or $2.75 per share, vs. $2,817,000,000 or $4.42 per share in 2024. Adjusted fourth quarter 2025 earnings were $841,000,000 or $1.28 per share, vs. $960 million or $1.50 per share in 2024. Full year 2025 adjusted earnings were $3,066,000,000 or $4.69 per share, favorably comparing to 2024's $2,969,000,000 or $4.65 per share. Variances: Semper Texas had $80 million higher equity earnings from UTM, etc.; Semper California had $213 million, including lower income tax benefits and higher net interest expense, and $148 million higher CPUC base operating margin; Semper Infrastructure had $123 million from various factors; Semper Parent had $41 million higher losses from higher net interest expense.

1. Affirmed full year 2026 adjusted earnings per share guidance range of $4.80 to $5.30. 2. Introduced full year 2027 EPS guidance range of $5.10 to $5.70. 3. Issued a 2030 EPS outlook of $6.70 to $7.50. 4. The 2030 outlook shows strong long-term growth expectations. 5. The $9 billion of upside opportunities in the capital plan can move the company into the upper end of the 2030 guidance range. 6. The settlement in Encore's base rate review and progress in Semper Infrastructure projects support the guidance.

Q: Elaborate on what moves into the top half of the 2030 range, including if 9 billion upside opportunities are accretive.

A: Quality and certainty of future earnings and cash flows have improved. Regulatory matters like 2028 GRC in California and addressing the $9 billion of future upside opportunities can move into the upper end. 2.

Q: Sense of shaping of 2028 - 2030 earnings growth.

A: Over time, input from investment community and sales side has led to more visibility into 2030, with growth not a straight line but robust, backed by dividend story. 3.

Q: Timeline and color on $9 billion of upside at Encore Texas.

A: $9 billion of upside layers in 28, 29, and 30. Base plan is heavily de-risked, incremental opportunities are potential in next five years with factors like ERCOT releasing projects, achieving CCNS, SRP filing, and batch zero process driving shift from incremental to base. 4.

Q: Offset keeping at high end of 2030 range.

A: Increased projection of internally generated cash flows by over $5 billion, continued improvement in California credit quality, higher growth at Encore with higher cash flows and earnings, and rate-based growth at 18% level across five-year plan. 5.

Q: Thoughts on remaining 25% in terms of funding $9 billion or other strategic actions.

A: Operating cash flows improved, $2.2 billion of additional proceeds from Sempra Infrastructure Partners transaction outside plan period, 25% residual stake in Sempra Infrastructure Partners provides flexibility, and will work on efficient financing plan in fall planning process. 6.

Q: Moving pieces in 7 - 10 midpoint for FY30, including sell-down of SIP and California.

A: Settlement approved in Texas, SI transaction closed, working on 2028 GRC in California, and California having high equity layers and positive regulatory environment factors. 7.

Q: Slippages in data center pipeline in Texas.

A: Data centers continuing to show up, Encore has upwards of 273 gigawatts in queue, working multiple avenues like batch zero process, RPG process, and developing list of loads for ERCOT's 2026 RTP projection, with at least 38 gigawatts meeting standards and more expected by April 1. 8.

Q: Trend of credit metrics through 2030.

A: SI partner transaction key to stronger balance sheet, regulated earnings to comprise approx 95% of business in 2027 and beyond, deconsolidating debt, constructive discussions with rating agencies, target 50 to 150 basis points cushion on average above FFO to debt thresholds, and focus on base rate review in Texas and SI transaction closing. 9.

Q: Outcomes from batch zero and large load forecast revisions posing downside risk to ERCOT mandated transmission spend.

A: The base capital plan is bulletproof with 70% allocated to transmission, and batch zero process outcomes are under incremental capital opportunities, not presently in base plan. 10.

Q: Thoughts on Texas road pipeline commitments.

A: Encore has collateral from customers, various processes like batch zero, RPG, and list of loads for ERCOT's 2026 RTP projection, with collateral around $3.5 billion showing interest of parties.