Sempra (SRE) Earnings

Management highlights

### Corporate Strategic Priorities - Complete the pending sale of a 45% equity stake in SI Partners in Q3 2026; this transaction will simplify the business model, recycle capital into regulated utility operations, eliminate the need for new common equity in the current base capital plan, and remove ~$9 billion of consolidated debt from Sempra's balance sheet. - The sale of ECOGAS (Mexico) remains on track to close in August 2026, after receiving critical regulatory approval. - Prioritize commissioning of ECA LNG Phase 1, and advance Port Arthur LNG Phase 1 and 2, which are currently on time and on budget. ### Encore (Sempra Texas) Operational Progress - Texas hit an all-time ERCOT peak demand of 91 gigawatts in July 2026, driving large multi-decade investment opportunity for grid modernization and expansion. 44 gigawatts of large customer load requests are eligible for the newly approved ERCOT Batch Zero interconnection process in Encore's service territory, 8 gigawatts of which are already interconnected and ramping to full utilization. - Encore has collected nearly $6 billion in collateral from large Batch Zero customers, including over $2 billion for the 44 gigawatts of submitted requests. Any required new transmission for Batch Zero projects will be incremental to Encore's existing base and incremental capital plans. - $4 billion of North/Central Texas transmission upgrades and $3 billion of non-Permian reliability projects have already been endorsed by ERCOT, and a $3 billion system resiliency plan filing is expected in 2027, forming the $10 billion incremental capital opportunity pipeline.

Guidance

- Sempra maintains its full-year 2026 adjusted diluted EPS guidance range of $4.80 to $5.30. - Full-year 2027 adjusted diluted EPS guidance range of $5.10 to $5.70 is also affirmed. - The company reaffirms its target long-term annual EPS growth rate of 7% to 9%. - Encore plans to update its five-year capital plan on the Q4 2026 earnings call, and Batch Zero-related additional capital investments will not be included in this update due to extended regulatory timelines, with updates expected after 2027.

Segment performance

1. **Sempra Texas (Encore)**: Reported a $138 million increase in adjusted equity earnings compared to Q2 2025, driven by new base rates (including interim rates), higher invested capital, and customer growth. This gain was partially offset by higher depreciation, interest expense, and operating and maintenance (O&M) costs. A $50 million favorable adjustment from the Q1 2026 base rate settlement was included in Q2 2026 earnings. As of 2026 half-year, Encore is progressing on its $47.5 billion five-year base capital plan and $10 billion incremental capital opportunity pipeline through 2030, and is targeting Texas to comprise over 60% of Sempra's total rate base by 2030. 2. **Sempra California**: Reported a net $13 million increase in adjusted earnings compared to Q2 2025. The segment saw a $24 million gain from higher CPUC base operating margin and higher electric transmission margin (partially offset by lower AFUDC equity), which more than offset an $11 million drag from higher net interest expense.

Risks & headwinds

- Batch Zero interconnection process timelines are uncertain, and regulatory reviews may delay capital deployment for new transmission projects in Texas. - Ongoing public and regulatory scrutiny of 765 kV transmission projects (driven by landowner concerns) could extend approval timelines for Permian Basin reliability projects. - Equipment damage discovered during planned maintenance at ECA LNG Phase 1 has delayed full commercial operations, pushing substantial completion to Q4 2026. - Uncertainty remains around the final content and outcome of California wildfire liability reform legislation, with no final bill text available as of the call. - Sempra currently holds a BAA2 credit rating with a negative outlook from Moody's, with an outlook revision not expected until early 2027 after the SI Partners transaction closes and project milestones are met.

Analyst Q&A

• Q: Could recent political discussions around pushing generation/behind-the-meter solutions instead of new transmission for Texas data centers impact your project timelines for Batch Zero opportunities?

  A: Management notes that Texas state policy is focused on creating a durable framework that ensures new large loads (like data centers) cover full interconnection costs and provide subsidies to lower residential rates, which aligns with Sempra's policy positions. Improved regulatory compacts from recent legislation and base rate reviews have already strengthened Encore's performance, and a more inclusive, deliberative process is expected to create a more stable foundation for long-term capital investment, rather than derailing growth opportunities.

• Q: What is the status of the recent delay at ECA LNG, and will it impact the timing of the SI Partners stake sale?

  A: After exporting the first cargo in July 2026, planned maintenance discovered damage to equipment connected to the mixed refrigerant compressors. The team is working with the EPC contractor and OEM to finalize root cause and remediation, with substantial completion now expected in Q4 2026, with no further delays expected. Substantial completion of ECA LNG is not a condition precedent to the SI Partners transaction, so the sale timeline remains unchanged.

• Q: How does the 44 gigawatts of Batch Zero load relate to Encore's previously reported 127.5 gigawatts of advanced interconnection requests, and are there still large additional growth opportunities outside of Batch Zero?

  A: The 44 gigawatts of Batch Zero-eligible load reflects the stricter eligibility requirements for the finalized process, which include completed studies, 50,000 MW financial security, site control attestation, and signed contracts, filtering down from the earlier 127.5 gigawatts of preliminary requests. Total active transmission interconnection requests are up 15% year-to-date, with non-data center LC&I requests up 8% year-over-year, so strong growth demand persists beyond the Batch Zero portfolio.

• Q: If no wildfire liability legislation passes in the current California legislative session, would Sempra adjust its California capital plan or GRC filing?

  A: Sempra's California rate base is already growing at a moderate 5% annual rate, aligned with state priorities of affordability while meeting safety and reliability needs. Management remains constructive that legislation will advance this session, and does not see a need to pre-emptively adjust its current capital plan before final legislative text is available.