Sempra Q4 FY2024 earnings call

Key managerial messages include: 2024 saw $10 billion of capital deployed across three business lines and adjusted earnings of roughly $3 billion. A new $56 billion capital plan for 2025-2029, a 16% increase over the prior plan, with over 90% dedicated to regulated utilities. Oncor had a successful 2024 with $4.7 billion deployed, rate base growth, and contemplating a base rate review. Sempra California received final rate case decisions and had safety and reliability accomplishments. Sempra Infrastructure made progress on LNG projects with ECA LNG Phase 1 at 90% completion and Port Arthur LNG Phase 1 on track. The board approved a dividend increase to $2.58 per share.

Sempra's segments include Sempra California, Sempra Texas, and Sempra Infrastructure. In Sempra California, 2024 had $46 million primarily from higher electric transmission margin, higher AFUDC equity, and higher CPUC-based operating margin, and $157 million primarily from higher income tax benefits from flow-through items, including higher gas tax repair benefits, partially offset by higher net interest expense. In Sempra Texas, there was $43 million of higher equity earnings primarily from higher invested capital and customer growth, partially offset by higher interest and operating expenses, and lower consumption primarily due to mild weather. In Sempra Infrastructure, there was $170 million of lower transportation earnings, including the cumulative impact of new tariffs going into effect in 2023, lower asset and supply optimization, and lower volumes for the renewables business, partially offset by $50 million primarily from lower net interest expense due to higher capitalized interest and higher income tax benefits.

Revised 2025 EPS guidance range to $4.30 to $4.70. Announced 2026 EPS guidance range of $4.80 to $5.30, representing ~12% growth from midpoint of 2025 guidance. Raised long-term EPS growth rate to 7% to 9%. New $56 billion capital plan for 2025-2029, a 16% increase over prior plan.

Factors include regulatory changes impacting earnings, interest rate impacts on financing, wildfire risks in California affecting insurance and regulatory outcomes, and uncertainties in the timing and impact of base rate reviews in Texas.

Q: Just maybe starting off on the 2025 rebates...

A: Shar Pourreza's question was addressed by Karen Sedgwick and Jeff Martin, discussing California rate case impacts, Texas base rate review, and natural gas price assumptions.

Q: Hi, Nick. So I just wanted to touch on, you know, you're raising your rate base CAGR...

A: Nick Campanella's question was answered by Jeff Martin, discussing rate base growth, financing, and expected earnings growth exceeding long-term guidance.

Q: Yeah. Hey. So just could you give us some sense of where FFO to debt is at the, I guess, 2024 and 2025...

A: Steve Fleishman's question was addressed by Jeff Martin and Karen Sedgwick, discussing FFO to debt metrics and discussions with rating agencies.

Q: Good morning, David. Thanks so much for taking the question. I guess, maybe a bit of a continuation of that last question. Is there a point in the plan where you expect that crossover to meet kind of when you catch back up to the prior 6% to 8%, you know, EPS growth level?

A: David Arcaro's question was answered by Jeff Martin, discussing the long-term view of earnings per share growth and intra-planning year growth expectations.

Q: Good morning, Ross. Good morning. How are you doing? Just two quick questions. One is, I guess, maybe it's kind of following Steve's question earlier...

A: Ross Fowler's question was addressed by Jeff Martin and Karen Sedgwick, discussing growth variance, project lumping, and earnings power transparency.

Q: Hey, Jeff. Thanks for taking the questions. Maybe just two quick ones for me on upcoming regulatory filings. First, just as you look to cost of capital in California...

A: Carly Davenport's question was answered by Jeff Martin, discussing California cost of capital filings and Oncor rate case cadence.

Q: Hello. Good afternoon. How are you doing? Just two quick questions. One is, I guess, maybe it's kind of following Steve's question earlier...

A: Anthony Crowdell's question was addressed by Jeff Martin, discussing regulatory filing cadence and plan resilience.

Q: Great. Guess my first question is really a follow-up to Carly's question. In terms of cost of capital, are you assuming that there's no significant change in the ROE assumption that comes out of the cost of capital this year?

A: Paul Fremont's question was answered by Jeff Martin, discussing cost of capital assumptions and California legislative wildfire fund replenishment alternatives