SAN DIEGO, June 29, 2021 /PRNewswire/ -- Today,
Sempra's (NYSE: SRE) (BMV: SRE) senior management team is providing
an update on the company's strategy, operations and financial
outlook at its 2021 Virtual Investor Day.
"Over the next decade, we see the economies of North America becoming increasingly
integrated," said Jeffrey W. Martin,
chairman and CEO of Sempra. "As a company, we are well positioned
to build the critical energy infrastructure that will be needed to
support new growth, while accelerating North America's transition to cleaner forms of
energy. Our competitive advantage lies in our enterprise-wide
commitment to innovation, sustainability and leadership."
Sempra's three business platforms – Sempra California, Sempra
Texas and Sempra Infrastructure – are strategically positioned in
some of the largest economies in North
America with a critical role in the energy future. The
company's strategic priorities are centered on executing a
$32 billion capital plan,
strengthening the balance sheet and returning value to
shareholders. Sempra's robust capital plan focuses on its utilities
and provides strong visibility to future earnings growth.
Earnings Guidance
"In the last several years, we have
realigned our portfolio with the objective of simplifying the
business while improving our financial results – and it is paying
dividends," said Trevor Mihalik,
executive vice president and chief financial officer for Sempra.
"Today, the strength of Sempra's balance sheet and a leading
earnings growth profile bolster our mission to be North America's premier energy infrastructure
company."
Sempra is increasing its full-year 2021 GAAP EPS guidance range
to $7.67 to $8.27 and increasing its full-year 2021 adjusted
EPS guidance range to $7.75 to
$8.35. Sempra is also announcing its
full-year 2022 EPS guidance range of $8.10 to $8.70.
Sempra California
Sempra's California platform, San Diego Gas &
Electric Co. (SDG&E) and Southern California Gas Co.
(SoCalGas), are helping to decarbonize the state's energy system,
while working to provide safe, reliable and cleaner energy to
approximately 26 million consumers. Recent operating highlights
include:
- Received a decision at SDG&E and SoCalGas in their Petition
for Modification of the 2019 General Rate Case (GRC) establishing
attrition rates for 2022 and 2023. This decision supports the
constructive outcomes of the GRC, which was based on the Risk
Assessment Mitigation Phase process and the continued delivery of
safe and reliable service to customers.
- Announced goals at SDG&E and SoCalGas to achieve net-zero
GHG emissions by 2045 across emission scopes 1, 2 and 3.
Sempra Texas
Sempra's Texas platform includes Oncor Electric
Delivery Co. LLC (Oncor) and Sharyland Utilities whose businesses
continue to modernize and extend their transmission and
distribution networks to connect customers to cleaner sources of
electricity. Supported by increasing population growth in the
Dallas-Fort Worth area, Oncor has
continued to grow its customer base anchored by a strong commitment
to safety, reliability and operational excellence. Oncor's recent
operating highlights include:
- Added approximately 77,000 additional premises in 2020, the
best organic growth for the company since 2007 and two times the
national average.
- Achieved one of the highest safety records in the utility's
history.
- Delivered top quartile reliability in 2020, ahead of its 2022
goal.
Sempra Infrastructure
Sempra Infrastructure is
well-positioned to advance growth opportunities by continuing to
develop, build, and operate the energy systems of the future. The
new business platform is expected to create increased shareholder
value and provide an improved platform for innovation and potential
new investments in renewables, hydrogen, green ammonia, energy
storage and carbon sequestration.
Through a series of transactions announced last year, Sempra
formed Sempra Infrastructure, a strategic growth platform with an
implied enterprise value of approximately $25.2 billion, including expected asset-related
debt of $8.37 billion. In April,
Sempra announced that it had entered into a definitive agreement to
sell a non-controlling 20% interest in Sempra Infrastructure to KKR
for $3.37 billion in cash, subject to
adjustments. The sale is expected to close in the coming weeks.
Additionally, in May, Sempra announced the completion of its
exchange offer to acquire the outstanding shares of IEnova
(Infraestructura Energética Nova, S.A.B de C.V.) not owned by
Sempra. Sempra's ownership interest in IEnova increased to 96.4%,
exceeding its initial target of 95% ownership of IEnova through the
exchange offer.
Sempra Infrastructure continues to advance its liquefied natural
gas (LNG) projects under development and in operation, with a view
toward improving energy diversification in foreign markets and
supporting the global energy transition.
Additionally, in Mexico, the
company is currently operating and constructing approximately 1,000
megawatts of renewables projects with a development pipeline of
nearly 3 gigawatts of cross-border solar, wind and battery
projects.
Utilizing Technology and Innovation to Drive Energy
Transition
The Sempra family of companies are focusing on
the importance of innovation, technology and leadership to better
serve customers, improve operational safety and efficiency, and
support the modernization of energy systems. Notable examples over
the past year include:
- SDG&E continued its top-tier wildfire mitigation efforts
with a focus on innovation and weather science. The utility has
invested more than $3 billion
building a more wildfire resistant system, including implementing a
robust weather network, using drone and satellite imaging for asset
and vegetation management, and fire hardening its infrastructure
assets.
- SoCalGas' H2 Hydrogen Home is the first project of its kind in
the U.S. demonstrating how carbon-free gas made from renewable
electricity can be used in pure form (or as a blend) to fuel the
clean energy systems of the future. The project was recently named
one of Fast Company's "World-Changing Ideas" in the North America category, which honors
innovations for the good of society and the planet.
- Oncor inspects approximately 3,700 miles of electrical
infrastructure each year with aerial technology capturing digital
imagery to create 3D models of the transmission system to identify
public safety concerns, component issues, property encroachments,
and vegetation management issues.
Sempra Brand Updated to Reflect Infrastructure-Focused
Strategy
Sempra has refreshed its brand to create better alignment with
the company's North American infrastructure strategy, including
removing "Energy" from its wordmark. Modernizing the brand also
supports the company's vision to deliver energy with purpose, ideal
of service to others and long-standing commitment to environmental
stewardship.
Sempra's new brand name will be effective with the New York
Stock Exchange on July 2, 2021. The
legal name of the company will continue to be Sempra Energy, doing
business as Sempra. The company's common stock will continue
trading under the ticker symbol "SRE."
Non-GAAP Financial Measure
This press release includes
Sempra's 2021 adjusted EPS guidance range, which is a non-GAAP
financial measure. See the appendix for additional information
regarding this non-GAAP financial measure.
About Sempra
Sempra's mission is to be North America's premier energy infrastructure
company. The Sempra family of companies have more than 19,000
talented employees who deliver energy with purpose to over 36
million consumers. With more than $66
billion in total assets at the end of 2020, the San Diego-based company is the owner of one of
the largest energy networks in North
America serving some of the world's leading economies. The
company is helping to advance the global energy transition by
enabling the delivery of lower-carbon energy solutions in each
market it serves, including California, Texas, Mexico
and the LNG export market. Sempra is consistently recognized as a
leader in sustainable business practices and for its long-standing
commitment to building a high-performing culture including safety,
workforce development and training, and diversity and inclusion.
Sempra is the only North American utility sector company included
on the Dow Jones Sustainability World Index and was also named one
of the "World's Most Admired Companies" for 2021 by Fortune
Magazine. For additional information about Sempra, please visit
Sempra's website at http://www.sempra.com and on Twitter
@SempraEnergy.
This press release contains statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are based on assumptions with respect to the future,
involve risks and uncertainties, and are not guarantees. Future
results may differ materially from those expressed in any
forward-looking statements. These forward-looking statements
represent our estimates and assumptions only as of the date of this
press release. We assume no obligation to update or revise any
forward-looking statement as a result of new information, future
events or other factors.
In this press release, forward-looking statements can be
identified by words such as "believes," "expects," "anticipates,"
"plans," "estimates," "projects," "forecasts," "should," "could,"
"would," "will," "confident," "may," "can," "potential,"
"possible," "proposed," "in process," "under construction," "in
development," "target," "outlook," "maintain," "continue," or
similar expressions, or when we discuss our guidance, priorities,
strategy, goals, vision, mission, opportunities, projections,
intentions or expectations.
Factors, among others, that could cause actual results and
events to differ materially from those described in any
forward-looking statements include risks and uncertainties relating
to: California wildfires,
including the risks that we may be found liable for damages
regardless of fault and that we may not be able to recover costs
from insurance, the wildfire fund established by California
Assembly Bill 1054 or in rates from customers; decisions,
investigations, regulations, issuances or revocations of permits
and other authorizations, renewals of franchises, and other actions
by (i) the Comisión Federal de Electricidad, California Public
Utilities Commission (CPUC), U.S. Department of Energy, Public
Utility Commission of Texas, and
other regulatory and governmental bodies and (ii) states, counties,
cities and other jurisdictions in the U.S., Mexico and other countries in which we do
business; the success of business development efforts, construction
projects and major acquisitions and divestitures, including risks
in (i) the ability to make a final investment decision, (ii)
completing construction projects or other transactions on schedule
and budget, (iii) the ability to realize anticipated benefits from
any of these efforts if completed, and (iv) obtaining the consent
of partners or other third parties; the resolution of civil and
criminal litigation, regulatory inquiries, investigations and
proceedings, and arbitrations, including, among others, those
related to the natural gas leak at Southern California Gas
Company's (SoCalGas) Aliso Canyon natural gas storage facility; the
impact of the COVID-19 pandemic on our capital projects, regulatory
approval processes, supply chain, liquidity and execution of
operations; actions by credit rating agencies to downgrade our
credit ratings or to place those ratings on negative outlook and
our ability to borrow on favorable terms and meet our substantial
debt service obligations; actions to reduce or eliminate reliance
on natural gas, including any deterioration of or increased
uncertainty in the political or regulatory environment for local
natural gas distribution companies operating in California, and the impact of volatility of
oil prices on our businesses and development projects; weather,
natural disasters, pandemics, accidents, equipment failures,
explosions, acts of terrorism, computer system outages and other
events that disrupt our operations, damage our facilities and
systems, cause the release of harmful materials, cause fires and
subject us to liability for property damage or personal injuries,
fines and penalties, some of which may not be covered by insurance,
may be disputed by insurers or may otherwise not be recoverable
through regulatory mechanisms or may impact our ability to obtain
satisfactory levels of affordable insurance; the availability of
electric power and natural gas and natural gas storage capacity,
including disruptions caused by failures in the transmission grid,
limitations on the withdrawal of natural gas from storage
facilities, and equipment failures; cybersecurity threats to the
energy grid, the storage and pipeline infrastructure, the
information and systems used to operate our businesses, and the
confidentiality of our proprietary information and the personal
information of our customers and employees; expropriation of
assets, failure of foreign governments and state-owned entities to
honor their contracts, and property disputes; the impact at San
Diego Gas & Electric Company (SDG&E) on competitive
customer rates and reliability due to the growth in distributed and
local power generation, including from departing retail load
resulting from customers transferring to Direct Access and
Community Choice Aggregation, and the risk of nonrecovery for
stranded assets and contractual obligations; Oncor Electric
Delivery Company LLC's (Oncor) ability to eliminate or reduce its
quarterly dividends due to regulatory and governance requirements
and commitments, including by actions of Oncor's independent
directors or a minority member director; volatility in foreign
currency exchange, inflation and interest rates and commodity
prices and our ability to effectively hedge these risks; changes in
tax and trade policies, laws and regulations, including tariffs and
revisions to international trade agreements that may increase our
costs, reduce our competitiveness, or impair our ability to resolve
trade disputes; and other uncertainties, some of which may be
difficult to predict and are beyond our control.
These risks and uncertainties are further discussed in the
reports that Sempra Energy has filed with the U.S. Securities and
Exchange Commission (SEC). These reports are available through the
EDGAR system free-of-charge on the SEC's website, www.sec.gov, and
on Sempra Energy's website, www.sempra.com. Investors should not
rely unduly on any forward-looking statements.
Sempra North American Infrastructure, Sempra LNG, Sempra
Mexico, Sempra Texas Utilities, Oncor and Infraestructura
Energética Nova, S.A.B. de C.V. (IEnova) are not the same companies
as the California utilities,
SDG&E or SoCalGas, and Sempra North American Infrastructure,
Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova
are not regulated by the CPUC.
APPENDIX
RECONCILIATION OF SEMPRA 2021 ADJUSTED EPS GUIDANCE RANGE
(Unaudited)
Sempra 2021 updated Adjusted EPS Guidance Range of
$7.75 to $8.35 excludes items (after the effects of income
taxes and, if applicable, noncontrolling interests) as
follows:
- $3 million impact from foreign
currency and inflation and associated undesignated derivatives for
the three months ended March 31,
2021(1)
- $(29) million net unrealized
losses on commodity derivatives for the three months ended
March 31, 2021
Sempra 2021 Adjusted EPS Guidance Range is a non-GAAP
financial measure (GAAP represents generally accepted accounting
principles in the United States of
America). This non-GAAP financial measure excludes the
impact from foreign currency and inflation and associated
undesignated derivatives and unrealized gains and losses on
commodity derivatives, which we expect to occur in future periods,
and which can vary significantly from one period to the next.
Exclusion of these items is useful to management and investors
because it provides a meaningful comparison of the performance of
Sempra's business operations to prior and future periods. Sempra
2021 Adjusted EPS Guidance Range should not be considered an
alternative to Sempra 2021 GAAP EPS Guidance Range. Non-GAAP
financial measures are supplementary information that should be
considered in addition to, but not as a substitute for, the
information prepared in accordance with GAAP. The table below
reconciles Sempra 2021 Adjusted EPS Guidance Range to Sempra 2021
GAAP EPS Guidance Range, which we consider to be the most directly
comparable financial measure calculated in accordance with
GAAP.
|
Full-Year
2021
|
|
Full-Year
2022
|
Sempra GAAP EPS
Guidance Range1
|
$
7.67
|
to
|
$
8.27
|
|
$
8.10
|
to
|
$
8.70
|
Excluded
items:
|
|
|
|
|
|
|
|
Impact from foreign
currency and inflation and associated undesignated
derivatives2
|
(0.01)
|
|
(0.01)
|
|
-
|
|
-
|
Net unrealized losses
on commodity derivatives
|
0.09
|
|
0.09
|
|
-
|
|
-
|
Sempra Adjusted EPS
Guidance Range3
|
$
7.75
|
to
|
$
8.35
|
|
$
8.10
|
to
|
$
8.70
|
Weighted-average
common shares outstanding, diluted
(millions)4,5
|
|
|
315
|
|
|
|
323
|
1. On
June 29, 2021, Sempra raised full-year 2021 GAAP EPS Guidance Range
from $7.42 to $8.02, to $7.67 to $8.27. The range reflects the
impact from foreign currency and inflation and undesignated
derivatives and net unrealized losses on commodity derivatives for
the three months ended March 31, 2021 and an increase in
weighted-average common shares outstanding from recent IEnova
exchange offer.
2. Amounts include impacts recorded in equity earnings
from our unconsolidated equity method
investments.
3. On June 29, 2021, Sempra raised full-year 2021
Adjusted EPS Guidance Range from $7.50 to $8.10, to $7.75 to
$8.35.
4. Weighted-average common shares outstanding reflects
the conversion of the mandatory convertible series A preferred
stock which converted on January 15, 2021, and series B preferred
stock which will automatically convert on the mandatory conversion
stock date of July 15, 2021. Share conversion rate assumed to be
midpoint of conversion rates between the initial and threshold
appreciation prices.
5. Includes impact of IEnova exchange
offer.
|
|
1. Amounts include
impacts recorded in equity earnings from our unconsolidated equity
method investments.
|
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SOURCE Sempra Energy