Sempra Q4 2023 Earnings Call

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Operator: Good day, and welcome to Sempra's fourth-quarter earnings call. Today's conference is being recorded. At this time, I'd like to turn it over to Glenn Donovan. Please go ahead.

Speaker Change: Good day and welcome to Suntrust's fourth quarter earnings call Today's conference is being recorded.

Speaker Change: At this time I'd like to turn it over to Glenn Donovan. Please go ahead.

Glenn Donovan: Good morning, and welcome to <unk> fourth quarter 2023 earnings call.

Glenn Donovan: Good morning and welcome to Sempra's fourth quarter 2023 earnings call. The live webcast of this teleconference and slide presentation are available on our website under our events and presentations section. We have several members of our management team with us today, including Jeff Martin, Chairman and Chief Executive Officer, and Karen Sedrick, Executive Vice President and Chief Financial Officer. Trevor Mihalik, Executive Vice President and Group President, Sempra California. Alan Nye, Chief Executive Officer, Encore.

Glenn Donovan: A live webcast of this teleconference and slide presentation are available on our website under events and presentations section.

Glenn Donovan: We have several members of our management team with us today.

Glenn Donovan: <unk>, Jeff Martin Chairman and Chief Executive Officer.

Glenn Donovan: Cedric Executive Vice President and Chief Financial Officer.

Glenn Donovan: Trevor Mihalik Executive Vice President and group President and for California.

Glenn Donovan: Allen Nye, Chief Executive Officer of Encore.

Glenn Donovan: Justin Byrd, Executive Vice President and Chief Executive Officer of Sempra Infrastructure; Peter Wall, Senior Vice President, Controller, and Chief Accounting Officer, and other members of our senior management. Before starting, I'd like to remind everyone that we'll be discussing four forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1994. However, actual results may differ materially from those projected in any forward-looking statement we make today.

Glenn Donovan: Justin Bird Executive Vice President and Chief Executive Officer of infrastructure Peter.

Glenn Donovan: Peter Wall, Senior Vice President Controller, and Chief Accounting Officer, and other members of our senior management team.

Speaker Change: Before starting I would like to remind everyone that we'll be discussing forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.

Speaker Change: Actual results may differ materially from those projected in any forward looking statements we make today.

Glenn Donovan: The factors that could cause our actual results to differ materially are discussed in the company's most recent 10-K filed with the SEC. Earnings per common share amounts in our presentation are shown on a diluted basis, and we'll be discussing certain non-GAAP financial measures. Please refer to the presentation slides that accompany this call for a reconciliation. We also encourage you to review our 10K for the year ended December 31st, 2023. Please note that all share and per share amounts reflect the two for one of our common stock in the form of a 100% stock dividend that we announced on the second quarter call and distributed in. I'd also like to mention that the four looking statements contained in this presentation speak only of today, February 27th, 2024, and it's important to note that the company does not assume any obligation to update or revise any of these four looking statements in the future. With that, please turn to slide five and let me hand the call over.

Speaker Change: Factors that could cause our actual results to differ materially are discussed in the company's most recent 10-K filed with the SEC.

Speaker Change: Earnings per common share amounts in our presentation are shown on a diluted basis.

We will be discussing certain non-GAAP financial measures.

Speaker Change: Please refer to the presentation slides that accompany this call for a reconciliation to GAAP measures.

Speaker Change: We also encourage you to review our 10-K for the year ended December 31 2023.

Speaker Change: Please note that all Sharon per share amounts reflect the two for one split of our common stock in the form of a 100% stock dividend that we announced in the second quarter call and distributed in August.

Speaker Change: I'd also like to mention that the forward looking statements contained in this presentation speak only of today.

Speaker Change: During 2007 to 2024 and it is important to note that the company does not assume any obligation to update or revise.

Speaker Change: Any of these forward looking statements in the future.

Speaker Change: With that please turn to slide five and let me hand, the call over to Jeff.

Jeffrey Walker Martin: Thank you, Glenn, and thank you all for joining us today. Over the last several months, we've spent time with investors and the research community listening to feedback on ways to make today's call more informative. In response to your feedback, we'll be providing more information, for more exact. I'll start off by summarizing our recent business accomplishments and our corporate strategy, and will be followed by the leaders of each of our business platforms who will likewise summarize their accomplishments, business model, and expected capital. Karen will close out today's presentation with a review of our Q4 and full year financial results and outline our new 2024 to 2028 CalPERS. We'll also be sure to save time at the end to take your questions.

Jeffrey Walker Martin: Thank you Glenn and thank you all for joining us today over the last several months, we've spent time with investors and the research community soliciting feedback on ways to make today's call more informative in response to your feedback we will be providing more information today from more executives al.

Speaker Change: Start off by summarizing our recent business accomplishments and our corporate strategy and will be followed by the leaders of each of our business platforms and will likewise summarize our accomplishments business model and expected capital deployment.

Karen will close out today's presentation with a review of our Q4 and full year financial results and outline our new 2024 to 2028 capital plan.

Speaker Change: We will also be sure to save time at the end to take your questions.

Jeffrey Walker Martin: Now turning to 2023, it was a strong year of operating and financial performance for us, and in large measure a credit to our corporate strategy and our success in simplifying our business model. At Sempra, we're focused on making disciplined investments in large and growing economic markets. They are looking to modernize their energy networks and connect communities to safer, more reliable, and cleaner energy.

Speaker Change: Now turning to 2023, it was a strong year of operating and financial performance for our company and in large measure is a credit to our corporate strategy and our success and simplified our business model at.

Speaker Change: At Sempra, we're focused on making disciplined investments in large and growing economic markets that are looking to modernize and energy networks and connect communities safer more reliable and cleaner energy.

Jeffrey Walker Martin: Over the last five years, this strategy has allowed us to build significant scale into our business for the benefit of customers and shareholders. As we previewed on our third quarter call in November, I'm excited to announce that our capital plan has increased by 20 percent, to a new company record of $48 billion, with more than 90% allocated to regulated transmission and distribution. Trevor, Alan, and Justin will go into more detail later in today's presentation, but the overall scope and size of our capital plan really speaks to the robust markets we operate in and the magnitude of the growth opportunities that are in front of our companies. Turning to our 2023 financial results, we delivered adjusted EPS of $4.61, exceeding the high end of our guidance and providing support to narrow our full year 2024 EPS guidance range. $4.60.

Over the last five years. This strategy has allowed us to build significant scale into our business for the benefit of customers and shareholders.

Speaker Change: As we previewed on our third quarter call in November I am excited to announce that our capital plan has increased by 20% to a new company record of $48 billion.

Speaker Change: With more than 90% allocated in our regulated transmission and distribution investments.

Speaker Change: Trevor Alan adjustment will go into more detail later in today's presentation, but the overall scope and size of our capital plan really speaks to the robust markets. We operate in and the magnitude of the growth opportunities that are in front of our company.

Speaker Change: Turning to our 2023 financial results, we delivered adjusted EPS of $4 61.

Speaker Change: Exceeding the high end of our guidance and providing support to narrow our full year 2024, EPS guidance range to $4 60.

Jeffrey Walker Martin: $4.90. This morning we're also announcing full year 2025 EPS guidance of $4.90 to $5.25, which represents approximately 7% growth from the midpoint of the prior guidance, based upon the continued growth we're seeing across our three T&D growth platforms. We're affirming our projected long-term EPS growth rate of 6 to 8%. Finally, we're also pleased to announce the Board of Directors-approved increase in our dividend for the 14th consecutive year to $2.48 per share. Please turn to the next slide.

Speaker Change: To $4 90.

Speaker Change: This morning, we're also announcing full year 2025, EPS guidance range.

Speaker Change: $4 90.

Speaker Change: To $5 25.

Speaker Change: Which represents approximately 7% growth from the midpoint of the prior guidance range.

Speaker Change: Based upon the continued growth we're seeing across our three T&D growth platforms. We're affirming our projected long term EPS growth rate of 6% to 8%.

Speaker Change: Finally, we're also pleased to announce the board of directors approved increase in our dividend for the 14th consecutive year to $2 48 per share.

Please turn to the next slide.

Jeffrey Walker Martin: For the past several years, the United States has experienced significant economic uncertainty due to higher inflation, supply chain disruptions, and higher interest rates. Against this backdrop, Sempra delivered strong financial performance in 2023 with record-adjusted earnings and record-adjusted revenue. Also, over the last several years, our investment strategy has consistently prioritized making investments in energy networks in California and Texas, and this has allowed us to grow our rate base in those markets at the end of 2023 to just over $50 billion. Looking forward, one of the primary benefits of rolling out an expanded capital plan is that it provides unique visibility to the strength of our long-term earnings. Also, it's important to note that our equity offering last November was successful in mitigating future equity needs associated with our new, On the regulatory front, we've made several advances highlighting the constructed nature of the jurisdictions where we operate and our ability to work effectively with key stakeholders. In California, the cost of capital mechanism As a result, SDG&E and SoCal Gas increased their authorized ROEs last year. We also reached a proposed settlement with certain interveners for a portion of our pending rate cases, which we view constructive.

Speaker Change: For the past several years, the United States has experienced significant economic uncertainty due to higher inflation supply chain disruptions and higher interest rates.

Against this backdrop separate delivered strong financial performance in 2023 with a record adjusted earnings and record adjusted earnings per share.

Speaker Change: So over the last several years, our investment strategy has consistently prioritized, making investments in energy networks in California and Texas.

Speaker Change: And this has allowed us to grow our rate base in those markets at the end of 2023% to just over $50 billion.

Speaker Change: Looking forward one of the primary benefits of rolling out an expanded capital plan is that it provides unique visibility to the strength of our long term earnings growth.

Speaker Change: Also it's important to note that our equity offering last November was successful in mitigating future equity needs associated with our new plan on.

Speaker Change: On the regulatory front, we've made several advances highlighting the constructive nature of the jurisdictions, where we operate and our ability to work effectively with key stakeholders in.

Speaker Change: In California, the cost of capital mechanism triggered as a result, <unk> and Socal gas increased their authorized ROE last month. We also reached a proposed settlement with certain intervenors for a portion of our pending rate cases, which we view constructively.

Jeffrey Walker Martin: Turning to Texas, Encore successfully completed its base rate review last spring. Also, several important pieces of legislation were passed that support new investments in transmission and distribution that benefit customers and the continued growth of the state's economy. Also, at Sempra Infrastructure, we declared positive FID on Port Arthur LNG Phase 1. We secured financing and began construction. We continue to make steady progress on our development. While the pause on non-FT export permits has impacted the sector, we're confident in the commercial value of our projects and will continue to develop these critical infrastructure assets on a reasonable timeline. Justin will address this topic further in his. Please turn to the next slide.

Speaker Change: Turning to Texas Oncor successfully completed its base rate review last spring also several important pieces of legislation, we're past that support new investments in transmission and distribution that benefit customers and the continued growth of the state's economy.

Speaker Change: Also it is simpler infrastructure, we declared positive.

Speaker Change: On Port Arthur LNG Phase, one secured financing and began construction.

Speaker Change: We continue to make steady progress on our development projects.

Speaker Change: While the pause on non FTA export permits has impacted the sector. We are confident in the commercial value of our projects and we'll continue to develop these critical infrastructure assets on a reasonable timeline.

Speaker Change: Justin will address this topic further in his section.

Justin Bird: Please turn to the next slide.

Justin Bird: <unk> building critical new infrastructure designed to support economic and population growth, while providing attractive financial returns to our owners through 2050 global GDP is expected to more than double much of which will come from emerging economies driving the need for incremental energy resources going forward, we strongly believe.

Jeffrey Walker Martin: Sempra is building critical new infrastructure designed to support economic and population growth while providing attractive financial returns to our owners. Through 2050, global GDP is expected to more than double, much of which will come from emerging economies, driving the need for incremental energy. Going forward, we strongly believe renewables, natural gas, and cleaner molecules will be critical in meeting rising energy demand as we transition to an energy future with lower carbon intensity. As an example, United States natural gas production set a record during 2023 for the third consecutive year, fueled by strong domestic demand and record LNG exports, all while still achieving lower carbon emissions over the past several decades, as renewables and cleaner burning natural gas replace coal as a fuel source in power generation. Please turn to the next slide. As we modernize our energy grids, the IEA estimates that $11 trillion is expected to be spent in the North American energy sector through 2016, with over $5 trillion focused on T&D. Please turn to the next slide.

Justin Bird: Renewables natural gas and cleaner molecules will be critical in meeting rising energy demand as we transitioned to an energy future with lower carbon intensity.

Justin Bird: As an example, United States natural gas production set a record during 2023 for the third consecutive year fueled by strong domestic demand and record LNG exports, all while still achieving lower carbon emissions over the past several decades as renewables and cleaner burning natural gas replace coal.

Justin Bird: As a fuel source and power generation.

Justin Bird: Turning to the next slide.

Justin Bird: As we modernize our energy grids. The IEA estimates that <unk> 11 trillion dollars are expected to be spent in the north American energy sector through 2050 with over five trillion dollars focused on T&D investments.

Justin Bird: Please turn to the next slide as we've outlined in the past we've been disciplined in maintaining our focus on what we believe is the higher value lower risk portion of the energy value chain in the T&D segment, we make disciplined investments with the view toward producing high quality recurring cash flows from our regulated utilities.

Justin Bird: And long term contracted assets that generally grow with inflation.

Justin Bird: Please turn to the next slide.

Justin Bird: As you can see here our strategy combined with disciplined capital allocation has allowed us to successfully meet or exceed our EPS guidance range for the last six years over this same time period, our adjusted EPS has compounded annually at approximately 10% since 2018.

Jeffrey Walker Martin: As we've outlined in the past, we've been disciplined in maintaining our focus on what we believe is the higher value, lower risk portion of the energy value chain. In the T&D segment, we make disciplined investments with a view toward producing high quality recurring cash from Regulated Utilities and long-term contracted assets that generally grow with inflation. Please turn to the next page

Justin Bird: <unk>, which is top decile amongst our peers.

Justin Bird: Turning to the next slide.

Justin Bird: Improving our corporate strategy has allowed us to build significant scale into our business for the benefit of our customers and shareholders and that's been demonstrated by the consistency of our financial performance.

Jeffrey Walker Martin: As you can see here, our strategy, combined with disciplined capital allocation, has allowed us to successfully meet or exceed our EPS guidance range for the last six years. Furthermore, over this same time period, our adjusted EPS has compounded annually at approximately 10% since 2018, which is in the top decile amongst our peers. Please turn to the next page

Justin Bird: Also noteworthy that we've accomplished this across different market cycles that have included a global pandemic supply chain shortages high inflation rising interest rates and geopolitical unrest.

Justin Bird: In short our disciplined execution has consistently delivered.

Justin Bird: Total shareholder returns at levels that are well above our peer group.

Justin Bird: Please turn to the next slide.

Justin Bird: Before I hand, the call to Trevor I would like to reiterate our key investment highlights we own high quality T&D growth platforms, located in California, and Texas and some of them North America's most attractive economic markets that also benefit from constructive regulation.

Jeffrey Walker Martin: Improving our corporate strategy has allowed us to build significant scale into our business for the benefit of our customers and shareholders, and that's been demonstrated by the consistency of our financial results. It's also noteworthy that we've accomplished this across different market cycles that have included a global pandemic, supply chain shortages, high inflation, rising interest rates, and geopolitical unrest. In short, our disciplined execution has consistently delivered.

Justin Bird: We exercise a disciplined approach to capital allocation and are excited to launch our new five year capital plan of $48 billion.

Justin Bird: We believe this sets out a clear roadmap for our future growth and supports our expected long term EPS growth rate of 6% to 8%.

Justin Bird: In conclusion, we're proud of our recent accomplishments and the growing strength of our business franchise across our management team. There is a lot of excitement about the opportunities that are ahead of us.

Justin Bird: Now please turn to the next slide where Trevor will walk you through the business updates at Sempra, California.

Jeffrey Walker Martin: Total shareholder returns at levels that are well above our peers. Please turn to the next slide. Before I hand the call to Trevor, I'd like to reiterate our key investment highlights. We own high-quality T&D growth platforms located in California and Texas and some of North America's most attractive economic markets that also benefit from constructive regulation. We exercise a disciplined approach to capital allocation and are excited to launch our new five-year capital plan of $48 billion.

Trevor: Thanks, Jeff.

Trevor: Let me start by highlighting the financial results, except for California.

Trevor: Earnings for the full year 2023 were $1 75 billion benefiting from $4 6 billion of capital investments focused on safety reliability and wildfire mitigation.

Trevor: These investments increased rate base by 11% over 2022.

Trevor: We have long emphasized California's constructive regulatory compact, including forward looking rate cases access to the cost of capital mechanism and an established wildfire fund.

Trevor: And this year, we had several positive regulatory outcomes that reinforced our conviction and supports attracting capital to the states.

Jeffrey Walker Martin: We believe this sets out a clear roadmap for our future growth and supports our expected long-term EPS growth rate of 6 to 8 percent. In conclusion, we're proud of our recent accomplishments and the growing strength of our business franchise. Across our management team, there's a lot of excitement about the opportunities that are ahead. Now, please turn to the next slide, where Trevor will walk you through the business updates at Sempra California. Thanks.

Trevor: As Jeff mentioned last fall the cost of capital mechanism triggered and the CPUC approved increasing our authorized Roe.

Trevor: <unk> and socal gas by 70 basis points.

Trevor: This increase was effective January one 2024.

Trevor: In October we reached settlements were important capital and O&M portions of our rate case request with certain intervenors.

Trevor: And while these settlements are subject to CPUC approval, we're encouraged by that progress and we anticipate receiving a proposed decision on our JRC and the second quarter.

Trevor Ian Mihalik: Let me start by highlighting the financial results. Earnings for the full year 2023 were $1.75 billion, benefiting from $4.6 billion of capital investment focused on safety, reliability, and wildfire mitigation. These investments increased rate base by 11% over 2020. We have long emphasized California's constructive regulatory framework, including forward-looking rate cases, access to the Cost of Capital Mechanism, and an established wildfire.

Trevor: As a reminder, once finalized rates will be retroactive to January one 2024.

Trevor: Separately in addition to the recently awarded transmission projects by Tyco STG.

Trevor: <unk> has advanced their competitive bid for the Imperial Valley to.

Trevor: So the north of songs transmission line.

Trevor: And expect an update in late April.

Trevor: We're also extremely proud of the recent recognition of our electric business.

Trevor: <unk> was again awarded best in the West for electric reliability for the 18th consecutive year and recognized for their industry leadership in wildfire mitigation predictive modeling technology.

Trevor Ian Mihalik: And this year, we had several positive regulatory outcomes that reinforced our conviction. Supports Attracting Capital to the State, as Jeff mentioned. Last fall, the cost of capital mechanism triggered. The CPUC approved increasing our authorized ROE at SDG&E and SoCalGas by 70 basis points. This increase was effective January 1, 2020. In October, we reached settlements for important capital and O&M portions of our rate case requests with certain intervenors.

Trevor: The CPUC also recently increased the authorized storage capacity of Elisa Kenyan by over 50%.

Trevor: This demonstrates the commission's recognition of the importance of existing energy infrastructure.

Trevor: And the critical role Socal gas plays in supporting reliability and affordability of both natural gas and electricity in California.

Trevor: And finally <unk>.

Trevor: Arches, which is one of socal gas as strategic partners was selected to receive funding to help develop a regional hydrogen hub.

Trevor Ian Mihalik: And while these settlements are subject to CPUC approval, we're encouraged by that progress, and we anticipate receiving a proposed decision on our GRC in the second quarter. As a reminder, once finalized, rates will be retroactive to January 1, 2020. Separately, in addition to the recently awarded transmission projects by TICE, SDG&E has advanced their competitive bid for the Imperial Valley, to the north of Song's transmission line, and expect an update in late April. We're also extremely proud of the recent recognition of our electr... SDG&E was again awarded Best in the Web for Electric Reliability for the 18th consecutive year and recognized for their industry leadership and Wildfire Mitigation Predict The CPUC also recently increased the authorized storage capacity of Aliso Canyon by over 50 percent.

Trevor: This is important because Los Angeles is one of the nation's largest manufacturing hubs.

Trevor: And cleaner molecules are expected to play a pivotal role in helping hard to electrify sector lower their admissions. Please.

Trevor: Please turn to the next slide.

Trevor: Now, let's turn to some of the key trends that are supporting growth at Central California.

Trevor: We operate in the largest U S markets, representing nearly 15% of national GDP.

Trevor: California is also among the top three states for job growth with nearly 1 million jobs created over the past five years.

Trevor: We are also well aligned with the state policy that promotes building an economy based on sustainable energy.

Trevor: Earlier this month the CPUC made further commitments to renewables mandating the construction of 56 Gigawatts of new clean energy by 2035, including over 15 Gigawatts of energy storage.

Trevor: California also remains home to the largest source of solar power and the highest penetration rate of electric vehicles of any state in the country.

Trevor Ian Mihalik: This demonstrates the Commission's recognition of the importance of existing energy infrastructure and the critical role SoCal Gas plays in supporting the reliability and affordability of both natural gas and electricity in California. And finally... Arches, which is one of SoCalGAS's strategic partners, was selected to receive DOE funding to help develop a regional hydrogen hub. This is important because Los Angeles is one of the nation's largest manufacturing hubs. Cleaner molecules are expected to play a pivotal role in helping the hard-to-electrify sector lower its emissions.

Trevor: Just in San Diego County, There are now over 140000, Evs and that number is expected to increase significantly in the coming years.

Trevor: It is also noteworthy that San Diego County leads to states with 23% of our customers having installed rooftop solar systems.

Trevor: These systems are often accompanied by a battery and battery storage solutions become more cost effective the need to reliably integrate these technologies on our network is expected to increase.

Trevor: Turning to Los Angeles.

Trevor: The manufacturing sector generates over $80 billion in annual GDP.

For customers that require high heat content molecules, RMG and hydrogen will be increasingly important for affordable reliable and safe operations.

When you pair California's economic growth with its ambitious clean energy goals the need for significant T&D investment is critical to help ensure reliability and affordability.

Trevor Ian Mihalik: Please turn to the next slide. Now, let's turn to some of the key trends that are supporting growth at Sempra California. We operate in the largest U.S. market, representing nearly 15% of national GDP. California is also among the top three states for jobs, with nearly one million jobs created over the past five years.

Trevor: The key takeaway here is that our investment strategy and the right rate case filings are closely aligned with public policy and the direction of the stages going please.

Please turn to the next slide.

Trevor: Central California is modernizing the T&D infrastructure necessary to integrate more renewables and clean molecules to serve the growing energy needs of customers.

Trevor: While facilitating California's energy transition.

Trevor Ian Mihalik: We are also well-aligned with state policy that promotes building an economy based on sustainable energy. Earlier this month, the CPUC made further commitments to renewables, mandating the construction of 56 gigawatts of new clean energy by 2035, including over 15 gigawatts of energy storage. California also remains home to the largest source of solar power and the highest penetration rate of electric vehicles of any state in the country.

Trevor: As this slide shows our utilities play a central role in connecting new cleaner sources of energy to a diverse and growing set of customers.

Trevor: We continue to prioritize safety and reliability with a strong focus on maintaining an efficient cost structure.

Trevor: We currently have the lowest bills relative to our peers in the state and are in line with the National average.

Trevor: We will always be focused on providing the best possible service, while ensuring customer affordability is a top priority. Please turn to the next slide.

Trevor: Turning to our five year capital plan.

Trevor: We are announcing over $24 billion of investments.

Trevor Ian Mihalik: Just in San Diego County, there are now over 140,000 EVs, and that number is expected to increase significantly in the coming years. It is also noteworthy that San Diego County leads the state, with 23% of our customers having installed rooftop solar. These systems are often accompanied by a battery.

Trevor: On the electric side, we are pursuing safe and reliable infrastructure investments integrating renewable energy incorporating battery storage.

Trevor: <unk> EV infrastructure and hardening the system against event risks.

Trevor: In our natural gas system.

Trevor: We'll continue to modernize our gas network.

Trevor: Reduced carbon emissions and make investments in energy infrastructure that support the delivery of cleaner molecules.

Trevor Ian Mihalik: Battery Storage Solutions Become More Cost-Effective. The need to reliably integrate these technologies on our network is expected to increase. Turning to Los Angeles.

Trevor: We expect these investments to grow our rate base at an approximate 7% CAGR from 2023 to 2028.

Trevor Ian Mihalik: The manufacturing sector generates over $80 billion in annual GDP, and customers that require high heat content. RNG and Hydrogen will be increasingly important for affordable, reliable, and safe operations. When you pair California's economic growth...

Trevor: We're excited about the growth prospects of temporary, California, and we feel fortunate to have the opportunity to deliver safe and reliable energy and a market with a constructive regulatory environment.

Trevor: Please turn to the next slide where Alan will discuss on course accomplishments in Texas.

Alan: Thank you Trevor.

Trevor Ian Mihalik: It's an ambitious clean energy goal. The Need for Significant T&D Investments The key takeaway here is that our investment strategy... And the rate case filings are closely aligned with public policy and the direction the state is going. Please turn to the next, Sempra California is modernizing the T&D infrastructure. It is necessary to integrate more renewables and clean molecules to serve the growing energy needs of customers while facilitating California's energy. As this slide shows, our utilities play a central role in connecting new, cleaner sources of energy to a diverse and growing set of customers. We continue to prioritize safety and reliability. We currently have the lowest bills relative to our peers in the state and are in line with the national average. We will always be focused on providing the best possible service while ensuring customer affordability is a top priority. Please turn to the next page

Alan: Encore delivered strong financial performance in 2023, deploying $3 8 billion of capital and growing rate base by 12% over the prior year. We were pleased to complete our base rate review at the PUC and emerge with a constructive outcome.

Alan: Our all prior T&D investments by encore were deemed prudent and approved.

Alan: 2023 also marked one of the most successful Texas Legislative sessions for our industry in recent history. Several bills that were passed during the 88th Texas Legislative session demonstrate the state's commitment to supporting a safer smarter more resilient and more reliable electric grid.

Alan: So power continued growth across the state Encore has historically worked closely with the Texas legislature and its many stakeholders to achieve productive outcomes, but this session. In particular was incredibly constructive first the legislature increased our allowed distribution cost recovery.

Trevor Ian Mihalik: Turning to our five-year capital. We're announcing over $24 billion. On the electric side, we are pursuing safe and reliable infrastructure investment. Integrating Renewable Energy, and Incorporating Battery Storage.

Alan: Covered tracker filings to twice a year, reducing encores regulatory lag on critical investments. Additionally, the legislature passed HB $25, 55, which encourages utilities to make their systems more resilient and provides expedited recovery for approved capital and O&M.

Trevor Ian Mihalik: Supporting EV Infrastructure, hardening the system against events on our natural gas system. We will continue to modernize our gas. Produce Carbon Emissions and Make Investments in Energy Infrastructure, Support the Delivery of Cleaner Molecules.

Alan: <unk> the PUC T finalized rules to implement HB $25 55 last month, we expect to file our first system resiliency plan or SRP.

Alan: Within the next several months the PCT is allowed to six months to review the SRP.

Alan Nye: We expect these investments to grow our rate base at an approximate 7% CAGR from 2023 to 2028. We're excited about the growth prospects at Sempra California. And we feel fortunate to have the opportunity to deliver safe and reliable energy in a market with a constructive regulatory environment. Please turn to the next slide, where Alan will discuss Encore's accomplishments in Texas. Thank you, Trevor.

Alan: And if approved we would expect to begin implementation by year end.

Alan: Distribution capital approved in the SRP will be recovered through our D. CRF tracker filings regulatory lag that normally accrues between the time of in service and the implementation of rates will be offset by a regulatory asset that will be you're covered in our next DC RF.

Alan Nye: Encore delivered strong financial performance in 2020,deploying $3.8 billion of capital and growing its rate base by 12% over the prior year. We were pleased to complete our base rate review at the PUCT and emerged with a constructive outcome where all prior T&D investments by Encore were deemed prudent and approved. 2023 also marked one of the most successful Texas legislative sessions for our industry in recent history. Several bills that were passed during the 88th Texas Legislative Session demonstrate the state's commitment to supporting a safer, smarter, more resilient, and more reliable electric grid to power continued growth across the state. Encore has historically worked closely with the Texas Legislature and its many stakeholders to achieve productive outcomes. But this session in particular was incredibly constructive. First,

Alan: Similarly, O&M expense approved as part of the SRP will be offset by a regulatory asset that will be included for recovery and a subsequent D. CRF use of this new mechanism should reduce the regulatory lag normally associated with these types of expenditures, we look forward to using the capital and O&M.

Alan: Gets approved under our SRP plan to improve the resiliency of our system Harden the system against storms extreme weather and wildfire risk and generally improve our customers' experience while at the same time improving recovery of the expenditures.

Alan: From an operational perspective encore continued to execute at a high level in 2023, we built rebuilt or upgraded approximately 3200 miles of T&D lines. While also increasing the number of premises. We served by 73000 in West Texas alone we built rebuilt.

Alan Nye: The legislature increased our allowed distribution cost recovery tracker filings to twice a year, reducing Encore's regulatory lag on critical investments. Additionally, the legislature passed HB 2555, which encourages utilities to make their systems more resilient and provides expedited recovery for approved capital and O&M expenditures. The P.U.C.T. finalized rules to implement HB 2555 last month.

Alan: <unk> or upgraded over 650 miles of T&D lines, and eight new switching and Substations, the Texas grid performed very well through record demand peaks over the last 12 months.

Alan: Encores reliability performance as measured by our non storm Sadie score improved by approximately 7% in 2023 compared to the previous year. Finally in 2023, we set company records for active transmission interconnection requests.

Alan Nye: We expect to file our first System Resiliency Plan, or SRP, within the next several months. The PECT is allowed six months to review the SRP. And if approved, we would expect to begin implementation by year. Distribution capital approved in the SRP will be recovered through our DCRF tracker file. Regulatory lag that normally accrues between the time of in-service and the implementation of rates will be offset by a regulatory asset that will be recovered in our next DCRS. Similarly, O&M expense approved as part of the SRP will be offset by a regulatory asset that will be included for recovery and a subsequent DCRF. Use of this new mechanism should reduce the regulatory lag normally associated with these types of expenditures. We look forward to using the capital in O&M that gets approved under our SRP plan to improve the resiliency of our system, harden the system against storms, extreme weather, and wildfire risk, and generally improve our customers' experience, while at the same time improving recovery of the expenditure. From an operational perspective, ENCQOR continued to perform at a high level.

Alan: And new transmission interconnection requests in the queue active generation and retail interconnection requests increased 25% year over year, New interconnection request increased 19% year over year. Please turn to the next slide.

Alan: These interconnection request are driven by the dynamic economic growth that we continue to see in Texas, The Texas Miracle continues.

And as demonstrated by the continued strong growth both in population and diverse commercial and industrial businesses moving to the state.

Alan: On core serve some of the country's fastest growing metro areas, including four of the <unk> fastest growing cities from a sheer scale perspective, Texas.

Alan: Texas GDP is second only to California.

Alan: And continues to grow at a robust pace.

Alan: <unk> at approximately 8% during the third quarter.

Alan: Faster than the nation as a whole for the fifth quarter in a row.

Texas continues to see electric vehicle penetration is well over recent 12 month period. The DFW Metroplex had the largest increase in EV registrations out of any major metro area in Texas with 63% growth.

Alan Nye: In 2023, we built, rebuilt, or upgraded approximately 3,200 miles of T&D line, while also increasing the number of premises we serve by 73,000. In West Texas alone, we built, rebuilt, or upgraded over 650 miles of T&D line and eight new switching and subs. The Texas grid performed very well through record demand peaks over the last 12 months.

Alan: Please turn to the next slide.

Alan: Oncor has also seen significant growth in commercial and industrial customers, representing electric loads that are larger than traditional commercial projects datacenter development continues to be robust across our service territory, including new sites that have the potential to support Hyperscale computing and general.

Alan: Artificial intelligence services. These projects represent the potential for thousands of megawatts of new electric load.

Alan Nye: Encore's reliability performance, as measured by our non-STORM SADI score, improved by approximately 7% in 2023 compared to the previous year. Finally, in 2023, we set company records for active transmission interconnection requests and new transmission interconnection requests in the queue. Active generation and retail interconnection requests increased 25% year-over-year.

Alan: Often hundreds of megawatts for just one project.

Similarly electrification of the oil and gas industry in West, Texas continues at an impressive pace of Permian Basin reliability plan update published by ERCOT earlier. This month projects that within 15 years. The total demand in West, Texas could increased fourfold from its current six five.

Alan: Gigawatts to 26 Gigawatts. This growth is expected to support oil and gas production as well as general electrification encore will be at the forefront and expanding our system to meet the requirements of these customers finally.

Alan Nye: New interconnection requests increased 19% year-over-year; please turn to the next. These interconnection requests are driven by the dynamic economic growth that we continue to see. The Texas Miracle continues, and is demonstrated by the continued strong growth both in population and diverse commercial and industrial businesses moving to the state. Encore serves some of the country's fastest-growing metro areas, including four of the 15 fastest-growing cities. From a sheer scale perspective,

Alan: As the population continues to expand both organically and from relocations, we still expect total premise growth to continue at approximately 2% annually. Each of these developments creates new opportunities to expand the oncor energy system, we are positioning ourselves to meet these demands through hiring supply.

Alan Nye: Texas GDP is second only to California and continues to grow at a robust rate, growing at approximately 8% during the third quarter, faster than the nation as a whole for the fifth consecutive quarter. Texas continues to see electric vehicle penetration as well. Over a recent 12-month period, the DFW Metroplex had the largest increase in EV registrations out of any major metro area in Texas, with 63%. Please turn to the next slide.

Alan: Chain procurement and system planning and looking forward to continuing to serve our customers in the ERCOT market.

Alan: Please turn to the next slide.

Alan: On <unk> Q3 call, we discuss this growth and announced our intention to increase our capital plan.

Alan: We are pleased to announce that <unk> five year capital plan for 2024 through 2028 is projected to be $24 2 billion.

Alan Nye: Encore has also seen significant growth in commercial and industrial, representing electric loads that are larger than traditional commercial projects. Data center development continues to be robust across our service territory, including new sites that have the potential to support hyperscale computing and Generative Artificial Intelligence Services. These projects represent the potential for thousands of megawatts of new electric load, often hundreds of megawatts for just one project. Similarly, electrification of the oil and gas industry in West Texas continues at an impressive rate. The Permian Basin Reliability Plan update, published by ERCOT earlier this month, projects that within 15 years, the total demand in West Texas could increase fourfold, from its current 6.5 gigawatts to 26 gigawatts.

Alan: Which is a 26% increase over our previous five year capital plan of $19 2 billion.

Alan: The vast majority of this capital plan is to serve customer growth, although the maintenance needs of our system continued to grow steadily as well. This plan does not include the amount of capital expenditures that we expect to request and the upcoming SRP filing that I mentioned earlier, we expect to file that plan and the <unk>.

Alan: First half of this year.

Alan: And the proposed spin will be subject to PUC to review and approval with today's updated plan, we anticipate encores rate base to grow at an annual average rate of 11% from 2023 to 2028.

Alan: While historically our earnings growth rate fell below our rate base growth due to regulatory lag.

Alan: The addition of enhanced recovery mechanisms are rising from the legislative session should move our long term earnings growth rate closer to our rate base growth rate.

Alan Nye: This growth is expected to support oil and gas production, as well as general electricity. Encore will be at the forefront in expanding its system to meet the requirements of these customers.

Alan: Please turn to the next slide where I'll turn the call to Justin to update you on simpler infrastructure.

Alan Nye: As the population continues to expand, both organically and from relocations, we still expect total premise growth to continue at approximately 2% annually. Each of these developments creates new opportunities to expand Encore Energy. We are positioning ourselves to meet these demands through hiring, supply chain procurement, and system planning, and looking forward to continuing to serve our customers and the ERCOT. Please turn to the next page.

Justin Bird: Thanks, Alan we're also excited about the opportunities in Texas Sempra infrastructure is advancing the approximately $13 billion Port Arthur LNG Phase one project in Texas. This.

Justin Bird: This investment along with Encore capital plan, certainly make central among the largest investors in the state.

Justin Bird: At Sempra infrastructure, we're advancing construction on five projects all of which are on time and on budget and our strategy differentiates us from others in the space.

Justin Bird: We have a dual coast LNG export strategy, a robust energy network portfolio.

Alan Nye: On Sempra's Q3 call, we discussed this growth and announced our intention to increase our capital. We are pleased to announce that Encore's five-year capital plan for 2024 through 2028 is projected to be $24.2 billion, which is a 26% increase over our previous five-year capital plan of $19.2 billion. The vast majority of this capital plan is to serve customer growth, although the maintenance needs of our system continue to grow steadily as well. This plan does not include the amount of capital expenditures that we expect to request in the upcoming SRP filing that I mentioned earlier.

Justin Bird: And power transmission infrastructure to move more renewable power across the border.

Justin Bird: All with the goal of delivering cleaner molecules and cleaner electrons to our customers and partners.

We've achieved several noteworthy milestones in 2023.

Justin Bird: Declaring positive FID on Port Arthur LNG Phase one was a major success and we secured all required project level debt and equity contribution.

Financially, we executed well relative to 2020 two's strong results and our ability to maintain momentum through 2023 is another indication of our sustainable business model.

<unk> infrastructure is 2023 adjusted earnings were $764 million.

Justin Bird: I would also like to specifically call out the progress at <unk> LNG phase one as it approaches its summer 2025.

Alan Nye: We expect to file that plan in the first half of this year, and the proposed spend will be subject to PUCT review and approval. With today's updated plan, we anticipate Encore's rate base to grow at an annual average rate of 11% from 2023 to 2028, although historically, our earnings growth rate fell below our rate-based growth due to regulatory lag.

Justin Bird: We are excited to bring one of the first North American Pacific Coast export projects to market at Cameron LNG Phase one we've now exceeded 700 cargo since production began in May of 2019, and we couldnt be more pleased with the high quality operations from this critical infrastructure asset.

Justin Bird: On the development and growth pipeline, our priorities remain focused on advancing commercial discussions for off take volume and equity ownership at Port Arthur Phase III, and assessing Cameron LNG phase twos EPC opportunities.

Alan Nye: The addition of enhanced recovery mechanisms arising from the legislative session should move our long-term earnings growth rate closer to our rate-based growth. Please turn to the next slide where I'll turn the call over to Justin to update you on Sempra. Thanks, Alan. We're also excited about the opportunities. Sempra Infrastructure is advancing the approximately $13 billion Port Arthur LNG Phase 1 project. This investment, along with Encore's capital plan, certainly makes Sempra among the largest investors in the state. At Sempra Infrastructure, we're advancing construction on five projects, all of which are on time and on budget, and our strategy differentiates us from others in the space. We have a dual-coast LNG export strategy. Robust Energy Network Portfolio, and Power Transmission Infrastructure to Move More Renewable Power Across the Border, all with the goal of delivering cleaner, cleaner Electrons to our customers and partners.

Justin Bird: At Cameron LNG phase III, we've been working with Bechtel on value engineering and at this stage, we feel it's best to continue those efforts while evaluating other potential EPC contractors, we're continuing to work closely with bechtel on Port Arthur Phase, one and potentially phase two but we in the Cameron partners wanted to take some additional time.

Justin Bird: To help ensure a cost effective build plan and conduct additional value engineering and analysis to improve the overall value of the project to our customers.

Justin Bird: At Port Arthur LNG Phase two we received FERC approval in September.

And earlier this month FERC staff issued an environmental assessment, finding no adverse impact as a result of the Port Arthur Louisiana Connector pipelines Amendment.

Justin Bird: I also want to mention that we continue to make significant progress towards an FID on Cimarron wind recall. This is a 300 megawatt wind project located near our existing ESG, one and ESG two wind projects that were directly interconnect with the California market finally I want.

To highlight a hydrogen hub project, we are participating in called high velocity that is expected to receive $1 2 billion from <unk> funding to pursue development.

Justin Byrd: We achieved several noteworthy milestones in 2023. Declaring positive FID on Port Arthur LNG Phase 1 was a major success, and we secured all required project-level debt and equity contributions. Financially, we executed well relative to 2022's strong results, and our ability to maintain momentum through 2023 is another indication of our sustainable business model. Sempra Infrastructure's 2023 adjusted earnings were $764 million.

Justin Bird: We are also actively engaged with a group of Japanese utilities on a collaboration to produce natural gas using renewable hydrogen and cotwo as inputs.

Justin Bird: Projects like these demonstrate sempra infrastructures innovative and entrepreneurial culture as we seek opportunities to provide cleaner and more secure energy for customers.

Justin Bird: Please turn to the next slide.

Justin Bird: Turning to macro trends impacting central infrastructure global energy demand continues to increase.

Justin Bird: On sustainability Sempra infrastructure plays a critical role in providing cleaner alternative solutions to heavier carbon fuels like coal and oil natural.

Justin Byrd: I'd also like to specifically call out the progress at ECHA LNG Phase 1 as it approaches its summer 2025 COD. We are excited to bring one of these. The first North American Pacific Coast export projects to market. At Cameron L&G Phase 1, we've now exceeded 700 cargoes since production began in May of 2019, and we couldn't be more pleased with the high-quality operations from this critical infrastructure asset. On the Development and Growth Pipeline, our priorities remain focused on advancing commercial discussions for offtake volume and equity ownership at Port Arthur-based and assessing Cameron LNG Phase 2's EPC opportunities. At Cameron LMG Phase II, we've been working with Bechtel on value engineering. And at this stage, we feel it's best to continue those efforts while evaluating other potential EPC contracts.

Justin Bird: Natural gas and particularly LNG can effectively replace less sustainable energy sources today.

Justin Bird: In fact industry sources estimate that global LNG demand in particular will grow approximately 50% by 2045.

There isn't an additional tailwind associated with emerging market growth as their share of global GDP increases relative to advancing economies.

Justin Bird: This drives overall energy consumption, because developing economies tend to be more energy intensive as they modernize and improve quality of life.

Justin Bird: Tempur infrastructure also develops renewables and associated infrastructure that provide cleaner sources of energy and contribute to a broader de carbonization efforts in North America.

Justin Bird: The final macro driver is the need for energy security and.

Justin Bird: Energy dense reliable and affordable energy is a key ingredient to building advanced economy. A key question is where that incremental energy production will be sourced.

Justin Byrd: We're continuing to work closely with Bechtel on Port Arthur Phase I and potentially Phase II, but we and the Cameron partners want to take some additional time to help ensure a cost-effective build-back and conduct additional value engineering and analysis to improve the overall value of the project. For Port Arthur LNG Phase 2, we received FERC approval in September. And earlier this month, FERC staff issued an environmental assessment finding no adverse impact as a result of the Port Arthur-Louisiana Connector Pipeline amendment.

Justin Bird: Recently, the deal we announced the pause on granting non FTA LNG export permits to reevaluate the impact granting these permits would have on domestic energy costs and to consider whether climate factors impact the public interest.

Justin Bird: Lng's climate role is important which is why even before the regulatory development. We started work on several initiatives designed to minimize our environmental impact and help reduce emissions across our portfolio.

Justin Bird: One example, being the conversion of E drive at Cameron LNG Phase III.

Justin Byrd: I also want to mention that we continue to make significant progress toward an FID on Cimarron Wind. Recall, this is a 300-megawatt wind project located near our existing ESJ-1 and ESJ-2 wind projects that will directly interconnect with the California market. Finally, I wanted to highlight a hydrogen hub project we are participating in called High Velocity that is expected to receive 1.2 billion dollars from DOE funding to pursue development. We are also actively engaged with a group of Japanese utilities on a collaboration to produce e-natural gas using renewable hydrogen and CO2 as a fuel. Projects like these demonstrate Sempra Infrastructure's innovative and entrepreneurial culture as we seek opportunities to provide cleaner and more secure energy for customers. Please turn to the next slide.

Justin Bird: We're also developing carbon capture and sequestration infrastructure associated with our LNG projects.

Justin Bird: Long term, we are confident in the commercial economic and environmental value of our export facilities and we will continue to work hard on behalf of our customers and investors to advance these projects.

Justin Bird: With that said this permanent pause only applies to projects that haven't yet received their non FTA export permit such as port Arthur Phase III. This pause does not impact on any of our assets in operation or under construction as a reminder, Cameron train four has a non FTA export permit and the <unk>.

Justin Bird: We stated in hearings earlier this month that the pause would not impact in service date extension requests for projects with existing permits.

Justin Bird: <unk> planning convention development projects, such as Port Arthur Phase II, and Cameron phase two have not reached FID.

Justin Byrd: Turning to macro trends impacting Sempra infrastructure, global energy demand continues to increase. On sustainability, Sempra infrastructure plays a critical role in providing cleaner, alternative solutions to heavier carbon fuels like coal and oil. Natural Gas, and particularly LNG, can effectively replace less sustainable energy sources today.

Justin Bird: And are not included in our capital plan or guidance, so any potential delay would not impact our current earnings growth visibility.

Justin Bird: For our existing capital plan.

Justin Bird: We can't speculate on the ultimate outcome of this policy, but we'd like to reiterate the compelling environmental value proposition that natural gas and LNG provide.

Justin Bird: The United States has decreased carbon emissions, 17% below 2005 levels, despite increasing GDP by more than double in that time.

Justin Byrd: In fact, industry sources estimate that global LNG demand, in particular, will grow approximately 50% by 2045. There is an additional tailwind associated with emerging market growth; their share of global GDP increases relative to advancing economies. This drives overall energy consumption because developing economies tend to be more energy-intensive as they modernize and improve their quality of life.

Justin Bird: A major reason for that progress is natural gas, replacing coal and energy production.

Justin Bird: We believe a lasting policy of limiting LNG exports with unfortunately hurt the global climate interests, because prospective buyers could be forced to rely on more carbon intensive fuels, including coal and fuel oil.

Justin Byrd: Sempra Infrastructure also develops renewables and associated infrastructure that provide cleaner sources of energy and contribute to broader decarbonization efforts in North America. The final macro driver is the need for energy security. Energy-dense, reliable, and affordable energy is a key ingredient to building advanced economies. The key question is where that incremental energy production will be sourced. Recently, the DOE announced a pause on granting non-FTA LNG export permits to re-evaluate the impact granting these permits would have on domestic energy costs and to consider whether climate factors impact the public. LNG's climate role is important, which is why even before the regulatory, development, we started work on several initiatives designed to minimize our environmental impact and help reduce emissions across our portfolio. One example is the conversion of e-drives at Cameron LMG Phase 2.

Justin Bird: We remain as enthusiastic as ever about the merits of our LNG projects as well as our ability to appropriately navigate the regulatory landscape to advance each one.

Justin Bird: Further we are optimistic that normal permitting conditions will resume after all relevant variables have been carefully evaluated by the administration.

Justin Bird: Please turn to the next slide.

Justin Bird: On this slide we highlight some key projects under construction in the Pacific and Gulf Coast.

Justin Bird: These projects strengthen our competitive advantage as a strategically located supplier to both Asia and Europe.

Justin Bird: The beauty of Greenfield development is that unlocks highly compelling brownfield expansion opportunities.

Justin Bird: We have begun procurement and engineering activities at Port Arthur Louisiana pipeline, a pipeline connecting port Arthur LNG to feed gas in Gillis.

Justin Bird: We've also begun procurement and engineering at Louisiana storage, a salt dome natural gas storage facility. These.

Justin Bird: These assets will contribute to the larger port Arthur energy hub, and demonstrate sempra infrastructures expertise and developing comprehensive energy projects.

Justin Byrd: We're also developing carbon capture and sequestration associated with our LNG project. Long-term, we are confident in the commercial, economic, and environmental value of our export facilities and will continue to work hard on behalf of our customers and investors to advance these. With that said, this permitting pause only applies to projects that haven't yet received their non-FDP permit, such as Port Arthur Faisel.

Justin Bird: Meanwhile, construction across the central infrastructure platforms continues to progress well at Port Arthur LNG Phase one the next milestone will be two commenced structural steel.

Justin Bird: At ACA LNG phase one we are targeting 90% completion of structural steel.

Justin Bird: And at the <unk> expansion, we have initiated construction and are targeting completion of the construction of the Mexicali segment later this year.

Justin Byrd: This pause does not impact any of our assets in operation or under construction. As a reminder, Cameron Train 4 has a non-FTA export, and the DOE stated in hearings earlier this year that the pause would not impact service date extension requests for projects with existing funding. Per Sempra's planning convention, development projects such as Port Arthur Phase II and Cameron Phase II have not reached FID and are not included in our capital plan or guidance. Therefore, any potential delay would not impact our current earnings growth visibility for our existing capital plan. We can't speculate on the ultimate outcome of this policy, but we'd like to reiterate the compelling environmental value proposition that natural gas and LNG have The United States has decreased carbon emissions 17% below 2005 levels. Despite increasing GDP by more than double in that time, a major reason for that progress is natural gas replacing coal in energy production. We believe a lasting policy of limiting LNG exports would unfortunately hurt the global climate interest because prospective buyers could be forced to rely on more carbon-intensive fuels, including coal and fuel oil.

Justin Bird: To reiterate simpler infrastructure is playing a key role in securing energy needs and contributing to de carbonization efforts for customers around the globe.

Justin Bird: Please turn to the next slide.

Justin Bird: Looking further out we are developing an enviable portfolio of growth projects and this slide showcases some of our more significant pursuits.

Justin Bird: For a full list of development assets, please refer to the appendix.

Justin Bird: I would also note that a number of these projects are brownfield investment opportunities made possible by our initial greenfield investments at Cameron and Port Arthur.

Justin Bird: Please turn to the next slide.

Justin Bird: To conclude we have $4 4 billion of capital deployment opportunities anchored on providing our long term customers with cleaner and secure energy.

Justin Bird: And as a reminder, this number only includes projects, which have reached a positive.

Justin Bird: Sure.

Justin Bird: Major 2024 investment allocations are slotted for the Port Arthur and energy hub is phase one construction progresses.

Justin Bird: LNG phase one as we close in on COPD.

Justin Bird: The.

Justin Bird: Pipeline expansion project and the Louisiana storage development.

Justin Bird: Now please turn to the next slide and let me turn it over to Karen who will take us through the financial update.

Karen: Thank you Justin I'm excited to share our year end results and give you more details on our financial plan.

Justin Byrd: We remain as enthusiastic as ever about the merits of our LNG projects, as well as our ability to appropriately navigate the regulatory landscape to advance each one. In addition, we are optimistic that normal permitting conditions will resume after all relevant variables have been carefully evaluated by the administration. Please turn to the next slide. On this slide, we highlight some key projects under construction on the Pacific and Gulf Coast. These projects strengthen our competitive advantage as a strategically located supplier to both Asia and Europe. The beauty of greenfield development is that it unlocks highly compelling brownfield expansion opportunities. We have begun procurement and engineering activities at Port Arthur, Louisiana Pipeline. Pipeline Connecting Port Arthur, LNG to Feed Gas and Gases. We've also begun procurement and engineering at Louisiana Storage, or Salt Dome Natural Gas Storage.

Karen: Earlier today, <unk> reported fourth quarter, 2023, GAAP earnings of $737 million or $1 16 per share.

Karen: This compares to fourth quarter 2020 to GAAP earnings of $438 million or <unk> 69 per share.

On an adjusted basis fourth quarter, 2023 earnings or $719 million or $1 13 per share.

Karen: This compares to our fourth quarter 2022 earnings of $743 million or $1 17 per share.

Karen: Full year 2023, GAAP earnings were $3 billion $30 million or $4 79 per share.

Karen: This compares to 2020 to GAAP earnings of $2.094 billion or $3 31 per share.

Karen: On an adjusted basis full year 2023 earnings for $2 billion $920 million.

Karen: Or $4 61 per share.

Karen: This compares to our previous full year 2022, adjusted earnings of $2 billion $915 million or.

Karen: Or $4 61 per share.

Justin Byrd: These assets will contribute to the larger Port Arthur energy hub and demonstrate Sempra infrastructure's expertise in developing comprehensive energy solutions. Meanwhile, construction across the Sempra infrastructure platforms continues to progress well. At Port Arthur LNG Phase 1, the next milestone will be to commence structural steel.

Speaker Change: This year's results demonstrate the combined strength of our three growth platforms and sets us up for improved growth in 2024, Please turn to the next slide.

Speaker Change: Now I will summarize the variance of full year 2023, adjusted earnings compared to the same period for last year.

Speaker Change: At Sempra, California, we had $69 million of higher net interest expense, partially offset by net tax benefits.

Justin Byrd: At ECHA LNG Phase 1, we are targeting 90% completion of the structure. And at the GRO expansion, we have initiated construction and are targeting completion of the construction of the Mexicali... later this year. To reiterate, Sempra Infrastructure is playing a key role in securing energy needs and contributing to decarbonization efforts for customers around the world. Please turn to the next slide. Looking further out, we are developing an enviable portfolio of growth projects, and this slide showcases some of our more. For a full list of development assets, please refer to the. I would also note that a number of these projects are brownfield investment opportunities made possible by our initial greenfield investments at Cameron and Port Arthur. Please turn to the next.

Speaker Change: Offset by $51 million of higher electric transmission and CPUC base operating margin.

Speaker Change: And $52 million of higher regulatory interest income and regulatory awards.

Speaker Change: At Sempra, Texas, we had $2 billion of higher equity earnings attributable to increased invested capital.

Speaker Change: Actually offset by higher interest and operating expenses.

Speaker Change: I would note that earnings in 2022, and 2023 were impacted by the lack of capital trackers. They can't be filed during the rate case.

Speaker Change: It's simpler infrastructure, we had $85 million of higher earnings attributable to Noncontrolling interest $10 million of higher taxes, partially offset by lower interest expense given increased capitalized interest.

Speaker Change: Set by $49 million of higher transportation tariffs higher asset supply optimization, partially offset by lower equity earnings from Cameron LNG.

Speaker Change: For Port Arthur while our ownership stake is approximately 20% we consolidate the project for accounting purposes.

Speaker Change: Capitalizing interest based on the projects in progress construction.

Justin Byrd: To conclude, we have $4.4 billion of capital deployment opportunities anchored on providing our long-term customers with cleaner and secure energy. And as a reminder, this number only includes projects which have reached a positive FID. Major 2024 investments are slotted for, and the Port Arthur Energy Hub as Phase I construction progresses. Back at LNG phase one as we close in on COD.

Speaker Change: As construction advances youre seeing the impact of higher capitalized interest versus previous years.

Speaker Change: Ultimately these capitalized costs will be amortized back as higher depreciation after the plant moves into commercial operations.

Speaker Change: At Sempra parent there were $15 million of higher investment gains, partially offset by higher net interest expense and lower income tax benefits. Please.

Speaker Change: Please turn to the next slide.

Speaker Change: Turning to new investments as Jeff noted earlier, we are announcing a company record $48 billion capital plan with over 90% of the planned investment allocated to our regulated utilities.

Karen Sedrick: GRO Pipeline Expansion Project, and the Louisiana Storage Development Program. Now please turn to the next slide and let me turn it over to Karen, who will take us through the financial update. Thank you, Justin.

Speaker Change: This represented an impressive 20% increase over the previous plan.

Speaker Change: Ultimately serve as the foundation for our company's growth over the coming years.

Speaker Change: About $24 $1 billion roughly half of the capital plan is mark for investment at Sempra California's two utilities.

Speaker Change: Which together have a weighted average ROE of approximately 10, 5%.

Speaker Change: At Sempra, Texas $19 $5 billion includes our proportionate share of encores planned capex.

Karen Sedrick: I'm excited to share our year-end results and give you more details on our finances. Earlier today, Sempra reported fourth quarter 2023 gap earnings of $737 million, or $1.16 per share, the new parish to fourth quarter $438 million. On an adjusted basis, fourth quarter 2023 earnings were $719 million, or $1.13 billion. This compares to our fourth quarter 2022 earnings of $743,000,000 or $1.17. Full year 2023 GAAP earnings were $3,030,000,000. $4.79.

Speaker Change: Where recent legislative developments should help unquote reduced regulatory lag and improve its ability to help lessen the gap between the authorized and actual rates of return.

Speaker Change: The remaining $4 4 billion are primarily associated with simpler infrastructures LNG projects under construction and their associated infrastructure.

Speaker Change: Please turn to the next slide.

Speaker Change: With this record capital plan I would like to illustrate some of the key sources and uses.

Speaker Change: As you know simple raised equity in November 2023 to support our future investment needs and mitigate the financing risk associated with the capital plan.

Speaker Change: As a result, we are in a strong financial position and anticipate a reliable internal operating cash flows and regulatory authorized that will provide the vast majority of our financing needs.

Speaker Change: Our growing business, while maintaining balance sheet strength.

Speaker Change: All with the goal of delivering attractive total shareholder returns over the long term.

Speaker Change: Along those lines.

Karen Sedrick: This compares to 2022 gap earnings of $2 billion, $9.4 million, or $3.31 million. On an adjusted basis, full year 2023 earnings were $2,920,000,000. $4.00. This compares to our previous full year 2022 adjusted earnings of $2,915,000,000. $4.61.

Speaker Change: We will continue to target of 50% to 60% dividend payout ratio.

Speaker Change: Providing plenty of reinvestment flexibility please.

Speaker Change: Please turn to the next slide.

Speaker Change: Moving to the utilities are strong earnings trajectory is underpinned by long term rate base growth.

Speaker Change: California, and Texas rate base is expected to grow at seven and 11% respectively from 2023 to 2020.

Speaker Change: Our rate base is split approximately evenly between California, and Texas, where we benefit from constructive regulatory jurisdictions and strong macro economic growth.

Speaker Change: On a combined basis, we anticipate just over 9% annual growth through 2028.

Speaker Change: This gives us added confidence in achieving our projected 6% to 8% long term EPS growth rate. Please.

Karen Sedrick: This year's results demonstrate the combined strength of our three growth platforms and set us up for improved growth in 2020. Please turn to the next page And now I will summarize the variants for the full year 2020. Trust, compared to the same period for less. At Sempra California, we had $69 million of higher net income, partially offset by a net tax benefit, offset by $51 million of higher electric transmission, and $52 million of higher regulatory interest income and regulatory. At Sempra Texas, we had $2 billion of higher equity, and others. Thank you. Thank you, partially offset by higher interest and I'd note that earnings in 2022 and 20 are impacted by the lack of capital trackers that can't be filed during At Sempra Infrastructure, we had $85 million of higher earnings attributable to non-controlling, $10 million of higher taxes, partially offset by lower interest rates, giving an increased capital, offset by 49 million dollars of higher transportation tariffs.

Speaker Change: Please turn to the next slide.

Speaker Change: Given the strength of our 2023 results. We've narrowed our 2024 earnings guidance estimates are now projecting EPS guidance for the year ranging from $4 62.

Speaker Change: The $4 90.

Speaker Change: Also we are announcing 2025 earnings per share guidance with a range of $4 90.

Speaker Change: To $5 25.

Speaker Change: This equates to a projected EPS midpoint, it's about 7% higher in 2020 for guidance.

Speaker Change: Now, let's break down a few of the assumptions embedded in these figures.

Speaker Change: California. This already includes the cost of capital trigger.

Speaker Change: As for the JRC, where assuming outcomes that are in the range of historical rate case decisions.

Speaker Change: Continue to work constructively with the CPUC and intervenors to the proceeding to achieve an outcome that allows us to continue to deliver safe reliable and sustainable energy for our customers.

Speaker Change: Turning to Texas.

Speaker Change: The prior call the guidance took into effect encores second DC RF.

Subject to PUC approval the CIS.

Speaker Change: Some resiliency plan looks like 2025 through 2027.

Speaker Change: And just the timing differences between filing and construction of projects, we would expect minimal financial impact in 2025.

Speaker Change: It's simpler infrastructure there are a few things to highlight.

Speaker Change: 2022, and 2023 benefited from an attractive commodity price environment and in 2023 received the cumulative benefit of new tariffs on select Mexico pipelines.

Speaker Change: Due to the conservative nature of our project development process, we secured rates on the gas pipeline connecting Zika well in advance of Sidoti.

Karen Sedrick: Higher Asset Supply Optimization, partially offset by lower equity earnings from Cameron and Port Arthur, where our ownership stake is approximately $24 million. We consolidate the project for accounting, thus capitalizing interest based on the project's in-progress construction. As construction advances, you're seeing the impact of higher capitalized interest versus previous. Ultimately, these capitalized costs will be amortized back as higher depreciation after the plant moves into commercial use.

Speaker Change: This allowed us to better optimize results during this period.

Speaker Change: We would expect this impact to moderate as we go forward, particularly with a lower forward curve for natural gas.

Speaker Change: And now with the magnitude of large projects currently under construction, we have better visibility to certain non capitalized costs that have now been added to our 2024 plan.

Speaker Change: And we have LNG phase one expected to come online in December of 2025, our full year operations expected in 2026.

Speaker Change: And finally regarding the share count the main driver of the increase is our recent equity offering as we've discussed the green shoe of just over 2 million shares settled immediately in November of 2023.

Karen Sedrick: Thank you. Thank you. Thank you.

Speaker Change: Over the course of this year, we're assuming weighted average diluted shares will increase by $4 million, which reflects the dividend reinvestment program equity based plans and the drawdown of our forward settlement, which we now assume will occur in the second half of 2024.

Karen Sedrick: $15,000,000 of higher investment, partially offset by higher net income and lower income tax. According to New Investments, as Jeff noted earlier, we're announcing a company record $48 billion in capital, with over 90% of the planned investment allocated to our regular. This represents an impressive 20% preview and will ultimately serve as the foundation for our company's growth over the next few years. About $24.1 billion, or roughly half of the capital, is marked for investment at Sempra California's together have a weighted average ROE of approximately 10.5%. At Sempra Texas, $19.5 billion includes our proportionate share of Encore's planned capital, where recent legislative developments should help Encore reduce regulatory lag and improve its ability to help lessen the gap between the authorized and act. The remaining $4.4 billion is primarily associated with Sempra Infrastructure's Ellen, under construction, and there is. With this record capital plan, I would like to illustrate some of the key sources. As you know, Sempra raised equity in November 2020. For more information, visit www. FEMA.gov and mitigate the financing risks associated with capital.

Speaker Change: Thus 2025 reflects those shares outstanding for the entire year, increasing our share count to approximately 654 million shares.

Speaker Change: Let's turn to the next slide.

Speaker Change: In addition to our new five year plan. We've added this slide and in an effort to be more responsive to input from our many investors.

Speaker Change: Here it shows the various categories of investments.

Speaker Change: Tracking our developing that fall outside of our current plan it totals over $10 billion and many of these opportunities could form part of our future capital campaign.

Speaker Change: Please turn to the next slide.

Speaker Change: You've heard this from our other executives today, but it is important to note that we're excited by the investment opportunities in front of us.

Speaker Change: We are owners and operators of top tier T&D utility platforms located in North America is the largest economies.

Speaker Change: Moreover, our utilities benefit from constructive regulation.

Speaker Change: Significant investment and help ensure safe reliable resilient and increasingly sustainable energy for our customers.

Speaker Change: Overtime, our key priorities remain largely the same we will invest in our high quality T&D energy infrastructure to improve customer service maintain a prudent balance sheet and provide compelling returns to shareholders.

Speaker Change: A record $48 billion capital plan focused on our regulated utilities will be the primary foundation for increasing rate base growth and earnings power and gives us confidence in achieving our projected long term EPS growth rate of 6% to 8%.

Speaker Change: We thank you for joining us as we continue to build North America's Premier Energy infrastructure company.

Speaker Change: We are as enthusiastic as ever about our opportunity to continue delivering attractive risk adjusted returns.

Speaker Change: I've had the opportunity to meet with many of you over the last month and I will be out on the road with the IR team in March and hope to connect with those of you I haven't had a chance to meet yet.

Speaker Change: With that I'd now like to open the call for some of your questions.

Speaker Change: Thank you.

Karen Sedrick: As a result, we are in a strong financial position and Anticipate Reliable Internal Operating Cash Flows and Regulatory Authorized Debt, which provide the vast majority of our financial aid. We are a growing business while maintaining balance sheet strength, all with the goal of delivering attractive total shareholder returns over the long term, along those lines. Sempra will continue to target a 50-60% dividend payout, providing plenty of reinvestment. Turn to the next. Moving to the utility. Our strong earnings trajectory is underpinned by long-term rates, California and Texas, expected to grow by 7% and 11%, respectively, 2023-2006.

Speaker Change: This concludes the prepared remarks, we will now open the line to take your questions.

Speaker Change: I would like to ask a question. Please signal by pressing star one one on your telephone keypad.

Speaker Change: Please make sure your mute function is turned off.

Speaker Change: We will pause for just a moment to allow everyone to signal for questions.

Speaker Change: And our first question will come from Konstantin <unk> from Guggenheim Partners. Your line is open.

Konstantin: Hi, good morning team congrats on a great quarter.

Konstantin: Morning Constantine.

Konstantin: Thanks, Thanks for taking the questions.

Konstantin: The first one would be on the 2025 earnings growth in California, that's pointing to around 5%.

Konstantin: How are you currently framing the DRC process into the 'twenty four 'twenty five planning assumptions, especially if there is some visibility around partial settlement issues in this process.

Karen Sedrick: Our rate base is split approximately evenly between California, where we benefit from constructive regulatory jurisdiction, and macro... On a combined basis, we anticipate just over 9% annual growth through 2020. And this gives us added confidence in achieving our projected 6% to 8% long-term EPS growth. Transcription by CastingWords, on the strength of our 2020.

Speaker Change: Yes, Constantine here's the way I would think about it is the way we framed our rate cases, we always focus on making investments that are aligned with public policy in the directly support our customers.

Speaker Change: In terms of assumptions, we take the time look at prior cases that we've been through at the CPUC and then we tend to make reasonable assumptions from a range of potential outcomes are.

Karen Sedrick: We've narrowed our 2024 earnings guidance and are now projecting EPS guidance ranging from $4.60 to $4.90. Also, we're announcing 2025 earnings per share guidance with a range of $4.90 to $5.25. This equates to a projected EPS of about 7% higher than 2024 guidance. Now let's break down a few of the assumptions embedded in this, and Sempra California. This already includes the cost of capital. As for the GRC, we're assuming outcomes that are in the range of the historical rate cases. We continue to work constructively with the CPUC and intervenors through the proceeding to achieve an outcome that allows us to continue to deliver Reliable and Sustainable Energy for Our Community. Trying to check.

Speaker Change: Our challenge is given where we're at in the regulatory process. That's probably all were prepared to share in terms of assumptions at this time, but you did make a great point, which is just last fall we settle with certain intervenors about one third of the rate case for the southern California gas company and about one third of the case for <unk>.

Speaker Change: And we view that quite constructively. So we're looking forward to a proposed decision in the second quarter and a final decision in the second half of the year.

Speaker Change: Okay, and does that imply that you're taking into account any of the settlement into your planning parameters or does that still.

Speaker Change: No I wouldn't think about the settlement itself impact and how we think about our assumptions I just think it views on alignment with some of the intervenors around the way we're thinking about meeting the public policy initiatives for the state.

Karen Sedrick: As we said in the prior call, the guidance took into effect on course 2nd DCRS, and subject to PUC approval and the Resiliency Plan, it will apply to 2025 through 2027. And due to timing differences between filing and construction of projects.

Speaker Change: Okay.

Speaker Change: Okay, perfect and then maybe shifting to your thoughts on cost of capital process at the CPUC.

Especially with phase II reply comments posted yesterday.

Karen Sedrick: Expect minimal financial impact in 2020. At Sempra Infrastructure, there are a few things to highlight. 2022 and 2023 benefited from an attractive commodity price, and in 2023 received the cumulative benefit of new tariffs on select Mexico due to the conservative nature of our project development process.

Speaker Change: Sorry to hear that.

Speaker Change: Yields are clearly pointing to a sustained increase but how do you just book and so on.

Speaker Change: On the five year total planet.

Speaker Change: Yes.

Speaker Change: I would think about it and I'll also say if <unk> like to add something as you recall. When this issue was first address last year, we had indicated to the investment community that we expected the cost of capital mechanism to trigger.

Speaker Change: And had included in our EPS guidance and now with the decision last December which we think was fairly clear it allowed us constant team to have a little bit more confidence to narrow our 2024 EPS guidance range.

Karen Sedrick: We secured rights on the gas pipeline connecting ICA well in advance. This allowed us to better optimize results during the trial, but we would expect this impact to moderate, particularly with a lower forward curve for natural gas. And now, with the magnitude of large projects currently under construction, we have better visibility to certain non-capitalized costs that have now been added to our 2020 budget, and we have ECA LNG phase one expected to come online in the summer of 2025. And finally, regarding the share... The main driver of the increase is our recent... As we've discussed, the green shoe of just over 2 million shares settled immediately. November of 2020

Speaker Change: The benefit of actually raising the midpoint of our guidance for this year.

Speaker Change: Lee I think California continues to be a very constructive regulatory jurisdiction.

Speaker Change: These point to the fact that we have forward looking rate cases here reasonable returns on equity to attract the capital that's needed a strong framework, it's actually quite unique for addressing climate related event risk and finally more and more people are starting to understand and value the cost of capital mechanism that accounts for market conditions, but Trevor would you like.

Trevor: To add anything in terms of the cost of capital, Yes, Yes, no I think you largely covered it I would just add that I think we are really in good shape here on this and I think the energy divisions disposition that it was pretty clear on this so.

Trevor: Again, we feel we're in good shape.

Speaker Change: Thanks, guys.

Karen Sedrick: Over the course of this year, we're assuming weighted average diluted shares will increase by 4 million, which reflects the Dividend Reinvestment Program, equity-based plans, and the Drawdown of our Forward Settlement, which we now assume will occur in the second half.

Speaker Change: So just one quick follow up.

Speaker Change: Embedded within kind of that ROE outcome.

Speaker Change: Do you have any O&M funding reinvestment embedded in the plan.

Speaker Change: Help me understand your question again please.

Speaker Change: Just with the tailwind from from some of the ROE outcome are you embedding any reinvestment in O&M from that tailwind going into 2004.

Karen Sedrick: Thus, 2025 reflects those shares outstanding for the entire, increasing our share count to approximately $654 million. Turn to the next. In addition to our new five-year plan, we've added this slide in an effort to be more responsive to input from our many. It shows the various categories of investments that we're tracking or developing that fall outside of our... totals over $10 billion, and many of these opportunities could form part of our future capital campaign. Please turn to the next page... You've heard this from our other executives. It is important to note that we're excited by the investment opportunities for your owners and operators of top-tier T&D utility platforms. Located in North America's largest...

Speaker Change: The way I would think about it as we put our plan together, which was all part of the current rate case. So the 2024 plan would be impacted by how the outcome of the rate cases, and when we think about 24% and 25, we had to take a reasonable set of assumptions based upon prior cases and thats embedded in our forecast.

Speaker Change: Okay perfect.

Speaker Change: Thank you constantino thank.

Speaker Change: Thank you very much thank you.

Speaker Change: Thank you.

Speaker Change: And our next question will come from Nick Campanella from Barclays. Your line is open good afternoon Nick.

Nicholas Campanella: Hey, good afternoon, I hope everyone's doing well thanks for everything today.

Nicholas Campanella: Thank you.

Nicholas Campanella: So I guess just.

Nicholas Campanella: File Thats SRP.

Nicholas Campanella: It sounds like Capex is biased yet again higher on the other side of that.

Karen Sedrick: Moreover, our utilities benefit from constructive to help ensure safe, reliable, resilient, and increasingly sustainable energy for our customers. Over time, our key priorities remain large, will invest in our high-quality T&E Energy Improved Customer Service, maintain a prudent balance, provide compelling return, a record $48 billion capital, focused on our regulated, be the primary foundation for increasing rates, Growth in Earnings Power, and Give Us Confidence in Achieving Our Thank you for joining us. We will continue to build North America's premier energy company, and we're as enthusiastic as ever about our opportunities to continue delivering attractive risk. I've had the opportunity to meet with many of you over the last month, and I'll be out on the road with the IR team in March and hope to connect with those of you I haven't had a chance to. And with that, I'd now like to open the call for some...

Nicholas Campanella: Probably a second half event, but just how are you kind of describing your capital needs.

Nicholas Campanella: And how you would fund the increased Capex.

Nicholas Campanella: <unk> debt et cetera.

Yes, I will start by reminding everyone on our Q3 call last year, we shared our expectation that our capital plan would go up between 10, and 20% and then that same months Youll recall that we saw sort of equity offering of a roughly $1 3 billion to support our future financing needs.

Nicholas Campanella: Slide 33, Nic goes to kind of the sources and uses and picks up last fall's equity issuance and the ongoing drip I think to your point the key takeaway for US is we're in great shape together with operating cash flows and net debt. We're in a very strong position to comfortably support our new capital program without the need for any additional equity.

<unk>.

Nic: Right and then and then I'm, sorry, but just on top of.

Nic: As you raised Capex I think again, if this FRP filing is not included in the current Capex plan.

Speaker Change: There are an incremental funding need on top of that and just how to think about that is there capacity I guess to raise.

Karen Sedrick: Thank you. This concludes the prepared remarks. We will now open the line to take your questions. If you would like to ask a question, please signal by pressing star 11 on your telephone keypad. Please make sure your mute function is turned off.

Speaker Change: Capex without equity here should we just kind of be doing some equity going forward sorry about that.

Speaker Change: No when we sized our equity needs last fall, we made sure that we did that with a margin around what we're trying to accomplish in terms of financing our future growth. So we have the capability of funding growth beyond 48 billion without raising additional equity. The challenge you get into is when you look at the slide that we provided it shows other opportunity.

Operator: We will pause for just a moment to allow everyone to signal for questions, and our first question will come from Constantine Lednev from Guggenheim Partners. Your line is open.

Constantine Lednev: Hi, good morning team. Congratulations on a great quarter. Good morning, Constantine.

Glenn Donovan: Thanks. Thanks for taking the questions. The first one would be on the 2025 earnings growth in California that's pointing to around 5%. How are you currently framing the GRC process and for the 24-25 planning assumptions, especially there's some visibility around partial settlement issues? Yeah, Constantine, here's the way I would think about it: the way we framed our rate cases, we always focus on making investments that are aligned with public policy and that directly support our customers. In terms of assumptions, we take the time to look at prior cases that we've been through at the CPUC, and then we tend to make reasonable assumptions from a range of potential outcomes.

Speaker Change: There's an additional 10 billion out there. So it's not just SRP, we've got other projects, which are coming down the pike, but I think the great News is we've got a record capital plan that capital plan is roughly $3 billion larger than our current market capitalization and we were thoughtful last fall to take equity overhang off of our stock.

Speaker Change: And make sure that we had a margin of error to fully fund our capital plan with additional growth.

Speaker Change: Very clear appreciate that and then.

Speaker Change: I guess, just turning to the Sempra infrastructure our earnings guidance.

Speaker Change: Absolutely appreciate Theres, a step up 2024 versus 2000.

Into 25 because of ACA.

Speaker Change: Are you, assuming just kind of like a mid year COPD, there and just I'm just trying to get a sense of what the normalized run rate for ACA as when that kind of comes online. If you can isolate that and are there any other kind of drivers.

Jeffrey Walker Martin: You know, our challenge is, given where we're at in the regulatory process, that's probably all we're prepared to share in terms of assumptions at this time, but you did make a great point, which is that just last fall, we settled with certain interveners, about one-third of the rate case for the Southern California Gas Company and about one-third of the case for SDG&E, and we view that quite constructively, so we're Okay, and does that imply that you're taking into account any of the settlement into your planning parameters? Or is that still the case?

Speaker Change: 0.2 in terms of the strength for $25 24.

Speaker Change: I'll just give you two things to focus on and Ken you can add if you'd like to but I would mentioned is you're going to see a little bit higher development expense is not capitalized in 2024, and I would use a half year convention for 2025, and that's the best way to think about your going forward run rate.

Ken: Yes, and I would just add that.

Ken: As you would expect our financial projections include the incremental revenues associated with the SBA contracts the conditioning volumes recognized after substantial completion facility and the contributions from the <unk> pipeline.

Jeffrey Walker Martin: No, I wouldn't think about the settlement itself and how we think about our assumptions. I just think it views an alignment with some of the interveners around the way we're thinking about meeting the public policy initiatives for the state. Okay, perfect. And then maybe shifting to your thoughts on the cost of capital process at the CPC, especially with phase two reply comments posted yesterday and because benchmark yields are clearly pointing to a sustained increase. But how do you just bookend the assumptions on the five-year total plan? Yeah, here's the way I would think about it.

Speaker Change: So breaking on the first phase of the Pacific Coast LNG facility, Theres really an exciting opportunity and differentiate simpler infrastructure with a dual close business model that will serve.

Speaker Change: Global energy demand.

Speaker Change: Hey, I appreciate all your time today. Thank you.

Speaker Change: Thank you Nick.

Speaker Change: Thank you.

Speaker Change: Our next question comes from David Arcaro from Morgan Stanley. Your line is open.

David Arcaro: Hey, there, thanks, and Hi, David question.

David Arcaro: Hi.

Jeffrey Walker Martin: And I will also see if Trevor would like to add something. As you recall, when this issue was first addressed last year, we had indicated to the investment community that we expected the cost of capital mechanism to trigger and had it included in our EPS guidance. And now, with the decision last December, which we think was fairly clear, it allowed us, Constantine, to have a little bit more confidence to narrow our 2024 EPS guidance range. And as you know, that had the benefit of actually raising the midpoint of our guidance for this year. Broadly, I think California continues to be a very constructive regulatory jurisdiction.

David Arcaro: Wondering if you could maybe elaborate a little bit on the value engineering timeframe on Cameron I'm curious if there's.

David Arcaro: Any way you could bracket, how long you've extended that process for us.

Speaker Change: Yes, so what might be helpful. Here David is.

Speaker Change: If you could just do two things if you've got a moment go ahead and talk about if you would just a brief update on the construction at both <unk> and Port Arthur and then come back to the development question. He is asking specifically, how we're trying to create additional value around the Cameron opportunity.

Speaker Change: Yes. Thank you, Jeff we're excited to share that on phase one in Port Arthur Phase one we're seeing both projects remain on track for construction.

Jeffrey Walker Martin: I always point to the fact that we have forward-looking rate cases here, reasonable returns on equity to attract the capital that's needed, a strong framework that's actually quite unique for addressing climate-related event risk, and finally, more and more people are starting to understand and value the cost of capital mechanism that accounts for market conditions. Trevor, would you like to add anything in terms of the cost of capital? Yeah, I think you've largely covered it.

Speaker Change: Phase one for COPD in the summer of 2025 and for Port Arthur train, one 2027 and train two in 2028.

Speaker Change: Moving along to the development projects, you recall that as part of our commitment to deliver superior risk adjusted returns we talk about the reverse field of dreams model, which is when they come.

Build it and along those same mines.

Trevor Ian Mihalik: I would just add that I think we are really in good shape here on this, and I think the Energy Division's disposition letter was pretty clear on this. So again, we feel we're in good shape.

Speaker Change: Say that we'll only move forward with our projects when we have the right cost and risk structure and long term contracted cash flows that support a strong return for our shareholders. So going to the heart of your question David on Phase II, we're seeing significant commercial demand for low cost brownfield LNG assets, particularly those that have.

Jeffrey Walker Martin: Okay, and just one quick follow-up, kind of embedded within kind of that ROE outcome. Do you have any O&M funding or system reinvestment embedded in your plan? Help me understand your question again, please.

Speaker Change: Permits in hand, and we believe the camera will be one of the most technologically advanced LNG facilities in the world and have one of the lowest emission profiles as we've shifted to electric drive.

Jeffrey Walker Martin: Just with the tailwinds from the ROE outcome, are you embedding any kind of reinvestment in O&M from that tailwind going into 2024? You know, the way I would think about it is when we put our plan together, which was all part of the current rate case, so the 2024 plan would be impacted by how the outcome of the rate case is, and when we think about 24 and 25, we had to take a reasonable set of assumptions based upon prior cases, and that's embedded in our forecast. Okay, perfect. Thank you, Constantine.

Speaker Change: We're working on the Green power tariff will have carbon sequestration.

Speaker Change: As you recall.

Speaker Change: It's fully permitted and we're working towards.

Speaker Change: The four work streams that Ive always talked about continuing to make progress, but we still have some work to be done so to our current efforts with respect to the Cameron partners are focused on optimizing costs and ensuring maximum value for the project.

Speaker Change: For example were exploring procurement or reservation of long lead and critical paths equipment.

Speaker Change: We are anticipating taking an FID on Cameron to as early as the first half of next year. So that's the first half of 2025.

Constantine Lednev: And our next question will come from Nick Campanella from Barclays. Your line is open. Good afternoon, Nick. Hey, good afternoon. I hope everyone's doing well.

Speaker Change: Shifting to Port Arthur we received our FERC permit last September and are now awaiting the Doe non FTA export permit.

Speaker Change: We're continuing to work with Bechtel on an EPC agreement that can optimize efficiencies with the phase one construction schedule and we're continuing our market effort marketing efforts for offtake in equity and having financing discussions with potential lenders.

Nicholas Campanella: Thanks for everything today. Thank you. So I guess just, you know, you're going to file this SRP. It sounds like CapEx is biased yet again higher on the other side of that, you know, probably a second half event. But just how are you kind of describing your capital needs and how you would fund increased CapEx equity debt, et cetera? Yeah, I will start, Nick, by reminding everyone that, you know, on our Q3 call last year, we shared our expectation that our capital plan would go up between 10 and 20 percent. And in that same month, you'll recall that we sized our equity offering of roughly $1.3 billion to support our future financing needs. Slide 33, Nick, goes through the sources and uses and picks up last fall's equity issuance and the ongoing drip. I think, to your point, the key takeaway for us is that we're in great shape.

Speaker Change: We also have our other Pacific coast LNG opportunities phase two at <unk> and Vista Pacific.

Speaker Change: Both of these are in the early stages of development, but we see clear opportunities and excitement around these projects.

Speaker Change: Just as a reminder, for our planning can mentioned none of these projects have yet received.

Speaker Change: Positive Friday, they're not included in our plan and represent upside the plan and future earnings.

Speaker Change: So David I would just conclude that with that additional work in terms of securing long lead time items additional value engineering, we're focusing on trying to take an idea on that project in the first half of next year.

David Arcaro: Perfect. Thank you both very comprehensive I'll leave it there and hand it over thank you.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question will come from Carly Davenport from Goldman Sachs. Your line is open.

Jeffrey Walker Martin: Together with our operating cash flows and net debt, we're in a very strong position to comfortably support our new capital program without the need for any additional equity. Slide 34, Nick, goes through the, Right, and then, I'm sorry, but just on top of, as you raise CapEx, I think, again, if this SRP filing is not included in the current CapEx plan, is there an incremental funding need on top of that? And just how should we think about that?

Carly Davenport: Good afternoon, Hi, Jeff. Thank you so much for taking the questions.

Carly Davenport: Maybe just to start as we think about the five year capital plan, increasing by the 20% you've reiterated the long term growth rate of the 6% to 8%, but just curious given the magnitude of that increase how we should think about the rate base and earnings growth relative to that range over the current planning period.

Jeffrey Walker Martin: Is there capacity, I guess, to raise additional CapEx without equity here, or should we just kind of be doing some equity going forward? Sorry about that. No, when we sized our equity needs last fall, we made sure that we did that with a margin around what we were trying to accomplish in terms of finance and our future growth. So we have the capability of funding growth beyond $48 billion without raising additional equity. The challenge you get into is, when you look at the slide that we've provided, it shows other opportunities. There's an additional $10 billion out there, so it's not just SRP.

Carly Davenport: Well.

Carly Davenport: Interesting you asked that the rate base growth across both of our utilities will be approximately 10%.

Carly Davenport: Which is a little bit stronger than we forecasted a year ago at the end of the planning period. Those two platforms will have $78 billion of rate base and we really view that really is the focus of the capital plan as we indicated captures over 90% of that 48 billion. What is of note is that there is an $8.

Carly Davenport: <unk> increase over the prior plan and over half of that call. It comes from the growth that we're seeing in Texas, which is really the strongest part of our story.

Jeffrey Walker Martin: We've got other projects which are coming down the pike. But I think the great news is we've got a record capital plan. That capital plan is roughly $3 billion larger than our current market capitalization, and we were thoughtful last fall to take the equity overhang off of our stock and make sure that we had a margin of error to fully fund our capital plan with additional growth. Very clearly appreciate that, and then, I guess just turning to the Sempra Infrastructure Earnings Guidance, absolutely appreciate there's a step up in 2024 into 2025 because of ECHA. Are you assuming just kind of like a mid-year COD there, and I'm just trying to get a sense of what the normalized run rate for ECHA is when that kind of comes online, if you could isolate that, and are there any other kind of drivers to point to in terms of the strength for 2025 versus 2024? Thanks.

Carly Davenport: But we continue to think that the.

Carly Davenport: Most important thing is we have been message at around a 6% to 8% growth rate for several years now.

Carly Davenport: This type of visibility causes us to have additional confidence in that number and one of the things I think that you and I have discussed before if you look at slide 10.

Carly Davenport: Last five or six years, you'll go back over 10 years or 15% or 20 <unk>. One of those few companies that has been able to perform earnings per share growth in that 7% to 10% range over long periods of time now, we're certainly forecasting the 6% to 8%.

Carly Davenport: On a go forward basis, but the key takeaway from this plan is we have a lot of confidence in our ability to deliver that I think as you've noted in your prior research.

Carly Davenport: <unk> indicated that I'll be disappointed if we don't outperform the high end of that range.

Speaker Change: That's super helpful. Thank you and then maybe just a follow up on Texas I think you mentioned in the slides planning for a 2% annual premise growth do you think that could be conservative just based on what you've seen recently in the different growth opportunities that you've seen in Texas.

Jeffrey Walker Martin: Yeah, I would just give you two things to focus on, and Karen, you can add if you'd like to, but what I would mention is you're going to see a little higher development expenses not capitalized in 2024, and I would use a half-year convention for 2025, and that's the best way to think about your going-forward run rate. Yeah, and I would just add that, as you would expect, our financial projections include the incremental revenues associated with the SPA contracts, the commissioning volumes recognized after substantial completion of the facility, and the contributions from the GRO pipeline. So, bringing on the first phase of the Pacific Coast LNG facility is really an exciting opportunity and differentiates Sempra infrastructure with a dual-coast business model that will serve global energy demand. Hey, I appreciate all your time today. Thank you. Thank you, Nick.

Speaker Change: Yes, I mentioned that over half of our planning increase came from Texas, and I wouldn't mind, having Alan kind of walk us through where the system, where the growth is showing up.

Alan: The story in Texas, I think which is quite unique is not just.

Alan: The diversity of the growth in Texas, not just on the premise side.

Alan: And it's also the amount of it currently is allocated to transmission I don't think Theres. Another growth story in the United States that is majority of the Capex is related to transmission and the reason that's important is alan's team has the lowest transmission distribution bills in the state and transmission projects because it benefits all rate payers and.

Alan: The state gets socialized across all the different jurisdictions, but Allen said.

Speaker Change: Currently as point, maybe you could talk about premise growth more broadly the growth that showed up on the system Yeah sure. Thanks, Jeff.

Speaker Change: Currently.

Speaker Change: Really interesting question, given what we're seeing on our system.

Nicholas Campanella: Thank you. Our next question comes from David Arcaro from Morgan Stanley. Your line is open. Oh, hey there, thanks for the question. Hi David.

Speaker Change: Jeff said and as I said in my opening remarks.

Allen Nye: We continue to see really very strong record breaking growth across our system.

David Arcaro: Hi, you know, I'm wondering if you could maybe elaborate a little bit on the value end and the time frame. And I'm curious if there's any way you could bracket how long you've extended that process for. Yeah, I thought, you know, what might be helpful here, David, is if you could, Justin, do two things, if you've got a moment.

Allen Nye: As I mentioned in my opening remarks premise growth remains very strong 73000 last year, a 14% increase year over year.

Allen Nye: From a transmission perspective transmission points of interconnection.

Allen Nye: Very large customers connecting a transmission voltage we set new.

Records for new and active points of interconnection 23.

Allen Nye: Total interconnections are up 25% year over year.

Jeffrey Walker Martin: Go ahead and talk about, if you would, just a brief update on the construction at both ECA and Port Arthur and then come back to the development question he's asking, specifically how we're trying to create additional value around the Cameron Opportunity. Yeah, thank you, Jeff. We're excited to share that on ECA Phase 1 and Port Arthur Phase 1, we're seeing both projects remain on track for construction. ECA Phase 1 for COD in the summer of 2025, and for Port Arthur Train 1, 2027, and Train 2 in 2028. Moving along to the development projects, you'll recall that as part of our commitment to deliver superior risk-adjusted returns, I always talk about the reverse field of dreams model, which is, when they come, I'll build it.

Allen Nye: New interconnections are up 19%.

Allen Nye: Year over year.

Allen Nye: And then we always break it down into retail and generation.

Allen Nye: Retail was up 13%, but I want to pause there on the on the 13%. So we go from 250 at the end of 'twenty two to $2 82 at the end of 'twenty three.

Allen Nye: Something to Jeff's point, the significant about our growth is not only the numbers, but kind of the magnitude and the diversity of the customers and so.

Allen Nye: And these retail numbers of the $2 82.

Allen Nye: Retail point of interconnection requests we presently have 46 of those are between 300 megawatts and 2600 megawatts individually in size.

Allen Nye: We actually had about 28 that are between three and 600 megawatts of piece and we have about 18.

Allen Nye: Better between 602 six gigs so.

Jeffrey Walker Martin: And along those same lines, I always say that we'll only move forward with our projects when we have the right cost and risk structure and long-term contracted cash flows that support a strong return for our shareholders. So, going to the heart of your question, David, on Phase 2, we're seeing significant commercial demand for low-cost, brownfield LNG assets, particularly those that have permits in hand, and we believe that Cameron will be one of the most technologically advanced LNG facilities in the world and have one of the lowest emission profiles. As we've shifted to electric drives, we're working on a green power tariff, and we'll have carbon sequestration. As you recall, it's fully permitted, and we're working toward an FID.

Allen Nye: Very long and very strong growth numerically just in the increase of the numbers, but also what we're seeing is the size of the customers.

Allen Nye: Excuse me on the on the generation interconnection side, we see an increase of 34% year over year.

Allen Nye: West, Texas, we're always talking about West, Texas continues to be a very strong story for us with the.

Allen Nye: Far West, Texas, whether zone peak, increasing by 16, 6% year over year.

Allen Nye: The two transmission circuits or rather loops that we use to serve that part of the state.

Allen Nye: Culberson Lube saw peak there was almost 18% above the prior year's T.

Allen Nye: And Stan.

Allen Nye: Creased about 20, just under just under 24%, so really really incredibly strong growth across our system.

Justin Byrd: The four work streams that I've always talked about continue to make progress, but we still have some work to do. So, our current efforts with respect to the Cameron partners are focused on optimizing costs and ensuring maximum value for the project. And, for example, we're exploring procurement or reservation of long-lead and critical path equipment. We are anticipating taking an FID on Cameron 2 as early as the first half of next year, so that's the first half of 2025. Shifting to Fort Arthur, we received our FERC permit last September and are now awaiting the DOE non-FTA export permit.

Allen Nye: The breakdown of Capex.

Allen Nye: Sure a breakdown of our 24.2, it's on slide 48.

Allen Nye: The appendix just to break down a little further we've got about $5 1 billion in distribution expansion about 13, five <unk> transmission expansion, which is a point Jeff made moments ago.

Allen Nye: $4 $2 billion in maintenance capital and then about $1 billion for intact.

Justin Byrd: We're continuing to work with Bechtel on an EPC agreement that can optimize efficiencies with the Phase 1 construction schedule, and we're continuing our marketing efforts for offtake and equity and having financing discussions with potential lenders. We also have our other Pacific Coast LNG opportunities, such as Phase 2 at ECA and Vista Pacifico. Both of these are in the early stages of development, but we see clear opportunities and excitement around these projects. So, just as a reminder, per our planning convention, none of these projects have yet received positive FID. They're not included in our plan and represent the upside of the plan and future earnings.

Allen Nye: And I think to Jeff's 0.3 things here just to conclude one.

Allen Nye: 70% little over 70% actually of all of this capex is pure growth capital.

Allen Nye: So about 97% of this five year plan is subject to recovery through our trackers.

Allen Nye: And then to Jeff's point, specifically, a little over 60% of all of this capital we're talking about is transmission, which obviously benefits everyone in the state and therefore is spread across state.

Allen Nye: Evenly which helps us both the growth.

David Arcaro: So, David, I would just conclude that with that additional work in terms of securing long-lead time items and additional value engineering, we're focusing on trying to take FID on that project in the first half of next year. Perfect. Yeah, thank you both. Very comprehensive. I'll leave it there and hand it over.

Allen Nye: Capital as well as the fact, the heavy emphasis on transmission really allows us to stay where we want to be which is among the low cost providers in the state.

Speaker Change: Excellent. Thanks.

Speaker Change: Very clear thanks for all that detail I appreciate the time.

Speaker Change: Thank you Kelly.

Speaker Change: Sure.

Speaker Change: Thank you.

Speaker Change: We now have time for one more question.

Carly Davenport: Thank you. Our next question will come from Carly Davenport from Goldman Sachs. Your line is open. Hi Carly.

Speaker Change: And then it will be from Ryan Levine from Citi. Your line is open.

Ryan Levine: Hi, everyone, Hi, Brian Hi, Ryan.

Jeffrey Walker Martin: Hi Jeff, thank you so much for taking the questions. Maybe just to start, as we think about the five-year capital plan increasing by 20%, you've reiterated the long-term growth rate of 6% to 8%, but just curious, given the magnitude of that increase, how should we think about the rate base and earnings growth relative to that range over the current planning period? Well, it's interesting you ask that.

Ryan Levine: Two questions one on transmission in the prepared remarks as mentioned, we should expect an update in late April for your project or the project that you're pursuing.

Ryan Levine: Should we expect an outcome there or just further update as there is a range of potential.

Ryan Levine: The scenarios that could play out in the coming weeks.

Speaker Change: Thank you for that question Ryan I'll, let Trevor response.

Jeffrey Walker Martin: The rate-based growth across both of our utilities will be approximately 10 percent, which is a little bit stronger than we forecasted a year ago. At the end of the planning period, those two platforms will have $78 billion of rate base, and we really view that as the focus of the capital plan. As we indicated, it captures over 90 percent of that $48 billion.

Speaker Change: Jeff Hey, Ryan, Yes, I think we will get a decision as to who is going to get selected in late April and then Theres a 120 days.

Jeffrey Walker Martin: For negotiations to happen for a final outcome. So I would say expect something over the next four months.

Jeffrey Walker Martin: Okay, and then on LNG.

Speaker Change: I appreciate the clarification around that.

Speaker Change: The non FTA permit extension new applications in terms of non FTE permitting extensions is there.

Jeffrey Walker Martin: What is of note is that there's an $8 billion increase over the prior plan, and over half of that currently comes from the growth that we're seeing in Texas, which is really the strongest part of our story. But we continue to think that the most important thing is that we have been messaging around a 6 to 8 percent growth rate for several years now. I think this type of visibility causes us to have additional confidence in that number.

Speaker Change: Timeline around how long that typically takes and does the pause for new applications potentially accelerate the timeline for extensions.

Speaker Change: Allocation of resource issues.

Speaker Change: No. We have we have used the extension process for different projects in the past and I would say there is not a standard timeline for that I think we were just pleased to see the dose confirmed that it was a separate separate process for extensions rather than for new filings. The filing that we've made for port Arthur Phase II is pending we just have to wait through this process.

Jeffrey Walker Martin: And one of the things I think that you and I have discussed before, if you look at slide 10, at the last, you know, 5 or 6 years, or go back over 10 years or 15 or 20, Sempra is one of those few companies that's been able to achieve earnings per share growth in that 7 to 10 percent range over long periods of time. Now, we're certainly forecasting the 6 to 8 percent on a go-forward basis, but the key takeaway from this plan is that we have a lot of confidence in our ability to deliver that. I think, as you've noted in your prior research, I've often indicated that I would be disappointed if we didn't outperform the high end of that range. That's super helpful.

Speaker Change: So the pause, but I think one of the points.

Ryan just a made in his discussion was.

Speaker Change: We have a whole series of development milestones that we're pursuing for port Arthur Phase two we think it's a very attractive commercially viable project.

Speaker Change: Those milestones we've worked through concurrently with the ultimate permitting process. So.

Speaker Change: Whether it ends up being a delay for that project course actually completed consistent with the timeline to other milestones remains to be seen.

Speaker Change: Okay. Thank you.

Alan Nye: And then maybe just to follow up on Texas, I think you mentioned in the slides planning for 2% annual premise growth. Do you think that could be conservative just based on what you've seen recently and the different growth opportunities that you've seen in Texas? Yeah, I mentioned that over half of our planning increase came from Texas, and I wouldn't mind having Alan kind of walk us through the system, where the growth is showing up. The story in Texas, I think, which is quite unique, is not just that it's the diversity of the growth in Texas, not just on the premises side, but it's also the amount of it, Carly, that's allocated to transmission.

Speaker Change: Thank you very much.

Speaker Change: Thank you that concludes today's question and answer session. At this time I would like to turn the conference back to Jeff Martin for any additional closing remarks.

Jeffrey Walker Martin: I wanted to briefly thank everyone for joining us today I know there were several competing calls and even conferences. This morning. So we appreciate everyone taking the time to join US. If there are any follow up items. Please reach out to our IR team with any questions. Thank you again and this concludes our call.

Speaker Change: Thank you for your participation you may now disconnect.

Speaker Change: Okay.

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Jeffrey Walker Martin: I don't think there's another growth story in the United States where the majority of the capex is related to transmission, and the reason that's important is Alan's team has the lowest transmission distribution bills in the state, and transmission projects, because they benefit all rate payers in the state, get socialized across all the different jurisdictions. But Alan, to Carly's point, maybe you could talk about premise growth, more broadly, the growth that has shown up on the system. Yeah, sure.

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Alan Nye: Thanks, Jeff, and hey, Carly. Really interesting question, given what we're seeing on our system, and as Jeff said, and as I said in my opening remarks, we continue to see really very strong, record-breaking growth across our system. You know, as I mentioned in my opening remarks, premise growth remains very strong, 73,000 last year, a 14 percent increase year over year. From a transmission perspective, transmission points of interconnection, you know, very large customers connecting at transmission voltage.

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Alan Nye: We set new year-end records for new and active points of interconnection, 23. Old interconnections are up 25 percent year over year. New interconnections are up 19 percent year over year. And then, you know, we always break it down into retail and generation.

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Alan Nye: Retail is up 13 percent, but I want to pause there on the 13 percent. So we go from 250 at the end of 22 to 282 at the end of 23. But something to Jeff's point that's significant about our growth is not only the numbers but the kind of the magnitude and the diversity of the customers. And so, in these retail numbers, of the 282 retail point of interconnection requests we presently have, 46 of those are between 300 megawatts and 2,600 megawatts individually in size. We actually have about 28 that are between 3 and 600 megawatts apiece, and we have about 18 that are between 600 and 2.6 gigawatts. So very long, very strong growth numerically just in the increase of the numbers, but also, what we're seeing is the size of the customers. Excuse me.

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Alan Nye: On the generation interconnection side, we see an increase of 34 percent year over year. West Texas, we always talk about West Texas, continues to be a very strong story for us with the far west Texas weather zone peak increasing by 16.6% year over year. The two transmission, you know, circuits or rather loops that we use to serve that part of the state, the Culverson loop saw a peak that was almost 18% above the prior year's peak, and Stanton increased about 20, just under 24%. So really, really incredibly strong growth across our system. Breakdown of CAPEX, Jeff? Sure.

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Alan Nye: A breakdown of our 24.2. It's on slide 48 of the appendix. Just to break it down a little further, we've got about $5.1 billion in distribution expansion, about $13.5 billion in transmission expansion, which is a point Jeff made moments ago. About $4.2 billion in maintenance capital, and then about $1.4 billion in tech.

Speaker Change: Okay.

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Alan Nye: And to Jeff's point, three things here just to conclude. One... 70 percent, a little over 70 percent, actually, of all this capex is pure growth capital. About 97 percent of this five-year plan is subject to recovery through our trackers. And then, to Jeff's point specifically, a little over 60 percent of all this capital we're talking about is transmission, which obviously benefits everyone in the state and, therefore, is spread across the state evenly, which helps us both with growth. Capital, as well as the fact that a heavy emphasis on transmission really allows us to stay where we want to be, which is among the low-cost providers in the state.

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Alan Nye: Yeah, excellent. Very clear. Thanks for all that detail.

Okay.

Speaker Change: Thank you.

Speaker Change: Yes.

Carly Davenport: We appreciate the time. Thank you, Carly. Thank you. We now have time for one more question, and it will be from Ryan Levine from Citi. Your line is open. Hi, everybody. Hi, Ryan.

Speaker Change: Yes.

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Ryan Levine: Hi. Two questions, one on transmission and the prepared remarks. Thank you all for joining us today. Do we expect an outcome there, or just further updates as there's a range of... scenarios that could play out? Thank you for that question, Ryan. I'll let Trevor respond. Sure, Jeff. Hey, Ryan.

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Trevor Ian Mihalik: Yeah, I think, you know, we'll get a decision as to who's going to get selected in late April, and then there are 120 days for negotiations to happen for a final outcome. So I would say, you know, expect something in the next four months. And then on LNG, I appreciate the clarification around the non-FTA permit extension and those new applications. In terms of non-FTA permitting... Is there a historical timeline around how long that typically takes, and does the pause for new applications potentially accelerate the timeline for, out. Now, we have used the extension process for different projects in the past, and I would say there's not a standard timeline for that.

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Jeffrey Walker Martin: I think we were just pleased to see the DOE confirm that it was a separate process for extensions rather than for new filings. The filing that we've made for Port Arthur Phase II is pending. We just have to wait through this process of the pause.

Jeffrey Walker Martin: I think one of the points, Ryan, that Justin made in his discussion was that we have a whole series of development milestones that we're pursuing for Port Arthur Phase II. We think it's a very attractive, commercially viable project. And I think those milestones we've worked through concurrently with the ultimate permitting process. So whether it ends up being a delay for the project or it's actually completed, consistent with the timeline for other milestones remains to be seen. OK. Thank you very much.

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Ryan Levine: Thank you. That concludes today's question and answer session. At this time, I'd like to turn the conference back to Jeff Martin for any additional closing remarks. I wanted to briefly thank everyone for joining us today.

Speaker Change: Okay.

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Jeffrey Walker Martin: I know there were several competing calls and even conferences this morning, so we appreciate everyone making the time to join us. If there are any follow-up items, please reach out to our IR team with any questions. Thank you again, and this concludes our call. Thank you for your participation. You may now disconnect.

Speaker Change: David.

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Glenn Donovan: ??? ??? ??? ??? ??? ??? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good day and welcome to Sempra's fourth quarter earnings call. Today's conference is being recorded. At this time, I'd like to turn it over to Glenn Donovan. Please go ahead.

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Glenn Donovan: Good morning, and welcome to Sempra's fourth quarter 2023 earnings call. The live webcast of this teleconference and slide presentation are available on our website under our events and presentations. We have several members of our management team with us today, including Jeff Martin, Chairman and Chief Executive Officer, and Karen Sedrick, Executive Vice President and Chief Financial Officer. Trevor Mihalik, Executive Vice President and Group President, Sempra California. Alan Nye, Chief Executive Officer, Encore.

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Speaker Change: Good day and welcome to <unk> fourth quarter earnings call Today's conference is being recorded.

Speaker Change: At this time I'd like to turn it over to Glenn Donovan. Please go ahead.

Glenn Donovan: Justin Byrd, Executive Vice President and Chief Executive Officer of Sempra Infrastructure; Peter Wall, Senior Vice President, Controller, and Chief Accounting Officer, and other members of our senior management. Before starting, I'd like to remind everyone that we'll be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1994. However, actual results may differ materially from those projected in any forward-looking statement we make today.

Glenn Donovan: Good morning, and welcome to <unk> fourth quarter 2023 earnings call.

Glenn Donovan: A live webcast of this teleconference and slide presentation are available on our website under events and presentations section.

Glenn Donovan: We have several members of our management team with us today, including Jeff Martin Chairman and Chief Executive Officer.

Glenn Donovan: Kieran Cedric Executive Vice President and Chief Financial Officer.

Glenn Donovan: Trevor Mihalik Executive Vice President and group President Semper, California.

Glenn Donovan: Allen Nye, Chief Executive Officer of Encore.

Glenn Donovan: Justin Bird Executive Vice President and Chief Executive Officer of infrastructure Peter.

Glenn Donovan: The factors that could cause our actual results to differ materially are discussed in the company's most recent 10-K filed with the SEC. Earnings per common share amounts in our presentation are shown on a diluted basis, and we'll be discussing certain non-GAAP financial measures. Please refer to the presentation slides that accompany this call for a reconciliation.

Glenn Donovan: Peter Wall, Senior Vice President Controller, and Chief Accounting Officer, and other members of our senior management team.

Glenn Donovan: Before starting I would like to remind everyone that we'll be discussing forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.

Glenn Donovan: Actual results may differ materially from those projected in any forward looking statements we make today.

Glenn Donovan: We also encourage you to review our 10K for the year ended December 31st, 2023. Please note that all share and per share amounts reflect the two for one of our common stock in the form of a 100% stock dividend that we announced on the second quarter call and distributed in an I'd also like to mention that the four looking statements contained in this presentation speak only of today, February 27th, 2024, and it's important to note that the company does not assume any obligation to update or revise any of these four looking statements in the future. With that Thank you, Glenn.

Glenn Donovan: Factors that could cause our actual results to differ materially are discussed in the company's most recent 10-K filed with the SEC.

Glenn Donovan: Earnings per common share amounts in our presentation are shown on a diluted basis.

Glenn Donovan: We'll be discussing certain non-GAAP financial measures.

Glenn Donovan: Please refer to the presentation slides that accompany this call for a reconciliation to GAAP measures.

Glenn Donovan: We also encourage you to review our 10-K for the year ended December 31 2023.

Glenn Donovan: Please note that all share and per share amounts reflect the two for one split of our common stock in the form of a 100% stock dividend that we announced in the second quarter call and distributed in August.

Jeffrey Walker Martin: And thank you all for joining us today. Over the last several months, we've spent time with investors and the research community, soliciting feedback on ways to make today's call more informative. In response to your feedback, we'll be providing more information, from more exact. I'll start off by summarizing our recent business accomplishments and our corporate strategy, and will be followed by the leaders of each of our business platforms who will likewise summarize their accomplishments, business model, and expected capital Karen will close out today's presentation with a review of our Q4 and full year financial results and outline our new 2024 to 2028 capital plan. We' Now turning to 2023, it was a strong year of operating and financial performance for us, and in large measure a credit to our corporate strategy and our success in simplifying our business model. At Sempra, we're focused on making disciplined investments in large and growing economic markets. They are looking to modernize their energy networks and connect communities to safer, more reliable, and cleaner energy.

Glenn Donovan: Also like to mention that the forward looking statements contained in this presentation speak only as of today February 27, 2024, and it is important to note that the company does not assume any obligation to update or revise any of these forward looking statements in the future.

Glenn Donovan: With that please turn to slide five and let me hand, the call over to Jeff.

Jeffrey Walker Martin: Thank you Glenn and thank you all for joining us today over the last several months, we spent time with investors and the research community.

Jeffrey Walker Martin: Listening feedback on ways to make today's call more informative.

Jeffrey Walker Martin: In response to your feedback will be providing more information today from more executives I'll start off by summarizing our recent business accomplishments and our corporate strategy and will be followed by the leaders of each of our business platforms, who will likewise summarize their accomplishments business model and expected capital deployment.

Jeffrey Walker Martin: Karen will close out today's presentation with a review of our Q4 and full year financial results and outline our new 2024 to 2028 capital plan.

Karen: We will also be sure to save time at the end to take your questions.

Now turning to 2023, it was a strong year of operating and financial performance for our company and in large measure is a credit to our corporate strategy and our success in simplifying our business model at.

Karen: At <unk>, we're focused on making disciplined investments in large and growing economic markets that are looking to modernize and energy networks and connect communities safer more reliable and cleaner energy.

Jeffrey Walker Martin: Over the last five years, this strategy has allowed us to build significant scale into our business for the benefit of customers and shareholders. As we previewed on our third quarter call in November, I'm excited to announce that our capital plan has increased by 20 percent to a new company record of $48 billion, with more than 90% allocated to regulated transmission and distribution. Trevor, Alan, and Justin will go into more detail later in today's presentation, but the overall scope and size of our capital plan really speaks to the robust markets we operate in and the magnitude of the growth opportunities that are in front of our company. Turning to our 2023 financial results, we delivered adjusted EPS of $4.61, exceeding the high end of our guidance and providing support to narrow our full year 2024 EPS guidance range. $4.60.

Over the last five years. This strategy has allowed us to build significant scale into our business for the benefit of customers and shareholders.

Karen: As we previewed on our third quarter call in November I am excited to announce that our capital plan has increased by 20% to a new company record of $48 billion.

Karen: With more than 90% allocated in our regulated transmission and distribution investments.

Karen: Trevor Alan adjustment will go into more detail later in today's presentation, but the overall scope and size of our capital plan really speaks to the robust markets. We operate in and the magnitude of the growth opportunities that are in front of our company.

Karen: Turning to our 2023 financial results, we delivered adjusted EPS of $4 61.

Karen: Exceeding the high end of our guidance and providing support to narrow our full year 2024, EPS guidance range to $4 60.

Jeffrey Walker Martin: $4.90. This morning we're also announcing full year 2025 EPS guidance range of $4.90 to $5.25, which represents approximately 7% growth from the midpoint of the prior guidance. Based upon the continued growth we're seeing across our three T&D growth platforms, we're affirming our projected long-term EPS growth rate of 6 to 8%. Finally, we're also pleased to announce the Board of Directors-approved increase in our dividend for the 14th consecutive year to $2.48 per share. Please turn to the next slide.

Karen: To $4 90.

Karen: This morning, we're also announcing full year 2025, EPS guidance range of <unk>.

Karen: $4 90.

Karen: To $5 25.

Karen: Which represents approximately 7% growth from the midpoint of the prior guidance range.

Karen: Based upon the continued growth we're seeing across our three T&D growth platforms. We're affirming our projected long term EPS growth rate of 6% to 8%.

Karen: Finally, we're also pleased to announce the board of directors approved increase in our dividend for the 14th consecutive year to $2 48 per share.

Karen: Please turn to the next slide.

Jeffrey Walker Martin: For the past several years, the United States has experienced significant economic uncertainty due to higher inflation, supply chain disruptions, and higher interest rates. Against this backdrop, Sempra delivered strong financial performance in 2023 with record-adjusted earnings and record-adjusted revenue. Also, over the last several years, our investment strategy has consistently prioritized making investments in energy networks in California and Texas, and this has allowed us to grow our rate base in those markets at the end of 2023 to just over $50 billion. Looking forward, one of the primary benefits of rolling out an expanded capital plan is that it provides unique visibility to the strength of our long-term earnings. Also, it's important to note that our equity offering last November was successful in mitigating future equity needs associated with our new program.

Karen: For the past several years, the United States has experienced significant economic uncertainty due to higher inflation supply chain disruptions and higher interest rates.

Karen: Against this backdrop <unk> delivered strong financial performance in 2023 with record adjusted earnings and record adjusted earnings per share.

Karen: Also over the last several years, our investment strategy has consistently prioritized, making investments in energy networks in California and Texas.

Karen: And this has allowed us to grow our rate base in those markets at the end of 2023 to just over $50 billion.

Karen: Looking forward one of the primary benefits of rolling out an expanded capital plan is that it provides unique visibility to the strength of our long term earnings growth.

Karen: Also it's important to note that our equity offering last November was successful in mitigating future equity needs associated with our new plan.

Jeffrey Walker Martin: On the regulatory front, we've made several advances highlighting the constructed nature of the jurisdictions where we operate and our ability to work effectively with key stakeholders. In California, the cost of capital mechanism was triggered, and as a result, SDG&E and SoCal Gas increased their authorized ROEs last year. We also reached a proposed settlement with certain intervenors for a portion of our pending rate cases, which we view constructive. Turning to Texas, Encore successfully completed its base rate review last spring.

Karen: On the regulatory front, we've made several advances highlighting the constructive nature of the jurisdictions, where we operate and our ability to work effectively with key stakeholders in California, or the cost of capital mechanism triggered as a result, <unk> and socal gas increased their authorized ROE last month, we all.

Karen: Also reached a proposed settlement with certain intervenors for a portion of our pending rate cases, which we view constructively.

Karen: Turning to Texas Oncor successfully completed its base rate review last spring.

Jeffrey Walker Martin: Also, several important pieces of legislation were passed that support new investments in transmission and distribution that benefit customers and the continued growth of the state's economy. Also, at Sempra Infrastructure, we declared positive FID on Port Arthur LNG Phase 1. We secured financing and began construction. We continue to make steady progress on our development. While the pause on non-FT export permits has impacted the sector, we're confident in the commercial value of our projects and will continue to develop these critical infrastructure assets on a reasonable timeline. Justin will address this topic further in his.

Karen: Also several important pieces of legislation, we're past that support new investments in transmission and distribution that benefit customers and the continued growth of the state's economy.

Karen: Also it simpler infrastructure, we declared positive.

Karen: On Port Arthur LNG Phase, one secured financing and began construction we continue to make steady progress on our development projects.

Karen: While the pause on non FTA export permits has impacted the sector. We are confident in the commercial value of our projects and we will continue to develop these critical infrastructure assets on a reasonable timeline.

Karen: Justin will address this topic further in his section.

Jeffrey Walker Martin: Please turn to the next slide. Sempra is building critical new infrastructure designed to support economic and population growth while providing attractive financial returns to its owners. Through 2050, global GDP is expected to more than double, much of which will come from emerging economies, driving the need for incremental energy. Going forward, we strongly believe renewables, natural gas, and cleaner molecules will be critical in meeting rising energy demand as we transition to an energy future with lower carbon intensity. As an example, United States natural gas production set a record during 2023 for the third consecutive year, fueled by strong domestic demand and record LNG exports, all while Please turn to the next slide. As we modernize our energy grids, the IEA estimates that $11 trillion is expected to be spent in the North American energy sector through 2050, with over $5 trillion focused on T&D. Please turn to the next slide.

Please turn to the next slide.

Karen: <unk> building critical new infrastructure designed to support economic and population growth, while providing attractive financial returns to our owners.

Karen: Through 2050 global GDP is expected to more than double much of which will come from emerging economies driving the need for incremental energy resources.

Karen: Going forward, we strongly believe renewables natural gas and cleaner molecules will be critical in meeting rising energy demand as we transitioned to an energy future with lower carbon intensity.

Karen: As an example, United States natural gas production set a record during 2023 for the third consecutive year fueled by strong domestic demand and record LNG exports, all while still achieving lower carbon emissions over the past several decades as renewables and cleaner burning natural gas replace coal.

Karen: As a fuel source and power generation. Please.

Karen: Please turn to the next slide.

Karen: As we modernize our energy grids. The IEA estimates that <unk> 11 trillion dollars are expected to be spent in the north American energy sector through 2050 with over five trillion dollars focused on T&D investments.

Karen: Please turn to the next slide.

Jeffrey Walker Martin: As we've outlined in the past, we've been disciplined in maintaining our focus on what we believe is the higher value, lower risk portion of the energy value chain. In the T&D segment, we make disciplined investments with a view toward producing high quality recurring cash from Regulated Utilities and Long-Term Contracted Assets that Generally Grow with Inflation. Please turn to the next page

Karen: As we've outlined in the past we've been disciplined in maintaining our focus on what we believe is the higher value lower risk portion of the energy value chain in the T&D segment, we make disciplined investments with the view toward producing high quality recurring cash flows from our regulated utilities and long term contracted assets that.

Karen: Generally grow with inflation please.

Karen: Please turn to the next slide.

Jeffrey Walker Martin: As you can see here, our strategy, combined with disciplined capital allocation, has allowed us to successfully meet or exceed our EPS guidance range for the last six years. Furthermore, over this same time period, our adjusted EPS has compounded annually at approximately 10% since 2018, which is in the top decile amongst our peers. Please turn to the next page

Karen: As you can see here our strategy combined with disciplined capital allocation has allowed us to successfully meet or exceed our EPS guidance range for the last six years.

Karen: Over this same time period, our adjusted EPS has compounded annually at approximately 10% since 2018, which is top decile amongst our peers.

Karen: Please turn to the next slide.

Jeffrey Walker Martin: Improving our corporate strategy has allowed us to build significant scale into our business for the benefit of our customers and shareholders, and that's been demonstrated by the consistency of our financial performance. It's also noteworthy that we've accomplished this across different market cycles that have included a global pandemic, supply chain shortages, high inflation, rising interest rates, and geopolitical unrest. In short, our disciplined execution has consistently delivered. Total shareholder returns are at levels that are well above our peers. Please turn to the next page.

Karen: Improving our corporate strategy has allowed us to build significant scale into our business for the benefit of our customers and shareholders and that's been demonstrated by the consistency of our financial performance.

Karen: It's also noteworthy that we've accomplished this across different market cycles that have included a global pandemic supply chain shortages high inflation rising interest rates and geopolitical unrest.

Karen: In short our disciplined execution has consistently delivered total shareholder returns at levels that are well above our peer group.

Karen: Please turn to the next slide.

Before I hand the call to Trevor, I'd like to reiterate our key investment highlights. We own high-quality T&D growth platforms located in California and Texas and some of North America's most attractive economic markets that also benefit from constructive regulation. We exercise a disciplined approach to capital allocation and are excited to launch our new five-year capital plan of $48 billion. We believe this sets out a clear roadmap for our future growth and supports our expected long-term EPS growth rate of 6 to 8 percent. In conclusion, we're proud of our recent accomplishments and the growing strength of our business friends. Across our management team, there's a lot of excitement about the opportunities that are ahead of us. Now please turn to the next slide, where Trevor will walk you through the business updates at Sempra California. Thanks.

Speaker Change: Before I hand, the call to Trevor I would like to reiterate our key investment highlights.

Trevor: We own high quality T&D growth platforms, located in California, and Texas and some of North America's most attractive economic markets that also benefit from constructive regulation we.

Trevor: We exercise a disciplined approach to capital allocation and are excited to launch our new five year capital plan of $48 billion.

Trevor: We believe this sets out a clear roadmap for our future growth and supports our expected long term EPS growth rate of 6% to 8%.

Trevor: In conclusion, we're proud of our recent accomplishments and the growing strength of our business franchise across our management team. There is a lot of excitement about the opportunities that are ahead of us.

Trevor: Now please turn to the next slide where Trevor will walk you through the business updates at Central California.

Let me start by highlighting the financial results. Earnings for the full year 2023 were $1.75 billion, benefiting from $4.6 billion of capital investment focused on safety, reliability, and wildfire mitigation. These investments will increase rate base by 11% over 2020. We have long emphasized California's constructive regulatory approach, including forward-looking rate cases. Access to the Cost of Capital Mechanism and an established wildfire. And this year, we had several positive regulatory outcomes that reinforced our conviction. Supports Attracting Capital to the State, as Jeff mentioned. Last fall, the cost of capital mechanism was triggered, and the CPUC approved increasing our authorized ROE at SDG&E and SoCalGas by 70 basis points. This increase was effective January 1, 2020. In October, we reached settlements were in.

Trevor: Thanks, Jeff.

Trevor: Let me start by highlighting the financial results, except for California.

Trevor: Earnings for the full year 2023 were $1 75 billion benefiting from $4 6 billion of capital investments.

Trevor: Just on safety reliability and wildfire mitigation.

Trevor: These investments increased rate base by 11% over 2022.

Trevor: We have long emphasized California's constructive regulatory compact, including forward looking rate cases access to the cost of capital mechanism and an established wildfire fund.

Trevor: This year, we had several positive regulatory outcomes that reinforced our conviction and supports attracting capital to the states.

Trevor: As Jeff mentioned last fall the cost of capital mechanism triggered.

Trevor: And the CPUC approved increasing our authorized ROE.

Trevor: <unk> and socal gas by 70 basis points.

This increase was effective January one 2024.

Trevor: In October we reached settlements.