Sempra Energy (SRE) Updates FY EPS Guidance

Sempra (NYSE: SRE) (BMV: SRE) today announced developments related to its strategy and financial performance.

"At this point in the year, we are pleased with our progress on several key strategic initiatives, including the timing of closing for Sempra Infrastructure, ongoing efforts to reduce litigation risk and improved visibility to the company's financial outlook. With all third-party transaction approvals received and material conditions satisfied, we have scheduled closing on our partnership with KKR on Oct. 1," said Jeffrey W. Martin, chairman and CEO of Sempra. "Also, today's announcement by SoCalGas provides a clear path to resolving material legacy litigation, while also reducing the overall risk to Sempra's portfolio."

Sale of Non-Controlling Interest in Sempra Infrastructure to KKR

Through a series of transactions announced last year, Sempra is forming Sempra Infrastructure, a strategic growth platform that is expected to increase shareholder value by consolidating Sempra's energy infrastructure businesses. The new platform will consist of the company's liquefied natural gas business and its ownership interest in IEnova (Infraestructura Energética Nova, S.A.B. de C.V.) and will invest in incremental capital opportunities associated with non-utility transmission and distribution infrastructure.

In May, Sempra completed its stock-for-stock exchange offer to acquire the publicly owned shares of IEnova. Also, earlier this month, Sempra completed its follow-on cash tender offer to acquire the remaining publicly owned shares of IEnova that were not obtained in the exchange offer. Sempra's ownership interest in IEnova is now 99.92%, and IEnova has submitted a request to applicable Mexican regulators to delist its shares from the Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A.B. de C.V.).

As a next step, Sempra has met all material closing conditions and is scheduled to complete the sale of a non-controlling, 20% interest in Sempra Infrastructure to KKR on Oct. 1. Proceeds from the sale are expected to be used to, among other things, help fund growth across Sempra's capital program, which is centered on its U.S. utilities, and to further strengthen its balance sheet.

Agreements to Resolve Aliso Canyon Litigation

Also today, SoCalGas announced agreements that are expected to resolve substantially all material civil litigation against SoCalGas and Sempra related to the 2015 Aliso Canyon natural gas storage facility leak. As a result of the agreements, SoCalGas will record an after-tax charge of approximately $1.1 billion this month, which will be consolidated in Sempra's third-quarter results. The net, after-tax cash outflows for SoCalGas are expected to ultimately be up to approximately $895 million, after taking into consideration the remaining insurance receivable and other adjustments.

The agreements to resolve the referenced claims are subject to obtaining certain minimum participation levels among the plaintiffs and court approval of the settlement allocation process, among other conditions. For additional information about these agreements to resolve Aliso Canyon natural gas storage facility litigation as well as remaining legal and regulatory proceedings related to the leak, please see the Current Report on Form 8-K filed by Sempra and SoCalGas with the Securities and Exchange Commission today.

Earnings Guidance

In consideration of the foregoing and the continued underlying strength of the company's adjusted financial results, Sempra is updating its 2021 financial guidance. Sempra's full-year 2021 GAAP earnings-per-common-share (EPS) guidance range is updated from $7.41 to $8.01 to $3.83 to $4.43, while the company is also guiding to the upper end of the range for its full-year 2021 adjusted EPS guidance of $7.75 to $8.35. Further, Sempra is reaffirming its full-year 2022 EPS guidance range of $8.10 to $8.70.

(Street sees FY EPS Of $8.13 and FY22 EPS of $8.46)

Today's guidance demonstrates Sempra's confidence in the continued strategic execution and future growth of the company, as it looks to continue delivering long-term sustainable value for shareholders. Sempra remains focused on building top-tier transmission and distribution infrastructure platforms, executing on its robust capital plan, and growing its future earnings.

Non-GAAP Financial Measure

This press release includes Sempra's 2021 adjusted EPS guidance range, which is a non-GAAP financial measure. See the appendix for additional information regarding this non-GAAP financial measure.

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