DBA Sempra

Good day and welcome to the Sempra Energy second quarter earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Faisal Khan. Please go ahead.

Good morning and welcome to Sempra Energy's second quarter 2020 earnings call. A live webcast of this teleconference and slide presentation is available on our website under the investor section. Several members of our management team are on the line with us today, including Jeff Martin, Chairman and Chief Executive Officer, Trevor Mahalik, Executive Vice President and Chief Financial Officer, Justin Bird, Chief Executive Officer of Sempra LNG, Alan Nye, Chief Executive Officer of Encore, Kevin Segarra, Group President, and Peter Wall, Senior Vice President, Controller, Chief Accounting Officer. 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 1995. Actual results may differ materially from those discussed today. The factors that could cause our actual results to differ materially are discussed in the company's most recent 10-K and 10-Q file with the SEC. All of the earnings per share amounts in our presentation are shown on a diluted basis and will be discussing certain non-GAAP financial measures. Please refer to the presentation slides that accompany this call for a reconciliation of GAAP measures. I'd also like to mention that the forward-looking statements contained in this presentation speak only as of today, August 5th, 2020, and the company does not assume any obligation to update or revise any of these forward-looking statements in the future. With that, please turn to slide four and let me hand the call over to Jeff.

Thank you, Faisal, and thank you all for joining us today. Two years ago, we laid out a strategic plan to divest non-core assets and reposition our business in the most attractive growth markets right here in North America. The plan also called for concentrating our investments in a more narrow segment of the energy value chain with the goal of improving our financial results. I'm proud to report that our strategy is working. You recall that our financial results in 2019 significantly exceeded our original guidance, and this year, we're pleased to have increased our 2020 EPS guidance range, completed our capital rotation program, generating total gross proceeds of $8.3 billion, continued executing our utility-centered capital program while deferring about $500 million of infrastructure capital, and at the end of last week, We reached substantial completion at Cameron Train 3 with commercial operations and full cash flows from all three trains expected in the coming days. Given the quality and strength of our earnings and particularly the visibility we now have to our future growth, we believe recent share price performance doesn't reflect the value of our company nor its growth prospects. Because of this, we've made the decision to buy back $500 million of our stock and received approval from our board for new authority of $2 billion for share repurchases. We're committed to being prudent stewards of your capital and will continue to look for ways to drive additional value back to our shareholders. Turning to our financial results for the quarter, we are benefiting from more concentrated investments in our T&D portfolio. Our adjusted earnings results for the first half of 2020 are up over 50% when compared to last year primarily driven by the results by U.S. Utilities and Cameron. We've already touched on our revised EPS guidance range for 2020, but I'd like to also highlight that we're also affirming our 2021 EPS guidance range as well. Now, please turn to slide five, where I'll provide an overview of our recently completed capital rotation program. The sale of our Chilean businesses in June for approximately $2.2 billion was the final transaction in our strategic capital rotation program and really sets us up well for the future. When we set out on this path at the end of 2017, we had just finished the year with adjusted earnings per share of $5.42. Since then, we've recycled approximately $27 billion in firm value back into our business with a focus on T&D infrastructure, invested close to $16 billion of growth capital in our utility and infrastructure businesses and raised the midpoint of our 2020 adjusted EPS guidance range from $7.10 to $7.50, close to a 40% projected increase over our 2017 results. Our company-wide commitment to operational excellence has led to the strong execution of this strategy, and our employees deserve a ton of credit. We are today more strategically focused, more profitable, and more optimistic about our future growth prospects. And it's all tied to making further progress on our mission to build North America's premier energy infrastructure company. Please turn to the next slide. Our ongoing focus on safety and reliability remains paramount and is a critical component of our overall mission. Here at Semper, our number one priority continues to be the health and well-being of all of our employees, customers, and the communities we serve. We've built a strong safety and performance culture throughout our organization. I cannot be more proud of the ongoing commitment and dedication of all of our employees to providing essential, safe, and reliable service to over 35 million consumers. We also continue to support our communities through charitable giving, donating over $13 million to local health and welfare areas since the start of the pandemic. As we look ahead, we're continuing to plan for the safe reentry back to the workplace. We continue to be thoughtful and strategic about returning to the office in a phased approach that considers specific work locations and personnel requirements while adhering to the latest safety guidelines. From an operational perspective, we built a strong and sustainable business that can successfully operate in a variety of challenging environments by decoupled revenues at our T&D utilities in California, investments in the largest T&D provider in Texas with no exposure to generation and regulatory protection from retail risk, tolling contracts with A-rated customers that are also our equity partners at Cameron LNG, and critical operating infrastructure in Mexico with dollar-denominated long-term contracts with an average tenor in excess of 20 years. Our strong financial results year-to-date highlight this sustainable business model. Please turn to the next slide. Across our businesses, we're invested in the portion of the energy value chain that we believe will provide the best risk-adjusted returns. Nearly all of our five-year capital plans expected to be invested in transmission and distribution projects. Through our narrowed geographic footprint, sustainable business model, and focus on T&D investments, we believe we've created an infrastructure portfolio with strong cash flows to support a growing dividend and improve visibility to future earnings growth. Now I'll turn the call over to Trevor to discuss our capital allocation approach as well as our operational and financial results.