DBA Sempra

Please stand by. We're about to begin. Good day and welcome to the Sempra Energy fourth quarter earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Nelly Molina, Vice President of Investor Relations.

Good morning, everyone, and welcome to our fourth quarter 2020 earnings call for Sempra Energy. A live webcast of this teleconference and its live presentation is available on our website under the investor section. With us today on the line, we have several members of our management team, including Jeff Martin, Chairman and Chief Executive Officer, Trevor Mihalik, Executive Vice President and Chief Financial Officer, Justin Bird, Chief Executive Officer of Sempra LNG, Kevin Sagara, Group President, Don Clevenger, Chief Financial Officer of Oncor, and Peter Wall, Senior Vice President, Controller, and 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 projected in any forward-looking statement we make today. 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. All of the earnings per share amount 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 to GAAP measures. I'd also like to mention that the forward-looking statements contained in this presentation speak only as of today, February 25th, 2021, and the company does not assume any obligation to update or revise any of these forward-looking statements in the future. Lastly, as you know, due to our filings in the U.S. and Mexico, we're limited in what we can say about the proposed Yanovas exchange offer and will be unable to respond to questions about these transactions. With that, please turn to slide four and let me hand the call over to Jeff.

Thanks a lot, Nelly, and thank you all for joining us today. To start, I'd like to take a moment to thank all of our employees and partners for their dedication and professionalism throughout 2020 in continuing to serve over 36 million consumers. I'd also like to briefly touch upon the extreme weather events that transpired last week. Our thoughts are with all those who have been impacted and the Encore employees who are tirelessly working to maintain the integrity of the grid in Texas. We've often discussed our investment strategy and how it's focused on building 21st century energy networks or transmission and distribution investments, that are essential to modern life, and the past year really highlights the importance of those essential services and why new investments will be needed to keep the grid growing and improving its resiliency. I'm pleased to report that in 2020, we also delivered strong financial and operating performance, creating positive momentum heading into 2021 as we build on our mission to be North America's premier energy infrastructure company. Turning to the financial results, Earlier this morning, we reported full-year 2020 adjusted earnings of $8.03 per share, the highest in our company's history. We also exceeded our previously increased 2020 adjusted EPS guidance range, which reflects our firm resolve to always try to meet or exceed our commitments. In line with this positive momentum, we're reaffirming our 2021 EPS guidance range. I'd also like to mention that this guidance range excludes impacts of the proposed ANOVA exchange offer and the sale of a non-controlling interest in separate infrastructure partners. Additionally, for the 11th consecutive year we're raising our dividend. Our Board of Directors approved an increase to our annualized dividend to $4.40 per share from $4.18 per share. While future dividends are at the discretion of the Board, we plan to target a 50% to 60% dividend payout ratio. This demonstrates our commitment to generating value for our shareholders by continuing to grow the dividend while also reinvesting in the future growth of the business. Now please turn to the next slide, where I'll highlight some of our more notable accomplishments for the year. Our strong performance is attributable to our strategic focus on value creation, a track record of discipline execution, and operational excellence. We're proud of our many accomplishments in 2020. We continue to advance our capital plan with approximately $7 billion spent in 2020, which continues to be anchored around safety and reliability investments at our U.S. utilities. We also completed the sale of our South American businesses in June amidst the backdrop of a global pandemic and international travel restrictions. This was a terrific accomplishment and a credit to our talented team and marks the full completion of our multi-year strategic capital rotation program, which has allowed us to successfully reposition our business in what we believe to be the most attractive markets in North America. In line with our consistent focus on creating value for our shareholders in December, we announced a series of integrated transactions intended to simplify our energy infrastructure businesses under one growth platform. This platform is also intended to create scale and strategic alignment while unlocking value by selling a non-controlling interest to a strategic partner. Trevor will provide an update on the progress later on in the presentation. Financially, we've achieved strong results, raising our 2020 adjusted EPS guidance range last June and today significantly exceeding that increased range. Additionally, we made great progress on our five-year capital plan while also executing a $500 million share buyback program. Fundamentally, across our U.S. utilities and infrastructure platforms, we remain focused on investing and growing our businesses. And to a point that I've made previously, We're allocating capital into a lower risk portion of the energy value chain in what we believe are the most attractive markets in North America. That really is the centerpiece of our strategy and is reflected in the strength of today's results. Please turn to the next slide. Our 2020 accomplishments are a testament to the remarkable growth we're continuing to see at our utilities. Our 2020 financial results were underpinned by strong performance grounded in safety and reliability. We also ended the period with approximately $37 billion of total combined rate base, of which nearly 74% is from electric T&D investments. So the key takeaway here is our two-year capital rotation program was specifically designed to build out this position as a leader in our North American energy networks in order to improve the strength and consistency of our financial results which has clearly been demonstrated over the last several years. Looking to the future, we believe our utilities platform will benefit from growth opportunities associated with serving the largest consumer base in the United States and operating in markets with the highest concentration of manufacturing and industrial production that, in combination, make up nearly a quarter of the total GDP of the United States. In addition to growth, I also want to mention several other competitive advantages that that allow our utilities to be successful in a variety of market conditions, such as decoupled revenues in California, constructive authorized ROEs averaging just over 10 percent, and constructive regulatory environments that support serving growth and investing to meet bold sustainability goals that further our efforts to decarbonize energy and also improve the safety and reliability of our system. Our California utilities have over 10 hydrogen research and development projects. We expect to showcase as well as other innovations that we have underway at our investor day later this spring. Now please turn to the next slide, but I'll turn the call over to Trevor to provide both business and financial updates.