DBA Sempra

Good day and welcome to SEMPRA's second 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.

Good morning and welcome to SEMPRA's second quarter 2024 earnings call. A 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. Karen Cedric, Executive Vice President and Chief Financial Officer. Trevor Mihalik, Executive Vice President and Group President, Sempra California. Justin Byrd, Executive Vice President and Chief Executive Officer of Sempra Infrastructure. Alan Nye, Chief Executive Officer of Encore. Peter Wall, Senior Vice President, Controller and Chief Accounting Officer. and other members of our senior management team. 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 and 10 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 reconciliation to GAAP measures. We also encourage you to review our 10-2 for the quarter ended June 30, 2024. I'd also like to mention that four looking statements contained in this presentation speak only of today, August 6, 2024, and it's important to note that 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, Glenn, and thank you all for joining us today. As we close out the first half of the year, we continue our focus on safety and operational excellence, and we're pleased with the strength of our financial performance. This actually sets us up well in the second half of the year while also supporting our confidence in a projected long-term EPS growth rate of 6% to 8%. And more importantly, we think there's a lot to be excited about. At Sempra California, we continue to play a critical role in helping the state achieve its safety, reliability, and decarbonization goals. That's why we continue to make important investments to improve safety, modernize the grid, and better support the delivery of cleaner forms of energy. We also look forward to advancing our general rate cases here in the state and anticipate a proposed decision later this summer with a final decision expected before the end of the year. The outcome of the GRC is expected to help our utilities better meet the state's public policy goals, advance reliability and community safety, and improve visibility to our plan of execution through 2027. At Semper Texas, Encore continues to see remarkable growth, and it's coming from a wide range of industries, including manufacturing, technology, and digital infrastructure. Annual premise growth, as one example, continues to trend around 2%, which is almost double the national average. Alan will walk through how electricity demand is impacting the Texas grid and also driving the need for new capital investments all across Encore service territory. Against that backdrop, you recall that Encore is currently executing on a record five-year capital plan of roughly $24 billion with a pending regulatory filing to improve system resiliency by investing incremental capital of up to $3 billion from 2025 through 2027. With the remarkable growth in Encore's service territory, we continue to expect to see higher levels of capital spending in the future, and this will be a key consideration in our financial planning process this fall. Finally, SEMPRA infrastructure remains focused on advancing critical infrastructure investments that support the energy transition and enhanced energy security, and we continue to see progress across several key development initiatives. Moving to our financial results for the quarter, earlier this morning, we reported adjusted EPS of 89 cents and year-to-date adjusted EPS of $2.24. As a reminder, these results do not reflect the impact of a final California GRC decision, which we expect before year end with rates retroactively applied to January 1. From my perspective, we've had a great start to the first half of the year. As a result, we're affirming both our full year 2024 adjusted EPS guidance range and our 2025 EPS guidance range. Please turn to the next slide. As a reminder, we view our corporate strategy as an opportunity to assert a competitive advantage in the energy markets, and there are three key elements to our plan of execution. First, we've positioned our portfolio in some of the most attractive economic markets in North America. California and Texas, for example, give our utilities great exposure to increasing demand for new infrastructure investments, while separate infrastructure benefits from strong tailwinds around the reshoring of industry to North America and global demand for improved energy security associated with the export of liquefied natural gas from the United States. Second, we focused our investment strategy in a more narrow part of the energy value chain, namely transmission and distribution investments. By doing so, we aim to improve the quality and recurring nature of our earnings and cash flows while reducing exposure to risk and price volatility. We believe this provides an improved risk reward profile for our owners. And finally, we aggressively compete capital inside our company across all three growth platforms to help ensure we're delivering the best overall returns to our owners. At the end of the day, being good stewards of capital is a top priority and has allowed us to continue delivering attractive risk-adjusted returns. As an example, we've been successful and delivering a 10% adjusted EPS compound annual growth rate since 2018. Next, I'll turn the call over to Alan to walk through the improving growth story that continues to unfold in Texas. Please turn to the next slide.