DBA Sempra

Good day and welcome to SEMPRA's Third 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 Third 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. Justin Byrd, Executive Vice President and Chief Executive Officer of Sempra Infrastructure. Alan Nye, Chief Executive Officer of Encore. Caroline Nguyen, Chief Executive Officer of SDG&E. 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-K and 10-Q 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 to GAAP measures. We also encourage you to review our 10Q for the quarter ended September 30th, 2024. I'd also like to mention that forward-looking statements contained in this presentation speak only of today, November 6th, 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. At SEMPRA, we believe the growth narrative for energy infrastructure continues to strengthen. With economic expansion and rising electricity demand, the United States is at a critical juncture where expanded investment is needed to upgrade and modernize its energy networks. Nationally, we face mounting challenges in the form of aging infrastructure, extreme weather events, and increased demands being placed on finite dispatchable generation resources. These trends confirm a growing need for new infrastructure investments to improve the resiliency of our energy networks, while at the same time extending the grid to new and diverse sources of energy. Consider that by 2030, the United States will need to have invested over $600 billion in transmission and distribution, and that forecast will likely prove conservative due to a series of sector tailwinds. Here's an example. Today, Texas is the eighth largest economy in the world and accounts for the highest level of both consumption and production of energy in the US. The International Energy Agency is now estimating that by 2026, global AI and data centers will require nearly twice the amount of electricity that the state of Texas currently consumes each year. So demand from digital infrastructure is another important growth driver for our sector. It also flags what I believe is an underappreciated investment thesis at Sempra. Here, we believe the best low risk and high growth play on AI is high voltage transmission. Alan will discuss this later in today's call, but there's a significant queue of over 350 gigawatts of generation and storage waiting to come on the grid in Texas. The critical success factor there is the speed at which companies like Encore can build, modernize, and extend the high voltage transmission grid. That's exactly why the Texas legislature passed a bill last session to shorten the permitting timeline for new transmission investments. Not only is Encore expected to build more high-voltage transmission this decade than any other company in America, Encore's regulated transmission investments officially go into rates with tracker filings being made twice annually. So the key takeaway for our industry is with economic expansion and higher expected demand growth, It's reasonable to believe that sector EPS growth will trend higher than historical norms. From my perspective, to outperform the peer group in this environment, it requires four key advantages. Number one, a clear and executable corporate strategy. Number two, exposure to sustained growth in large economic markets with constructive regulation. Number three, economies of scale in operations, technology, and access to capital. And number four, a strong track record of discipline capital allocation. That's why in this higher growth environment, SEMPRA is well positioned to outperform its peer group. We have the leading utility platforms in the two largest economies in the United States, both Texas and California. And we also own an infrastructure business with scale that invests in projects providing secure and cleaner forms of energy, targeting higher equity returns in our utilities and contributing important cash flows that support our balance sheet and capital campaign. Currently, we're in the middle of our fall planning process, and one of the early takeaways from that work is we have improved visibility to a growing portfolio of investment opportunities. Next, turning to our financial results, I'm pleased with the progress the company has made in the third quarter and throughout the year as we continue to await a final GRC decision in California. Earlier this morning, we reported adjusted EPS of 89 cents for the third quarter and year-to-date adjusted EPS of $3.12. As a reminder, these results do not yet reflect the California GRC proposed decision, which is pending before the Commission. Assuming a final decision is received before year-end, the earnings impacts will be applied retroactively to the beginning of 2024. As a result, we're affirming our full year of 2024 adjusted EPS guidance range, 2025 EPS guidance range, and projected long-term EPS growth rate. Next, I'll turn the call over to Alan Nye, who will take us through recent developments at Encore, which I continue to believe has the best growth story in our industry. Please turn to the next slide.