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YEARS AND GOING STRONG

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It is pride in our past that gives us confidence in our future."

Jeffrey W. Martin

Chairman and Chief Executive Officer

Dear fellow shareholders:

We begin 2023 with great optimism. This year marks Sempra’s 25th anniversary — a milestone I am honored to recognize alongside thousands of talented employees across our family of companies. I am incredibly proud of the strong foundation we have built.

Our company has long been committed to service to others, which is symbolized in the humanistic logo that accompanies our brand. At its heart, this commitment to service and the betterment of our community is central to our corporate culture and a constant reminder that we stand tallest when we are successful in finding new and better ways to serve customers, while enabling shareholders and stakeholders alike to thrive.

Today, in many ways, it is pride in our past that gives us confidence in our future. It is from Sempra’s rich tradition of serving others that we understand our role in society and how we can meet the expectations of a growing list of stakeholders. While much has changed over the last quarter-century, our vision — delivering energy with purpose — has remained constant as we embrace each new challenge as an opportunity to create innovative, forward-looking solutions.

This is an important time for our company. Energy infrastructure is a great enabler of prosperity, health and well-being for billions of people around the world. That is why Sempra® is pursuing the dual opportunities of advancing decarbonization and helping to deliver energy security globally, all while improving the resiliency of our delivery of energy in the markets we serve.

At Sempra, our high-performing culture empowers us to deliver results the right way. Safety, affordability and reliability are core priorities of our business strategy as we execute a disciplined capital allocation approach to meet financial goals.

Our 2022 accomplishments include:

  • Achieved outstanding safety records across our platforms.
  • Achieved strong financial results while continuing to support a growing dividend.
  • Delivered total shareholder return of 20% in 2022, which equals a return of 1,191% since we were founded in 1998, as compared to the S&P 500 Utilities and S&P 500 indices, which produced returns of 477% and 435%, respectively, during the same 25-year period.1
  • Hit an all-time high stock price of $176.47 on September 12.2
  • Completed the sale of a non-controlling, 10% interest in Sempra Infrastructure Partners to a subsidiary of Abu Dhabi Investment Authority for $1.7 billion, resulting in Sempra retaining a 70% controlling stake in Sempra Infrastructure Partners.
  • Improved our sustainability programs to earn recognition as the #1 Ranked Utility in America for environmental, social and governance (ESG) and financial performance by Investor’s Business Daily.

1 Total shareholder return for 2022 is calculated for the one-year period ended December 31, 2022. Total shareholder return since Sempra’s founding is calculated for the period from June 29, 1998 through December 31, 2022.
2 Reflects the intraday high price of Sempra’s common stock on September 12, 2022. The closing price of Sempra’s common stock on March 1, 2023 was $147.86.

For the past three years, our Leading 2025 strategic initiative — designed to drive sustained performance and long-term value for our shareholders and all stakeholders in the communities we serve — has guided our decisions.

Our three growth platforms of Sempra California, Sempra Texas and Sempra Infrastructure are building the infrastructure that delivers electricity and cleaner fuels to some of North America’s leading economies. Together, these growth platforms serve a common purpose of helping to meet the world’s expanding decarbonization and energy security goals.

Sempra California

Sempra’s California utilities, San Diego Gas & Electric Co. (SDG&E®) and Southern California Gas Co. (SoCalGas®), are combining the power of research, technology and innovation to support California’s ambitious clean energy goals.

Amid the urgency to address climate change and its impacts, SDG&E worked with thirdparty experts to create The Path to Net Zero: A Decarbonization Roadmap for California, which is an insightful study on how the state could achieve carbon neutrality by 2045 while increasing climate resiliency. In support of that strategy, SDG&E received California Public Utilities Commission (CPUC) approval of 200 megawatts of utility-owned energy storage, a portion of which is expected to support four microgrids located at strategic substations throughout the service territory. These initiatives are just a few of the examples of the operational excellence that earned SDG&E designation by PA Consulting in its ReliabilityOne® awards as the Best in the West for Electric Reliability for the 17th year in a row.

Sempra’s California utilities are participating in more than 20 hydrogen research and demonstration projects underway aiming to enhance grid resiliency and help decarbonize the economy.

In 2022, SoCalGas announced a proposal to develop what would be the nation’s largest green hydrogen energy infrastructure system, the Angeles Link. This proposal has the potential to significantly reduce greenhouse gas emissions from electric generation, industrial processes, heavy-duty trucking and other hard-to-electrify sectors in Southern California. In December, the CPUC approved SoCalGas establishing a memorandum account to track the costs of feasibility studies for Angeles Link — an important milestone for SoCalGas’ Aspire 2045 strategy.

Sempra Texas

Oncor Electric Delivery Company LLC (Oncor), based in Dallas, continues to facilitate the growing integration of renewable energy throughout Texas. Its capital plan supports the build-out of critical new transmission and distribution infrastructure to support premise growth, new high-voltage interconnections and one of the fastest-growing economies in the nation. Oncor continues to grow and execute on its capital plan and harness innovative technologies to safely deliver reliable energy to Texans.

Oncor maintained steady operational execution in 2022, constructing new projects to support growth across Texas and increase reliability for the Electric Reliability Council of Texas market. The utility placed more than $1 billion of transmission projects into service, including placement of 13 substations and 18 new switching stations into service and approximately 340 miles of new or upgraded high-voltage transmission lines. Additionally, in 2022, Oncor experienced a 53% increase in active generation and retail transmission interconnection requests. This strong momentum is driven by residential and commercial growth across Oncor’s service territory and continued high demand for renewable energy.

Sempra Infrastructure

The 2021 launch of Sempra Infrastructure, headquartered in Houston, is one of our most exciting milestones to date. With three innovative business lines — clean power, energy networks, and liquefied natural gas (LNG) and net-zero solutions — Sempra Infrastructure is making significant commercial advancements across its North American energy infrastructure projects, which are competitively positioned along the Gulf and Pacific Coasts.

Amidst heightened global interest in energy security concerns and the trend toward reducing the production of electricity from coal, the company’s portfolio of LNG export development projects continued to make notable progress in 2022. Sempra Infrastructure’s dual-coast strategy positions the company to supply LNG to both Atlantic and Pacific customers as the world marches forward on a decarbonization pathway while helping to meet the growing demands for secure and reliable energy. The company continues to make progress marketing its LNG development projects including Port Arthur LNG Phase 2 and Cameron LNG Phase 2. The expansion at Cameron LNG currently targets a final investment decision after completion of a competitive front-end engineering and design process in the summer of 2023.

Sempra Infrastructure also made significant headway in the construction of Energía Costa Azul LNG Phase 1, contributing more than 5 million hours worked without a lost time incident.

At Sempra, we believe we do well when the world around us thrives. That is why our purpose and business initiatives are aligned with addressing some of society’s greatest challenges.

At our very core, we need to deliver innovation and new infrastructure investments that help drive broad economic growth. We view these investments through the lens of enabling growth, prosperity and access to the cleaner fuels of the future.

As we look forward to the next 25 years, we envision a new era of technology and innovation with the potential to power advancements across the entire energy value chain. With new technologies, how energy is sustainably produced and transported will change — all with a view of producing more energy that is both cleaner and more affordable. We also believe that new technologies will emerge and unlock untold opportunities for consumer and industrial markets. Populations will grow and with them, the demand for energy essential to modern life. That is why our company views modern energy infrastructure as a key enabler of societal, economic, and environmental progress.

At Sempra, progress means doing even more to deliver affordable, reliable and increasingly cleaner forms of energy. It means becoming more efficient, investing in innovation, growing the capabilities of our employees and returning greater value to our shareholders. I could not be more excited by Sempra’s opportunity to continue to better serve customers by advancing our collective decarbonization and energy security goals — all while delivering value for shareholders.

On behalf of Sempra’s leadership team and board of directors, thank you for your confidence in our mission and for partnering with us on this journey. Together, we are advancing a better future for all.

Boldly forward together,

Jeffrey W. Martin
Chairman and CEO

About Sempra

Sempra is a leading North American energy infrastructure company that helps meet the daily energy needs of nearly 40 million consumers.

As the owner of one of the largest energy networks on the continent, Sempra is helping to electrify and decarbonize some of the world’s most significant economic markets, including California, Texas, Mexico and the LNG export market. The company is also consistently recognized as a leader in sustainable business practices and for its long-standing commitment to building a high-performance culture focused on safety, leadership and workforce development, and diversity and inclusion. Investor’s Business Daily named Sempra the top-ranked utility in the U.S. for environmental, social and governance scores and financial performance. Sempra was also included on the Dow Jones Sustainability North America Index for the 12th consecutive year.

Sempra California

SDG&E and SoCalGas are energy delivery companies that provide safe, reliable and increasingly clean energy to roughly 25 million consumers in Southern and Central California. With a focus on grid resiliency, reducing emissions and integrating more renewable energy onto its networks, they are also supporting California’s goal of getting five million electric vehicles on the road by 2030. California is known for advancing new technologies and innovation, a spirit embraced at our California utilities that are at the forefront of research into hydrogen, battery storage, predictive technology and other tools designed to reduce the impact of severe weather events and support the state’s ambitious climate goals.

Sempra California

SDG&E and SoCalGas are energy delivery companies that provide safe, reliable and increasingly clean energy to roughly 25 million consumers in Southern and Central California. With a focus on grid resiliency, reducing emissions and integrating more renewable energy onto its networks, they are also supporting California’s goal of getting five million electric vehicles on the road by 2030. California is known for advancing new technologies and innovation, a spirit embraced at our California utilities that are at the forefront of research into hydrogen, battery storage, predictive technology and other tools designed to reduce the impact of severe weather events and support the state’s ambitious climate goals.

Sempra Texas*

Sempra Texas includes Oncor, a regulated electric transmission and distribution utility headquartered in Dallas that safely delivers reliable electricity to a population of approximately 13 million Texans. With more than 140,000 miles of transmission and distribution lines, Oncor is the largest pure-play transmission and distribution company in Texas, connecting communities across the state to Texas’ diverse energy supplies.

*Sempra indirectly owns an 80.25% interest in Oncor

Sempra Texas

Sempra Texas includes Oncor, a regulated electric transmission and distribution utility headquartered in Dallas that safely delivers reliable electricity to a population of approximately 13 million Texans. With more than 140,000 miles of transmission and distribution lines, Oncor is the largest pure-play transmission and distribution company in Texas, connecting communities across the state to Texas’ diverse energy supplies.

*Sempra indirectly owns an 80.25% interest in Oncor

Sempra Infrastructure**

Sempra Infrastructure, headquartered in Houston, is focused on delivering energy for a better world by developing, building and operating and investing in renewable power plants, energy networks, and LNG and net-zero solutions that are expected to play a crucial role in the energy systems of the future. Through the combined strength of its assets in North America, Sempra Infrastructure is connecting customers across the globe to modern energy infrastructure to source and transport renewables and natural gas, while advancing carbon sequestration and clean hydrogen.

**Sempra owns a 70% interest in Sempra Infrastructure Partners, which, together with its operating company subsidiaries, primarily makes up the Sempra Infrastructure platform

Sempra Infrastructure

Sempra Infrastructure, headquartered in Houston, is focused on delivering energy for a better world by developing, building and operating and investing in renewable power plants, energy networks, and LNG and net-zero solutions that are expected to play a crucial role in the energy systems of the future. Through the combined strength of its assets in North America, Sempra Infrastructure is connecting customers across the globe to modern energy infrastructure to source and transport renewables and natural gas, while advancing carbon sequestration and clean hydrogen.

**Sempra owns a 70% interest in Sempra Infrastructure Partners, which, together with its operating company subsidiaries, primarily makes up the Sempra Infrastructure platform

Financial Highlights

Comparative Total Returns

comparative total returns

The above graph compares the percentage change in the cumulative total shareholder return on Sempra common stock for the 20-year period ended December 31, 2022, with the performance over the same period of the S&P 500 Index and the S&P 500 Utilities Index. These returns were calculated assuming an initial investment of $100 in our common stock, the S&P 500 Index and the S&P 500 Utilities Index on December 31, 2002, and the reinvestment of all dividends.


Consolidated Data

In millions, except per-share amounts 2020 2021 2022
(1) Represents a non-GAAP financial measure. GAAP represents generally accepted accounting principles in the United States of America. See A-pages for an explanation and reconciliation of non-GAAP financial measures.
Revenues $11,370 $12,857 $14,439
Earnings $3,764 $1,254 $2,094
Adjusted Earnings(1) $2,342 $2,637 $2,915
Earnings Per Common Share
Basic $12.93 $4.03 $6.65
Diluted $12.88 $4.01 $6.62
Adjusted Diluted(1) $8.00 $8.43 $9.21
Diluted Weighted-Average Number of Common Shares Outstanding
GAAP 292.3 313.0 316.4
Adjusted 305.7 313.0 316.4
Total Assets $66,623 $72,045 $78,574
Dividends Declared Per Common Share $4.18 $4.40 $4.58
Debt-to-Total Capitalization Ratio 49% 47% 50%
Book Value Per Common Share $70.11 $79.17 $83.43

Downloads

Full 2022 Annual Report

2022 Form 10-K

2023 Proxy Statement

Corporate Information

American Stock Transfer & Trust Company, LLC

Attn: Sempra

6201 15th Avenue
Brooklyn, NY 11219

Telephone: 877-773-6772
Email: [email protected]

Hearing Impaired (TTY):
866-703-9077 or 718-921-8386
Internet: astfinancial.com

Investors with general questions regarding Sempra or Southern California Gas Company securities should contact the company at:

Sempra
Shareholder Services

488 8th Avenue
San Diego, CA 92101

Telephone: 877-736-7727
Email: [email protected]

Sempra’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission, which includes as exhibits the certifications filed by Sempra’s chief executive officer and chief financial officer under the Sarbanes-Oxley Act of 2002, is available to shareholders at no charge by writing to the company’s Shareholder Services Department.

This information, as well as our Corporate Governance Guidelines, Code of Business Conduct and Ethics for Directors and Principal and Executive Officers and standing board committee charters, also are available on the company’s website at mirkobonello.com.

Security analysts, portfolio managers and other members of the financial community should contact:

Jenell McKay
Director – Investor Relations
Telephone:
619-696-2901

Sempra Common Stock:
Trading Symbols:
SRE and SRE.MX
New York Stock Exchange and 
Mexican Stock Exchange

Sempra 5.75% Jr. Subordinated Notes Due 2079:
Trading Symbol:
SREA
New York Stock Exchange

Sempra provides a Direct Stock Purchase Plan as a simple, convenient and affordable way to invest in the company’s common stock.

The plan also allows shareholders to reinvest all or a portion of their cash dividends. The plan is offered only by means of a prospectus, which can be obtained by calling the plan administrator, American Stock Transfer & Trust Company, LLC, at 877-773-6772, or through the Internet at astfinancial.com.

This report contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed or implied in any forward-looking statement. These forward-looking statements represent our estimates and assumptions only as of the date of this report. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise.

In this report, forward-looking statements can be identified by words such as “believes,” “expects,” “intends,” “anticipates,” “contemplates,” “plans,” “estimates,” “projects,” “forecasts,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “in process,” “construct,” “develop,” “opportunity,” “initiative,” “target,” “outlook,” “optimistic,” “maintain,” “continue,” “progress,” “advance,” “goal,” “aim,” “commit,” or similar expressions, or when we discuss our guidance, priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations.

Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include risks and uncertainties relating to: California wildfires, including that we may be found liable for damages regardless of fault and that we may not be able to recover all or a substantial portion of costs from insurance, the wildfire fund established by California Assembly Bill 1054, rates from customers or a combination thereof; decisions, investigations, inquiries, regulations, issuances or revocations of permits or other authorizations, renewals of franchises, and other actions by (i) the California Public Utilities Commission (CPUC), Comisión Reguladora de Energía, U.S. Department of Energy, U.S. Federal Energy Regulatory Commission, Public Utility Commission of Texas, and other governmental and regulatory bodies and (ii) the U.S., Mexico and states, counties, cities and other jurisdictions therein and in other countries in which we do business; the success of business development efforts, construction projects and acquisitions and divestitures, including risks in (i) being able to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) realizing anticipated benefits from any of these efforts if completed, and (iv) obtaining the consent or approval of partners or other third parties, including governmental and regulatory bodies; litigation, arbitrations, property disputes and other proceedings, and changes to laws and regulations, including those related to the energy industry in Mexico; cybersecurity threats, including by state and state-sponsored actors, of ransomware or other attacks on our systems or the systems of third-parties with which we conduct business, including the energy grid or other energy infrastructure, all of which have become more pronounced due to recent geopolitical events, such as the war in Ukraine; our ability to borrow money on favorable terms and meet our debt service obligations, including due to (i) actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook or (ii) rising interest rates and inflation; failure of foreign governments, state-owned entities and our counterparties to honor their contracts and commitments; the impact on affordability of San Diego Gas & Electric Company’s (SDG&E) and Southern California Gas Company’s (SoCalGas) customer rates and their cost of capital and on SDG&E’s, SoCalGas’ and Sempra Infrastructure’s ability to pass through higher costs to current and future customers due to (i) volatility in inflation, interest rates and commodity prices, (ii) with respect to SDG&E’s and SoCalGas’ businesses, the cost of the clean energy transition in California, (iii) with respect to SDG&E’s business, departing retail load resulting from additional customers transferring to Community Choice Aggregation and Direct Access, and (iv) with respect to Sempra Infrastructure’s business, volatility in foreign currency exchange rates; the impact of climate and sustainability policies, laws, rules, disclosures, and trends, including actions to reduce or eliminate reliance on natural gas, increased uncertainty in the political or regulatory environment for California natural gas distribution companies and the risk of nonrecovery for stranded assets; our ability to incorporate new technologies into our businesses, including those designed to support governmental and private party energy and climate goals; weather, natural disasters, pandemics, accidents, equipment failures, explosions, terrorism, information system outages or other events that disrupt our operations, damage our facilities or systems, cause the release of harmful materials, cause fires or subject us to liability for damages, fines and penalties, some of which may not be recoverable through regulatory mechanisms, may be disputed or not covered by insurers, or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of electric power, natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid, pipeline system or limitations on the withdrawal of natural gas from storage facilities; Oncor Electric Delivery Company LLC’s (Oncor) ability to eliminate or reduce its quarterly dividends due to regulatory and governance requirements and commitments, including by actions of Oncor’s independent directors or a minority member director; changes in tax and trade policies, laws and regulations, including tariffs, revisions to international trade agreements and sanctions, such as those that have been imposed and that may be imposed in the future in connection with the war in Ukraine, which may increase our costs, reduce our competitiveness, impact our ability to do business with certain counterparties, or impair our ability to resolve trade disputes; and other uncertainties, some of which are difficult to predict and beyond our control.

These risks and uncertainties are further discussed in the reports that Sempra has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC’s website, sec.gov, and on Sempra’s website, mirkobonello.com. Investors should not rely unduly on any forward-looking statements.

Sempra Infrastructure, Sempra Infrastructure Partners, Sempra Texas, Sempra Texas Utilities, Oncor and Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova) are not the same companies as the California utilities, SDG&E or SoCalGas, and Sempra Infrastructure, Sempra Infrastructure Partners, Sempra Texas, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.

None of the website references in this report are active hyperlinks, and the information contained on, or that can be accessed through, any such website is not, and shall not be deemed to be, part of this document.