2021 Annual Report

Advancing
a better future
for all

"Our goal is not to just be a participant in this transition to a cleaner energy system — we are committed to help lead it"

Jeffrey W. Martin

Chairman and Chief Executive Officer

Dear fellow shareholders:

Over the last two years, we have seen the world undergo changes at a scale unseen in more than a century. The global pandemic has changed the nature of how we lead our lives and redefined the meaning of health and safety for each of us. The recent crisis in Ukraine is also disturbing and unsettling and creates a sense of profound sadness for everyone.

As we reassess almost every aspect of our lives, we are also seeking new opportunities, striving to find a greater sense of balance at home and at work, and ultimately envisioning a new normal — namely a world with greater peace and stability.

The extraordinary changes we have experienced over the last two years also spurred a dramatic shift in business perspectives — both for our company and the overall energy industry.

I want to share what we are doing at Sempra to be a leader in today’s dynamic world and how the changes we are experiencing underscore the critical role that energy infrastructure plays in supporting economic growth here in North America and abroad. I also want to reinforce how these changes underpin our core strategies, including elevating our focus on sustainable business practices, growing investments in new technologies, and maintaining our emphasis on strong capital discipline — all with a view toward delivering greater value to our company’s shareholders.

At Sempra, this past year also provided an opportunity to look forward with greater clarity and passion to our Leading 2025 strategy — our strategic initiative to drive sustained performance and long-term value for all our stakeholders in the communities we serve. The unprecedented global focus on climate change has compelled companies and countries to recommit themselves to a cleaner, safer and healthier planet. It is no longer enough for businesses to simply serve customers well. We must demonstrate genuine progress and accountability in everything we do to advance more sustainable business practices.

The central purpose of our company is to play a critical role in building the 21st century energy networks to advance electrification and promote energy diversification, resiliency, and affordable access to cleaner forms of energy. But to be clear, our goal is not to just be a participant in this transition to a cleaner energy system — we are committed to help lead it.

As we look ahead, we fully expect the speed of change to accelerate. We believe global energy markets are going to evolve dramatically over the next 30 years — with energy investments centering on cleaner forms of electrification and decarbonization strategies across all sectors of the economy.

Against the background of this shifting energy landscape, we are well-positioned to attract significant investment opportunities through our three integrated growth platforms: Sempra California, Sempra Texas and Sempra Infrastructure. We are committed to finding new and better ways to serve our customers, with a near-term focus on four critical success factors:

  • Sustainability as the centerpiece of our corporate strategy
  • Leadership in technology and innovation
  • Financial strength to deliver across different market cycles
  • Energy diversification to capture new opportunities

Read the Full Letter

About Sempra

Sempra’s mission is to be North America’s premier energy infrastructure company. The Sempra family of companies have 20,000 talented employees who deliver energy with purpose to nearly 40 million consumers. With more than $72 billion in total assets at the end of 2021, the San Diego-based company is the owner of one of the largest energy networks in North America, helping some of the world’s leading economies move to cleaner sources of energy. The company is helping to advance the global energy transition through electrification and decarbonization in the markets it serves, including California, Texas, Mexico and the LNG export market. Sempra is consistently recognized as a leader in sustainable business practices and for its long-standing commitment to building a high-performing culture focused on safety, workforce development and training, and diversity and inclusion. Sempra is the only North American utility sector company included on the Dow Jones Sustainability World Index and was also named one of the "World’s Most Admired Companies" for 2022 by Fortune Magazine.

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Sempra California

Sempra California is working to provide clean, safe and reliable energy to nearly 26 million consumers in Southern and Central California through its utilities SDG&E and SoCalGas. With a focus on grid resiliency, reducing emissions and integrating increasingly renewable energy onto our networks, we're also supporting California's goal of getting five million electric vehicles on the road by 2030. California is known for technology and innovation, a spirit embraced at our utilities that are on the leading edge of research into hydrogen, battery storage, predictive technology and other tools designed to support the state’s ambitious climate goals.

Sempra Texas

Sempra California is working to provide clean, safe and reliable energy to nearly 26 million consumers in Southern and Central California through its utilities SDG&E and SoCalGas. With a focus on grid resiliency, reducing emissions and integrating increasingly renewable energy onto our networks, we're also supporting California's goal of getting five million electric vehicles on the road by 2030. California is known for technology and innovation, a spirit embraced at our utilities that are on the leading edge of research into hydrogen, battery storage, predictive technology and other tools designed to support the state’s ambitious climate goals.

Sempra Infrastructure

Sempra California is working to provide clean, safe and reliable energy to nearly 26 million consumers in Southern and Central California through its utilities SDG&E and SoCalGas. With a focus on grid resiliency, reducing emissions and integrating increasingly renewable energy onto our networks, we're also supporting California's goal of getting five million electric vehicles on the road by 2030. California is known for technology and innovation, a spirit embraced at our utilities that are on the leading edge of research into hydrogen, battery storage, predictive technology and other tools designed to support the state’s ambitious climate goals.

Sempra LNG

Sempra LNG’s mission is being North America’s premier LNG infrastructure company by providing sustainable, safe and reliable access to U.S. natural gas for global markets.

united states map

Learn More

Oncor Electric Delivery Co. LLC*

Oncor, based in Dallas, Texas, operates the largest transmission and distribution system in the state, delivering safe and reliable energy to approximately 10 million Texans.

united states map

Learn More

*Sempra Energy indirectly owns 80.25% of Oncor.

Financial Highlights

Comparative Total Returns

Consolidated Data

In millions, except per-share amounts 2019 2020 2021
(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.

(2) 2020 and 2019 amounts have been updated to exclude additional items to conform to current year presentation
Revenues $10,829 $11,370 $12,857
Earnings $2,055 $3,764 $1,254
Adjusted Earnings(1)(2) $1,911 $2,350 $2,637
Earnings Per Common Share
Basic $7.40 $12.93 $4.03
Diluted $7.29 $12.88 $4.01
Adjusted Diluted(1)(2) $6.99 $8.00 $8.43
Diluted Weighted-Average Number of Common Shares Outstanding
GAAP 282.0 292.3 313.0
Adjusted 282.0 305.7 313.0
Total Assets $65,665 $66,623 $72,045
Dividends Declared Per Common Share $3.87 $4.18 $4.40
Debt-to-Total Capitalization Ratio 54% 49% 47%
Book Value Per Common Share $60.58 $70.11 $79.17

Downloads

Full 2021 Annual Report
2021 Form 10-K
2022 Proxy Statement

Corporate Information

Transfer Agent

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: www.astfinancial.com

Shareholder Services

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]

News and Information

Sempra’s Annual Report on Form 10-K filed with the 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 Sempra.com.

Investor Relations

Security analysts, portfolio managers and other members of the financial community should contact:
Lindsay Gartner
Director – Investor Relations
Telephone: 619-696-2901

Stock Exchange Listings

Sempra Energy Common Stock:
Ticker 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

Direct Common Stock Investment Plan

Sempra offers a Direct Common Stock Purchase Plan as a simple, convenient and affordable way to invest in the company. Cash dividends from a participant’s account can be reinvested automatically in full or in part (but not less than 10% of each dividend) to purchase additional shares, or participants may choose to receive all or a portion of their cash dividends electronically or by check. Participation in the plan requires an initial investment of as little as $500. The plan allows additional cash investments of a minimum of $25 up to a maximum of $150,000 per calendar year. Brokerage commissions incurred in the purchase of shares will be paid by Sempra. 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 www.astfinancial.com.

Information Regarding Forward-Looking Statements

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 in any forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the filing date of the Annual Report on Form 10-K included herein. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.

In this report, forward-looking statements can be identified by words such as "believes," "expects," "intends," "anticipates," "plans," "estimates," "projects," "forecasts," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "in process," "under construction," "in development," "opportunity," "target," "outlook," "maintain," "continue," "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 described in any forward-looking statements include risks and uncertainties relating to: California wildfires, including the risks 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, in rates from customers or a combination thereof; decisions, investigations, regulations, issuances or revocations of permits and 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 regulatory and governmental bodies and (ii) states, counties, cities and other jurisdictions in the U.S., Mexico and other countries in which we do business; the success of business development efforts, construction projects and acquisitions and divestitures, including risks in (i) the ability to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) the ability to realize anticipated benefits from any of these efforts if completed, and (iv) obtaining the consent or approval of partners or other third parties, including governmental entities and regulatory bodies; the resolution of civil and criminal litigation, regulatory inquiries, investigations and proceedings, arbitrations, and property disputes, including those related to the natural gas leak at Southern California Gas Company’s (SoCalGas) Aliso Canyon natural gas storage facility; changes to laws, including proposed changes to the Mexican constitution that could materially limit access to the electric generation market and changes to Mexico’s trade rules that could materially limit our ability to import, export, transport and store hydrocarbons; failure of foreign governments and state-owned entities to honor their contracts and commitments; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow on favorable terms and meet our debt service obligations; the impact of energy and climate policies, legislation and rulemaking, as well as related goals set, and actions taken, by companies in our industry, including actions to reduce or eliminate reliance on natural gas generally and any deterioration of or increased uncertainty in the political or regulatory environment for California natural gas distribution companies and the risk of nonrecovery for stranded assets; the pace of the development and adoption of new technologies in the energy sector, including those designed to support governmental and private party energy and climate goals, and our ability to timely and economically incorporate them into our business; weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, information system outages or other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires or subject us to liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance, may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of electric power and natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid or limitations on the withdrawal of natural gas from storage facilities; the impact of the COVID-19 pandemic, including potential vaccination mandates, on capital projects, regulatory approvals and the execution of our operations; cybersecurity threats to the energy grid, storage and pipeline infrastructure, information and systems used to operate our businesses, and confidentiality of our proprietary information and personal information of our customers and employees, including ransomware attacks on our systems and the systems of third-party vendors and other parties with which we conduct business, all of which may become more pronounced in the event of geopolitical events and other uncertainties, such as the conflict in Ukraine; the impact at San Diego Gas & Electric Company (SDG&E) on competitive customer rates and reliability due to the growth in distributed and local power generation, including from departing retail load resulting from customers transferring to Community Choice Aggregation and Direct Access, and the risk of nonrecovery for stranded assets and contractual obligations; 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; volatility in foreign currency exchange, inflation and interest rates and commodity prices, including inflationary pressures in the U.S., and our ability to effectively hedge these risks and with respect to inflation and interest rates, the impact on SDG&E’s and SoCalGas’ cost of capital and the affordability of customer rates; changes in tax and trade policies, laws and regulations, including tariffs and revisions to international trade agreements that may increase our costs, reduce our competitiveness, or impair our ability to resolve trade disputes; and other uncertainties, some of which may be difficult to predict and are beyond our control.

We caution you not to rely unduly on any forward-looking statements. You should review and consider carefully the risks, uncertainties and other factors that affect our business as described herein and in other reports that we file with the U.S. Securities and Exchange Commission.

Sempra Infrastructure, Sempra LNG, 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 LNG, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.

From FORTUNE, ©2022 FORTUNE Media IP Limited. All rights reserved. Used under license. FORTUNE and FORTUNE World’s Most Admired Companies are registered trademarks of FORTUNE Media IP Limited and are used under license. FORTUNE is not affiliated with, and does not endorse the products or services of, Sempra.

2021 Annual Report