Sempra Energy : CEO Shares How Company Is Driving Sustainable Value in Shareholder Letter

This is an excerpt from Chairman and CEO Jeff Martin's comprehensive letter to shareholders.

Dear fellow shareholders:

While this past year has brought many unexpected challenges, I am optimistic about what lies ahead. We have seen people from all walks of life persevere and come together to support one another in ways that are inspirational to all of us. As vaccination programs expand across America and we look to rebuild the greatest economy in the world, we are also reminded of the vital role of energy.

Energy - and the critical infrastructure that delivers it - are foundational to all aspects of daily life. As the global pandemic has underscored, it powers healthcare facilities, first responders and other critical services. It also empowers millions of people working or studying from home and many more who are relying on us every day for the energy they need to power their lives and businesses.

That is why I have been profoundly inspired by the work of our employees. They have displayed great leadership, resilience and an unwavering commitment to doing the right thing over the past year. They have continued to deliver energy with purpose to our more than 36 million consumers in North America, and many more around the world, during a time when our customers needed it most.

Safety is a foundational value at Sempra Energy, guiding how we serve our customers and communities during times of great crisis. Our operating companies innovated to develop new ways for our employees to continue working safely when the world around us demanded it.

Our resilience over the past year makes me even more optimistic for the future. We are continuing to focus on innovation, sustainability and leadership as we strengthen our investments and work toward a net-zero carbon footprint. By aiming higher, and thinking differently, we believe we can help solve some of our society's greatest challenges.

Despite unprecedented events, we continued to execute on our strategic mission to be North America's premier energy infrastructure company. To read more about our accomplishments in 2020, please refer to the full shareholder letter.

Shaping the Future of Energy

Each of our operating companies is playing a key role in delivering essential energy to some of the biggest economies in the world. We are delivering cleaner forms of energy to our customers while concentrating our investments in transmission and distribution infrastructure - the section of the energy value chain that we believe provides attractive, risk-adjusted returns to our owners.

Advancing Our High-Performance Culture

We believe we have the best workforce in the industry and our high-performance culture continues to set us apart. Our company's culture is underpinned by a focus on safety. In 2020:

• The construction activities for Cameron LNG Phase 1 concluded with a remarkable safety record of more than 89 million hours without a lost-time incident;
• SDG&E and SoCalGas both achieved record-setting safety performances in 2020 with their lowest injury and lost-time incident rates on record;
• Oncor logged 10 million hours without a lost-time incident; and
• IEnova achieved a 99th percentile score in health and safety according to a survey conducted in coordination with the U.S. National Safety Council.

Across our family of companies, we are realizing the benefits of our safety-focused mindset in which everyone feels responsible for their own safety as well as the safety of others.

Another key factor in our high performance is our long-standing commitment to an inclusive workplace, where we value diverse views, backgrounds and experiences. We believe these factors improve decision making, advance innovation, and ultimately deliver a culture that reflects the ideal of service to others. This year, we will continue to take concrete actions to advance our high-performance culture and maintain a workplace where everyone feels empowered to bring their authentic and best selves to work.

Driving Sustainable Value

Looking ahead, we are committed to expanding our position as a leader in the North American markets where we operate: California, Texas, Mexico and the LNG export market. We are working to enhance the value of energy infrastructure for customers across North America, while expanding lower-carbon energy choices and energy access and affordability.

As the owner of one of the largest energy networks in North America, we are confident that our strategy of making critical new investments primarily focused on transmission and distribution infrastructure will help accelerate the energy transition. Our role in the energy value chain will help us assert a leadership position in helping to decarbonize every market we serve. Moreover, we also expect these activities to increase shareholder value by producing strong organic growth and improved earnings visibility.

At Sempra Energy, we have set out to boldly build a different type of energy company - one that is focused on the empowering value of energy infrastructure. As a purpose-driven and values-led company, we are striving to build a cleaner and smarter grid as part of our commitment to help lead a carbon-neutral society, while also delivering increased value to our shareholders.

I am proud to lead an amazing leadership team, as well as one of the most talented workforces in our industry. In everything that we do, you can count on us to prioritize creating sustainable value for our shareholders and other stakeholders as we work to have a positive impact in our communities and our society.

Ever forward together,

Jeffrey W. Martin
Chairman and Chief Executive Officer

Meet Jeffrey Martin

This article 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 date of this press release. 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 article, forward-looking statements can be identified by words such as 'believes,' 'expects,' 'anticipates,' 'plans,' 'estimates,' 'projects,' 'forecasts,' 'should,' 'could,' 'would,' 'will,' 'confident,' 'may,' 'can,' 'potential,' 'possible,' 'proposed,' 'in process,' 'under construction,' 'in development,' 'target,' 'outlook,' 'maintain,' 'continue,' 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 costs from insurance, the wildfire fund established by California Assembly Bill 1054 or in rates from customers; decisions, investigations, regulations, issuances or revocations of permits and other authorizations, renewals of franchises, and other actions by (i) the Comisión Federal de Electricidad, California Public Utilities Commission (CPUC), U.S. Department of Energy, 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 major 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 of partners or other third parties; the resolution of civil and criminal litigation, regulatory inquiries, investigations and proceedings, and arbitrations, including, among others, those related to the natural gas leak at Southern California Gas Company's (SoCalGas) Aliso Canyon natural gas storage facility; the impact of the COVID-19 pandemic on our capital projects, regulatory approval processes, supply chain, liquidity and execution of operations; 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 substantial debt service obligations; moves to reduce or eliminate reliance on natural gas and the impact of volatility of oil prices on our businesses and development projects; weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, computer system outages and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires and subject us to liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits), 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, limitations on the withdrawal of natural gas from storage facilities, and equipment failures; cybersecurity threats to the energy grid, storage and pipeline infrastructure, the information and systems used to operate our businesses, and the confidentiality of our proprietary information and the personal information of our customers and employees; expropriation of assets, failure of foreign governments and state-owned entities to honor their contracts, and property disputes; 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 Direct Access and Community Choice Aggregation, 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 and interest and inflation rates and commodity prices and our ability to effectively hedge these risks; 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.

These risks and uncertainties are further discussed in the reports that Sempra Energy 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, www.sec.gov, and on the company's website, www.sempra.com. Investors should not rely unduly on any forward-looking statements.

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