Sempra Financial Model
Utilities Company Financials Example (Free Excel Download)
Sempra is a North American energy infrastructure company that operates regulated electric and natural gas utilities, alongside a portfolio of LNG and energy infrastructure assets.
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About this model
This model provides a sum-of-the-parts (SOTP) equity valuation and capital allocation analysis for Sempra, enabling an equity research analyst to evaluate the earnings accretion and funding feasibility of the company's record $65 billion 2026–2030 capital plan as it transitions to a predominantly regulated utility model.
- Sempra is a North American energy infrastructure company that operates regulated electric and natural gas utilities, alongside a portfolio of LNG and energy infrastructure assets.
- Business segments: Sempra California (SDG&E and SoCalGas, ~60% of earnings), Sempra Texas (equity method investment in Oncor, ~25% of earnings), and Sempra Infrastructure (LNG and Mexican infrastructure, ~15% of earnings).
- Key geographies: California, Texas, and Mexico/US Gulf Coast.
- Business model type: Asset-heavy, regulated rate-base utility model with long-term contracted infrastructure cash flows.
- Competitive position: One of the largest utility holding companies in the US, serving nearly 40 million consumers, with a uniquely positioned growth engine in Texas due to massive data centre and demographic load growth.
- Recent major events: In early 2026, Sempra announced a record $65 billion capital plan for 2026–2030 (targeting an 11% rate base CAGR to $97 billion by 2030) and a definitive agreement to sell a 45% stake in Sempra Infrastructure Partners (implied equity value ~$22.2 billion) to deconsolidate debt and fund utility growth without issuing new common equity.
The downloadable Sempra financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsSempra financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $11.68B | $13.72B | $14.85B | $11.82B | $12.42B |
| Income before income taxes and equity earnings | $219.0M | $1.34B | $2.63B | $2.11B | $1.17B |
| Depreciation and amortization | -$1.85B | -$2.02B | -$2.23B | -$2.44B | -$2.56B |
| Net income | $1.32B | $2.14B | $3.08B | $2.86B | $1.84B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for Sempra
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Sempra California (SDG&E and SoCalGas)
- Segment name: Sempra California
- Revenue driver formula: Authorized Base Margin (Rate Base × Authorized ROA/ROE) + Cost of Fuel/Gas Pass-Through + Regulatory Recoveries
- Historical growth rate: 4-6% CAGR (driven by General Rate Case outcomes)
- Key growth levers and headwinds: Grid modernization, wildfire mitigation investments, and electrification mandates; headwinds include regulatory disallowances (e.g., COVID-19 cost recovery denials) and customer affordability pressures.
- Pricing dynamics: Fully regulated by the California Public Utilities Commission (CPUC); decoupled revenue mechanisms mean earnings are driven by capital investment, not volumetric sales.
- Revenue recognition notes: Revenues are recognized as energy is delivered, with balancing accounts used to track over/under-collections of authorized revenue requirements.
- Seasonality: Higher electric revenues in Q3 (summer cooling) and higher gas revenues in Q1/Q4 (winter heating).
Sempra Texas (Oncor)
- Segment name: Sempra Texas Utilities
- Revenue driver formula: Equity Earnings = (Oncor Net Income) × Sempra's Ownership Percentage (80.25%)
- Historical growth rate: 10-15% CAGR
- Key growth levers and headwinds: Unprecedented transmission load growth from data centres, AI, and population migration to Texas; supported by the PUCT's unified tracker mechanism for capital recovery.
- Pricing dynamics: Regulated by the Public Utility Commission of Texas (PUCT); wholesale transmission rates and retail distribution rates.
- Revenue recognition notes: Reported as "Equity earnings from investments" on Sempra's consolidated income statement, not as top-line revenue.
- Seasonality: Peak transmission and distribution volumes during the Texas summer (Q3).
Sempra Infrastructure
- Segment name: Sempra Infrastructure
- Revenue driver formula: (Contracted LNG Capacity × Tolling Fee) + (Pipeline Volumes × Tariff) + Energy Sales
- Historical growth rate: Highly variable depending on project completion (e.g., ECA LNG Phase 1, Port Arthur LNG).
- Key growth levers and headwinds: Global LNG demand and successful execution of mega-projects; headwinds include construction delays, interest rate impacts on project finance, and foreign currency/inflation exposure in Mexico.
- Pricing dynamics: Long-term (15-20 year) take-or-pay contracts and tolling agreements.
- Revenue recognition notes: Capacity revenues recognized straight-line over the contract term; commodity sales recognized upon delivery.
- Seasonality: Less seasonal due to fixed-fee contract structures, though Mexican energy sales can fluctuate with local weather.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Cost of natural gas, Cost of electric fuel and purchased power.
- Gross margin range: Not a highly relevant metric for decoupled utilities, as fuel costs are a direct pass-through to customers with zero margin markup.
- Key input costs and commodity exposures: Natural gas prices and wholesale electricity prices.
- How COGS scales with revenue: 1:1 linear relationship with the "Cost of Fuel" revenue line item.
Operating Expenses
- O&M (Operations and Maintenance): The primary controllable cost centre for the utilities (labour, materials, contractor services). Typically 25-30% of total revenues.
- Depreciation & Amortisation: Extremely high (~15-20% of revenue) due to the capital-intensive nature of utility infrastructure.
- Franchise fees and other taxes: Pass-through taxes levied by local municipalities.
- Restructuring / one-time charges: Occasional regulatory disallowances (e.g., $104M impact in Q4 2024 at Sempra California).
Margin Profile
- Operating margin: 18-22% consolidated.
- Net margin: 10-15% consolidated.
- Margin trend: Expanding slightly as the business mix shifts toward higher-margin equity earnings from Texas and fixed-fee LNG infrastructure.
Balance Sheet Structure
- Total assets: ~$85-95 billion.
- Key asset categories: Property, Plant and Equipment (PP&E) makes up >60% of assets; Regulatory Assets (deferred costs approved for future recovery) make up ~10-15%; Investments in unconsolidated entities (Oncor) make up ~15%.
- Goodwill & intangibles: Minimal relative to total assets, primarily legacy goodwill from the Oncor acquisition.
- Working capital profile:
- DSO: 35-45 days.
- DIO: Gas in storage turns over seasonally (typically 30-60 days).
- DPO: 40-50 days.
- Net working capital as % of revenue: Typically negative or near zero, as utilities use customer deposits and balancing accounts to fund short-term operations.
- PP&E: Primarily electric transmission/distribution grids, gas pipelines, and LNG facilities. Depreciated over 30-50 year useful lives.
- Right-of-use assets: Immaterial compared to utility plant.
Capital Expenditure & Investment
- Capex as % of revenue: 75-90% (Revenue is a poor denominator for utility capex; capex is driven by rate base growth targets).
- Maintenance capex vs. growth capex: ~30% maintenance / 70% growth (grid modernization, transmission expansion).
- Major capex programmes underway: $65 billion capital plan for 2026–2030 (averaging ~$13 billion annually). Over 95% is directed to regulated utilities in Texas and California.
- Capitalised software / development costs: Minor relative to hard infrastructure.
- M&A pattern: Capital recycling. Sempra is selling a 45% stake in Sempra Infrastructure Partners to fund organic utility growth.
Debt & Capital Structure
- Total debt: ~$30-35 billion consolidated.
- Debt/EBITDA ratio: Target 4.5x - 5.0x.
- Credit rating: BBB+ / Baa1 (Investment Grade).
- Key debt instruments: Long-term first mortgage bonds at the utility level, holding company senior unsecured notes, and project finance debt at Sempra Infrastructure.
- Interest rate profile: Predominantly fixed-rate long-term bonds; project finance debt often hedged with interest rate swaps.
- Covenants: Standard FFO-to-Debt metrics; management targets 50-150 bps of cushion above rating agency downgrade thresholds.
- Share repurchase programme: Not active; capital is prioritized for utility rate base growth.
- Dividend policy: $2.63 per share annualized for 2026 (16th consecutive year of increases); payout ratio typically 50-60% of adjusted earnings.
Cash Flow Characteristics
- Operating cash flow conversion: OCF / Net Income is typically 1.2x - 1.5x due to massive non-cash D&A and deferred income taxes.
- Free cash flow margin: Highly negative. The company generates ~$4-5 billion in OCF but spends ~$13 billion in CapEx annually.
- Major non-cash items: Depreciation, deferred taxes, equity earnings from Oncor (less dividends received), and unrealized gains/losses on commodity derivatives.
- Working capital cash flow impact: Fluctuates with under/over-collected regulatory balancing accounts.
- Capex intensity: Extreme. The $65 billion 2026-2030 plan requires external funding, which is being bridged by the Sempra Infrastructure stake sale rather than common equity issuance.
Sheet Structure
- Assumptions: Macro, regulatory ROEs, rate base growth targets, capex schedule, and financing assumptions.
- Summary: Consolidated dashboard showing Adjusted EPS, Rate Base roll-forward, and SOTP valuation.
- Sempra California: SDG&E and SoCalGas revenue build (Base Margin + Pass-throughs), O&M, D&A, and segment earnings.
- Sempra Texas (Oncor): Rate base roll-forward, authorized return, net income build, and Sempra's 80.25% equity earnings cut.
- Sempra Infrastructure: Project-level capacity, tolling revenues, Mexican utility revenues, project O&M, and segment earnings.
- Consolidated Income Statement: Aggregation of segments, holding company interest expense, and GAAP to Non-GAAP (Adjusted EPS) bridge.
- Consolidated Balance Sheet: Utility plant, regulatory assets/liabilities, equity investments, debt, and equity.
- Consolidated Cash Flow: Net income to OCF, CapEx, asset sale proceeds (SI Partners), debt issuance/repayment, and dividends.
- Debt & Interest Schedule: Tranche-by-tranche roll-forward of utility-level and HoldCo debt, calculating weighted average interest.
- SOTP Valuation: DCF for Sempra Infrastructure, P/E and P/Rate Base multiples for California and Texas utilities.
Key Financial Relationships
- `California Base Margin Revenue = Prior Year Rate Base × Authorized Return on Asset (ROA)`
- `California Total Revenue = Base Margin Revenue + Cost of Fuel + Regulatory Amortizations`
- `Texas Rate Base = Prior Year Texas Rate Base + Texas CapEx - Texas Depreciation` (Targeting 18% CAGR through 2030)
- `Oncor Net Income = Average Texas Rate Base × Authorized ROE × Equity Ratio`
- `Sempra Texas Equity Earnings = Oncor Net Income × 0.8025`
- `Infrastructure Revenue = (Contracted Capacity × Fixed Tolling Rate) + (Delivered Volumes × Commodity Price)`
- `Consolidated CapEx = California CapEx + Texas CapEx (memo only, unconsolidated) + Infrastructure CapEx` (Targeting ~$13B annually)
- `Consolidated D&A = Prior Year PP&E × Composite Depreciation Rate (~3.5%)`
- `Interest Expense = Average Debt Balance × Weighted Average Interest Rate`
- `Adjusted Net Income = GAAP Net Income + Regulatory Disallowances + Unrealized Derivative Losses - Gain on Asset Sales`
- `Adjusted EPS = Adjusted Net Income / Diluted Shares Outstanding`
- `Dividends Paid = Annualized Dividend Per Share ($2.63 in 2026) × Shares Outstanding`
Cross-Sheet Dependencies
- The Assumptions sheet drives the CapEx and Rate Base roll-forwards on the Sempra California and Sempra Texas sheets.
- The Sempra Texas sheet calculates Equity Earnings, which flows directly to the Consolidated Income Statement (below operating income) and the Consolidated Cash Flow (net of dividends received from Oncor).
- The Consolidated Cash Flow determines the funding gap (CapEx + Dividends - OCF - Asset Sale Proceeds), which feeds the Debt & Interest Schedule as new debt issuance.
- The Debt & Interest Schedule feeds Interest Expense back to the Consolidated Income Statement, creating a circular reference that must be managed with a toggle or iterative calculation.
- The SOTP Valuation pulls segment-level net income and rate base figures from the individual segment sheets.
Sign Convention
- Income Statement: Revenues are positive. Expenses (COGS, O&M, D&A, Interest) are negative. Net Income is positive.
- Balance Sheet: Assets are positive. Liabilities and Equity are positive.
- Cash Flow Statement: Cash inflows (Net Income, D&A, debt issuance, asset sales) are positive. Cash outflows (CapEx, dividends, debt repayment, working capital increases) are negative.
- Formulas: Gross Margin = Revenue + COGS (where COGS is negative).
Things Most Likely to Go Wrong
- Consolidating Oncor: Sempra Texas is an equity method investment. Do NOT consolidate Oncor's revenue, O&M, or debt into Sempra's top-line figures. Only the net equity earnings flow through the income statement.
- Deconsolidation of SI Partners: Sempra is selling a 45% stake in SI Partners. The model must adjust the balance sheet to deconsolidate SI Partners' project debt and adjust the minority interest line item upon transaction close (expected mid-2026).
- Fuel Cost Pass-Throughs: Spikes in natural gas prices inflate both revenue and COGS equally. Do not model margin expansion on fuel cost increases; they are a zero-margin pass-through.
- Regulatory Lag: California utilities often experience delayed cost recovery. Model balancing accounts (regulatory assets) to capture costs incurred today that will be billed to customers in future years.
- GAAP vs. Adjusted EPS: Sempra's GAAP earnings are highly volatile due to mark-to-market derivative swings and foreign currency impacts in Mexico. The model must solve for *Adjusted EPS* to compare against management guidance ($4.80-$5.30 for 2026).
- Share Count: Management explicitly stated no new common equity is needed to fund the 2026-2030 base capital plan. Keep the share count flat; do not model dilutive equity issuances to plug the cash flow deficit.
- Rate Base vs. PP&E: Rate base is a regulatory construct, not a GAAP balance sheet line item. They must be tracked separately. Rate base drives California revenues and Texas earnings.
Validation Checks
- "2026 Adjusted EPS must fall within the $4.80 to $5.30 guidance range."
- "2030 Adjusted EPS must align with the $6.70 to $7.50 long-term outlook."
- "Consolidated Rate Base must grow from $57 billion in 2025 to approximately $97 billion by 2030 (11% CAGR)."
- "Sempra Texas Rate Base must reflect an ~18% CAGR through 2030."
- "Annual Capital Expenditures must average ~$13 billion per year from 2026 to 2030."
- "Common dividends per share must equal $2.63 in 2026 and grow in line with historical trends."
- "Balance sheet must balance: Total Assets = Total Liabilities + Equity in every period."
- "No new common equity issuance should be modelled to fund the base capital plan."
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| 2026-2030 Total Capital Plan | 65.0 | $ Billions | Management guidance for 5-year plan |
| Annual CapEx Run-Rate | 13.0 | $ Billions | Average annual spend to hit $65B target |
| Consolidated Rate Base CAGR | 11.0 | % | Management target to reach $97B by 2030 |
| Sempra Texas Rate Base CAGR | 18.0 | % | Management target driven by TX load growth |
| Sempra Ownership of Oncor | 80.25 | % | Actual reported ownership stake |
| 2026 Annualized Dividend | 2.63 | $ / Share | Declared Q1 2026 dividend annualized |
| SI Partners Sale Implied Equity Value | 22.2 | $ Billions | Implied value from definitive agreement |
| Sempra California O&M as % of Rev | 28.0 | % | Historical average for regulated utilities |
| Effective Tax Rate | 16.0 | % | Historical average reflecting utility tax advantages |
| Diluted Shares Outstanding | 635 | Millions | Q4 2025 reported share count |
| Cost of Debt (New Issuance) | 5.5 | % | Current investment-grade utility borrowing rates |
| Target FFO / Debt Cushion | 100 | bps | Midpoint of management's 50-150 bps target |
Data Sources & Benchmarks
- SEC EDGAR: Sempra (SRE) 2025 Form 10-K and 8-K earnings releases.
- Investor Relations: Sempra Q4 2025 Earnings Presentation and 2026-2030 Capital Plan Update.
- Key Peers for Benchmarking: Edison International (EIX), PG&E Corporation (PCG), CenterPoint Energy (CNP), and NextEra Energy (NEE).
- Industry Data Sources: California Public Utilities Commission (CPUC) rate case dockets, Public Utility Commission of Texas (PUCT) filings, and ERCOT load growth forecasts.
Sources
Do more with the Sempra model
Frequently asked
What does Sempra do?+
Sempra is a North American energy infrastructure company that operates regulated electric and natural gas utilities, alongside a portfolio of LNG and energy infrastructure assets. Its main business segments include Sempra California, Sempra Texas, and Sempra Infrastructure, serving nearly 40 million consumers across key geographies like California, Texas, and Mexico/US Gulf Coast.
How does Sempra generate revenue?+
Sempra operates an asset-heavy, regulated rate-base utility model, generating revenue primarily from its electric and natural gas utilities in California and Texas. Additionally, its Sempra Infrastructure segment contributes through long-term contracted cash flows from LNG and Mexican infrastructure assets.
What is Sempra's capital expenditure strategy?+
Sempra has announced a record $65 billion capital plan for 2026–2030, averaging approximately $13 billion annually. Over 95% of this investment is directed towards its regulated utilities in Texas and California, targeting an 11% rate base CAGR to $97 billion by 2030.
What is the purpose of the Sempra financial model?+
The Sempra financial model provides a sum-of-the-parts (SOTP) equity valuation and capital allocation analysis. It enables an equity research analyst to evaluate the earnings accretion and funding feasibility of the company's significant capital plan as it transitions to a predominantly regulated utility model.
Can I download an Excel financial model for Sempra (SRE)?+
Yes, an Excel financial model for Sempra (SRE) is available for download, covering a forecast horizon from FY2026 to FY2030. This general corporate model family is designed to assist in evaluating Sempra's financial performance and strategic capital allocation.
What are Sempra's main business segments?+
Sempra's business is divided into Sempra California, which includes SDG&E and SoCalGas and accounts for about 60% of earnings, and Sempra Texas, which is an equity method investment in Oncor contributing approximately 25% of earnings. The remaining 15% of earnings come from Sempra Infrastructure, encompassing LNG and Mexican infrastructure assets.
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