Sustainable Value Creation For All Stakeholders...2 Disclaimer THIS PRESENTATION IS FOR DISCUSSION...

Sustainable Value Creation For All Stakeholders

www.SustainableSempra.com

June 11, 2018

www.SustainableSempra.com▫ 2 ▫

Disclaimer

THIS PRESENTATION IS FOR DISCUSSION AND INFORMATIONAL PURPOSES ONLY. THE VIEWS EXPRESSED HEREIN REPRESENT THE OPINIONS OF ELLIOTT MANAGEMENT CORPORATION AND ITSAFFILIATES (COLLECTIVELY, “ELLIOTT MANAGEMENT”) AND BLUESCAPE RESOURCES COMPANY LLC AND ITS AFFILIATES (COLLECTIVELY, “BLUESCAPE”). ALL OF THE INFORMATION CONTAINEDHEREIN IS BASED ON PUBLICLY AVAILABLE INFORMATION WITH RESPECT TO SEMPRA ENERGY (THE “COMPANY”), INCLUDING FILINGS MADE BY THE COMPANY WITH THE SECURITIES ANDEXCHANGE COMMISSION (“SEC”), AND OTHER SOURCES. IT DOES NOT CONSIDER IN ANY MANNER THE SPECIFIC INVESTMENT OBJECTIVE, FINANCIAL SITUATION, SUITABILITY, OR THEPARTICULAR NEED OF ANY SPECIFIC PERSON WHO MAY RECEIVE THIS PRESENTATION, AND SHOULD NOT BE TAKEN AS ADVICE ON THE MERITS OF ANY INVESTMENT DECISION WITH RESPECT TOTHE COMPANY OR ANY OTHER PERSON. NO INVESTMENT DECISIONS SHOULD BE BASED IN ANY MANNER ON THE INFORMATION SET FORTH IN THIS PRESENTATION. EACH RECIPIENT SHOULDCONSULT ITS OWN COUNSEL, TAX AND FINANCIAL ADVISERS AS TO THE LEGAL AND RELATED MATTERS CONCERNING THE INFORMATION CONTAINED HEREIN. THIS PRESENTATION DOES NOTPURPORT TO BE ALL-INCLUSIVE OR TO CONTAIN ALL OF THE INFORMATION THAT MAY BE RELEVANT TO AN EVALUATION OF THE COMPANY, ITS SECURITIES OR THE MATTERS DESCRIBEDHEREIN.

THIS PRESENTATION DOES NOT CONSTITUTE (AND SHOULD NOT BE CONSTRUED TO BE) A SOLICITATION OR OFFER BY ELLIOTT MANAGEMENT, BLUESCAPE OR ANY OF THEIR RESPECTIVEDIRECTORS, OFFICERS, EMPLOYEES OR AGENTS TO BUY OR SELL ANY SECURITIES OR RELATED FINANCIAL INSTRUMENTS OF THE COMPANY OR ANY OTHER PERSON IN ANY JURISDICTION. THISPRESENTATION DOES NOT CONSTITUTE FINANCIAL PROMOTION, INVESTMENT ADVICE OR AN INDUCEMENT OR AN ENCOURAGEMENT TO PARTICIPATE IN ANY PRODUCT, OFFERING ORINVESTMENT OR TO ENTER INTO ANY AGREEMENT WITH THE RECIPIENT. THIS PRESENTATION SHOULD NOT BE RELIED UPON FOR LEGAL, ACCOUNTING OR TAX ADVICE OR INVESTMENTRECOMMENDATIONS OR FOR ANY OTHER PURPOSE. NEITHER OF ELLIOTT MANAGEMENT NOR BLUESCAPE MAKE ANY REPRESENTATION OR WARRANTY IS MADE THAT THEIR RESPECTIVEINVESTMENT PROCESSES OR INVESTMENT OBJECTIVES WILL OR ARE LIKELY TO BE ACHIEVED OR SUCCESSFUL OR THAT THEIR RESPECTIVE INVESTMENTS WILL MAKE ANY PROFIT OR WILL NOTSUSTAIN LOSSES. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

NO REPRESENTATION, WARRANTY OR UNDERTAKING, EXPRESS OR IMPLIED, IS GIVEN AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION OR VIEWS CONTAINED HEREIN. ELLIOTTMANAGEMENT, BLUESCAPE AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS EXPRESSLY DISCLAIM ANY LIABILITY WHICH MAY ARISE FROM THIS PRESENTATIONAND ANY ERRORS CONTAINED THEREIN AND/OR OMISSIONS THEREFROM OR FROM ANY USE OF THE CONTENTS OF THIS PRESENTATION. NO AGREEMENT, COMMITMENT OR UNDERSTANDINGOR LEGAL RELATIONSHIP EXISTS OR SHALL BE DEEMED TO EXIST BETWEEN OR AMONG ELLIOTT MANAGEMENT, BLUESCAPE OR ANY OTHER PARTY OR PARTIES BY VIRTUE OF FURNISHING THISPRESENTATION. NEITHER ELLIOTT MANAGEMENT NOR BLUESCAPE HAVE SOUGHT OR OBTAINED CONSENT FROM ANY THIRD PARTY TO USE ANY STATEMENTS OR INFORMATION INDICATEDHEREIN AS HAVING BEEN OBTAINED OR DERIVED FROM STATEMENTS MADE OR PUBLISHED BY THIRD PARTIES. ANY SUCH STATEMENTS OR INFORMATION SHOULD NOT BE VIEWED ASINDICATING THE SUPPORT OF SUCH THIRD PARTY FOR THE VIEWS EXPRESSED HEREIN.

EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS ADDRESSED IN THIS PRESENTATION ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE CERTAIN RISKS ANDUNCERTAINTIES. YOU SHOULD BE AWARE THAT PROJECTIONS AND FORWARD LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN AND ACTUAL RESULTS MAY DIFFER FROM THE PROJECTIONSAND OTHER FORWARD LOOKING STATEMENTS CONTAINED HEREIN DUE TO REASONS THAT MAY OR MAY NOT BE FORESEEABLE. THERE CAN BE NO ASSURANCE THAT THE COMPANY’SSECURITIES WILL TRADE AT THE PRICES THAT MAY BE IMPLIED HEREIN. NO REPRESENTATION OR WARRANTY IS MADE AS TO THE ACCURACY OR REASONABLENESS OF THE ASSUMPTIONSUNDERLYING THE PROJECTIONS AND OTHER FORWARD LOOKING STATEMENTS CONTAINED HEREIN. PROJECTIONS, MARKET OUTLOOKS, ASSUMPTIONS OR ESTIMATES IN THIS MATERIAL AREFORWARD-LOOKING STATEMENTS, ARE BASED UPON CERTAIN ASSUMPTIONS, AND ARE SUBJECT TO A VARIETY OF RISKS AND CHANGES, INCLUDING RISKS AND CHANGES AFFECTING INDUSTRIESGENERALLY AND THE COMPANY SPECIFICALLY.

ELLIOTT MANAGEMENT AND BLUESCAPE RESERVE THE RIGHT TO CHANGE OR MODIFY ANY OF THE OPINIONS EXPRESSED HEREIN AT ANY TIME AS THEY DEEM APPROPRIATE. ELLIOTTMANAGEMENT AND BLUESCAPE DISCLAIM ANY OBLIGATION TO UPDATE THE INFORMATION CONTAINED HEREIN.

ALL TRADEMARKS AND TRADE NAMES USED HEREIN ARE THE EXCLUSIVE PROPERTY OF THEIR RESPECTIVE OWNERS AND THEY ARE NOT AFFILIATED WITH ELLIOTT MANAGEMENT OR BLUESCAPE.

ELLIOTT®

▫ 3 ▫

Executive Summary



About Elliott and Bluescape

ELLIOTT

Investment firm founded in 1977 with over $35B of assets under management

Multi-strategy firm active in debt, equities, commodities, currencies and various other asset classes across a range of industries

Strong track record investing in the power, utility and broader energy sector and working with companies to create long-term fundamental stakeholder value

Private investment firm founded in 2007 focused on value-oriented investments in the upstream oil and gas, power and utility industries

John Wilder, Founder and Executive Chairman of Bluescape, served as CEO and Chairman of TXU Corp. from 2004-07, achieving an annual TSR of 65% and ranking as the fifth best performing company in the S&P 500 during that period

Elliott and Bluescape have conducted exhaustive research on Sempra, including working with a team of industry-leading advisers and experts, to evaluate and develop our recommendations

Elliott and Bluescape’s world-class team of advisers includes:

Six Highly Qualified Board Candidates with deep industry, regulatory, executive, and leadership experience and strong local ties

Leading Regulatory Counsel to understand each jurisdiction in which Sempra operates; we retained four specialized local law firms (California, Texas, FERC, and Mexico) to study the regulatory implications of our proposal’s various potential results

Leading Corporate Counsel to review Sempra’s corporate governance and legal structure

Leading Financial Adviser to independently verify the viability and value creation potential of the proposed strategic plan

Big 4 Accounting Firm & Tax Counsel to vet structures and understand the tax consequences of contemplated spin-offs and divestitures

Independent Compensation Consultant to unpack Sempra management’s incentive structure and benchmark against industry peers

We are pleased to share our suggestions for creating a better Sempra for all key stakeholders


Why Are We Here?

Sempra has Continually Underperformed: Despite owning a collection of highly attractive businesses, Sempra’s share price has meaningfully underperformed and persistently trades at a steep discount to both peers and achievable value

Sempra’s Conglomerate Strategy has Failed: A litany of operational and financial setbacks demonstrate drift into a low-performance organization with a detached management structure and Board as the company has become larger, more complex, and more disparate

Inadequate Oversight: Executive compensation, board oversight, corporate structure and behavior are not rooted in appropriate performance and accountability measures and are not in the best interests of key stakeholders

Elliott and Bluescape collectively own a 4.9% economic interest in Sempra valued at more than $1.3 billion1

We believe Sempra can achieve $11-16 billion of value creation from an appropriately conducted business review

Sustainable Value Creation: Two-pronged approach:

Reset Oversight: Refresh the Board with new truly objective, highly qualified directors

Strategic Review: New Board committee to complete a sober, dispassionate, full portfolio and operational review

Sempra’s Potential: Elliott and Bluescape have crafted a readily achievable plan that demonstrates the potential value creation at Sempra from unlocking its significant conglomerate discount, highlighting the value of its LNG development pipeline, and improving US utility operations

Key Stakeholder Benefits: Change in strategy expected to yield significantly better tangible outcomes for customers, employees, regulators and shareholders

Sempra’s Performance Sempra’s Opportunity

38-57%upside

1 Elliott – approx. $1.17B, Bluescape – approx. $152m.

We believe Jeff Martin and his team have a unique opportunity to create a more Sustainable Sempra and achieve $139-158 per share


Sempra Has Underperformed

Sempra’s total shareholder return (“TSR”) has meaningfully underperformed peers and, importantly, its own opportunity

Sempra’s underperformance is not due to the quality of underlying businesses…

Sempra TSR Relative to Infrastructure Utility Peers1 Sempra TSR Relative to Proxy Peers2

Sempra TSR Relative to S&P 500 Utilities Index Sempra TSR Relative to S&P 500

Source: Bloomberg as of 6/7/18.Note: Charts represent peer median relative cumulative total shareholder return.1. Infrastructure utility peers include: NEE, D, DTE, AGR, CNP and NI.2. Proxy peers from Sempra 2018 proxy statement.

(4)

(17)

(39)(34)

(26)

1-Year 2-Year 3-Year 4-Year 5-Year

(3)(8)

(31)

(18)

(7)


(5)(6)

(21)(18)

(9)


(28)

(38)(35)

(42) (42)1-Year 2-Year 3-Year 4-Year 5-Year


22

.5x

20

.4x

19

.0x

18

.7x

18

.2x

17

.4x

17

.9x

17

.6x

16

.4x

16

.3x

16

.3x

16

.2x

16

.0x

15

.8x

15

.6x

15

.2x

15

.0x

14

.8x

14

.6x

14

.2x

14

.1x

13

.3x

Gas Utility Peer Median: 18.9x Electric & Infrastructure

Utility Peer Median: 15.8x

NWN OGS NJR ATO SWX SR AGR NEE LNT NI AEE CMS WEC ED XEL PNW DTE AEP ES CNP D SRE

Lowest Valuation Among Peers

2020 P/E: Sempra vs. Utility Peers

Sempra’s steep valuation discount to peers reflects a substantial conglomerate discount

Source: Bloomberg as of 6/7/18.Note: See Appendix slide 44 for peer group detail.

…Rather, investors do not trust Sempra’s oversight or believe in its strategy


How Has Sempra Become an Underperformer?$

5.2

5

$5

.65

$5

.75

$5

.35

$6

.25

$4

.71

$5

.21

$5

.05

$5

.42

$5

.55

2014 2015 2016 2017 2018Guidance

5-Year Plan Midpoint

Actual

EPS

EPS

SDG&E and SoCalGas provide Sempra holding company robust access to capital

?? ?

85% of management’s annual bonus is based on absolute earnings dollars, not EPS

Pursuing sheer size, Sempra develops and acquires several valuable yet divergent businesses

Lack of focus causes operational issues and consistent misses against 5-year plan1

Sempra’s Board is structured to empower the longest-tenured directors

Investors and analysts lose faith in Sempra,leading to a steep valuation discount2

1 2 3

4 5 6

Access to Capital Misguided Incentives Disparate Portfolio

Operational Issues Poor Oversight Low Valuation

MISS

MISSMISS

MISS

18.9x

15.8x

13.3x

Gas UtilityPeer P/E

Electric UtilityPeer P/E

SempraP/E

Source: Bloomberg as of 6/7/18, SEC filings, Sempra 2018 proxy statement and company presentations.1. Comparison of reported adjusted EPS vs. midpoint of five-year plan EPS target from four years prior.2. 2020 P/E multiple. See Appendix slide 44 for gas and electric utility peer groups.


Current Sempra Does Not Fit Together

Risk Profile Regulated electricRegulated electric

& gasRegulated gas

Long-term contracted,

construction risk

Long-term contracted,

currency risk

Regulated,currency risk

Long-term contracted

Valuation Framework

P/E multiple, dividend yield +

growth


growth


growth

EV/EBITDA, DCF or $/tonne

EV/EBITDA EV/EBITDA or P/EFree cash flow

yield or $/installed kW

Geography US – Texas US – California US – California US – Gulf Coast Mexico Chile and Peru US

Regulator PUCTCPUC electric: ~50%

CPUC gas: ~10%FERC: ~40%

CPUC FERC, DOE CREChile – CNE

Peru –OSINERGMIN

FERC

NaturalInvestor Base

Dedicated electric utility

Dedicatedutility

Dedicatedgas utility

Energy / midstream

Energy / midstream, emerging markets

Dedicatedemerging markets

Yield-oriented

LeadershipSkills

Texas focus; electric ops & maintenance

California focus; electric ops & maintenance

California focus; gas LDC ops & maintenance

Mega-scale gas project

development & construction

Emerging markets project development &

construction

Emerging markets electric

ops & maintenance

Renewables project

development & construction

Sempra’s portfolio approach is suboptimal for its stakeholders. Each business has a different cost of capital and a different risk-return profile

To create a more sustainable company, Sempra must reset oversight, streamline its portfolio, and improve core operations

Source: SEC filings.


Fixing the Problems at Sempra

To address Sempra’s three critical problems we have developed three clear solutions


$40

$35 ($26)

$91

$5 $4

LNG & MidstreamSpin

Non-CoreBusiness

Divestitures

$7B HoldcoDebt Paydown

Pro Forma USUtilities

Utility High-Performance

Strategy

BuybackAccretion

Achievable 6-12Month Price

Target

Sempra’s Potential

Board Enhancement: Six new directors already identified who are truly independent, highly qualified with diverse experience and expertise, who will rely on fact-based evidence to inform their decision-making

Strategic Review Committee (“SRC”): Formation of a new Board committee comprised of the most qualified directors to immediately initiate strategic review

Reset Oversight

Portfolio Review: SRC to conduct “no stone unturned” review to consider all pathways to maximize value –including tax-free spin-offs and tax-optimized business divestitures

Operational Review: SRC to simultaneously review operations to enhance safety, reliability and service at Sempra’s US utilities, with no net increase in customer rates, and maximize LNG development opportunities

Announce Sustainable Sempra Plan by Year-End

Strategic Review

With improved oversight and from the work of a newly formed Strategic Review Committee,we believe that Sempra can create $11-16 billion of value

$139-158

38-57%upside

Note: Assumes share count of 279m including forward share sales. Figures shown are midpoints of each valuation range. See slide 33 for additional detail.1. Net of ~1x EBITDA of proposed holdco debt and $1.7B of convertible preferred stock.2. Accretion from $2-3B share buyback.

1 2

Achievable Upside For a Sustainable Sempra


Customers: Improved reliability and customer service due to renewed operational focus; increased investment in infrastructure with no net increase in utility customer rates

Employees: More opportunity due to increased growth and investment potential; better and safer work environment from new high-performance culture

Regulators: Eliminates exogenous risks from businesses outside each regulator’s direct purview; improved safety and reliability standards on an affordable / cost-efficient basis; enhanced transparency and accountability

Shareholders: Improved management accountability and alignment, transparency, operating performance, financial results and optimized, enhanced value realization with greater overall certainty

A Better Sempra for all Key Stakeholders

Becoming more focused and well-run will benefit all key stakeholdersin each of Sempra’s businesses

A more reliable, more profitable, and more sustainable Sempra


(5)

0

5

10

15

20

1/1

9

1/2

6

2/2

2/9

2/1

6

2/2

3

3/2

3/9

3/1

6

3/2

3

3/3

0

4/6

4/1

3

4/2

0

4/2

7

5/4

5/1

1

5/1

8

5/2

5

6/1

FirstEnergy

XLU

Recent Elliott and Bluescape Collaborations

NRG Total Shareholder Return

Enhanced Oversight: Addition of highly qualified directors and formation of a Business Review Committee of the Board within 1 month

Independent Review: An objective review of NRG’s strategy and operations which culminated in the announcement of a highly successful Transformation Plan within 4 months

$6B of Value Created

#1 Stock in S&P 500 in 2017

#1 Stock in XLU YTD 2018

$1B Cash Flow Improvement

Sale of Non-Core Businesses

FE vs. XLU Since Elliott & Bluescape Investment

Enhanced Oversight: Active involvement of John Wilder on FirstEnergy’s newly formed Restructuring Working Group

Portfolio Focus: Landmark $2.5B investment led by Elliott and Bluescape to repair FE’s balance sheet and enable its exit from merchant generation and refocus on its collection of pristine, regulated utility companies within 3 months

We see similar opportunities at Sempra

Prior to 2018, FE had underperformed the XLU for 6 consecutive years

Source: Bloomberg as of 6/7/18.

+102%+99%

+80%

Since Elliott 13D vs. XLU vs. S&P 500

Source: Bloomberg as of 6/7/18. +18% FE relative TSR vs. XLU from 1/19/18.

+18%

ELLIOTT®

▫ 14 ▫

Sempra Today is Not Working



As Sempra Gets Bigger, Underperformance Deepens

Source: Bloomberg as of 6/7/18.1. Infrastructure utility peers include: NEE, D, DTE, CNP and NI (AGR is excluded from 3-year chart as it was not yet public 3 years ago).

The market is telling Sempra that the time is NOW for a comprehensive strategic review

Sempra TSR Relative to Infrastructure Utility Peers1 and Sempra Enterprise Value

Sempra’s enterprise value has expanded by nearly $17 billion over the last three years,while its TSR has underperformed infrastructure peers by 39%

Sempra relative TSR (LHS)

Sempra enterprise

value (RHS)

(39%)

$57B

$35

$40

$45

$50

$55

$60

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(40)

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J-15 S-15 D-15 M-16 J-16 S-16 D-16 M-17 J-17 S-17 D-17 M-18

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Sem

pra

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Regulated gas & electric utility serving San Diego county

100% SRE owned

$8.5B rate base 1.4m electric, 0.9m gas

customers

Regulated gas utility serving southern California including LA

100% SRE owned

$5.5B rate base 6.0m gas customers

Regulated electric utility serving northwest Texas and Dallas metro

80% SRE owned

$11B rate base 3.5m electric customers

50.2% interest in Cameron LNG export project Gas storage and pipeline assets Leading LNG development pipeline

13.9 Mtpa total liquefactioncapacity at Cameron

42 bcf of gas storage ~25 Mtpa of potential LNG

development projects1

Mexico energy infrastructure company 66.4% SRE owned

1,400 miles of natural gas pipelines with throughput of 16.5 bcf/day

Largest regulated electric utility in Peru 83.6% SRE owned

1.1m electric customers

Third largest regulated electric utility in Chile. 100% SRE owned

0.7m electric customers

Long-term contracted wind and solar assets primarily in NV, AZ, CA and the Midwest US

1.6GW capacity

Sempra Today

However, Sempra has failed to articulate a logical strategy around its various businesses.In reality, no coherent strategy actually exists

Map of Sempra’s Businesses

Source: SEC filings. Map from Sempra website.1. Estimated capacity attributable to Sempra. See Appendix slide 41.

“SRE remains one of the more complex and diversified companies in our universe...”Goldman Sachs, June 6, 2018


How Did Sempra Get SO BIG?

This is NOT working for any of Sempra’s Key Stakeholders

Sempra’s growth strategy relies on siphoning earnings and creditworthiness from its core California utilities and deploying that capital into various unrelated businesses with poor returns and results


Rationale for Current Strategy Doesn’t Hold Together

This is Sempra’s rationale for its strategy from the 2017 Analyst Day

Owning a collection of three distinct, unconnected assets in the Texas regiondoes not constitute a “Gulf Coast strategy”

Sempra has not demonstrated any tangible or quantifiable benefits across its businesses for any of its key stakeholders

Pg. 8 of Sempra’s 2017 Analyst Day Presentation

Pg. 10 of Sempra’s 3Q17 Earnings Presentation


Purported Operational Synergies Lack Credibility

Alleged “Synergy” Management Commentary Elliott / Bluescape Perspective

“Risk Profile”

“With all of our businesses, we are fully committed to our strategy of maintaining high-growth, but utility-like risk profile.”

Executive Chairman Debra Reed, April 5, 2017

Sempra’s businesses have different risk profiles, different growth opportunities, different customers, different regulators, different natural owners anddifferent valuation parameters

This is the underpinning of what’s wrong with Sempra’s current structure and the root cause of underperformance

“Geographic”

“We expect the addition of Oncor, coupled with our existing presence in the natural gas market, to position us well to be a leading player in the Gulf Coast.”

Executive Chairman Debra Reed, October 30, 2017

There is virtually no integration or physical interconnectedness between Sempra’s businesses

Geographic proximity is not a synergy in and of itself

“ProjectConstruction”

“We build transmission at SDG&E. We build transmission in Chile.”

President & COO Joe Householder, April 5, 2017

Expertise in constructing and maintaining renewables and transmission assets is not unique or proprietary

“Safety & Reliability”

“Like our California utilities and our South American utilities, operational excellence is paramount to our focus: safety, reliability and customer service.”

Former Executive VP Steven Davis, April 5, 2017

Safety, reliability and customer service should be the highest priority for any energy / utility business, but it does not justify being a conglomerate

Sempra’s track record does not inspire confidence that the company has high-performance operations


Disparate Businesses Result in Operational Issues

Incident What Happened Key Lessons

Cameron LNG Construction Delays

Cameron LNG commercial operation dates have been delayed numerous times for over 12 months cumulatively due to construction-related issues

Management was ambiguous around timing of plant commissioning and further timing slippages

By comparison, several of Cheniere’s LNG facilities have been completed months ahead of schedule

Large unregulated construction projects require proactive management

In 2016, Sempra management was not aware of any delay until notified by the contractor and was ill-equipped to respond

Aliso Canyon Gas Leak

October 2015 natural gas leak at the SoCalGas Aliso Canyon facility was the worst natural gas leak in US history in terms of environmental impact

Gas leak released over 100,000 metric tons of methane into the atmosphere, with a carbon footprint worse than the Deepwater Horizon oil spill1

Safety and reliability must be the number one priority for any utility management team

Gas leak is an example of “eye off the ball” mismanagement of core operations

Rockies Express Pipeline Impairment

Cumulative impairments on the Rockies Express pipeline cost shareholders approximately $600 million2

Project was plagued at the outset, with construction cost ballooning from $4.4B to $6.8B, an over 50% increase

Subsequent changes to re-contracting prospects led Sempra to write down and ultimately dispose of its 25% interest

Despite the long-term contracted nature of assets, midstream infrastructure investment requires specialized experience and foresight

Argentina Impairment

Sempra lost virtually its entire investment in two Argentine regulated utilities, costing shareholders over $200 million

Businesses in foreign jurisdictions have completely different risk profiles compared to regulated US utilities

Sempra’s structure has resulted in serious execution missteps, which creates meaningful risks for all key stakeholders and results in lack of confidence in leadership

Source: SEC filings.1. From The Independent UK, 1/2/2018.2. Cumulative pre-tax impairments on Rockies Express Pipeline and related pipeline capacity release.


Consistent EPS Misses Demonstrate Lack of Grasp and Focus

2011–2017 Segment EPS Contribution

($0.52)($0.22)

($0.67) ($0.69) ($0.61) ($0.46) ($0.55)

$1.91 $1.44 $1.61

$1.97 $1.87 $1.53 $1.77

$1.19

$1.17 $1.36

$1.32 $1.67 $1.58

$1.66

$1.78

$1.96 $1.89

$2.11 $2.28

$2.39 $2.55

2011 2012 2013 2014 2015 2016 2017

6.1%CAGR

California utilities are growing EPS

“Everything Else,” is Flat/Down

5.7%CAGR

(1.3)%CAGR

5-Year Plan EPS Guidance vs. Actual Achieved1

$5.25

$5.65 $5.75

$5.35

$6.25

$4.71

$5.21

$5.05

$5.42

$5.55

2014 2015 2016 2017 2018 GuidanceMidpoint

5-Year Plan Midpoint Actual

10%miss

8%miss 12%

miss

11%miss

“The bear case on SRE is that they never make their five-year forecast, so why believe them now?...It is true that SRE will have fallen short of the majority of their five-year plans for EPS growth aspirations laid out in ‘12/‘13/‘14/‘15.”

Evercore ISI, April 5, 2018

Sempra has not been able to sustainably drive earnings growth at non-California businesses

SDG&E

Other Businesses

SoCalGas

Corporate

Source: SEC filings, company presentations.1. Comparison of reported adjusted EPS vs. midpoint of five-year plan EPS target from four years prior.


Repeated Downward Earnings Revisions

$4.00

$5.00

$6.00

$7.00

$8.00

Jun-14 Jun-15 Jun-16 Jun-17 Jun-18

2019: (12%)

2018: (13%)2017: (8%)

2016: (8%)

Sempra’s consensus earnings estimates have consistently seen significant downward revisions, perpetuating share price underperformance and low valuation

2016–2019 Street Consensus EPS Estimate Trend

“Looking for gradual negative revisions to 2018-20 outlook, but disproportionate rebase of '18 keeps LT EPS CAGR intact to '21.”

Bank of America, May 8, 2018

“We see a potential re-set of growth expectations ahead…Should the company rely more on future LNG project or other riskier international or other non-utility sources of growth in the future, we see potential for additional multiple compression as well.”

JP Morgan, June 4, 2018

“The bear case on SRE continues to be skepticism regarding their ability to achieve their L-T EPS growth aspirations, pointing to SRE’s historic underperformance vs. their growth aspirations.”

Evercore ISI, May 9, 2018

Source: Bloomberg as of 6/7/18.

“Our updated 2019 estimates come in below consensus, and we expect 2019 guidance at SRE’s analyst day (June 28th) to disappoint.”

Goldman Sachs, May 15, 2018


Sempra’s Board Structure is Problematic

Exec. Directors Age Tenure Industry? Board Roles Nom & Gov. Comp.

Debra Reed 61 40* Yes Chairman, Former CEO

Jeff Martin 56 14* Yes CEO

Indp. Directors Age Tenure Industry? Board Roles Nom & Gov. Comp.

Director 1 62 24 No Chair of Governance

Director 2 74 20 No

Director 3 73 17 Yes Lead Director, Chair of Comp

Director 4 73 10 No Chair of Health & Safety

Director 5 69 7 No

Director 6 66 5 No Chair of Audit

Director 7 66 5 Yes

Director 8 72 5 No

Director 9 55 5 Yes

Director 10 56 1 No

Director 11 48 1 No

Director 12 62 1 No

The power structure of the current Board is skewed heavily towards the longest tenured directors

In particular, the compensation committee has failed to properly construct management’s incentive scheme

The Board today lacks key industry and capital allocation know-how and credibility

Longest tenured directors dominate key positions, notably the Nominating & Governance and Compensation Committees

Sempra’s Lead Director has 17 years of tenure and the Chairman of the Nominating & Governance Committee has 24 years of tenure

Only three of Sempra’s 12 independent directors have utility industry experience

Four of Sempra’s 12 independent directors have no beneficial ownership in Company stock at all (0 common shares or options)

In aggregate, Sempra’s independent directors own a total of 52,200 shares, or 0.02% of the current shares outstanding

Only one of Sempra’s independent directors has ever purchased shares on the open market (and on only one occasion)

Since 2010, Sempra’s independent directors have sold nearly $20 million of stock on the open market

Sempra’s Board would greatly benefit from new fresh perspectives and real industry experience

Source: Sempra 2018 proxy statement.

* Tenure for Debra Reed and Jeff Martin refers to tenure at Sempra, not the Board. Ms. Reed has been a director since April 2010 and Mr. Martin joined the board in May 2018.


The Problems with Sempra’s Annual Incentive Structure

Governance Concerns Made Tangible in Incentive Structure

Sempra’s incentive structure encourages GET BIG strategy and rewards mediocrity

Management’s bonus is 85% based on absolute earnings dollars (not EPS)

2013 2014 2015 2016 2017

Previous Year Actual Target Actual

The Board sets very low goals for management’s bonus. In fact, in 3 of the last 5 years, the set goal was lower than the previous year’s actual result

-10%

3%

-4% 0%1%

Management’s annual pension contribution is based on salary and 3-year average highest bonus during the prior 10 years, thus shareholders pay double for low goals

Peer Group CEOs Annual Incentive Payout as a % of Target

2013 2014 2015 2016 2017 5YR Avg.

75th 155% 155% 141% 147% 143% 141%

50th 135% 126% 122% 127% 121% 127%

25th 109% 113% 107% 107% 101% 109%

Sempra 189% 177% 188% 105% 196% 171%

Sempra TSR Percentile vs. Proxy Peers 92% 34% 22% 12% 28% 42%

Source: Sempra proxy statements.

This plan allows for low return investments and acquisitions so long as it grows absolute earnings dollars (not per share)

Earnings In billions of dollars

Previous Year Earnings vs. Target (85% of Annual Bonus) vs. Actual Achieved


$5

3

$5

1

$4

6

$4

6

$4

3

$4

3

$4

3

$4

2

$4

2

$4

0

$3

9

$3

9

$3

8

$3

5

$3

4

$3

4

$3

1

$3

1

$3

0

$3

0

$2

8

$2

8

$2

6

$2

1

$2

0

$1

9

$1

7

5

60

19

1413

30

-11

5

44

7

-8

40

18

5

35

48

38

49

40 39

12

42

-12

68

3942

(20)

(10)

0

10

20

30

40

50

60

70

80

-$10

$0

$10

$20

$30

$40

$50

$60

TSR

CEO

Pay

in M

M

CEO Pay Peer Avg Pay TSR Peer Avg TSR

The Result: Big Company, Big Pay, Small Returns

3-Year (2015–17) CEO Pay vs. Proxy Peer TSR

Sempra has paid its CEO more than $50 million over the last three years vs. a peer average of $36 million, despite underperforming proxy peers by more than 20%

Source: Bloomberg, company proxy statements.

ELLIOTT®

▫ 26 ▫

Creating a Better Sempra


www.SustainableSempra.com▫ 27 ▫Source: Fireside chat with Wolfe Research, September 14, 2017.

“I hope that over time [Sempra’s businesses] grow so huge that it makes sense to have that type of separation.

Executive Chairman Debra Reed, September 14, 2017

“

Analyst: “You got high quality businesses in each thing that you do…but they are kind of disparate businesses. You could arguably say that they could be put together in different standalone businesses and the like.”


Sustainable Value Creation


Reset Oversight

Strong California ties

Strong Texas ties

Strong Louisiana ties

Utility industry executive and board experience and expertise

Midstream industry executive and board experience and expertise

Federal and state energy regulatory commission experience and expertise

Political / legislative experience and expertise

Strong leadership and high-performance culture qualifications

Transaction advisory / special committee experience and expertise

We have identified six new, highly qualified directors with diverse, highly relevant skill-sets and look forward to sharing their credentials with Sempra


Strategic Review

A comprehensive plan to improve Sempra is readily achievable by late 2018

A rigorous review of Sempra’s portfolio and operations should lead to tangible, sustainable enhancements for all key stakeholders

Refresh Board

Appoint six new highly qualified directors

Form Strategic Review Committee of the Board

Form Strategic Review Committee (“SRC”) of the Board populated with some or all of the newly appointed Board members; SRC to hire independent advisers

Full Business Review

SRC to conduct full business review, including both i) portfolio review to evaluate strategic alternatives for each business; and ii) operational review to identify efficiencies and growth opportunities

Announce New Plan

Publicly announce results of business review and begin plan implementation immediately


Sempra’s Conglomerate Discount Can be Efficiently Unlocked

SCALE Each underlying business has critical scale Each underlying business is a billion dollar plus enterprise

Several of Sempra’s businesses lead their respective sectors

NO DIS-SYNERGIES No operational dis-synergies from separation No real integration or physical interconnectedness

between businesses

MANAGEMENT Each operating business has its own fully staffed

management team Enhanced focus from removal of complexity from

disparate businesses

Potential cost savings from eliminating unnecessary layers of corporate overhead

TAX LEAKAGE Minimal to zero cash tax leakage Simplification can be effectuated through tax-free spins

and tax-efficient divestitures

Sempra has >$4 billion of net operating losses to shield taxable gains

Strategic Review Will Create a More Focused Sempra

Sempra Today Asset Sales New High-Performance Companies

US Utility Co. LNG Co.

Sempra’s corporate structure can be simplified over a short period of timewith no disruption to underlying operating businesses


Operational Review

Employ back-to-basics strategy with increased executive management focus on core utility operations rather than unregulated growth

Transition SDG&E and SoCalGas into high-performance organizations

Target top-decile metrics in relevant industry benchmarks including customer satisfaction, safety and reliability, environmental compliance and cost efficiency

Incremental rate base investment opportunity of $2.5-5.0 billion expected with no net increase in customer rates

Ample investment opportunities in pipeline safety, weather hardening, grid modernization, green energy initiatives and cybersecurity

Service, Safety and Reliability: Improved reliability as measured by SAIDI and SAIFI from pipeline safety and grid modernization investments

Weather Hardening: Increased protection against extreme weather events and wildfires from infrastructure hardening

Green Energy: More investment in behind-the-meter services and solutions such as battery storage and electric vehicle infrastructure

Benefits to Customers, Employees and Regulators

High-Performance Strategy Cost-Effective Rate Base Investment


Spin-off to Shareholders:

50.2% unconsolidated interest in Cameron LNG JV 42 Bcf gulf coast gas storage, Cameron Interstate Pipeline $8-9B $28-31

Development Projects Risked NPV of ~25 Mtpa of LNG development projects Cameron Trains 4-5, Port Arthur, Energia Costa Azul, P2K pipeline $3B $10-11

Business Divestitures:

66.4% interest in IEnova 83.6% interest in Luz del Sur, 100% interest in Chilquinta 1.6 GW net capacity of contracted wind and solar generation across the US

$9-10B $33-37

Holdco Debt Reduction Assumes $7.2B of holdco debt paydown from sale proceeds ($7B) ($26)

High-Performance US Utilities:

100% interest in SDG&E and SoCalGas; 80% interest in Oncor $29-30B $105-109

High-Performance Strategy NPV of incremental $2.5-5.0B rate base investment over 3-5 years $1-2B $3-7

Pro Forma Holdco Debt $5.4B face value of remaining holdco debt or ~1x EBITDA1, capitalized at

consistent multiple of after-tax interest expense $1.7B face value of convertible preferred deducted dollar-for-dollar

($5B) ($16)

Share Buyback Accretion2 Accretion from $2-3B buyback using proceeds from business divestitures after holdco debt paydown $1-2B $2-5

Total Equity Value $39-44B $139-158

Potential Upside For a Sustainable Sempra

Note: Assumes share count of 279m including forward share sales.1. Expected to sustain strong investment grade credit metrics.2. Represents capitalized value of accretion from share buybacks. Actual equity value would be $36-39B with 250-262m shares outstanding.

Equity Value Per SRE Share


Which Sempra Do You Choose?

Status QuoSustainable

SempraImprovement

Target Share Price $101/Share $139-158/Share $38-57/Share Upside

Target Equity Value1 $28B $39-44B$11-16B Value

Creation

Holdco Debt $12B $5B $7B Less Holdco Debt

Potential EquityIssuance / Buyback

$2B Issuance $2-3B Buyback$4-5B Less Equity

Need

US Utility Earnings Growth2 5-7% 7-10% +2-3% Higher Growth

After initiating an objective portfolio and operational review, Sempra can change its trajectory and become a more valuable and more sustainable company

1. Assumes share count of 279m including forward share sales.2. Expected 3-5 year earnings growth rate with ~1x of holdco leverage.


Operational Review Should Identify Long-Term Improvements

The below upside factors, which are not included in our analysis,offer Sempra shareholders even further substantial value-creation opportunities over time

1. Estimated pre-tax cash flow before project financing amortization.

US Utility Co. LNG Co.

Earnings Growth Additional Opportunity Cameron Trains 1-3LNG & Midstream

Development

Implementation of High-Performance Strategy enables industry-leading utility earnings / dividend growth of 7-10% and corresponding value accretion over time

Potential to expand scope, magnitude and duration of High-Performance Strategy upon further objective review of Sempra’s US utility operations

Annual free cash flow from Cameron Trains 1-3 attributable to Sempra expected to be $550m+ beginning in 20201

Potential to optimize operating cost structure of Cameron and maximize output

~25 Mtpa of cost-effective LNG development capacity at three different sites (see Appendix slide 48)

Successful development of even one facility would result in billions of dollars of incremental value


Next Steps

We appreciate stakeholders’ consideration of our perspectives and invite Sempra’skey stakeholders and analysts to share their thoughts with us

We hope that we can work expeditiously with Sempra to initiate the fundamental changes needed

Elliott and Bluescape formally ask for the following initial next steps:

Engagement with Elliott and Bluescape on Board refreshment, including consideration of the six highly qualified directors that we have identified

Formation of Strategic Review Committee which will include newly appointed directors

Sempra’s new Strategic Review Committee to initiate a full portfolio and operational review with the help of advisers


Contact Information

[email protected]

Toll-Free: +1-877-259-6290

[email protected]

+1-212-478-2017

mailto:[email protected]

mailto:[email protected]

ELLIOTT®

▫ 38 ▫

Appendix



Customers / ServiceTerritory

3.5 million electric

Dallas metro and northwest Texas

1.4 million electric, 0.9 million gas

San Diego County and southern Orange County

6 million gas

Southern California including the Los Angeles metro

Sempra Ownership 80% 100% 100%

Rate Base / Growth $11B / 7% $8.5B rate base (~50% CPUC electric, ~10% CPUC gas, ~40% FERC)

6% rate base growth1

$5.5B / 7%1

Other Commentary More than four attempts to acquire Oncor over the past three years

Small geographical service territory and best-in-class systems limit exposure to wildfire risk

Largest natural gas distribution utility in the US

Indicative Comparable Peers

Regulated US Utilities

Sempra’s US utilities have strong growth rates and should command premium valuations as a standalone US utility holding company

Source: SEC filings, SDG&E 2019 General Rate Case filing, Sempra earnings calls.1. Based on Sempra 2017 Analyst Day presentation 2017-21 projected rate base growth.

BUSINESS OVERVIEW


SDG&E - CPUC Electric, 17%

SDG&E - FERC, 14%

SDG&E - CPUC Gas, 3%

SoCalGas - CPUC Gas, 22%

Oncor - PUCT, 44%

Sempra’s US Utilities Have Limited Exposure to Wildfires

Sempra US Utility Aggregate Rate Base Composition

~83% of aggregate rate base assets are either: TX assets not subject to

inverse condemnation Gas assets with no

wildfire exposure FERC assets with history

of cost recovery

Only ~17% of Sempra’s aggregate rate base is electric infrastructure regulated by the CPUC

SDG&E Service Territory

“In our view, Sempra has minimal wildfire risk due to its small geographic footprint, and “best in class” fire mitigation and management program.”

Citi, March 19, 2018

Only a small fraction of Sempra’s US utility business is exposed to California wildfire risk

Source: SEC filings, CPUC website, SDG&E and SoCalGas 2019 General Rate Case filings.

BUSINESS OVERVIEW

• SDG&E’s small geographic service area, which is ~7% the size of SoCalEdand PG&E, further limits wildfire exposure

• SDG&E is known to have best-in-class technology, including cameras to monitor systems and the ability to quickly de-energize electric infrastructure


• 3 LNG trains

• 13.9 Mtpa nameplate capacity

• 50.2% SRE ownership

• 20-year take-or-pay agreements with A-rated counterparties (who are also project owners) for full nameplate capacity

• No commodity exposure

• 84% complete with projected 2019 completion for all 3 trains

• Louisiana Gulf Coast

• 2 LNG trains

• 9 Mtpa brownfield capacity

• 50.2% SRE ownership

• Fully permitted by FERC and DOE

• Louisiana Gulf Coast

• 2 LNG trains

• 13.5 Mtpa greenfield capacity

• 3,000-acre prime land position along gulf coast

• FERC and DOE non-FTA applications filed

• Texas Gulf Coast

• Mid-scale 2.5 Mtpa LNG facility in the near-term

• 12 Mtpa LNG facility longer-term

• Pursuant to development agreement with IEnova

• Permitted by Mexican regulators

• Mexico West Coast / Baja

• 1.5-2.0 Bcfd Permian-to-Katy Pipeline; JV with Boardwalk

Contracted 20-year cash flow annuity

Opportunity to develop over 25 Mtpa1 of cost-effective liquefaction capacity

Sempra has the foundation of a highly valuable standalone LNG and midstream franchise.High-performance execution and strategic vision are key to unlocking the value of this business

Expansion Trains 4 & 5Trains 1-3

LNG & Midstream

OtherProjects

1. Estimated capacity attributable to Sempra; assumes retention of 50% interest in ECA liquefaction pursuant to a development agreement with IEnova.

BUSINESS OVERVIEW


Description Premier Mexico energy infrastructure company primarily focused on natural gas transportation and distribution

Significant growth opportunities in renewables and liquids infrastructure

Long-term contracted dollar-based assets

Largest electric utility in Peru

Primarily transmission and distribution

Serves 1.1 million customers

Third largest electric utility in Chile

Primarily transmission and distribution

Serves 0.7 million customers

1.6 GW of net wind and solar generation across the US

Fully contracted assets with 17 year weighted average remaining contract life

Public Market Valuation

$6.1B equity value

$8.8B TEV

$1.8B equity value

$2.4B TEV

N/A N/A

Sempra Ownership

66.4% 83.6% 100% Various

Business Overview: Other Businesses

Sempra’s three international businesses and renewables portfolio are all attractive but non-core. Each has a strong growth profile and constructive regulatory environment

Source: Bloomberg, SEC filings.

BUSINESS OVERVIEW


Business Segment Valuation Methodology

0.0-1.0x discount to median electric utility peer group P/E multiples on year-forward basis (see Appendix slide 44) Electric utility peer group: AEP, ED, XEL, WEC, ES, AEE, CMS, LNT, PNW

0.0-0.5x discount to median gas utility peer group P/E multiples on year-forward basis (see Appendix slide 44) Gas utility peer group: ATO, OGS, NJR, SWX, SR, NWN

0.5-1.0x premium to median electric utility peer group P/E multiples on year-forward basis (see Appendix slide 44) Electric utility peer group: AEP, ED, XEL, WEC, ES, AEE, CMS, LNT, PNW

Cameron LNG Trains 1-3: 13.4-14.4x EV/EBITDA applied to midpoint of run-rate EBITDA guidance range of $812.5m; corresponds to $1,600-$1,700/tonne capacity

o Consistent with Cheniere’s (CQP and LNG) current observed market valuation Gas storage: $10-12m/Bcf capacity; Cameron Interstate Pipeline: 10-11x EV/EBITDA

LNG & MidstreamDevelopment Projects

65-70% discount to unrisked NPV of ~$8.5B for prospective LNG & Midstream development projects See comparison to other LNG development companies on Appendix slide 48

Sale at 10-25% change-of-control premium to current public market valuation

Sale at 10-25% change-of-control premium to current public market valuation

Sale at 10-25% change-of-control premium to estimated standalone value calculated using aggregate IPSA P/E multiple

Sale of 1.6GW of wind and solar assets at $1,500-1,650/kW change-of-control value less $631m non-controlling interest

Key Valuation Assumptions

Our valuation range is constructed using the parametersdescribed below and is achievable over 6-12 months

VALUATION


Relevant Comparable Company Valuation Statistics

Public Market Trading Comparables

Source: Bloomberg as of 6/7/18, company presentations.Note: Peer groups developed by Elliott & Bluescape and our financial adviser to most closely match Sempra’s utility businesses and excludes certain special situations.1. Reflects midpoint of medium-term EPS growth guidance.2. EPS adjusted to exclude impact of non-recurring items.

VALUATION

Share Mkt Cap TEV 2018E 2018-21 Yield + EV / EBITDA P / E

Name Ticker Price ($B) ($B) Div. Yield EPS CAGR Growth 2018 2019 2020 2018 2019 2020

Electric Utility Peers

American Electric Power Co Inc AEP $64.15 $31.6 $55.3 3.9% 5.1% 9.0% 10.1x 9.5x 9.0x 16.5x 15.6x 14.8x

Consolidated Edison Inc ED 72.79 22.6 39.4 3.9% 3.4% 7.4% 10.1 9.5 9.2 17.1 16.4 15.8

Xcel Energy Inc XEL 42.72 21.7 37.6 3.6% 6.0% 9.6% 10.1 9.4 9.1 17.6 16.5 15.6

WEC Energy Group Inc WEC 59.38 18.7 29.5 3.7% 6.2% 9.9% 12.1 11.3 10.7 18.0 17.0 16.0

Eversource Energy ES 53.60 17.0 31.0 3.8% 6.2% 9.9% 11.5 10.8 10.4 16.5 15.4 14.6

Ameren Corp AEE 56.90 13.8 22.8 3.3% 7.4% 10.7% 10.0 9.4 8.8 18.7 17.6 16.3

CMS Energy Corp CMS 43.38 12.3 22.4 3.3% 6.9% 10.2% 10.1 9.5 9.2 18.6 17.3 16.2

Alliant Energy Corp LNT 39.19 9.1 14.6 3.4% 6.0% 9.5% 11.9 10.9 9.6 18.5 17.4 16.4

Pinnacle West Capital Corp PNW 74.48 8.3 13.7 3.8% 5.1% 8.9% 9.7 9.1 8.7 16.7 15.8 15.2

Median $17.0 $29.5 3.7% 6.0% 9.6% 10.1x 9.5x 9.2x 17.6x 16.5x 15.8x

Gas Utility Peers

Atmos Energy Corp ATO $85.73 $9.5 $12.6 2.3% 7.0% 1 9.3% 12.1x 10.8x 9.7x 21.6x 20.1x 18.7x

ONE Gas Inc OGS 71.17 3.7 5.2 2.6% 6.5% 9.1% 11.9 11.2 10.4 22.8 21.6 20.4

New Jersey Resources Corp NJR 41.05 3.6 4.9 2.7% 7.0% 1 9.7% 14.4 13.8 12.8 21.9 2 20.6 19.0

Southwest Gas Holdings Inc SWX 74.19 3.6 5.6 2.8% 7.0% 9.8% 9.7 9.0 8.8 20.4 19.3 18.2

Spire Inc SR 67.85 3.4 6.0 3.3% 5.0% 8.3% 12.8 11.7 10.9 19.2 2 18.1 17.4

Northwest Natural Gas Co NWN 58.10 1.7 2.5 3.3% 5.6% 8.8% 11.6 10.8 10.4 25.6 23.4 22.5

Median $3.6 $5.4 2.7% 6.8% 9.2% 12.0x 11.0x 10.4x 21.8x 20.3x 18.9x

Infrastructure Utility Peers

NextEra Energy Inc NEE $156.38 $73.7 $108.7 2.8% 7.8% 10.7% 11.8x 10.7x 10.1x 20.2x 18.7x 17.6x

Dominion Energy Inc D 62.39 40.7 80.3 5.4% 4.3% 9.6% 11.7 11.0 10.1 15.3 14.7 14.1

DTE Energy Co DTE 97.04 17.6 30.8 3.7% 6.2% 9.9% 11.0 10.1 9.5 16.8 15.8 15.0

Avangrid Inc AGR 50.40 15.6 21.7 3.5% 8.3% 11.9% 10.4 9.8 9.2 20.9 19.9 17.9

CenterPoint Energy Inc CNP 25.41 11.0 18.6 4.4% 5.8% 10.2% 8.6 8.4 7.9 16.0 15.1 14.2

NiSource Inc NI 23.56 8.5 17.6 3.3% 6.4% 9.6% 11.5 10.4 9.8 18.4 17.1 16.3

Median $16.6 $26.3 3.6% 6.3% 10.0% 11.2x 10.2x 9.6x 17.6x 16.4x 15.7x


Relevant M&A Transactions

High quality regulated and contracted businesses have commanded significant M&A premiums and valuations well in excess of what is embedded in Sempra’s share price

Precedent Transaction Comparables

Source: Bloomberg, SNL Energy, company press releases.

VALUATION

Date Date Transaction Equity Offer FY+1 FY+1 EV/

Acquirer Target Announced Closed Value ($B) Value ($B) Premium P/E EBITDA

Gas Utility Transactions

Centerpoint Vectren 4/23/18 TBD $8.1 $6.0 17% 23.8x 11.6x

HydroOne Avista 7/19/17 TBD 5.3 3.5 24% 25.6x 11.2x

AltaGas WGL Holdings 1/25/17 TBD 6.3 4.5 28% 24.2x 11.4x

Dominion Questar 2/1/16 9/19/16 6.0 4.4 30% 19.0x 10.0x

Duke Energy Piedmont 10/26/15 10/4/16 6.7 4.9 42% 30.0x 15.0x

Emera Teco 9/4/15 7/1/16 10.4 6.5 48% 23.2x 10.7x

Southern AGL Resources 8/24/15 7/1/16 11.9 7.9 36% 21.0x 10.0x

Median 30% 23.8x 11.2x

Electric Utility/Transmission Transactions

NextEra Gulf Power 5/21/18 TBD $5.8 $4.4 NA 24.7x 12.8x

Dominion Scana 1/3/18 TBD 14.6 7.9 42% 18.2x 11.5x

Sempra Oncor 8/20/17 3/9/18 18.8 9.5 NA 23.7x 9.9x

Fortis ITC 2/9/16 10/14/16 11.3 6.9 33% 20.0x 11.9x

Algonquin Power Empire District Electric 2/9/16 1/3/17 2.4 1.5 21% 21.5x 9.7x

Iberdrola UIL 2/25/15 12/17/15 4.8 3.0 19% 20.7x 9.8x

Median 27% 21.1x 10.7x

Natural Gas Infrastructure Transactions

Pembina Veresen 5/1/17 10/11/17 $7.1 $4.3 22% 33.5x 15.0x

Enbridge Spectra 9/6/16 2/27/17 48.6 28.3 12% 27.1x 14.9x

Transcanada Columbia Pipeline Group 3/17/16 7/1/16 13.3 10.2 29% 36.3x 17.1x

MPLX Markwest 7/13/15 12/4/15 21.3 15.7 32% 67.3x 18.0x

Median 26% 34.9x 16.0x


Cameron LNG vs. Cheniere Metrics Comparison

Cameron LNG compares favorably to Cheniere’s projects: i) more contracted, ii) no commodity exposure, iii) better counterparty credit, iv) less levered

Trains 1-3 Cheniere Energy Partners(Sabine Pass Trains 1-5)

Cheniere Energy Inc.(Sabine Pass Trains 1-5, Corpus

Christi Trains 1-3)

FID Nameplate Capacity

13.9 Mtpa 22.5 Mtpa 36.0 Mtpa

ExpectedCompletion

2019 2019 2021

Contract Terms 100% 20-year take-or-pay ~90% 20-year take-or-pay ~85% long-term take-or-pay

Gas Procurement Customer responsible Cheniere responsible Cheniere responsible

Counterparty Credit

All A-rated~55% A-rated or better;

~45% BBB-rated~40% A-rated or better;

~60% BBB-rated or unrated

Consolidated Debt/EBITDA

~4.5x1 ~6x2 ~6-6.5x2

Enterprise Value N/A $38B2,3 $54B2,4

Source: SEC filings, company presentations.1. Sempra’s $3.7B share of Cameron LNG JV financing per Sempra’s 2017 10-K divided by run-rate EBITDA guidance midpoint of $812.5m.2. Uses midpoint of debt guidance as shown in Cheniere’s 5/29/18 investor presentation.3. Market cap grossed up by 20% (estimated run-rate cash flow allocation to GP) to account for GP interest.4. Shares o/s of 288m as shown in Cheniere’s 5/29/18 investor presentation; non-controlling interest valued using market value of CQP and CQH shares not owned by Cheniere.

VALUATION


$22 B$24 B

$25 B$26 B

$28 B

$1,600 /tonne

$1,700 /tonne

$1,800 /tonne

$1,900 /tonne

$2,000 /tonne

Cameron LNG vs. Cheniere Valuation Comparison

Public market values of LNG businesses provide a marker for thepotential standalone value of Sempra’s LNG & Midstream businesses

Public Market TEV / Mtpa of Contracted LNG Businesses

$1,700 / tonne $1,500 /

tonne

Cheniere EnergyPartners LP (CQP)

Cheniere EnergyInc (LNG)

Implied 100% TEV of Cameron Trains 1-3 (13.9 Mtpa)

Later completion date for Corpus Christi Train 3

Implied Equity Value to SRE:

$7.5B $8B $9B $9.5B $10B

Elliott & BluescapeValuation Range

Source: Bloomberg as of 6/7/18, SEC filings.

VALUATION


LNG Development Comparison

Standalone publicly-traded LNG development businessescommand significant market valuations

$2.5 B

$0.7 B

Tellurian NextDecade

Public market value of LNG development companies

Attributable Capacity

Brownfield / Greenfield

RegulatoryPermits

Cameron T4-5 4.5 Mtpa Brownfield Received

Port Arthur 13.5 Mtpa Greenfield Filed

Energia Costa Azul ~7 Mtpa1 Brownfield Received

Total Sempra ~25 Mtpa

Tellurian / Driftwood 27.6 Mtpa Greenfield Filed

NextDecade / Rio Grande

27 Mtpa Greenfield Filed

Two of Sempra’s projects are at brownfield sites and have received regulatory permits

Comparison of LNG development projects

Source: Bloomberg as of 6/7/18.1. Assumes Sempra retains 50% interest in ECA liquefaction pursuant to a development agreement with IEnova.

VALUATION

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