XML 51 R22.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

GENERAL INFORMATION AND OTHER FINANCIAL DATA | 6 Months Ended
--- | ---
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
GENERAL INFORMATION AND OTHER FINANCIAL DATA | GENERAL INFORMATION AND OTHER FINANCIAL DATA PRINCIPLES OF CONSOLIDATION Sempra Sempra’s Condensed Consolidated Financial Statements include the accounts of Sempra, a California-based holding company, and its consolidated entities, which invest in, develop and operate energy infrastructure in North America, and provide electric and gas services to customers. Sempra has three separate reportable segments, which we describe in Note 12. In the fourth quarter of 2023, Sempra realigned its reportable segments to reflect changes in how the CODM oversees our three platforms: Sempra California, Sempra Texas Utilities and Sempra Infrastructure. Our former SDG&E and SoCalGas reportable segments were combined into one operating and reportable segment, Sempra California, which is consistent with how the CODM assesses performance due to the similarities of their operations, including geographic location and regulatory framework in California. Sempra’s historical segment disclosures have been restated to conform with the current presentation, so that all discussions reflect the revised segment information of its three reportable segments. All references in these Notes to our reportable segments are not intended to refer to any legal entity with the same or similar name. SDG&E SDG&E’s common stock is wholly owned by Enova Corporation, which is a wholly owned subsidiary of Sempra. SDG&E is a regulated public utility that provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County. SDG&E has one reportable segment. SoCalGas SoCalGas’ common stock is wholly owned by Pacific Enterprises, which is a wholly owned subsidiary of Sempra. SoCalGas is a regulated public natural gas distribution utility, serving customers throughout most of Southern California and part of central California. SoCalGas has one reportable segment. BASIS OF PRESENTATION This is a combined report of Sempra, SDG&E and SoCalGas. We provide separate information for SDG&E and SoCalGas as required. We have eliminated intercompany accounts and transactions within the condensed consolidated financial statements of each Registrant. We have prepared our Condensed Consolidated Financial Statements in conformity with U.S. GAAP and in accordance with the interim period reporting requirements of Form 10-Q and applicable rules of the SEC. The financial statements reflect all adjustments that are necessary for a fair presentation of the results for the interim periods. These adjustments are only of a normal, recurring nature. Results of operations for interim periods are not necessarily indicative of results for the entire year or for any other period. We evaluated events and transactions that occurred after June 30, 2024 through the date the financial statements were issued and, in the opinion of management, the accompanying statements reflect all adjustments necessary for a fair presentation. All December 31, 2023 balance sheet information in the Condensed Consolidated Financial Statements has been derived from our audited 2023 Consolidated Financial Statements in the Annual Report. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the interim period reporting provisions of U.S. GAAP and the SEC. We describe our significant accounting policies in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report and the impact of the adoption of new accounting standards on those policies in Note 2 below. We follow the same accounting policies for interim period reporting purposes. The information contained in this report should be read in conjunction with the Annual Report. REGULATED OPERATIONS SDG&E, SoCalGas and Sempra Infrastructure’s natural gas distribution utility, Ecogas, prepare their financial statements in accordance with the provisions of U.S. GAAP governing rate-regulated operations. We discuss revenue recognition and the effects of regulation at our utilities in Notes 3 and 4 below and in Notes 1, 3 and 4 of the Notes to Consolidated Financial Statements in the Annual Report. Our Sempra Texas Utilities segment is comprised of our equity method investments in holding companies that own interests in regulated electric transmission and distribution utilities in Texas. Our Sempra Infrastructure segment includes the operating companies of our subsidiary, SI Partners, as well as certain holding companies and risk management activity. Certain business activities at Sempra Infrastructure are regulated by the CRE and the FERC and meet the regulatory accounting requirements of U.S. GAAP. VARIABLE INTEREST ENTITIES We consolidate a VIE if we are the primary beneficiary of the VIE. Our determination of whether we are the primary beneficiary is based on qualitative and quantitative analyses, which assess: ▪the purpose and design of the VIE; ▪the nature of the VIE’s risks and the risks we absorb; ▪the power to direct activities that most significantly impact the economic performance of the VIE; and ▪the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. We will continue to evaluate our VIEs for any changes that may impact our determination of whether an entity is a VIE and if we are the primary beneficiary. SDG&E SDG&E’s power procurement is subject to reliability requirements that may require SDG&E to enter into various PPAs that include variable interests. SDG&E evaluates the respective entities to determine if variable interests exist and, based on the qualitative and quantitative analyses described above, if SDG&E, and indirectly Sempra, is the primary beneficiary. SDG&E has agreements under which it purchases power generated by facilities for which it supplies all of the natural gas to fuel the power plant (i.e., tolling agreements). SDG&E’s obligation to absorb natural gas costs may be a significant variable interest. In addition, SDG&E has the power to direct the dispatch of electricity generated by these facilities. Based on our analysis, the ability to direct the dispatch of electricity may have the most significant impact on the economic performance of the entity owning the generating facility because of the associated exposure to the cost of natural gas, which fuels the plants, and the value of electricity produced. To the extent that SDG&E (1) is obligated to purchase and provide fuel to operate the facility, (2) has the power to direct the dispatch, and (3) purchases all of the output from the facility for a substantial portion of the facility’s useful life, SDG&E may be the primary beneficiary of the entity owning the generating facility. SDG&E determines if it is the primary beneficiary in these cases based on a qualitative approach in which it considers the operational characteristics of the facility, including its expected power generation output relative to its capacity to generate and the financial structure of the entity, among other factors. If SDG&E determines that it is the primary beneficiary, SDG&E and Sempra consolidate the entity that owns the facility as a VIE. In addition to tolling agreements, other variable interests involve various elements of fuel and power costs, and other components of cash flows expected to be paid to or received by our counterparties. In most of these cases, the expectation of variability is not substantial, and SDG&E generally does not have the power to direct activities, including the operation and maintenance activities of the generating facility, that most significantly impact the economic performance of the other VIEs. If our ongoing evaluation of these VIEs were to conclude that SDG&E becomes the primary beneficiary and consolidation by SDG&E becomes necessary, the effects could be significant to the financial position and liquidity of SDG&E and Sempra. SDG&E determined that none of its PPAs and tolling agreements resulted in SDG&E being the primary beneficiary of a VIE at June 30, 2024 and December 31, 2023. PPAs and tolling agreements that relate to SDG&E’s involvement with VIEs are primarily accounted for as finance leases. The carrying amounts of the assets and liabilities under these contracts are included in PP&E, net, and finance lease liabilities with balances of $1,151 million and $1,166 million at June 30, 2024 and December 31, 2023, respectively. SDG&E recovers costs incurred on PPAs, tolling agreements and other variable interests through CPUC-approved long-term power procurement plans. SDG&E has no residual interest in the respective entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 16 of the Notes to Consolidated Financial Statements in the Annual Report. As a result, SDG&E’s potential exposure to loss from its variable interest in these VIEs is not significant. Other Sempra Oncor Holdings Oncor Holdings is a VIE. Sempra is not the primary beneficiary of this VIE because of the structural and operational ring-fencing and governance measures in place that prevent us from having the power to direct the significant activities of Oncor Holdings. As a result, we do not consolidate Oncor Holdings and instead account for our ownership interest as an equity method investment. See Note 6 of the Notes to Consolidated Financial Statements in the Annual Report for additional information about our equity method investment in Oncor Holdings and restrictions on our ability to influence its activities. Our maximum exposure to loss, which fluctuates over time, from our interest in Oncor Holdings does not exceed the carrying value of our investment, which was $14,809 million and $14,266 million at June 30, 2024 and December 31, 2023, respectively. Cameron LNG JV Cameron LNG JV is a VIE principally due to contractual provisions that transfer certain risks to customers. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of Cameron LNG JV, including LNG production and operation and maintenance activities at the liquefaction facility. Therefore, we account for our investment in Cameron LNG JV under the equity method. The carrying value of our investment was $1,114 million at June 30, 2024 and $1,008 million at December 31, 2023. Our maximum exposure to loss, which fluctuates over time, includes the carrying value of our investment and our obligation under the SDSRA, which we discuss in Note 5. CFIN As we discuss in Note 5, in July 2020, Sempra entered into a Support Agreement for the benefit of CFIN, which is a VIE. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of CFIN, including modification, prepayment, and refinance decisions related to the financing arrangement with external lenders and Cameron LNG JV’s four project owners as well as the ability to determine and enforce remedies in the event of default. The conditional obligations of the Support Agreement represent a variable interest that we measure at fair value on a recurring basis (see Note 8). Sempra’s maximum exposure to loss under the terms of the Support Agreement is $979 million. ECA LNG Phase 1 ECA LNG Phase 1 is a VIE because its total equity at risk is not sufficient to finance its activities without additional subordinated financial support. We expect that ECA LNG Phase 1 will require future capital contributions or other financial support to finance the construction of the facility. Sempra is the primary beneficiary of this VIE because we have the power to direct the activities related to the construction and future operation and maintenance of the liquefaction facility. As a result, we consolidate ECA LNG Phase 1. Sempra consolidated $1,680 million and $1,580 million of assets at June 30, 2024 and December 31, 2023, respectively, consisting primarily of PP&E, net, attributable to ECA LNG Phase 1 that could be used only to settle obligations of this VIE and that are not available to settle obligations of Sempra, and $1,049 million and $1,029 million of liabilities at June 30, 2024 and December 31, 2023, respectively, consisting primarily of long-term debt attributable to ECA LNG Phase 1 for which creditors do not have recourse to the general credit of Sempra. Additionally, as we discuss in Note 6, IEnova and TotalEnergies SE have provided guarantees for 83.4% and 16.6%, respectively, of the loan facility supporting construction of the liquefaction facility. Port Arthur LNG Port Arthur LNG is a VIE because its total equity at risk is not sufficient to finance its activities without additional subordinated financial support. We expect that Port Arthur LNG will require future capital contributions or other financial support to finance the construction of the PA LNG Phase 1 project. Sempra is the primary beneficiary of this VIE because we have the power to direct the activities related to the construction and future operation and maintenance of the liquefaction facility. As a result, we consolidate Port Arthur LNG. Sempra consolidated $5,019 million and $3,927 million of assets at June 30, 2024 and December 31, 2023, respectively, consisting primarily of PP&E, net, and other long-term assets attributable to Port Arthur LNG that could be used only to settle obligations of this VIE and that are not available to settle obligations of Sempra, and $606 million and $600 million of liabilities at June 30, 2024 and December 31, 2023, respectively, consisting primarily of accounts payable and long-term debt attributable to Port Arthur LNG for which creditors do not have recourse to the general credit of Sempra. CASH, CASH EQUIVALENTS AND RESTRICTED CASH The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on Sempra’s Condensed Consolidated Balance Sheets to the sum of such amounts reported on Sempra’s Condensed Consolidated Statements of Cash Flows. We provide information about the nature of restricted cash in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
| June 30, 2024 | December 31, 2023
Sempra: |  |
Cash and cash equivalents | $ | 228 |  | $ | 236 |
Restricted cash, current | 16 |  | 49 |
Restricted cash, noncurrent | 107 |  | 104 |
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows | $ | 351 |  | $ | 389 |
CREDIT LOSSES We are exposed to credit losses from financial assets measured at amortized cost, including trade and other accounts receivable, amounts due from unconsolidated affiliates, our net investment in sales-type leases and a note receivable. We are also exposed to credit losses from off-balance sheet arrangements through Sempra’s guarantee related to Cameron LNG JV’s SDSRA, which we discuss in Note 5. We regularly monitor and evaluate credit losses and record allowances for expected credit losses, if necessary, for trade and other accounts receivable using a combination of factors, including past-due status based on contractual terms, trends in write-offs, the age of the receivables and customer payment patterns, historical and industry trends, counterparty creditworthiness, economic conditions and specific events, such as bankruptcies, pandemics and other factors. We write off financial assets measured at amortized cost in the period in which we determine they are not recoverable. We record recoveries of amounts previously written off when it is known that they will be recovered. The implementation of customer assistance programs and higher 2023 winter season customer billings have resulted in certain SDG&E and SoCalGas customers exhibiting slower payment and higher levels of nonpayment than has been the case historically. In January 2024, the CPUC directed SDG&E and SoCalGas to offer long-term repayment plans to eligible residential customers with past-due balances until October 2026. SDG&E and SoCalGas have regulatory mechanisms to recover credit losses and thus record changes in the allowances for credit losses related to Accounts Receivable – Trade that are probable of recovery in regulatory accounts. We discuss regulatory accounts in Note 4 below and in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report. Changes in allowances for credit losses for trade receivables and other receivables are as follows:
CHANGES IN ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions) |
| 2024 | 2023
Sempra: |  |
Allowances for credit losses at January 1 | $ | 533 |  | $ | 181 |
Provisions for expected credit losses | 94 |  | 228 |
Write-offs | (112) |  | (43) |
Allowances for credit losses at June 30 | $ | 515 |  | $ | 366 |
SDG&E: |  |
Allowances for credit losses at January 1 | $ | 144 |  | $ | 78 |
Provisions for expected credit losses | 24 |  | 63 |
Write-offs | (42) |  | (23) |
Allowances for credit losses at June 30 | $ | 126 |  | $ | 118 |
SoCalGas: |  |
Allowances for credit losses at January 1 | $ | 331 |  | $ | 98 |
Provisions for expected credit losses | 45 |  | 164 |
Write-offs | (70) |  | (20) |
Allowances for credit losses at June 30 | $ | 306 |  | $ | 242 |
Allowances for credit losses related to trade receivables and other receivables are included in the Condensed Consolidated Balance Sheets as follows:
ALLOWANCES FOR CREDIT LOSSES |
(Dollars in millions) |
| June 30, | December 31,
| 2024 | 2023
Sempra: |  |
Accounts receivable – trade, net | $ | 451 |  | $ | 480 |
Accounts receivable – other, net | 52 |  | 52 |
Other long-term assets | 12 |  | 1 |
Total allowances for credit losses | $ | 515 |  | $ | 533 |
SDG&E: |  |
Accounts receivable – trade, net | $ | 96 |  | $ | 116 |
Accounts receivable – other, net | 26 |  | 27 |
Other long-term assets | 4 |  | 1 |
Total allowances for credit losses | $ | 126 |  | $ | 144 |
SoCalGas: |  |
Accounts receivable – trade, net | $ | 272 |  | $ | 306 |
Accounts receivable – other, net | 26 |  | 25 |
Other long-term assets | 8 |  | — |
Total allowances for credit losses | $ | 306 |  | $ | 331 |
As we discuss below in “Note Receivable,” we have an interest-bearing promissory note due from KKR Pinnacle. On a quarterly basis, we evaluate credit losses and record allowances for expected credit losses on this note receivable, including compounded interest and unamortized transaction costs, based on published default rate studies, the maturity date of the instrument and an internally developed credit rating. At both June 30, 2024 and December 31, 2023, $6 million of expected credit losses are included in Other Long-Term Assets on Sempra’s Condensed Consolidated Balance Sheets. As we discuss in Note 5, Sempra provided a guarantee for the benefit of Cameron LNG JV related to amounts withdrawn by Sempra Infrastructure from the SDSRA. On a quarterly basis, we evaluate credit losses and record liabilities for expected credit losses on this off-balance sheet arrangement based on external credit ratings, published default rate studies and the maturity date of the arrangement. At both June 30, 2024 and December 31, 2023, $5 million of expected credit losses are included in Deferred Credits and Other on Sempra’s Condensed Consolidated Balance Sheets. TRANSACTIONS WITH AFFILIATES We summarize amounts due from and to unconsolidated affiliates at the Registrants in the following table.
AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
| June 30, 2024 |  | December 31, 2023
Sempra: |  |  |
Tax sharing arrangement with Oncor Holdings | $ | — |  |  | $ | 25 |
Various affiliates | 7 |  |  | 6 |
Total due from unconsolidated affiliates – current | $ | 7 |  |  | $ | 31 |
Tax sharing arrangement with Oncor Holdings | $ | (3) |  |  | $ | — |
TAG Pipelines – 5.5% Note due January 9, 2024(1) | — |  |  | (5) |
Total due to unconsolidated affiliates – current | $ | (3) |  |  | $ | (5) |
TAG Pipelines(1): |  |  |
5.5% Note due January 14, 2025 | $ | — |  |  | $ | (24) |
5.5% Note due July 16, 2025 | — |  |  | (23) |
5.5% Note due January 14, 2026 | (8) |  |  | (20) |
5.5% Note due July 14, 2026 | (12) |  |  | (11) |
5.5% Note due January 19, 2027 | (15) |  |  | (14) |
5.5% Note due July 21, 2027 | (18) |  |  | (17) |
5.5% Note due January 19, 2028 | (46) |  |  | — |
TAG Norte – 5.74% Note due December 17, 2029(1) | (203) |  |  | (198) |
Total due to unconsolidated affiliates – noncurrent | $ | (302) |  |  | $ | (307) |
SDG&E: |  |  |
SoCalGas | $ | 9 |  |  | $ | — |
Total due from unconsolidated affiliates – current | $ | 9 |  |  | $ | — |
Sempra | $ | (27) |  |  | $ | (44) |
SoCalGas | — |  |  | (21) |
Various affiliates | (13) |  |  | (8) |
Total due to unconsolidated affiliates – current | $ | (40) |  |  | $ | (73) |
Income taxes due from Sempra(2) | $ | 223 |  |  | $ | 246 |
SoCalGas: |  |  |
SDG&E | $ | — |  |  | $ | 21 |
Various affiliates | 1 |  |  | 1 |
Total due from unconsolidated affiliates – current | $ | 1 |  |  | $ | 22 |
Sempra | $ | (34) |  |  | $ | (38) |
SDG&E | (8) |  |  | — |
Total due to unconsolidated affiliates – current | $ | (42) |  |  | $ | (38) |
Income taxes due from Sempra(2) | $ | 10 |  |  | $ | 6 |
(1) U.S. dollar-denominated loans at fixed interest rates. Amounts include principal balances plus accumulated interest outstanding and VAT payable to the Mexican government. (2) SDG&E and SoCalGas are included in the consolidated income tax return of Sempra, and their respective income tax expense is computed as an amount equal to that which would result from each company having always filed a separate return. Amounts include current and noncurrent income taxes due to/from Sempra. We summarize income statement information from unconsolidated affiliates in the following table.
INCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)
| Three months ended June 30, |  | Six months ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Sempra: |  |  |  |  |  |  |
Revenues | $ | 10 |  |  | $ | 11 |  |  | $ | 20 |  |  | $ | 24 |
Interest expense | 3 |  |  | 4 |  |  | 7 |  |  | 8 |
SDG&E: |  |  |  |  |  |  |
Revenues | $ | 5 |  |  | $ | 6 |  |  | $ | 11 |  |  | $ | 10 |
Cost of sales | 35 |  |  | 27 |  |  | 75 |  |  | 57 |
SoCalGas: |  |  |  |  |  |  |
Revenues | $ | 37 |  |  | $ | 28 |  |  | $ | 81 |  |  | $ | 62 |
Cost of sales(1) | — |  |  | 4 |  |  | (3) |  |  | 35 |
(1) Includes net commodity costs from natural gas transactions with unconsolidated affiliates. Guarantees Sempra provides guarantees related to Cameron LNG JV’s SDSRA and CFIN’s Support Agreement. We discuss these guarantees in Note 5. INVENTORIES The components of inventories are as follows:
INVENTORY BALANCES
(Dollars in millions)
| Sempra |  | SDG&E |  | SoCalGas
| June 30, 2024 |  | December 31, 2023 |  | June 30, 2024 |  | December 31, 2023 |  | June 30, 2024 |  | December 31, 2023
Natural gas | $ | 147 |  |  | $ | 174 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 132 |  |  | $ | 155 |
LNG | 8 |  |  | 9 |  |  | — |  |  | — |  |  | — |  |  | — |
Materials and supplies | 312 |  |  | 299 |  |  | 158 |  |  | 152 |  |  | 128 |  |  | 122 |
Total | $ | 467 |  |  | $ | 482 |  |  | $ | 159 |  |  | $ | 153 |  |  | $ | 260 |  |  | $ | 277 |
DEDICATED ASSETS IN SUPPORT OF CERTAIN BENEFITS PLANS In support of its Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans, Sempra maintains dedicated assets, including a Rabbi Trust and investments in life insurance contracts, which totaled $547 million and $549 million at June 30, 2024 and December 31, 2023, respectively. WILDFIRE FUND In July 2019, the Wildfire Legislation was signed into law to address certain issues related to catastrophic wildfires in California and their impact on electric IOUs. We discuss the Wildfire Legislation further in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report. SDG&E periodically evaluates the estimated period of benefit of the Wildfire Fund asset based on actual experience and changes in assumptions. In the second quarter of 2024, SDG&E revised its estimate of the period of benefit from 15 years to 25 years. NOTE RECEIVABLE In November 2021, Sempra loaned $300 million to KKR Pinnacle in exchange for an interest-bearing promissory note that is due in full no later than October 2029 and bears compound interest at 5% per annum, which may be paid quarterly or added to the outstanding principal at the election of KKR Pinnacle. At June 30, 2024 and December 31, 2023, Other Long-Term Assets includes $340 million and $332 million, respectively, of outstanding principal, compounded interest and unamortized transaction costs, net of allowance for credit losses, on Sempra’s Condensed Consolidated Balance Sheets. PROPERTY, PLANT AND EQUIPMENT Sempra Infrastructure’s Sonora natural gas pipeline consists of two pipeline segments, the Sasabe-Puerto Libertad-Guaymas segment and the Guaymas-El Oro segment. Each segment has its own service agreement with the CFE. Following the start of commercial operations of the Guaymas-El Oro segment, Sempra Infrastructure reported damage to the pipeline in the Yaqui territory that has made that section inoperable since August 2017. Sempra Infrastructure and the CFE have agreed to an amendment to their transportation services agreement and to re-route the portion of the pipeline that is in the Yaqui territory, whereby the CFE would pay for the re-routing with a new tariff. This amendment will terminate if certain conditions are not met, and Sempra Infrastructure retains the right to terminate the transportation services agreement and seek to recover its reasonable and documented costs and lost profit. Sempra Infrastructure continues to acquire and pursue the necessary rights-of-way and permits for the re-routed portion of the pipeline. At June 30, 2024, Sempra Infrastructure had $406 million in PP&E, net, related to the Guaymas-El Oro segment of the Sonora pipeline, which could be subject to impairment if Sempra Infrastructure is unable to re-route a portion of the pipeline and resume operations or if Sempra Infrastructure terminates the contract and is unable to obtain recovery. CAPITALIZED FINANCING COSTS Capitalized financing costs include capitalized interest costs and AFUDC related to both debt and equity financing of construction projects. We capitalize interest costs incurred to finance capital projects and interest at equity method investments that have not commenced planned principal operations. The table below summarizes capitalized financing costs, comprised of AFUDC and capitalized interest.
CAPITALIZED FINANCING COSTS |  |  |  |  |  |  |
(Dollars in millions) |  |  |  |  |  |  |
| Three months ended June 30, |  | Six months ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Sempra | $ | 155 |  |  | $ | 110 |  |  | $ | 300 |  |  | $ | 183 |
SDG&E | 27 |  |  | 31 |  |  | 53 |  |  | 62 |
SoCalGas | 26 |  |  | 20 |  |  | 50 |  |  | 35 |
COMPREHENSIVE INCOME The following tables present the changes in AOCI by component and amounts reclassified out of AOCI to net income, after amounts attributable to NCI.
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
(Dollars in millions)
| Foreign currency translation adjustments |  | Financial instruments |  | Pension and PBOP |  | Total AOCI
| Three months ended June 30, 2024 and 2023
Sempra: |  |  |  |  |  |  |
Balance at March 31, 2024 | $ | (33) |  |  | $ | 42 |  |  | $ | (113) |  |  | $ | (104) |
OCI before reclassifications | (16) |  |  | 3 |  |  | (1) |  |  | (14) |
Amounts reclassified from AOCI | — |  |  | (10) |  |  | 7 |  |  | (3) |
Net OCI | (16) |  |  | (7) |  |  | 6 |  |  | (17) |
Balance at June 30, 2024 | $ | (49) |  |  | $ | 35 |  |  | $ | (107) |  |  | $ | (121) |
Balance at March 31, 2023 | $ | (49) |  |  | $ | (35) |  |  | $ | (98) |  |  | $ | (182) |
OCI before reclassifications | 11 |  |  | 53 |  |  | — |  |  | 64 |
Amounts reclassified from AOCI | — |  |  | (4) |  |  | 1 |  |  | (3) |
Net OCI | 11 |  |  | 49 |  |  | 1 |  |  | 61 |
Balance at June 30, 2023 | $ | (38) |  |  | $ | 14 |  |  | $ | (97) |  |  | $ | (121) |
SDG&E: |  |  |  |  |  |  |
Balance at March 31, 2024 and June 30, 2024 |  |  |  |  | $ | (8) |  |  | $ | (8) |
Balance at March 31, 2023 and June 30, 2023 |  |  |  |  | $ | (7) |  |  | $ | (7) |
SoCalGas: |  |  |  |  |  |  |
Balance at March 31, 2024 |  |  | $ | (11) |  |  | $ | (11) |  |  | $ | (22) |
Amounts reclassified from AOCI |  |  | 1 |  |  | — |  |  | 1 |
Net OCI |  |  | 1 |  |  | — |  |  | 1 |
Balance at June 30, 2024 |  |  | $ | (10) |  |  | $ | (11) |  |  | $ | (21) |
Balance at March 31, 2023 |  |  | $ | (12) |  |  | $ | (11) |  |  | $ | (23) |
Amounts reclassified from AOCI |  |  | 1 |  |  | — |  |  | 1 |
Net OCI |  |  | 1 |  |  | — |  |  | 1 |
Balance at June 30, 2023 |  |  | $ | (11) |  |  | $ | (11) |  |  | $ | (22) |
(1) All amounts are net of income tax, if subject to tax, and after NCI.
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) (CONTINUED)
(Dollars in millions)
| Foreign currency translation adjustments |  | Financial instruments |  | Pension and PBOP |  | Total AOCI
| Six months ended June 30, 2024 and 2023
Sempra: |  |  |  |  |  |  |
Balance at December 31, 2023 | $ | (36) |  |  | $ | 3 |  |  | $ | (117) |  |  | $ | (150) |
OCI before reclassifications | (13) |  |  | 48 |  |  | 1 |  |  | 36 |
Amounts reclassified from AOCI | — |  |  | (16) |  |  | 9 |  |  | (7) |
Net OCI | (13) |  |  | 32 |  |  | 10 |  |  | 29 |
Balance at June 30, 2024 | $ | (49) |  |  | $ | 35 |  |  | $ | (107) |  |  | $ | (121) |
Balance at December 31, 2022 | $ | (59) |  |  | $ | 10 |  |  | $ | (86) |  |  | $ | (135) |
OCI before reclassifications | 21 |  |  | 13 |  |  | (13) |  |  | 21 |
Amounts reclassified from AOCI | — |  |  | (9) |  |  | 2 |  |  | (7) |
Net OCI | 21 |  |  | 4 |  |  | (11) |  |  | 14 |
Balance at June 30, 2023 | $ | (38) |  |  | $ | 14 |  |  | $ | (97) |  |  | $ | (121) |
SDG&E: |  |  |  |  |  |  |
Balance at December 31, 2023 and June 30, 2024 |  |  |  |  | $ | (8) |  |  | $ | (8) |
Balance at December 31, 2022 and June 30, 2023 |  |  |  |  | $ | (7) |  |  | $ | (7) |
SoCalGas: |  |  |  |  |  |  |
Balance at December 31, 2023 |  |  | $ | (11) |  |  | $ | (12) |  |  | $ | (23) |
Amounts reclassified from AOCI |  |  | 1 |  |  | 1 |  |  | 2 |
Net OCI |  |  | 1 |  |  | 1 |  |  | 2 |
Balance at June 30, 2024 |  |  | $ | (10) |  |  | $ | (11) |  |  | $ | (21) |
Balance at December 31, 2022 |  |  | $ | (12) |  |  | $ | (12) |  |  | $ | (24) |
Amounts reclassified from AOCI |  |  | 1 |  |  | 1 |  |  | 2 |
Net OCI |  |  | 1 |  |  | 1 |  |  | 2 |
Balance at June 30, 2023 |  |  | $ | (11) |  |  | $ | (11) |  |  | $ | (22) |
(1) All amounts are net of income tax, if subject to tax, and after NCI.
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
Details about AOCI components | Amounts reclassified from AOCI |  | Affected line item on Condensed Consolidated Statements of Operations
| Three months ended June 30, |  |
| 2024 |  | 2023 |  |
Sempra: |  |  |  |  |
Financial instruments: |  |  |  |  |
Interest rate instruments | $ | (3) |  |  | $ | — |  |  | Interest Expense
Interest rate instruments | (10) |  |  | (14) |  |  | Equity Earnings(1)
Foreign exchange instruments | (2) |  |  | — |  |  | Revenues: Energy-Related Businesses
| (1) |  |  | 1 |  |  | Other Income, Net
Foreign exchange instruments | (2) |  |  | 1 |  |  | Equity Earnings(1)
Interest rate and foreign exchange instruments | — |  |  | (1) |  |  | Interest Expense
Total, before income tax | (18) |  |  | (13) |  |  |
| 3 |  |  | — |  |  | Income Tax Benefit (Expense)
Total, net of income tax | (15) |  |  | (13) |  |  |
| 5 |  |  | 9 |  |  | Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCI | $ | (10) |  |  | $ | (4) |  |  |
Pension and PBOP(2): |  |  |  |  |
Amortization of actuarial loss | $ | 1 |  |  | $ | 1 |  |  | Other Income, Net
Settlement charges | 9 |  |  | — |  |  | Other Income, Net
Total, before income tax | 10 |  |  | 1 |  |  |
| (3) |  |  | — |  |  | Income Tax Benefit (Expense)
Total, net of income tax | $ | 7 |  |  | $ | 1 |  |  |
Total reclassifications for the period, net of income tax and after NCI | $ | (3) |  |  | $ | (3) |  |  |
SoCalGas: |  |  |  |  |
Financial instruments: |  |  |  |  |
Interest rate instruments | $ | 1 |  |  | $ | 1 |  |  | Interest Expense
Total reclassifications for the period, net of income tax | $ | 1 |  |  | $ | 1 |  |  |
(1) Equity earnings at Oncor Holdings and our foreign equity method investees are recognized after tax. (2) Amounts are included in the computation of net periodic benefit cost (see “Pension and PBOP” below).
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
(Dollars in millions)
Details about AOCI components | Amounts reclassified from AOCI |  | Affected line item on Condensed Consolidated Statements of Operations
| Six months ended June 30, |  |
| 2024 |  | 2023 |  |
Sempra: |  |  |  |  |
Financial instruments: |  |  |  |  |
Interest rate instruments | $ | (6) |  |  | $ | — |  |  | Interest Expense
Interest rate instruments | (15) |  |  | (21) |  |  | Equity Earnings(1)
Foreign exchange instruments | (5) |  |  | — |  |  | Revenues: Energy-Related Businesses
| (1) |  |  | 2 |  |  | Other Income, Net
Foreign exchange instruments | (4) |  |  | 2 |  |  | Equity Earnings(1)
Interest rate and foreign exchange instruments | — |  |  | (1) |  |  | Interest Expense
| — |  |  | (6) |  |  | Other Income, Net
Total, before income tax | (31) |  |  | (24) |  |  |
| 6 |  |  | 3 |  |  | Income Tax Benefit (Expense)
Total, net of income tax | (25) |  |  | (21) |  |  |
| 9 |  |  | 12 |  |  | Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCI | $ | (16) |  |  | $ | (9) |  |  |
Pension and PBOP(2): |  |  |  |  |
Amortization of actuarial loss | $ | 3 |  |  | $ | 1 |  |  | Other Income, Net
Amortization of prior service cost | 1 |  |  | 1 |  |  | Other Income, Net
Settlement charges | 9 |  |  | — |  |  | Other Income, Net
Total, before income tax | 13 |  |  | 2 |  |  |
| (4) |  |  | — |  |  | Income Tax Benefit (Expense)
Total, net of income tax | $ | 9 |  |  | $ | 2 |  |  |
Total reclassifications for the period, net of income tax and after NCI | $ | (7) |  |  | $ | (7) |  |  |
SoCalGas: |  |  |  |  |
Financial instruments: |  |  |  |  |
Interest rate instruments | $ | 1 |  |  | $ | 1 |  |  | Interest Expense
Pension and PBOP(2): |  |  |  |  |
Amortization of prior service cost | $ | 1 |  |  | $ | 1 |  |  | Other Income (Expense), Net
Total reclassifications for the period, net of income tax | $ | 2 |  |  | $ | 2 |  |  |
(1) Equity earnings at Oncor Holdings and our foreign equity method investees are recognized after tax. (2) Amounts are included in the computation of net periodic benefit cost (see “Pension and PBOP” below). For the three months and six months ended June 30, 2024 and 2023, reclassifications out of AOCI to net income were negligible for SDG&E. PENSION AND PBOP Net Periodic Benefit Cost The following tables provide the components of net periodic benefit cost. The components of net periodic benefit cost, other than the service cost component, are included in Other Income, Net.
NET PERIODIC BENEFIT COST (CONTINUED)
(Dollars in millions)
| Pension |  | PBOP
| Six months ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Sempra: |  |  |  |  |  |  |
Service cost | $ | 65 |  |  | $ | 57 |  |  | $ | 7 |  |  | $ | 7 |
Interest cost | 83 |  |  | 79 |  |  | 18 |  |  | 19 |
Expected return on assets | (91) |  |  | (85) |  |  | (34) |  |  | (35) |
Amortization of: |  |  |  |  |  |  |
Prior service cost (credit) | 3 |  |  | 2 |  |  | (1) |  |  | (1) |
Actuarial loss (gain) | 6 |  |  | 4 |  |  | (8) |  |  | (12) |
Settlement charges | 9 |  |  | — |  |  | — |  |  | — |
Net periodic benefit cost (credit) | 75 |  |  | 57 |  |  | (18) |  |  | (22) |
Regulatory adjustments | 1 |  |  | 58 |  |  | 18 |  |  | 22 |
Total expense recognized | $ | 76 |  |  | $ | 115 |  |  | $ | — |  |  | $ | — |
SDG&E: |  |  |  |  |  |  |
Service cost | $ | 19 |  |  | $ | 16 |  |  | $ | 2 |  |  | $ | 1 |
Interest cost | 22 |  |  | 20 |  |  | 3 |  |  | 4 |
Expected return on assets | (23) |  |  | (20) |  |  | (4) |  |  | (4) |
Amortization of: |  |  |  |  |  |  |
Actuarial loss (gain) | 3 |  |  | 2 |  |  | (1) |  |  | (1) |
Net periodic benefit cost | 21 |  |  | 18 |  |  | — |  |  | — |
Regulatory adjustments | (7) |  |  | 8 |  |  | — |  |  | — |
Total expense recognized | $ | 14 |  |  | $ | 26 |  |  | $ | — |  |  | $ | — |
SoCalGas: |  |  |  |  |  |  |
Service cost | $ | 38 |  |  | $ | 34 |  |  | $ | 5 |  |  | $ | 5 |
Interest cost | 52 |  |  | 51 |  |  | 14 |  |  | 14 |
Expected return on assets | (61) |  |  | (60) |  |  | (30) |  |  | (30) |
Amortization of: |  |  |  |  |  |  |
Prior service cost (credit) | 2 |  |  | 2 |  |  | (1) |  |  | (1) |
Actuarial gain | — |  |  | — |  |  | (6) |  |  | (10) |
Net periodic benefit cost (credit) | 31 |  |  | 27 |  |  | (18) |  |  | (22) |
Regulatory adjustments | 8 |  |  | 50 |  |  | 18 |  |  | 22 |
Total expense recognized | $ | 39 |  |  | $ | 77 |  |  | $ | — |  |  | $ | — |
OTHER INCOME, NET Other Income, Net, consists of the following:
OTHER INCOME (EXPENSE), NET |  |  |  |  |  |  |
(Dollars in millions) |  |  |  |  |  |  |
| Three months ended June 30, |  | Six months ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Sempra: |  |  |  |  |  |  |
Allowance for equity funds used during construction | $ | 38 |  |  | $ | 37 |  |  | $ | 75 |  |  | $ | 70 |
Investment gains, net(1) | 3 |  |  | 5 |  |  | 19 |  |  | 17 |
Gains (losses) on interest rate and foreign exchange instruments, net | 1 |  |  | (1) |  |  | 1 |  |  | 4 |
Foreign currency transaction (losses) gains, net | (2) |  |  | 3 |  |  | (1) |  |  | 4 |
Non-service components of net periodic benefit cost | (32) |  |  | (26) |  |  | (4) |  |  | (51) |
Interest on regulatory balancing accounts, net | 24 |  |  | 19 |  |  | 42 |  |  | 37 |
Sundry, net | (2) |  |  | (6) |  |  | (3) |  |  | (9) |
Total | $ | 30 |  |  | $ | 31 |  |  | $ | 129 |  |  | $ | 72 |
SDG&E: |  |  |  |  |  |  |
Allowance for equity funds used during construction | $ | 19 |  |  | $ | 23 |  |  | $ | 39 |  |  | $ | 46 |
Non-service components of net periodic benefit cost | (3) |  |  | (5) |  |  | 7 |  |  | (9) |
Interest on regulatory balancing accounts, net | 11 |  |  | 11 |  |  | 18 |  |  | 21 |
Sundry, net | (4) |  |  | (7) |  |  | (8) |  |  | (8) |
Total | $ | 23 |  |  | $ | 22 |  |  | $ | 56 |  |  | $ | 50 |
SoCalGas: |  |  |  |  |  |  |
Allowance for equity funds used during construction | $ | 19 |  |  | $ | 14 |  |  | $ | 36 |  |  | $ | 24 |
Non-service components of net periodic benefit cost | (17) |  |  | (19) |  |  | 4 |  |  | (38) |
Interest on regulatory balancing accounts, net | 13 |  |  | 8 |  |  | 24 |  |  | 16 |
Sundry, net | (2) |  |  | (2) |  |  | (4) |  |  | (9) |
Total | $ | 13 |  |  | $ | 1 |  |  | $ | 60 |  |  | $ | (7) |
(1) Represents net investment gains on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are offset by corresponding changes in compensation expense related to the plans, recorded in O&M on the Condensed Consolidated Statements of Operations. INCOME TAXES We provide our calculations of ETRs in the following table.
INCOME TAX (BENEFIT) EXPENSE AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
| Three months ended June 30, |  | Six months ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Sempra: |  |  |  |  |  |  |
Income tax (benefit) expense | $ | (130) |  |  | $ | 175 |  |  | $ | 42 |  |  | $ | 551 |
Income before income taxes and equity earnings | $ | 308 |  |  | $ | 523 |  |  | $ | 1,013 |  |  | $ | 1,852 |
Equity earnings, before income tax(1) | 160 |  |  | 153 |  |  | 294 |  |  | 285 |
Pretax income | $ | 468 |  |  | $ | 676 |  |  | $ | 1,307 |  |  | $ | 2,137 |
Effective income tax rate | (28) | % |  | 26 | % |  | 3 | % |  | 26 | %
SDG&E: |  |  |  |  |  |  |
Income tax expense | $ | 34 |  |  | $ | 4 |  |  | $ | 74 |  |  | $ | 11 |
Income before income taxes | $ | 220 |  |  | $ | 188 |  |  | $ | 483 |  |  | $ | 453 |
Effective income tax rate | 15 | % |  | 2 | % |  | 15 | % |  | 2 | %
SoCalGas: |  |  |  |  |  |  |
Income tax expense (benefit) | $ | 10 |  |  | $ | (21) |  |  | $ | 53 |  |  | $ | 73 |
Income before income taxes | $ | 141 |  |  | $ | 135 |  |  | $ | 543 |  |  | $ | 589 |
Effective income tax rate | 7 | % |  | (16) | % |  | 10 | % |  | 12 | %
(1) We discuss how we recognize equity earnings in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report. Sempra, SDG&E and SoCalGas record income taxes for interim periods utilizing a forecasted ETR anticipated for the full year. Unusual and infrequent items and items that cannot be reliably estimated are recorded in the interim period in which they occur, which can result in variability in the ETR. For SDG&E and SoCalGas, the CPUC requires flow-through rate-making treatment for the current income tax benefit or expense arising from certain property-related and other temporary differences between the treatment for financial reporting and income tax, which will reverse over time. Under the regulatory accounting treatment required for these flow-through temporary differences, deferred income tax assets and liabilities are not recorded to deferred income tax expense, but rather to a regulatory asset or liability, which impacts the ETR. As a result, changes in the relative size of these items compared to pretax income, from period to period, can cause variations in the ETR. The following items are subject to flow-through treatment: ▪repairs expenditures related to a certain portion of utility plant fixed assets ▪the equity portion of AFUDC, which is non-taxable ▪a portion of the cost of removal of utility plant assets ▪utility self-developed software expenditures ▪depreciation on a certain portion of utility plant assets ▪state income taxes AFUDC related to equity recorded for regulated construction projects at Sempra Infrastructure has similar flow-through treatment. Under the IRA, in 2023, the scope of projects eligible for ITCs was expanded to include standalone energy storage projects, which are transferable under the IRA. The IRA also provided an election through 2024 that permits ITCs related to standalone energy storage projects to be returned to utility customers over a period that is shorter than the life of the applicable asset. In April 2023, the IRS issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting for gas repairs expenditures. As a result of this Revenue Procedure, SoCalGas updated its assessment of prior years’ unrecognized income tax benefits and, in the three months and six months ended June 30, 2023, recorded an income tax benefit of $43 million for previously unrecognized income tax benefits pertaining to gas repairs expenditures. Sempra intends to elect this change in tax accounting method in its consolidated 2023 income tax return filing, and Sempra, SDG&E and SoCalGas have applied this methodology in the calculation of their 2024 forecasted ETRs. Sempra, SDG&E, and SoCalGas record regulatory liabilities for benefits that will be flowed through to customers in the future.

X
- Definition The entire disclosures of supplemental information, including descriptions and amounts, related to the balance sheet, income statement, and/or cash flow statement. + References No definition available. + Details
Name: | us-gaap_AdditionalFinancialInformationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration