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GENERAL INFORMATION AND OTHER FINANCIAL DATA | 9 Months Ended
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Sep. 30, 2025
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 operating and reportable segments, which we describe in Note 14. 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 operating and 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 operating and 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 Sempra’s Condensed Consolidated Financial Statements. 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 September 30, 2025 through the date the financial statements were issued and, in the opinion of management, the accompanying financial statements reflect all adjustments and disclosures necessary for a fair presentation. All December 31, 2024 balance sheet information in the Condensed Consolidated Financial Statements has been derived from our audited 2024 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’s and SoCalGas’ accounting policies and financial statements reflect the application of U.S. GAAP provisions governing rate-regulated operations and the policies of the CPUC and the FERC. 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. Sempra Infrastructure’s natural gas distribution utility, Ecogas, also applies U.S. GAAP provisions governing rate-regulated operations, including the same evaluation of probability of recovery of regulatory assets described above. Certain business activities at Sempra Infrastructure are regulated by the CNE 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 September 30, 2025 and December 31, 2024. 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 $1,116 million and $1,138 million at September 30, 2025 and December 31, 2024, 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 15 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 5 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 is $17,038 million and $15,400 million at September 30, 2025 and December 31, 2024, 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 is $1,198 million, of which $1,181 million is classified as held for sale (see Note 6), at September 30, 2025 and $1,149 million at December 31, 2024. 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 13. CFIN As we discuss in Note 13, 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 9). Sempra’s maximum exposure to loss under the terms of the Support Agreement is $979 million, which we discuss in Note 13. Other VIEs ECA LNG Phase 1, Port Arthur LNG I and Port Arthur LNG II are VIEs because their total equity at risk is not sufficient to finance their activities without additional subordinated financial support. We expect that these entities will require future capital contributions or other financial support to finance the construction of their respective liquefaction facilities. Sempra is the primary beneficiary of these VIEs because we have the power to direct the activities that most significantly impact their economic performance, including construction and future operation and maintenance of the facilities. As a result, we consolidate these VIEs. Sempra consolidated $14,130 million and $8,177 million of assets at September 30, 2025 and December 31, 2024, respectively, consisting primarily of PP&E, net, and restricted cash attributable to these VIEs that could be used only to settle obligations of these VIEs and that are not available to settle obligations of Sempra, and $5,288 million and $2,664 million of liabilities at September 30, 2025 and December 31, 2024, respectively, consisting primarily of long-term debt and accounts payable attributable to these VIEs for which creditors do not have recourse to the general credit of Sempra. At September 30, 2025, these assets and liabilities are classified as held for sale (see Note 6). Additionally, IEnova and TotalEnergies SE have provided guarantees for repayment of up to $1,226 million and $305 million, respectively, plus accrued and unpaid interest, of the loan facility supporting construction of the ECA LNG Phase 1 project (see Note 7). Both SI Partners and ConocoPhillips have provided guarantees relating to their respective affiliate’s commitment to make its pro rata equity share of capital contributions to fund 110% of the development budget of the PA LNG Phase 1 project, in an aggregate amount of up to $9.0 billion (see Note 11). SI Partners’ guarantee covers 70% of this amount plus enforcement costs of its guarantee. SI Partners has committed to fund up to $7.8 billion to PA2 JVCo to support its share of the budgeted PA LNG Phase 2 project construction costs, while Blackstone has committed to fund $7.0 billion (see Note 10). SI Partners has also provided a guarantee for repayment of the $300 million credit facility supporting construction of the PA LNG Phase 2 project (see Note 7). 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)
| September 30, 2025 | December 31, 2024
Sempra: |  |
Cash and cash equivalents | $ | 5 |  | $ | 1,565 |
Restricted cash, current | 2 |  | 21 |
Restricted cash, noncurrent | — |  | 3 |
Assets held for sale | 3,018 |  | — |
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows | $ | 3,025 |  | $ | 1,589 |
Restricted cash of $2.9 billion that is classified as held for sale at September 30, 2025 includes the following: ▪certain funds at Port Arthur LNG I for which withdrawals and usage are dictated by its debt agreements ▪certain funds at Port Arthur LNG II for which withdrawals and usage are dictated by the PA2 JVCo LLCA ▪funds denominated in U.S. dollars and Mexican pesos to pay for rights-of-way and other costs pursuant to certain agreements related to pipeline projects CREDIT LOSSES Financial Assets Measured at Amortized Cost 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 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. 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. 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. Changes in allowances for credit losses for trade receivables, other receivables and a note receivable are as follows:
CHANGES IN ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
| 2025 | 2024
Sempra: |  |
Allowances for credit losses at January 1 | $ | 519 |  | $ | 539 |
Provisions for expected credit losses(1) | 106 |  | 148 |
Write-offs(1) | (147) |  | (169) |
Reclassification to assets held for sale | (134) |  | — |
Allowances for credit losses at September 30 | $ | 344 |  | $ | 518 |
SDG&E: |  |
Allowances for credit losses at January 1 | $ | 114 |  | $ | 144 |
Provisions for expected credit losses | 40 |  | 46 |
Write-offs | (61) |  | (63) |
Allowances for credit losses at September 30 | $ | 93 |  | $ | 127 |
SoCalGas: |  |
Allowances for credit losses at January 1 | $ | 285 |  | $ | 331 |
Provisions for expected credit losses | 42 |  | 70 |
Write-offs | (80) |  | (107) |
Allowances for credit losses at September 30 | $ | 247 |  | $ | 294 |
(1) Includes activities within the disposal group that is held for sale. Allowances for credit losses related to trade receivables, other receivables and a note receivable are included in the Condensed Consolidated Balance Sheets as follows:
ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
| September 30, | December 31,
| 2025 | 2024
Sempra: |  |
Accounts receivable – trade, net | $ | 270 |  | $ | 447 |
Accounts receivable – other, net | 53 |  | 53 |
Other long-term assets(1)(2) | 21 |  | 19 |
Total allowances for credit losses | $ | 344 |  | $ | 519 |
SDG&E: |  |
Accounts receivable – trade, net | $ | 61 |  | $ | 81 |
Accounts receivable – other, net | 27 |  | 25 |
Other long-term assets(1) | 5 |  | 8 |
Total allowances for credit losses | $ | 93 |  | $ | 114 |
SoCalGas: |  |
Accounts receivable – trade, net | $ | 209 |  | $ | 251 |
Accounts receivable – other, net | 26 |  | 28 |
Other long-term assets(1) | 12 |  | 6 |
Total allowances for credit losses | $ | 247 |  | $ | 285 |
(1) In January 2024, the CPUC directed SDG&E and SoCalGas to offer long-term repayment plans to eligible residential customers with past-due balances. (2) At September 30, 2025 and December 31, 2024, includes $4 and $5, respectively, of expected credit losses on an interest-bearing promissory note due from KKR Pinnacle. Off-Balance Sheet Credit Exposures We are exposed to credit losses from off-balance sheet arrangements through Sempra’s guarantees, which we discuss in Note 13. On a quarterly basis, we evaluate credit losses and record liabilities for expected credit losses on our off-balance sheet arrangements based on external credit ratings, published default rate studies and the maturity date of the arrangements. On Sempra’s Condensed Consolidated Balance Sheets, expected credit losses of $5 million are included in Deferred Credits and Other at both September 30, 2025 and December 31, 2024, and $3 million are included in Liabilities Held for Sale at September 30, 2025. 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)
| September 30, 2025 |  | December 31, 2024
Sempra: |  |  |
Tax sharing agreement with Oncor Holdings | $ | — |  |  | $ | 8 |
Various affiliates | — |  |  | 5 |
Total due from unconsolidated affiliates – current(1) | $ | — |  |  | $ | 13 |
Tax sharing arrangement with Oncor Holdings | $ | (17) |  |  | $ | — |
Total due to unconsolidated affiliates – current | $ | (17) |  |  | $ | — |
TAG Pipelines Norte, S. de R.L. de C.V.(2): |  |  |
5.5% Note due January 14, 2026 | $ | — |  |  | $ | (8) |
5.5% Note due July 14, 2026 | — |  |  | (12) |
5.5% Note due January 19, 2027 | — |  |  | (15) |
5.5% Note due July 21, 2027 | — |  |  | (19) |
5.5% Note due January 19, 2028 | — |  |  | (48) |
5.5% Note due July 18, 2028 | — |  |  | (41) |
TAG Norte – 5.74% Note due December 17, 2029(2) | — |  |  | (209) |
Total due to unconsolidated affiliates – noncurrent(1) | $ | — |  |  | $ | (352) |
SDG&E: |  |  |
SoCalGas | $ | 13 |  |  | $ | — |
Total due from unconsolidated affiliates – current | $ | 13 |  |  | $ | — |
Sempra | $ | (57) |  |  | $ | (42) |
SoCalGas | — |  |  | (14) |
Various affiliates | (8) |  |  | (3) |
Total due to unconsolidated affiliates – current | $ | (65) |  |  | $ | (59) |
Income taxes due from Sempra(3) | $ | 46 |  |  | $ | 38 |
SoCalGas: |  |  |
SDG&E | $ | — |  |  | $ | 14 |
Various affiliates | 2 |  |  | 2 |
Total due from unconsolidated affiliates – current | $ | 2 |  |  | $ | 16 |
Sempra | $ | (49) |  |  | $ | (38) |
SDG&E | (13) |  |  | — |
Total due to unconsolidated affiliates – current | $ | (62) |  |  | $ | (38) |
Income taxes due from (to) Sempra(3) | $ | 20 |  |  | $ | (6) |
(1) At September 30, 2025, $3 due from unconsolidated affiliates is classified as Assets Held For Sale and $417 due to unconsolidated affiliates is classified as Liabilities Held For Sale on the Sempra Condensed Consolidated Balance Sheet. (2) U.S. dollar-denominated loans at fixed interest rates. Amounts include principal balances plus accumulated interest outstanding and value added tax payable to the Mexican government. (3) SDG&E and SoCalGas are included in the consolidated income tax return of Sempra, and their respective income tax expense/benefit 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 from/to Sempra. The following table summarizes income statement information from unconsolidated affiliates.
INCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)
| Three months ended September 30, |  | Nine months ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Sempra: |  |  |  |  |  |  |
Revenues | $ | 9 |  |  | $ | 11 |  |  | $ | 26 |  |  | $ | 31 |
Interest expense | 4 |  |  | 5 |  |  | 13 |  |  | 12 |
SDG&E: |  |  |  |  |  |  |
Revenues | $ | 6 |  |  | $ | 6 |  |  | $ | 17 |  |  | $ | 17 |
Cost of sales | 35 |  |  | 36 |  |  | 103 |  |  | 111 |
SoCalGas: |  |  |  |  |  |  |
Revenues | $ | 47 |  |  | $ | 43 |  |  | $ | 128 |  |  | $ | 124 |
Cost of sales(1) | (2) |  |  | (2) |  |  | (3) |  |  | (5) |
(1) Includes net commodity costs from natural gas transactions with unconsolidated affiliates. Guarantees Sempra provides guarantees to certain unconsolidated affiliates, which we discuss in Note 13. INVENTORIES The components of inventories are as follows:
INVENTORY BALANCES
(Dollars in millions)
| Sempra |  | SDG&E |  | SoCalGas
| September 30, 2025(1) |  | December 31, 2024 |  | September 30, 2025 |  | December 31, 2024 |  | September 30, 2025 |  | December 31, 2024
Natural gas | $ | 162 |  |  | $ | 163 |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | 160 |  |  | $ | 148 |
LNG | — |  |  | 27 |  |  | — |  |  | — |  |  | — |  |  | — |
Materials and supplies | 403 |  |  | 369 |  |  | 261 |  |  | 201 |  |  | 142 |  |  | 139 |
Total | $ | 565 |  |  | $ | 559 |  |  | $ | 263 |  |  | $ | 202 |  |  | $ | 302 |  |  | $ | 287 |
(1) Total inventories of $103 is classified as Assets Held For Sale on the Sempra Condensed Consolidated Balance Sheet, which consists of $10 of natural gas, $11 of LNG and $82 of materials and supplies. 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 $585 million at both September 30, 2025 and December 31, 2024. WILDFIRE FUND AND CONTINUATION ACCOUNT 2019 Wildfire Legislation In July 2019, the 2019 Wildfire Legislation was signed into law to address certain issues related to catastrophic wildfires in California and their impact on electric IOUs through the establishment of the Wildfire Fund. We discuss the 2019 Wildfire Legislation and related Wildfire Fund further in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report. SDG&E expects to submit its request to the OEIS for its annual wildfire safety certification in December 2025. OEIS will have until March 2026 to issue the certification or provide written notice explaining why additional time is needed. SDG&E’s existing certification remains valid until this pending request is resolved. Wildfire Fund Asset At September 30, 2025, the carrying value of SDG&E’s Wildfire Fund asset totaled $264 million. SDG&E recognizes a reduction of its Wildfire Fund asset and records a charge against earnings in the period when there is a reduction of the available coverage due to recoverable claims from any of the participating IOUs. Wildfire claims that are recoverable from the Wildfire Fund, net of anticipated or actual reimbursement to the Wildfire Fund by the responsible IOU, decrease the Wildfire Fund asset and remaining available coverage. SDG&E periodically evaluates the estimated period of benefit of the Wildfire Fund asset based on actual experience and changes in assumptions, including relying on publicly disclosed wildfire-related losses incurred by the other participating IOUs. In October 2025, a participating IOU publicly disclosed that it has received, or expects to receive, approximately $1.2 billion in aggregate reimbursements from the Wildfire Fund for eligible claims related to wildfires that occurred in 2019 and 2021. In the three months and nine months ended September 30, 2025, SDG&E reduced its Wildfire Fund asset by recording $2 million of accelerated amortization in O&M on Sempra’s and SDG&E’s Condensed Consolidated Statements of Operations. Also in October 2025, another participating IOU publicly disclosed its intent to seek reimbursement from the Wildfire Fund for losses incurred and expected to be incurred in connection with a wildfire that remains under investigation, and for which the cause has not yet been conclusively determined. The administrator of the Wildfire Fund has confirmed that this wildfire qualifies as a “covered wildfire” for purposes of accessing the fund. The participating IOU has stated that it is currently unable to reasonably estimate a range of potential losses associated with this event. Accordingly, SDG&E is unable to estimate a range of potential loss resulting from any reduction in available coverage from the Wildfire Fund. 2025 Wildfire Legislation In September 2025, the 2025 Wildfire Legislation was signed into law. The 2025 Wildfire Legislation established, among other things, the Continuation Account, a new state-administered account with up to $18.0 billion of additional liquidity to reimburse catastrophic wildfire-related claims incurred by large California electric IOUs, including SDG&E, if the Wildfire Fund is depleted. The 2025 Wildfire Legislation preserves key elements of the 2019 Wildfire Legislation, including cost recovery standards and requirements, a cap on liability in the event of a finding of imprudence by the CPUC, and continued access to wildfire claims liquidity through the new Continuation Account. The Continuation Account will become operative if, prior to December 31, 2028, either (i) the Wildfire Fund’s administrator projects that the original Wildfire Fund will be depleted, or (ii) a participating electric IOU notifies the Wildfire Fund’s administrator that it anticipates more than $1.0 billion in eligible claims in a single coverage year for one or more wildfires that ignite after September 19, 2025, the effective date of the 2025 Wildfire Legislation. All of California’s large electric IOUs, including SDG&E, have elected to participate in the Continuation Account. If the Continuation Account becomes operative, it would be funded with a combination of ratepayer and electric IOU shareholder contributions. Ratepayer contributions totaling $9.0 billion would be financed through new bonds to be issued by the California Department of Water Resources and secured by the extension of an existing Wildfire Fund-related non-bypassable ratepayer charge from 2036-2045, subject to a determination by the CPUC that the extension is just and reasonable. Electric IOU shareholder contributions totaling $5.1 billion would be obtained through fixed annual contributions of $300 million from 2029 through 2045, plus an additional $3.9 billion in contingent shareholder contributions payable in annual installments of $780 million if the Wildfire Fund’s administrator determines there is additional need, subject to a potential ratepayer credit of 50% of the amount of any remaining contingent contribution installments if the Wildfire Fund’s administrator terminates the Continuation Account prior to their collection. SDG&E’s proportionate share of the aggregate shareholder contribution amount through 2045 is expected to be $387 million, comprising (i) $219.3 million of fixed contributions of $12.9 million annually for 17 years, and (ii) $167.7 million of contingent contributions of $33.5 million annually for five years. Only claims arising from wildfires that ignited on or after September 19, 2025 in excess of the greater of $1.0 billion or the amount of insurance coverage required by the Wildfire Fund’s administrator are eligible for reimbursement from the Continuation Account. As with the 2019 Wildfire Legislation, for participating electric IOUs that have received a safety certification, reimbursements to the Continuation Account with electric IOU shareholder contributions are not required if a CPUC reasonableness review, conducted under the prudency standards established by the 2019 Wildfire Legislation, results in a finding that the participating IOU acted prudently. Reimbursements to the Continuation Account with electric IOU shareholder contributions are required for wildfire liabilities deemed imprudently incurred, but the amount of the reimbursement is subject to a cap if the Continuation Account is not otherwise depleted. The applicable participating electric IOU may credit its shareholder contributions to the Continuation Account against required reimbursements, subject to a cap equal to the lesser of (i) the disallowed costs, or (ii) 20% of the electric IOU’s total transmission and distribution equity rate base for the year of ignition of the applicable wildfire, less (a) prior reimbursements by the electric IOU for any covered wildfire-related disallowances within three years before the date of ignition of the applicable wildfire, and (b) any unused shareholder contributions by the electric IOU not already credited. SDG&E’s current estimated cap, which will vary over time, is approximately $1.4 billion based on its 2024 transmission and distribution equity rate base. As with the 2019 Wildfire Legislation, participating electric IOUs are not permitted to earn an equity return on a certain amount of capital investments supporting wildfire risk mitigation. The 2025 Wildfire Legislation establishes this amount as $6.0 billion of wildfire risk mitigation capital investments authorized by the CPUC after January 1, 2026, and SDG&E’s proportionate share is limited to $258 million. If the Continuation Account becomes operative, SDG&E would record an obligation for its commitment to make shareholder contributions to the Continuation Account. 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 September 30, 2025 and December 31, 2024, Other Long-Term Assets includes $363 million and $349 million, respectively, of outstanding principal, compounded interest and unamortized transaction costs, net of allowance for credit losses, on Sempra’s Condensed Consolidated Balance Sheets. At the closing of the sale of a portion of our equity interest in SI Partners, which we discuss in Note 6, Sempra and the KKR Partners will amend this $300 million promissory note to, among other things, extend its maturity date and increase its interest rate to 8.5% per annum before January 1, 2031 and 10.0% thereafter through a due date seven years and 91 days after the closing. 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 because it was not able to be repaired due to legal challenges, which were resolved in March 2023, by some members of the Yaqui tribe. 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 portion of the pipeline that needs to be re-routed. The Guaymas-El Oro segment will continue to be owned by and a Sole Risk Project of Sempra after closing the sale of a portion of our equity interest in SI Partners, which we discuss in Note 6. At September 30, 2025, Sempra Infrastructure has $391 million in PP&E, net, related to the Guaymas-El Oro segment of the Sonora pipeline, which could be subject to impairment if, among other things, 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 The table below summarizes capitalized financing costs, comprised of capitalized interest and AFUDC related to debt.
CAPITALIZED FINANCING COSTS |  |  |  |  |  |  |
(Dollars in millions) |  |  |  |  |  |  |
| Three months ended September 30, |  | Nine months ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Sempra | $ | 205 |  |  | $ | 166 |  |  | $ | 574 |  |  | $ | 466 |
SDG&E | 25 |  |  | 27 |  |  | 82 |  |  | 80 |
SoCalGas | 25 |  |  | 25 |  |  | 75 |  |  | 75 |
ASSET RETIREMENT OBLIGATIONS We discuss AROs in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report. We summarize changes in AROs in the following table.
CHANGES IN ASSET RETIREMENT OBLIGATIONS
(Dollars in millions)
| Sempra |  | SDG&E |  | SoCalGas
| 2025 | 2024 |  | 2025 | 2024 |  | 2025 | 2024
Balance at January 1(1) | $ | 3,925 |  | $ | 3,831 |  |  | $ | 900 |  | $ | 894 |  |  | $ | 2,930 |  | $ | 2,847 |
Accretion expense(2) | 121 |  | 115 |  |  | 30 |  | 27 |  |  | 88 |  | 84 |
Liabilities incurred | 9 |  | — |  |  | 9 |  | — |  |  | — |  | — |
Payments | (48) |  | (45) |  |  | (39) |  | (40) |  |  | (9) |  | (5) |
Revisions(2) | 50 |  | (9) |  |  | (6) |  | — |  |  | 59 |  | (9) |
Reclassification to liabilities held for sale | (93) |  | — |  |  | — |  | — |  |  | — |  | — |
Balance at September 30(1) | $ | 3,964 |  | $ | 3,892 |  |  | $ | 894 |  | $ | 881 |  |  | $ | 3,068 |  | $ | 2,917 |
(1) Current portion of the ARO for Sempra is included in Other Current Liabilities on the Condensed Consolidated Balance Sheets. (2) Sempra includes activities within the disposal group that is held for sale. 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 September 30, 2025 and 2024
Sempra: |  |  |  |  |  |  |
Balance at June 30, 2025 | $ | (55) |  |  | $ | (50) |  |  | $ | (110) |  |  | $ | (215) |
OCI before reclassifications | 5 |  |  | (11) |  |  | (1) |  |  | (7) |
Amounts reclassified from AOCI | — |  |  | (2) |  |  | 12 |  |  | 10 |
Net OCI | 5 |  |  | (13) |  |  | 11 |  |  | 3 |
Balance at September 30, 2025 | $ | (50) |  |  | $ | (63) |  |  | $ | (99) |  |  | $ | (212) |
Balance at June 30, 2024 | $ | (49) |  |  | $ | 35 |  |  | $ | (107) |  |  | $ | (121) |
OCI before reclassifications | (12) |  |  | (49) |  |  | — |  |  | (61) |
Amounts reclassified from AOCI | — |  |  | (5) |  |  | 2 |  |  | (3) |
Net OCI | (12) |  |  | (54) |  |  | 2 |  |  | (64) |
Balance at September 30, 2024 | $ | (61) |  |  | $ | (19) |  |  | $ | (105) |  |  | $ | (185) |
SDG&E: |  |  |  |  |  |  |
Balance at June 30, 2025 and September 30, 2025 |  |  |  |  | $ | (12) |  |  | $ | (12) |
Balance at June 30, 2024 and September 30, 2024 |  |  |  |  | $ | (8) |  |  | $ | (8) |
SoCalGas: |  |  |  |  |  |  |
Balance at June 30, 2025 |  |  | $ | (10) |  |  | $ | (14) |  |  | $ | (24) |
Amounts reclassified from AOCI |  |  | 1 |  |  | 5 |  |  | 6 |
Net OCI |  |  | 1 |  |  | 5 |  |  | 6 |
Balance at September 30, 2025 |  |  | $ | (9) |  |  | $ | (9) |  |  | $ | (18) |
Balance at June 30, 2024 and September 30, 2024 |  |  | $ | (10) |  |  | $ | (11) |  |  | $ | (21) |
(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
| Nine months ended September 30, 2025 and 2024
Sempra: |  |  |  |  |  |  |
Balance at December 31, 2024 | $ | (66) |  |  | $ | 15 |  |  | $ | (115) |  |  | $ | (166) |
OCI before reclassifications | 16 |  |  | (76) |  |  | (3) |  |  | (63) |
Amounts reclassified from AOCI | — |  |  | (2) |  |  | 19 |  |  | 17 |
Net OCI | 16 |  |  | (78) |  |  | 16 |  |  | (46) |
Balance at September 30, 2025 | $ | (50) |  |  | $ | (63) |  |  | $ | (99) |  |  | $ | (212) |
Balance at December 31, 2023 | $ | (36) |  |  | $ | 3 |  |  | $ | (117) |  |  | $ | (150) |
OCI before reclassifications | (25) |  |  | (1) |  |  | 1 |  |  | (25) |
Amounts reclassified from AOCI | — |  |  | (21) |  |  | 11 |  |  | (10) |
Net OCI | (25) |  |  | (22) |  |  | 12 |  |  | (35) |
Balance at September 30, 2024 | $ | (61) |  |  | $ | (19) |  |  | $ | (105) |  |  | $ | (185) |
SDG&E: |  |  |  |  |  |  |
Balance at December 31, 2024 and September 30, 2025 |  |  |  |  | $ | (12) |  |  | $ | (12) |
Balance at December 31, 2023 and September 30, 2024 |  |  |  |  | $ | (8) |  |  | $ | (8) |
SoCalGas: |  |  |  |  |  |  |
Balance at December 31, 2024 |  |  | $ | (10) |  |  | $ | (17) |  |  | $ | (27) |
OCI before reclassifications |  |  | — |  |  | (2) |  |  | (2) |
Amounts reclassified from AOCI |  |  | 1 |  |  | 10 |  |  | 11 |
Net OCI |  |  | 1 |  |  | 8 |  |  | 9 |
Balance at September 30, 2025 |  |  | $ | (9) |  |  | $ | (9) |  |  | $ | (18) |
Balance at December 31, 2023 |  |  | $ | (11) |  |  | $ | (12) |  |  | $ | (23) |
Amounts reclassified from AOCI |  |  | 1 |  |  | 1 |  |  | 2 |
Net OCI |  |  | 1 |  |  | 1 |  |  | 2 |
Balance at September 30, 2024 |  |  | $ | (10) |  |  | $ | (11) |  |  | $ | (21) |
(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 September 30, |  |
| 2025 |  | 2024 |  |
Sempra: |  |  |  |  |
Financial instruments: |  |  |  |  |
Interest rate instruments | $ | (4) |  |  | $ | (3) |  |  | Interest expense
Interest rate instruments | (6) |  |  | (5) |  |  | Equity earnings(1)
Foreign exchange instruments | 2 |  |  | — |  |  | Revenues: Energy-related businesses
Foreign exchange instruments | 1 |  |  | (1) |  |  | Other income, net
Foreign exchange instruments | 3 |  |  | (1) |  |  | Equity earnings(1)
Total, before income tax | (4) |  |  | (10) |  |  |
| 1 |  |  | 3 |  |  | Income tax (expense) benefit
Total, net of income tax | (3) |  |  | (7) |  |  |
| 1 |  |  | 2 |  |  | Earnings attributable to noncontrolling interests
Total, net of income tax and after NCI | $ | (2) |  |  | $ | (5) |  |  |
Pension and PBOP(2): |  |  |  |  |
Amortization of actuarial loss | $ | 2 |  |  | $ | 2 |  |  | Other income, net
Amortization of prior service cost | — |  |  | 1 |  |  | Other income, net
Settlement charges | 12 |  |  | — |  |  | Other income, net
Total, before income tax | 14 |  |  | 3 |  |  |
| (2) |  |  | (1) |  |  | Income tax (expense) benefit
Total, net of income tax | $ | 12 |  |  | $ | 2 |  |  |
Total reclassifications for the period, net of income tax and after NCI | $ | 10 |  |  | $ | (3) |  |  |
SoCalGas: |  |  |  |  |
Financial instruments: |  |  |  |  |
Interest rate instruments | $ | 1 |  |  | $ | — |  |  | Interest expense
Pension and PBOP(2): |  |  |  |  |
Settlement charges | $ | 6 |  |  | $ | — |  |  | Other (expense) income, net
Total, before income tax | 6 |  |  | — |  |  |
| (1) |  |  | — |  |  | Income tax benefit (expense)
Total, net of income tax | $ | 5 |  |  | $ | — |  |  |
Total reclassifications for the period, net of income tax | $ | 6 |  |  | $ | — |  |  |
(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
| Nine months ended September 30, |  |
| 2025 |  | 2024 |  |
Sempra: |  |  |  |  |
Financial instruments: |  |  |  |  |
Interest rate instruments | $ | (6) |  |  | $ | (9) |  |  | Interest expense
Interest rate instruments | (10) |  |  | (20) |  |  | Equity earnings(1)
Foreign exchange instruments | 3 |  |  | (5) |  |  | Revenues: Energy-related businesses
| 2 |  |  | (2) |  |  | Other income, net
Foreign exchange instruments | 4 |  |  | (5) |  |  | Equity earnings(1)
Total, before income tax | (7) |  |  | (41) |  |  |
| 2 |  |  | 9 |  |  | Income tax (expense) benefit
Total, net of income tax | (5) |  |  | (32) |  |  |
| 3 |  |  | 11 |  |  | Earnings attributable to noncontrolling interests
Total, net of income tax and after NCI | $ | (2) |  |  | $ | (21) |  |  |
Pension and PBOP(2): |  |  |  |  |
Amortization of actuarial loss | $ | 5 |  |  | $ | 5 |  |  | Other income, net
Amortization of prior service cost | 1 |  |  | 2 |  |  | Other income, net
Settlement charges | 16 |  |  | 9 |  |  | Other income, net
Total, before income tax | 22 |  |  | 16 |  |  |
| (3) |  |  | (5) |  |  | Income tax (expense) benefit
Total, net of income tax | $ | 19 |  |  | $ | 11 |  |  |
Total reclassifications for the period, net of income tax and after NCI | $ | 17 |  |  | $ | (10) |  |  |
SoCalGas: |  |  |  |  |
Financial instruments: |  |  |  |  |
Interest rate instruments | $ | 1 |  |  | $ | 1 |  |  | Interest expense
Pension and PBOP(2): |  |  |  |  |
Amortization of actuarial loss | $ | 1 |  |  | $ | — |  |  | Other (expense) income, net
Amortization of prior service cost | 1 |  |  | 1 |  |  | Other (expense) income, net
Settlement charges | 10 |  |  | — |  |  | Other (expense) income, net
Total, before income tax | 12 |  |  | 1 |  |  |
| (2) |  |  | — |  |  | Income tax benefit (expense)
Total, net of income tax | $ | 10 |  |  | $ | 1 |  |  |
Total reclassifications for the period, net of income tax | $ | 11 |  |  | $ | 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). In the three months and nine months ended September 30, 2025 and 2024, reclassifications out of AOCI to net income were negligible for SDG&E. PENSION AND PBOP Special Termination Benefits In the second quarter of 2025, certain eligible employees retired under a VREP and received an additional postretirement health benefit in the form of a $100,000 Health Reimbursement Account. Employees eligible to participate in the VREP consisted of SDG&E represented and non-represented employees and SoCalGas non-represented employees aged 62 years or older with five years of service or ages 55 to 61 with 10 years of service as of May 31, 2025, and SoCalGas represented employees aged 65 or older with five years of service or ages 55 to 64 with 15 years of service as of June 30, 2025. We treated the benefit obligation attributable to the Health Reimbursement Account as a special termination benefit. This resulted in increases to the recorded liability for PBOP and net periodic benefit cost of $40 million for Sempra, $17 million for SDG&E and $23 million for SoCalGas in the nine months ended September 30, 2025. Partial Plan Termination In connection with the planned sale of a portion of our equity interest in SI Partners, which we discuss in Note 6, Sempra entered into an agreement to contribute Sempra Services Corporation, a wholly owned subsidiary of Sempra, to SI Partners. Sempra Services Corporation employs U.S. employees performing services for SI Partners and is a participating employer in Sempra’s noncontributory defined benefit pension and PBOP plans. Upon closing the sale, which we expect to occur in the second or third quarter of 2026, Sempra Services Corporation will cease to be a participating employer in Sempra’s pension and PBOP plans. This will result in a partial termination of Sempra’s pension plan due to a reduction in the number of active participants by more than 20%. All impacted participants will be fully vested in their pension benefits as of the termination date. We expect to recognize the financial statement impact, which is currently probable but not estimable, including adjustments to pension and PBOP liabilities, AOCI, curtailment and special termination benefit accounting at the close of the sale. The financial impact for settlement accounting will be recognized when the lump sum payout crosses the annual settlement threshold. 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
(Dollars in millions)
| Pension |  | PBOP
| Three months ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Sempra: |  |  |  |  |  |  |
Service cost | $ | 32 |  |  | $ | 34 |  |  | $ | 3 |  |  | $ | 4 |
Interest cost | 42 |  |  | 41 |  |  | 10 |  |  | 9 |
Expected return on assets | (41) |  |  | (40) |  |  | (17) |  |  | (19) |
Amortization of: |  |  |  |  |  |  |
Prior service cost (credit) | 1 |  |  | 1 |  |  | (1) |  |  | (1) |
Actuarial loss (gain) | 3 |  |  | 4 |  |  | (3) |  |  | (4) |
Settlement charges | 12 |  |  | — |  |  | — |  |  | — |
Net periodic benefit cost (credit) | 49 |  |  | 40 |  |  | (8) |  |  | (11) |
Regulatory adjustments | 26 |  |  | 20 |  |  | 8 |  |  | 10 |
Total expense (income) recognized | $ | 75 |  |  | $ | 60 |  |  | $ | — |  |  | $ | (1) |
SDG&E: |  |  |  |  |  |  |
Service cost | $ | 10 |  |  | $ | 10 |  |  | $ | — |  |  | $ | — |
Interest cost | 11 |  |  | 10 |  |  | 2 |  |  | 3 |
Expected return on assets | (11) |  |  | (10) |  |  | (2) |  |  | (3) |
Amortization of: |  |  |  |  |  |  |
Actuarial loss | 1 |  |  | 3 |  |  | — |  |  | — |
Net periodic benefit cost | 11 |  |  | 13 |  |  | — |  |  | — |
Regulatory adjustments | 2 |  |  | — |  |  | — |  |  | — |
Total expense recognized | $ | 13 |  |  | $ | 13 |  |  | $ | — |  |  | $ | — |
SoCalGas: |  |  |  |  |  |  |
Service cost | $ | 19 |  |  | $ | 21 |  |  | $ | 2 |  |  | $ | 3 |
Interest cost | 28 |  |  | 26 |  |  | 7 |  |  | 7 |
Expected return on assets | (30) |  |  | (29) |  |  | (13) |  |  | (15) |
Amortization of: |  |  |  |  |  |  |
Prior service cost (credit) | 1 |  |  | 1 |  |  | (1) |  |  | (1) |
Actuarial gain (loss) | 1 |  |  | 1 |  |  | (3) |  |  | (4) |
Settlement charges | 6 |  |  | — |  |  | — |  |  | — |
Net periodic benefit cost (credit) | 25 |  |  | 20 |  |  | (8) |  |  | (10) |
Regulatory adjustments | 24 |  |  | 20 |  |  | 8 |  |  | 10 |
Total expense recognized | $ | 49 |  |  | $ | 40 |  |  | $ | — |  |  | $ | — |
NET PERIODIC BENEFIT COST (CONTINUED)
(Dollars in millions)
| Pension |  | PBOP
| Nine months ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Sempra: |  |  |  |  |  |  |
Service cost | $ | 96 |  |  | $ | 99 |  |  | $ | 10 |  |  | $ | 11 |
Interest cost | 132 |  |  | 124 |  |  | 29 |  |  | 27 |
Expected return on assets | (130) |  |  | (131) |  |  | (50) |  |  | (53) |
Amortization of: |  |  |  |  |  |  |
Prior service cost (credit) | 3 |  |  | 4 |  |  | (2) |  |  | (2) |
Actuarial loss (gain) | 9 |  |  | 10 |  |  | (9) |  |  | (12) |
Settlement charges | 16 |  |  | 9 |  |  | — |  |  | — |
Special termination benefits | — |  |  | — |  |  | 40 |  |  | — |
Net periodic benefit cost (credit) | 126 |  |  | 115 |  |  | 18 |  |  | (29) |
Regulatory adjustments | 25 |  |  | 21 |  |  | (15) |  |  | 28 |
Total expense (income) recognized | $ | 151 |  |  | $ | 136 |  |  | $ | 3 |  |  | $ | (1) |
SDG&E: |  |  |  |  |  |  |
Service cost | $ | 29 |  |  | $ | 29 |  |  | $ | 1 |  |  | $ | 2 |
Interest cost | 35 |  |  | 32 |  |  | 6 |  |  | 6 |
Expected return on assets | (35) |  |  | (33) |  |  | (6) |  |  | (7) |
Amortization of: |  |  |  |  |  |  |
Actuarial loss (gain) | 3 |  |  | 6 |  |  | (1) |  |  | (1) |
Special termination benefits | — |  |  | — |  |  | 17 |  |  | — |
Net periodic benefit cost | 32 |  |  | 34 |  |  | 17 |  |  | — |
Regulatory adjustments | (6) |  |  | (7) |  |  | (14) |  |  | — |
Total expense recognized | $ | 26 |  |  | $ | 27 |  |  | $ | 3 |  |  | $ | — |
SoCalGas: |  |  |  |  |  |  |
Service cost | $ | 57 |  |  | $ | 59 |  |  | $ | 7 |  |  | $ | 8 |
Interest cost | 84 |  |  | 78 |  |  | 22 |  |  | 21 |
Expected return on assets | (89) |  |  | (90) |  |  | (42) |  |  | (45) |
Amortization of: |  |  |  |  |  |  |
Prior service cost (credit) | 3 |  |  | 3 |  |  | (2) |  |  | (2) |
Actuarial loss (gain) | 2 |  |  | 1 |  |  | (7) |  |  | (10) |
Settlement charges | 10 |  |  | — |  |  | — |  |  | — |
Special termination benefits | — |  |  | — |  |  | 23 |  |  | — |
Net periodic benefit cost (credit) | 67 |  |  | 51 |  |  | 1 |  |  | (28) |
Regulatory adjustments | 31 |  |  | 28 |  |  | (1) |  |  | 28 |
Total expense recognized | $ | 98 |  |  | $ | 79 |  |  | $ | — |  |  | $ | — |
Benefit Plan Contributions The following table shows our year-to-date contributions to pension and PBOP plans and the amounts we expect to contribute in 2025.
BENEFIT PLAN CONTRIBUTIONS
(Dollars in millions)
|  | Sempra |  | SDG&E |  | SoCalGas
Contributions through September 30, 2025: |  |  |  |  |  |
Pension plans |  | $ | 158 |  |  | $ | 26 |  |  | $ | 110 |
PBOP plans |  | 2 |  | — |  |  | 1
Total expected contributions in 2025: |  |  |  |  |  |
Pension plans |  | $ | 292 |  |  | $ | 56 |  |  | $ | 196 |
PBOP plans |  | 16 |  | 13 |  | 1 |
OTHER INCOME, NET Other Income, Net, consists of the following:
OTHER INCOME (EXPENSE), NET
(Dollars in millions)
| Three months ended September 30, |  | Nine months ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Sempra: |  |  |  |  |  |  |
Allowance for equity funds used during construction | $ | 43 |  |  | $ | 39 |  |  | $ | 130 |  |  | $ | 114 |
Investment gains, net(1) | 22 |  |  | 29 |  |  | 47 |  |  | 48 |
(Losses) gains on interest rate and foreign exchange instruments, net | (1) |  |  | 1 |  |  | (2) |  |  | 2 |
Foreign currency transaction gains (losses), net | 4 |  |  | (5) |  |  | 10 |  |  | (6) |
Non-service components of net periodic benefit cost | (40) |  |  | (21) |  |  | (48) |  |  | (25) |
Interest on regulatory balancing accounts, net | 29 |  |  | 26 |  |  | 70 |  |  | 68 |
Sundry, net | (8) |  |  | (4) |  |  | (8) |  |  | (7) |
Total | $ | 49 |  |  | $ | 65 |  |  | $ | 199 |  |  | $ | 194 |
SDG&E: |  |  |  |  |  |  |
Allowance for equity funds used during construction | $ | 19 |  |  | $ | 21 |  |  | $ | 61 |  |  | $ | 60 |
Non-service components of net periodic benefit cost | (3) |  |  | (3) |  |  | 1 |  |  | 4 |
Interest on regulatory balancing accounts, net | 18 |  |  | 12 |  |  | 44 |  |  | 30 |
Sundry, net | (2) |  |  | — |  |  | (3) |  |  | (8) |
Total | $ | 32 |  |  | $ | 30 |  |  | $ | 103 |  |  | $ | 86 |
SoCalGas: |  |  |  |  |  |  |
Allowance for equity funds used during construction | $ | 17 |  |  | $ | 18 |  |  | $ | 53 |  |  | $ | 54 |
Non-service components of net periodic benefit cost | (28) |  |  | (16) |  |  | (34) |  |  | (12) |
Interest on regulatory balancing accounts, net | 11 |  |  | 14 |  |  | 26 |  |  | 38 |
Sundry, net | (3) |  |  | (3) |  |  | (8) |  |  | (7) |
Total | $ | (3) |  |  | $ | 13 |  |  | $ | 37 |  |  | $ | 73 |
(1) Represents net investment gains (losses) 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 EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
| Three months ended September 30, |  | Nine months ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Sempra: |  |  |  |  |  |  |
Income tax expense (benefit) | $ | 482 |  |  | $ | (105) |  |  | $ | 711 |  |  | $ | (63) |
Income before income taxes and equity earnings | $ | 160 |  |  | $ | 200 |  |  | $ | 1,109 |  |  | $ | 1,213 |
Equity earnings, before income tax(1) | 133 |  |  | 132 |  |  | 443 |  |  | 426 |
Pretax income | $ | 293 |  |  | $ | 332 |  |  | $ | 1,552 |  |  | $ | 1,639 |
Effective income tax rate | 165 | % |  | (32) | % |  | 46 | % |  | (4) | %
SDG&E: |  |  |  |  |  |  |
Income tax (benefit) expense | $ | (33) |  |  | $ | 15 |  |  | $ | (12) |  |  | $ | 89 |
Income before income taxes | $ | 291 |  |  | $ | 276 |  |  | $ | 768 |  |  | $ | 759 |
Effective income tax rate | (11) | % |  | 5 | % |  | (2) | % |  | 12 | %
SoCalGas: |  |  |  |  |  |  |
Income tax (benefit) expense | $ | (95) |  |  | $ | (52) |  |  | $ | (51) |  |  | $ | 1 |
(Loss) income before income taxes | $ | (49) |  |  | $ | (66) |  |  | $ | 523 |  |  | $ | 477 |
Effective income tax rate | 194 | % |  | 79 | % |  | (10) | % |  | — | %
(1) We discuss how we recognize equity earnings in Note 5 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 that will be flowed through to customers in the future, 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. Items subject to flow-through treatment include: ▪repairs expenditures related to certain utility plant fixed assets ▪the equity component of AFUDC, which is non-taxable ▪cost of removal related to certain utility plant assets ▪utility self-developed software expenditures ▪depreciation related to certain utility plant assets ▪state income taxes AFUDC related to equity recorded for regulated construction projects at Sempra Infrastructure has similar flow-through treatment. The OBBBA was signed into law on July 4, 2025. The OBBBA includes revisions to tax credits and other incentives for energy and climate initiatives of the Inflation Reduction Act enacted in 2022 and extends or revises key provisions of the TCJA, among other changes. Effective January 1, 2025, we have adopted the provisions of OBBBA, which include immediate expensing of domestic research and experimental expenditures, including utility self-developed software expenditures, under the new Internal Revenue Code Section 174A. This change supersedes prior rules requiring five-year amortization of domestic research and experimental expenditures under the TCJA. In accordance with IRS transitional guidance (Revenue Procedure 2025-28), we plan to elect to accelerate deductions for domestic unamortized utility self-developed software expenditures incurred in tax years 2022-2024, with remaining balances deductible over 2025 and 2026. As a result, Sempra, SDG&E and SoCalGas recorded an income tax benefit of $73 million, $26 million and $47 million, respectively, in the three months and nine months ended September 30, 2025. We will continue to monitor guidance issued by the U.S. Department of the Treasury and the IRS. In connection with classifying SI Partners and Ecogas as held for sale, which we discuss in Note 6, we recognized income tax expense of $514 million and $552 million in the three months and nine months ended September 30, 2025, respectively. We have previously included unrecognized income tax benefits in our annual tabular reconciliation related to our investment in SI Partners. As a result of the held for sale classification and the anticipated closing of the sale, we believe it is reasonably possible that a decrease of up to $150 million in unrecognized income tax benefits related to outside basis differences and Mexico tax liabilities will be necessary in the next 12 months. These changes in unrecognized income tax benefits would not decrease or increase the effective tax rate.

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