GENERAL INFORMATION AND OTHER FINANCIAL DATA (Tables)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Cash and Cash Equivalents

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.

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	1,077	$	370
Restricted cash, current	74		40
Restricted cash, noncurrent	91		52
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows	$	1,242	$	462

Accounts Receivable, Allowance for Credit Loss Table

We provide below the changes in allowances for credit losses for trade receivables and other receivables. SDG&E and SoCalGas record changes in the allowances for credit losses related to Accounts Receivable – Trade in regulatory accounts.

CHANGES IN ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	2023		2022
Sempra:
Allowances for credit losses at January 1	$	181	$	136
Provisions for expected credit losses	228		77
Write-offs	(43)		(36)
Allowances for credit losses at June 30	$	366	$	177
SDG&E:
Allowances for credit losses at January 1	$	78	$	66
Provisions for expected credit losses	63		37
Write-offs	(23)		(18)
Allowances for credit losses at June 30	$	118	$	85
SoCalGas:
Allowances for credit losses at January 1	$	98	$	69
Provisions for expected credit losses	164		37
Write-offs	(20)		(18)
Allowances for credit losses at June 30	$	242	$	88

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,
	2023		2022
Sempra:
Accounts receivable – trade, net	$	320	$	140
Accounts receivable – other, net	46		40
Other long-term assets	—		1
Total allowances for credit losses	$	366	$	181
SDG&E:
Accounts receivable – trade, net	$	91	$	52
Accounts receivable – other, net	27		25
Other long-term assets	—		1
Total allowances for credit losses	$	118	$	78
SoCalGas:
Accounts receivable – trade, net	$	223	$	83
Accounts receivable – other, net	19		15
Total allowances for credit losses	$	242	$	98

Inventory Table

The components of inventories are as follows:

INVENTORY BALANCES
(Dollars in millions)
	Sempra				SDG&E				SoCalGas
	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Natural gas	$	87	$	106	$	1	$	1	$	63	$	74
LNG	17		62		—		—		—		—
Materials and supplies	279		235		142		133		117		85
Total	$	383	$	403	$	143	$	134	$	180	$	159

Capitalized Financing Costs Table

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,
	2023		2022		2023		2022
Sempra	$	110	$	60	$	183	$	117
SDG&E	31		26		62		54
SoCalGas	20		17		35		35

Net Periodic Benefit Cost Table

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 the Other Income (Expense), Net, table below.

NET PERIODIC BENEFIT COST – SEMPRA
(Dollars in millions)
	Pension				PBOP
	Three months ended June 30,
	2023		2022		2023		2022
Service cost	$	29	$	42	$	3	$	6
Interest cost	39		29		10		7
Expected return on assets	(42)		(45)		(18)		(16)
Amortization of:
Prior service cost	1		2		—		—
Actuarial loss (gain)	2		5		(6)		(3)
Net periodic benefit cost (credit)	29		33		(11)		(6)
Regulatory adjustments	29		24		11		6
Total expense recognized	$	58	$	57	$	—	$	—
	Six months ended June 30,
	2023		2022		2023		2022
Service cost	$	57	$	83	$	7	$	13
Interest cost	79		59		19		14
Expected return on assets	(85)		(91)		(35)		(32)
Amortization of:
Prior service cost (credit)	2		5		(1)		(1)
Actuarial loss (gain)	4		11		(12)		(7)
Net periodic benefit cost (credit)	57		67		(22)		(13)
Regulatory adjustments	58		(3)		22		13
Total expense recognized	$	115	$	64	$	—	$	—

NET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)
	Pension				PBOP
	Three months ended June 30,
	2023		2022		2023		2022
Service cost	$	8	$	10	$	—	$	1
Interest cost	10		6		2		2
Expected return on assets	(10)		(11)		(2)		(3)
Amortization of:
Actuarial loss	1		1		—		—
Net periodic benefit cost	9		6		—		—
Regulatory adjustments	4		7		—		—
Total expense recognized	$	13	$	13	$	—	$	—
	Six months ended June 30,
	2023		2022		2023		2022
Service cost	$	16	$	20	$	1	$	3
Interest cost	20		13		4		3
Expected return on assets	(20)		(22)		(4)		(5)
Amortization of:
Actuarial loss (gain)	2		1		(1)		(1)
Net periodic benefit cost	18		12		—		—
Regulatory adjustments	8		2		—		—
Total expense recognized	$	26	$	14	$	—	$	—

NET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)
	Pension				PBOP
	Three months ended June 30,
	2023		2022		2023		2022
Service cost	$	17	$	28	$	2	$	5
Interest cost	26		21		7		6
Expected return on assets	(31)		(33)		(15)		(14)
Amortization of:
Prior service cost	1		2		—		—
Actuarial loss (gain)	—		4		(5)		(3)
Net periodic benefit cost (credit)	13		22		(11)		(6)
Regulatory adjustments	25		17		11		6
Total expense recognized	$	38	$	39	$	—	$	—
	Six months ended June 30,
	2023		2022		2023		2022
Service cost	$	34	$	56	$	5	$	10
Interest cost	51		41		14		11
Expected return on assets	(60)		(64)		(30)		(27)
Amortization of:
Prior service cost (credit)	2		4		(1)		(1)
Actuarial loss (gain)	—		8		(10)		(6)
Net periodic benefit cost (credit)	27		45		(22)		(13)
Regulatory adjustments	50		(5)		22		13
Total expense recognized	$	77	$	40	$	—	$	—

Earnings Per Share Computations Table

EARNINGS PER COMMON SHARE COMPUTATIONS
(Dollars in millions, except per share amounts; shares in thousands)
	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Numerator:
Earnings attributable to common shares	$	603	$	559	$	1,572	$	1,171
Denominator:
Weighted-average common shares outstanding for basic EPS(1)	315,007		314,845		314,963		315,595
Dilutive effect of stock options and RSUs(2)	1,053		1,022		1,129		1,052
Weighted-average common shares outstanding for diluted EPS	316,060		315,867		316,092		316,647
EPS:
Basic	$	1.91	$	1.78	$	4.99	$	3.71
Diluted	$	1.91	$	1.77	$	4.97	$	3.70

(1)    Includes 355 and 399 fully vested RSUs held in our Deferred Compensation Plan for the three months ended June 30, 2023 and 2022, respectively, and 358 and 403 of such RSUs for the six months ended June 30, 2023 and 2022, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.

(2)    Due to market fluctuations of both Sempra common stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.

The following represents the unaudited pro forma effect of the two-for-one stock split as if it had been effective for all periods presented:

PRO FORMA EARNINGS PER COMMON SHARE COMPUTATIONS ON A POST-SPLIT BASIS
(Dollars in millions, except per share amounts; shares in thousands)
	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Numerator:
Earnings attributable to common shares	$	603	$	559	$	1,572	$	1,171
Denominator:
Weighted-average common shares outstanding for basic EPS(1)	630,014		629,691		629,926		631,190
Dilutive effect of stock options and RSUs	2,107		2,044		2,259		2,104
Weighted-average common shares outstanding for diluted EPS	632,121		631,735		632,185		633,294
EPS:
Basic	$	0.96	$	0.89	$	2.50	$	1.86
Diluted	$	0.95	$	0.89	$	2.49	$	1.85

(1)    Includes 710 and 798 fully vested RSUs held in our Deferred Compensation Plan for the three months ended June 30, 2023 and 2022, respectively, and 716 and 806 of such RSUs for the six months ended June 30, 2023 and 2022, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.

Schedule of Accumulated Other Comprehensive Income (Loss) Table

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, 2023 and 2022
Sempra:
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)
Balance at March 31, 2022	$	(76)	$	(78)	$	(75)	$	(229)
OCI before reclassifications	1		37		1		39
Amounts reclassified from AOCI(2)	10		11		2		23
Net OCI(2)	11		48		3		62
Balance at June 30, 2022	$	(65)	$	(30)	$	(72)	$	(167)
SDG&E:
Balance at March 31, 2023 and June 30, 2023					$	(7)	$	(7)
Balance at March 31, 2022 and June 30, 2022					$	(10)	$	(10)
SoCalGas:
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)
Balance at March 31, 2022			$	(13)	$	(17)	$	(30)
Amounts reclassified from AOCI			1		—		1
Net OCI			1		—		1
Balance at June 30, 2022			$	(12)	$	(17)	$	(29)

(1)    All amounts are net of income tax, if subject to tax, and after NCI.

(2)    Total AOCI includes $9 of foreign currency translation adjustments associated with sale of NCI to ADIA, which we discuss below in “Other Noncontrolling Interests – Sempra Infrastructure.” This transaction did not impact the Condensed Consolidated Statement of Comprehensive Income (Loss).

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, 2023 and 2022
Sempra:
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)
Balance at December 31, 2021	$	(79)	$	(156)	$	(83)	$	(318)
OCI before reclassifications	4		111		7		122
Amounts reclassified from AOCI(2)	10		15		4		29
Net OCI(2)	14		126		11		151
Balance at June 30, 2022	$	(65)	$	(30)	$	(72)	$	(167)
SDG&E:
Balance at December 31, 2022 and June 30, 2023					$	(7)	$	(7)
Balance at December 31, 2021 and June 30, 2022					$	(10)	$	(10)
SoCalGas:
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)
Balance at December 31, 2021			$	(13)	$	(18)	$	(31)
Amounts reclassified from AOCI			1		1		2
Net OCI			1		1		2
Balance at June 30, 2022			$	(12)	$	(17)	$	(29)

(1)    All amounts are net of income tax, if subject to tax, and after NCI.

(2)    Total AOCI includes $9 of foreign currency translation adjustments associated with sale of NCI to ADIA, which we discuss below in “Other Noncontrolling Interests – Sempra Infrastructure.” This transaction did not impact the Condensed Consolidated Statement of Comprehensive Income (Loss).

Reclassifications out of AOCI Table

RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
Details about AOCI	Amounts reclassified from AOCI				Affected line item on Condensed Consolidated Statements of Operations
	Three months ended June 30,
	2023		2022
Sempra:
Foreign currency translation adjustments	$	—	$	1	Operation and Maintenance
Financial instruments:
Interest rate instruments	$	(14)	$	13	Equity Earnings(1)
Foreign exchange instruments	—		(1)		Revenues: Energy-Related Businesses
	1		1		Other Income (Expense), Net
Foreign exchange instruments	1		—		Equity Earnings
Interest rate and foreign exchange instruments	(1)		(1)		Interest Expense
Total, before income tax	(13)		12
	—		(4)		Income Tax Expense
Total, net of income tax	(13)		8
	9		3		Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCI	$	(4)	$	11
Pension and PBOP(2):
Amortization of actuarial loss	$	1	$	2	Other Income (Expense), Net
Amortization of prior service cost	—		1		Other Income (Expense), Net
Total, before income tax	1		3
	—		(1)		Income Tax Expense
Total, net of income tax	$	1	$	2
Total reclassifications for the period, net of income  tax and after NCI	$	(3)	$	14
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 our foreign equity method investees are recognized after tax.

(2)    Amounts are included in the computation of net periodic benefit cost (see “Net Periodic Benefit Cost” above).

RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
(Dollars in millions)
Details about AOCI	Amounts reclassified from AOCI				Affected line item on Condensed Consolidated Statements of Operations
	Six months ended June 30,
	2023		2022
Sempra:
Foreign currency translation adjustments	$	—	$	1	Operation and Maintenance
Financial instruments:
Interest rate instruments	$	—	$	(1)	Interest Expense
Interest rate instruments	(21)		27		Equity Earnings(1)
Foreign exchange instruments	—		(2)		Revenues: Energy-Related Businesses
	2		1		Other Income (Expense), Net
Foreign exchange instruments	2		(1)		Equity Earnings(1)
Interest rate and foreign exchange instruments	(1)		(1)		Interest Expense
	(6)		(6)		Other Income (Expense), Net
Total, before income tax	(24)		17
	3		(5)		Income Tax Expense
Total, net of income tax	(21)		12
	12		3		Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCI	$	(9)	$	15
Pension and PBOP(2):
Amortization of actuarial loss	$	1	$	4	Other Income (Expense), Net
Amortization of prior service cost	1		2		Other Income (Expense), Net
Total, before income tax	2		6
	—		(2)		Income Tax Expense
Total, net of income tax	$	2	$	4
Total reclassifications for the period, net of income  tax and after NCI	$	(7)	$	20
SoCalGas:
Financial instruments:
Interest rate instruments	$	1	$	1	Interest Expense
Pension and PBOP(2):
Amortization of actuarial loss	$	—	$	1	Other Income (Expense), Net
Amortization of prior service cost	1		—		Other Income (Expense), Net
Total, net of income tax	$	1	$	1
Total reclassifications for the period, net of income  tax	$	2	$	2

(1)    Equity earnings at our foreign equity method investees are recognized after tax.

(2)    Amounts are included in the computation of net periodic benefit cost (see “Net Periodic Benefit Cost” above).

Ownership Interests Held By Others Table

The following table provides information about NCI held by others in subsidiaries or entities consolidated by us and recorded in Other Noncontrolling Interests in Total Equity on Sempra’s Condensed Consolidated Balance Sheets.

OTHER NONCONTROLLING INTERESTS
(Dollars in millions)
	Percent ownership held by noncontrolling interests				Equity held by noncontrolling interests
	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
Sempra Infrastructure:
SI Partners	30.0	%	30.0	%	$	2,424	$	2,060
SI Partners subsidiaries(1)	0.1 - 30.0		0.1 - 16.6		734		61
Total Sempra					$	3,158	$	2,121

(1)    SI Partners has subsidiaries with NCI held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.

Transactions with Affiliates Table

We summarize amounts due from and to unconsolidated affiliates at Sempra, SDG&E and SoCalGas in the following table.

AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	June 30, 2023		December 31, 2022
Sempra:
Tax sharing arrangement with Oncor Holdings	$	15	$	41
Various affiliates	11		13
Total due from unconsolidated affiliates – current	$	26	$	54
Sempra Infrastructure(1):
TAG Pipelines Norte, S. de R.L. de C.V. – 5.5% Note due January 9, 2024	$	(5)	$	—
Total due to unconsolidated affiliates – current	$	(5)	$	—
Sempra Infrastructure(1):
TAG Pipelines Norte, S. de R.L. de C.V.:
5.5% Note due January 9, 2024	$	—	$	(40)
5.5% Note due January 14, 2025	(23)		(23)
5.5% Note due July 16, 2025	(22)		(21)
5.5% Note due January 14, 2026	(19)		(19)
5.5% Note due July 14, 2026	(11)		(11)
5.5% Note due January 19, 2027	(14)		—
TAG – 5.74% Note due December 17, 2029	(193)		(187)
Total due to unconsolidated affiliates – noncurrent	$	(282)	$	(301)
SDG&E:
Various affiliates	$	1	$	—
Total due from unconsolidated affiliates – current	$	1	$	—
Sempra	$	(29)	$	(49)
SoCalGas	—		(72)
Various affiliates	(14)		(14)
Total due to unconsolidated affiliates – current	$	(43)	$	(135)
Income taxes due (to) from Sempra(2)	$	(32)	$	10
SoCalGas:
SDG&E	$	—	$	72
Various affiliates	1		5
Total due from unconsolidated affiliates – current	$	1	$	77
Sempra	$	(36)	$	(36)
Total due to unconsolidated affiliates – current	$	(36)	$	(36)
Income taxes due to Sempra(2)	$	(11)	$	(16)

(1)     U.S. dollar-denominated loans at fixed interest rates. Amounts include principal balances plus accumulated interest outstanding.

(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.

The following table summarizes income statement information from unconsolidated affiliates.

INCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Sempra:
Revenues	$	11	$	15	$	24	$	22
Interest income	—		4		—		14
Interest expense	4		4		8		8
SDG&E:
Revenues	$	6	$	4	$	10	$	8
Cost of sales	27		26		57		50
SoCalGas:
Revenues	$	28	$	23	$	62	$	49
Cost of sales(1)	4		(4)		35		(4)

(1)     Includes net commodity costs from natural gas transactions with unconsolidated affiliates.

Other Income and Expense Table

Other Income (Expense), Net, consists of the following:

OTHER INCOME (EXPENSE), NET
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Sempra:
Allowance for equity funds used during construction	$	37	$	34	$	70	$	69
Investment gains (losses), net(1)	5		(34)		17		(47)
(Losses) gains on interest rate and foreign exchange instruments, net	(1)		(1)		4		5
Foreign currency transaction gains (losses), net(2)	3		(3)		4		(22)
Non-service components of net periodic benefit cost	(26)		(9)		(51)		32
Interest on regulatory balancing accounts, net	19		4		37		5
Sundry, net	(6)		8		(9)		(5)
Total	$	31	$	(1)	$	72	$	37
SDG&E:
Allowance for equity funds used during construction	$	23	$	21	$	46	$	42
Non-service components of net periodic benefit cost	(5)		(2)		(9)		9
Interest on regulatory balancing accounts, net	11		3		21		4
Sundry, net	(7)		—		(8)		1
Total	$	22	$	22	$	50	$	56
SoCalGas:
Allowance for equity funds used during construction	$	14	$	13	$	24	$	26
Non-service components of net periodic benefit cost	(19)		(6)		(38)		26
Interest on regulatory balancing accounts, net	8		1		16		1
Sundry, net	(2)		(4)		(9)		(15)
Total	$	1	$	4	$	(7)	$	38

(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.

(2)    Includes losses of $11 in the six months ended June 30, 2022 from translation to U.S. dollars of a Mexican peso-denominated loan to IMG, which are offset by corresponding amounts included in Equity Earnings on the Condensed Consolidated Statement of Operations.

Income Tax Expense and Effective Income Tax Rates Table

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 June 30,						Six months ended June 30,
	2023			2022			2023			2022
Sempra:
Income tax expense	$	175		$	80		$	551		$	414
Income before income taxes and equity earnings	$	523		$	364		$	1,852		$	1,029
Equity earnings, before income tax(1)	153			159			285			302
Pretax income	$	676		$	523		$	2,137		$	1,331
Effective income tax rate	26		%	15		%	26		%	31		%
SDG&E:
Income tax expense	$	4		$	42		$	11		$	106
Income before income taxes	$	188		$	218		$	453		$	516
Effective income tax rate	2		%	19		%	2		%	21		%
SoCalGas:
Income tax (benefit) expense	$	(21)		$	19		$	73		$	103
Income before income taxes	$	135		$	107		$	589		$	525
Effective income tax rate	(16)		%	18		%	12		%	20		%

(1)    We discuss how we recognize equity earnings in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.